Odonate Therapeutics, Inc. (ODT) stock prices were up by 2.97% as of the market closing on July 2nd 2021, bringing the price per share up to USD$3.47 at the end of the trading day. Subsequent premarket fluctuations saw the stock skyrocket by 32.85%, bringing it up to USD$4.61.
Cessation of Texetaxel Development
The company recently announced the discontinuation of the development of its flagship tesetaxel treatment, along with the intent to wrap up operations related to the treatment’s development. ODT is collaborating with clinical sites to transition patients from their ongoing studies to relevant and applicable alternative therapies. Compassionate use programs will see the continuation of treatment with tesetaxel, as deemed appropriate in extreme cases.
March 31st 2021 saw the company announce USD$133.2 million in cash, indicating a stellar liquidity position. December 31st 2020 had reported USD$157.3 million, with the difference being largely attributable to a USD$24.9 million cost of operating activities for the three month period ended March 31st 2021. Net loss at the end of the quarter was reported at USD$33.8 million, representing a net loss of USD$0.90 per share. The same time period over the previous year saw the company reported USD$30.2 million in net loss, representing a net loss of USD$0.99 per share.
Meme Stock Phenomenon
With the company having closed operations for its primary driving force, the recent surge in equity value is truly confounding. In the absence of recent news developments or changes in the company’s fundamentals, it seems ODT has become the latest target of the meme stock phenomenon that has been raging through stock markets since the AMC and GME debacles earlier in the year.
About Meme Stocks
With very little reason to invest in the company, ODT owes its fortuitous surge in equity value to the proliferation of meme stocks. Meme stocks are underperforming companies, with little to no reason to justify an investment in, that are heavily pumped by retail investors. These investors target underdog companies with high short interests in a coordinated short squeeze on the social media platform, Reddit. Understandably, meme stocks come packed with high risk and volatility. Upward movement relies on the strength of each link in the chain of coordination. While many profit heavily on this confounding stock movement, as many or more investors lose their investments if they are late to the pump and dump.
Future Outlook for ODT
As it stands, ODT is poised to collapse, but it seems to be kept afloat by its recent surge in equity value. Unless it comes out with significant news in the very near future or manages to leverage its additional capital to generate more organic growth, the future for ODT does not look bright.