(Bloomberg) – Shares of Apellis Pharmaceuticals Inc. suffered their worst two-day decline on record after confirming reports that some patients developed severe inflammation after being treated with the eye drug.
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The dip is welcome news for traders betting against Apellis. Shares of the biopharmaceutical company fell 24% on Tuesday, extending their two-day decline to 53%, shedding about $5.2 billion in market value.
According to data from S3 Partners LLC, short sellers generated approximately $414 million in paper profits during this period. That has given the group a 0.66% return in 2023, or a paper gain of about $51 million, after posting a loss of about $363 million on Friday.
Before the abrupt sell-off, Apellis had rebounded for seven straight months and was up 63% this year by Friday’s close. Up until this week, it was among the top performers in the Nasdaq Biotech Index.
Apellis shares fell a record 38% Monday after reports circulated that the American Society of Retina Specialists had sent out a memo to its members regarding six cases of retinal vasculitis after using the company’s eye drug Syfovre . The stock extended those losses to a second day after confirming the cases in a filing with the US Securities and Exchange Commission.
“While these events should concern us and should not be dismissed out of hand, it may be premature to conclude that this alert will have a material adverse impact on Syfovre’s launch,” wrote Douglas Tsao, analyst at HC Wainwright & Co., in a note to investors.
Tsao added that he will have to reconsider this stance and Syfovre’s competitive positioning if more reports come in that the incidence of vasculitis is rising significantly.
The story goes on
– With support from Matt Turner.
(Updates stock movement at market close)
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