Why Pasithea Therapeutics Corp. (KTTA)’s stock is Stumbling Down?

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Pasithea Therapeutics Corp. (KTTA) stock continues falling down, as it lost 27.86% at $4.04 at the last check today, November 24. The stock opened at $4.30 in today’s session and has so far seen a volume of 17.5 million which is 407% of its average. In the previous market session, the stock reached its new 52-week high of $8.50 at a volume of 189.2 million. Yesterday’s gain made the stock to add 60.08% in its value in the past five days. While the stock has gained 28.72% in the past month. Currently, KTTA stock has a market capital of $73.13 million with 13.06 million outstanding shares.

The current downtrend in the stock seems to be a result of profit booking from its yesterday’s gain, along with news of its new private placement.

Pasithea Therapeutics Corp. (KTTA) is a biotechnology company that is focused on the research and discovery of new and effective treatments for psychiatric and neurological disorders.

KTTA’s Recent Developments

Yesterday the company announced the approval of its subsidiary for the provision of nasal spray for depression in adults. After the announcement, the stock reached its new 52-week high, but the gain in the stock did not last long as profit booking began. Moreover, the company announced a private placement today. The news of the private placement seems to have added to the stock’s downtrend as well.

Approval of Nasal Spray for Depression

On November 23, Pasithea Therapeutics Corp. (KTTA) announced the approval of its subsidiary Pasithea Clinics to provide esketamine nasal spray (SPRAVATO) for treatment-resistant depression in adults. Moreover, the company has started offering the treatment in Knightsbridge, London.

SPRAVATO is a nasal spray with a novel mechanism, which works very differently than the available therapies for major depressive disorder(MDD). Most of the treatments available for MDD have little success rate and over 30% of patients remain unaffected after treatments. Such patients are deemed to have treatment-resistant depression. There are very little to no treatment options available for such patients. KTTA’s SPRAVATO is a huge milestone in treating patients with treatment-resistant depression.

KTTA’s Private Placement announcement

On November 24, Pasithea Therapeutics Corp. (KTTA) announced the pricing of $30.4 million private placement to the market under Nasdaq rules. The company’s purchase agreements with certain institutional investors will allow them to purchase 8.68 million shares of its common stock with warrants. The purchase price of the common stock will be $3.50 per share, with the warrant priced at a premium.

The company expects the offering to close on or about November 29, 2021. While it intends to use the gross proceeds of $30.4 million from the placement to fund clinical research and development work.

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