** Originally published on FXEmpire **
Joshua Divine, NewsQuantified Team, for FXEmpire
Timely access to stock-related news alerts enables a wide variety of potential trading strategies, both long and short. News events as mundane as earnings reports and as dramatic as major international mergers can drive immediate price changes backed by substantial momentum.
NewsQuantified works to provide practical news-based stock analytics to investors of all sizes. We’re pleased to report on one of today’s top performing news-alerts for the readers of FXEmpire.
A particular type of news event has proven able to cause explosive price changes: pharmaceutical product development milestones. Development events ranging from FDA approval of new treatments to favorable clinic trial results can quickly transform little-known, cash poor pharmaceutical stocks into fantastic buying opportunities. These events are commonly associated with double and even triple-digit gains in single trading sessions.
NewsQuantified users received an alert at 7 AM on Tuesday that Insmed (INSM) had received positive top-line results from a Phase 3 study of its new potential treatment for NTM (Nontuberculous Mycobacterial Lung Disease). NTM is a rare, difficult to treat, and highly damaging lung condition. Its varied symptoms include fever, weight loss, cough, blood in mucus, and night sweats. And, while the condition has continued to increase in its occurrence in the US population, efforts at new treatment development have failed—until now.
Insmed’s stock jumped over 130% on the news, at the time of this writing. NTM has no currently approved therapies, suggesting that INSM’s new ALIS approach could become a lucrative front-line treatment for the condition. ALIS works by delivering the antibiotic amikacin directly to the lungs, rather than intravenously. This approach increases effectiveness while limiting toxic side effects.
Insmed specializes in developing novel therapies for patients confronting rare conditions with inadequate current treatment options. With this background in successfully commercializing treatments for rare conditions, this positive trial result held particular weight with investors, who piled into the stock in short order.
Other signs point to a rapid marketization of the treatment. The ALIS therapy has already received “breakthrough therapy designation” and “fast track status” from the United States Food and Drug Administration, legal designations to minimize regulatory delays for the new treatment. Meanwhile, alongside the positive trial results, Insmed announced their intent to pursue an additional “accelerated approval” mechanism through remaining stages of the regulatory process.
While INSM has already registered massive gains, we should note that the buying opportunity is not over. Academic research suggests that news-based stock price changes tend to persist over the next 90 days, for positive price changes (30 days for negative changes). Indeed, we’re already seeing the sort of news events that could drive sustained momentum: analysts think these new treatment results could make Insmed a prime takeover target.