Orphazyme is positioned as the new meme action. Experts are trying to explain why the titles of this Danish biotech skyrocketed almost 1,387% on Thursday.
Orphazyme has stated that it has no idea why its Wall Street-listed shares rose overnight. The company has warned of the danger of being sucked into the frenzy “investors who buy the shares of the company can lose a significant part of your investments if the price of such securities subsequently decreases “
“The only reasonable conclusion that can be drawn is that Denmark now has its own stock of memes, it is no longer just GameStop and AMC that are getting extraordinary and inexplicable hikes and prices,” said Hansen, investment economist at retail broker Nordnet.
“Sometimes, there is no logical explanation for what happens in the stock market. And the development in Orphazyme’s share price is an example of that,” adds the expert.
Orphazyme also stated that “it is not aware of any material changes in its clinical development programs, financial condition or results of operations that would explain such price volatility or volume of operations.”
The company’s investors have been waiting for a major update on the application of an experimental treatment for Niemann-Pick disease. The drug, called arimoclomol, is under priority review with the US authorities, who are due to give a resolution on June 17. However, Orphazyme has not provided any recent news on the review that could explain the movement of the shares.
The U.S. Securities and Exchange Commission said this week that it is examining the markets Looking for signs of manipulation as meme shares continue to rise. That’s when trading in such stocks took off again this week, with the buzz on WallStreetBets and other social media platforms about the potential for short contractions.
Orphazyme, which uses heat shock proteins to develop therapies for rare neurodegenerative diseases, has had a turbulent time since its initial public offering in 2017. The company’s shares peaked in February 2020, trading 69% above the IPO price, but now they are about a third below the price, even with Friday’s earnings the company loses 11% year-to-date.
Analyst Jim Cramer is outraged by ‘meme actions’ and sees them as more like a ‘casino’ than Wall Street