After a big antiviral drug trial failure and an 80 percent collapse of its stock on Monday, Durham-based drug firm Chimerix was basically written off by numerous analysts. But Chimerix is far from dead, especially after a big investment from Point72, a major Wall Street hedge fund.
Chimerix (Nasdaq: CMRX) shares rallied more than 7 percent, or 60 cents, Thursday to close at $8.95.
But earlier in the day Chimerix climbed as high as $9.75.
That’s a big rally from the low of $6.43 on Monday.
Trading was extremely heavy at nearly 31 million shares – just as active as earlier in the week when Chimerix collapsed on the news of the Phase 3 drug failure of its leading product candidate.
What triggered the rally?
Hedge fund Point72, led by renowned manager Steven Cohen, disclosed that it had taken a 5.3 stake in the company.
Why the deal? Point72 told CNBC that it didn’t comment on positions the firm has taken.
Chimerix has some 46 million shares outstanding, so Point72 acquired some 2.45 million shares at a fraction of the value Chimerix had earlier in 2015. On Aug. 5, for example, shares had traded at a 52-week high og $58.04.
Wall Street news site Insider Moneky pointed out why so many investors followed Cohen’s bet that Chimerix is far from done.
“Cohen is known for making many successful bets, which is why his moves are almost always scrutinized,” it said. “In this case, it’s particularly interesting, since Chimerix … stock has lost more than 80% of its value on Monday, following the disclosure of poor results from the Phase 3 trial of brincidofovir in the prevention of cytomegalovirus in patients that went through hematopoietic stem cell transplants. Nevertheless, the company said that it remains optimistic about the product and believes that it has potential.”