The Axcella Health Inc (NASDAQ: AXLA) stock price surged 62.4%, as of 8:25 EST, despite the lack of news releases from the biotech company today. Given the lack of current news releases, we have to look at recent announcements to see if we can find a reason to back up today’s rally in AXLA stock.
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The clinical-stage biotech company recently announced plans to conduct a reverse stock split. It will seek shareholder approval of the reverse stock split at its annual general meeting (AGM) scheduled for September 11, 2023, at 10:00 AM Eastern Time.
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The details of the reverse stock split will be between 1-for-two and 1-for-25, with the exact ratio being determined by the company’s board of directors. The AGM will also allow the election of three Class I directors to the firm’s board of directors to serve until the 2026 annual meeting of stockholders.
Axcella Health is a clinical-stage biotech company operating in the United States. The company formulates treatments for complex diseases using endogenous metabolic modulators. Its product pipeline includes AXA1125, a long COVID treatment in Phase 2a clinical trial.
AXA1125 is also in a Phase 2b clinical trial for treating non-alcoholic steatohepatitis. The company also has AXA1665 in Phase 2 clinical trial to reduce the risk of overt hepatic encephalopathy recurrence.
The company also released its quarterly report earlier in August, highlighting its business's multiple risks and uncertainties. The firm noted that it had incurred net losses every year since its inception and anticipates continuing to incur net losses.
Axcella Health also noted that it would require additional capital to fund its operations. If the firm fails to obtain the necessary financing, it cannot complete the development and commercialisation of its product candidates.
The company also noted substantial doubt about its ability to continue as a going concern, given that clinical development is a lengthy and expensive process with an uncertain outcome. Despite its grim outlook, the firm’s net loss shrunk to $7.39 million from $40.35 million.
The Axcella Health (AXLA) stock price.
Axcella Health stock price surged 62.40% to trade at $0.2842, from Monday’s closing price of $0.1750.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.