Before markets opened this morning, InvestorPlace contributor William White listed NeuroSense Therapeutics (NASDAQ:NRSN) among the top market movers. White noted that the neurodegenerative disease treatment company was surging more than 39% with “no clean news.” Investors soon learned why NRSN stock was up by so much, however. NeuroSense just received important regulatory clearance for a promising treatment.
More specifically, NeuroSense announced this morning that it had obtained clearance from the U.S. Food and Drug Administration (FDA) to “initiate a pharmacokinetic study of PrimeC in healthy adult subjects.” Now, since its pre-market surge, NRSN stock hasn’t slowed down. As of this writing, it’s up an impressive 350% for the day. Today’s gains have pushed it above the penny stock level to around $7 per share. For a stock that began the day at $2, those gains are not to be taken lightly.
So, let’s take a look at the bigger picture concerning NRSN stock and how investors should be assessing it.
What’s Happening with NRSN Stock?
It’s no secret that pharmaceutical stocks often surge on regulatory victories. For a small company like NeuroSense, this recent news could help it take a seat among the innovators of its sector. This particular treatment from the company is aimed at amyotrophic lateral sclerosis (ALS), a dangerous disease with no cure and few treatment options. NeuroSense described the treatment in a statement:
“PrimeC is a novel extended-release oral formulation composed of a unique fixed-dose combination of two FDA-approved drugs: ciprofloxacin and celecoxib. PrimeC is designed to synergistically target several key mechanisms of amyotrophic lateral sclerosis (ALS) […]”
Given the lack of effective treatment methods for ALS, it’s easy to see why momentum around this news is high. Wall Street clearly saw NRSN stock as an undervalued play to prioritize before it was too late. It’s important to note, though, that the company is still conducting studies on PrimeC. This means that, while there’s time for NeuroSense to encounter more roadblocks, there’s also time for it to progress.
What It Means
If the company sees more progress, NRSN stock should continue to rise. Still, when regulatory clearance moves a drug from one phase to another, investors should evaluate the company carefully. To that end, NeuroSense is a micro-cap name that was trading on the low end of penny territory less than 24 hours ago. It has generally received little coverage from outlets and even less from analysts.
Still, today’s surge indicates investors are clearly excited about its progress and expect more news ahead. As such, everyone should be watching as NeuroSense moves onto its next phases of development. If it continues to win, investors who went in on NRSN as a penny stock will see significant gains.
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On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.