EyeGate (EYEG) soars amid plans to buy Bayon. A pharma stock to buy?

Summary

  • Stocks of EyeGate Pharmaceuticals, Inc. (EYEG:US, NASDAQ: EYEG) soared by about 103 per cent in the premarket trading hours on Tuesday, July 27.
  • Once the markets opened, EYEG stock was recording a growth of roughly 37 per cent at the time of writing this (11.53AM EST).
  • The surge came as the company revealed its plans to purchase private pharma firm Bayon Therapeutics

Stocks of EyeGate Pharmaceuticals, Inc. (EYEG:US, NASDAQ: EYEG) soared by about 103 per cent in the premarket trading hours on Tuesday, July 27. Once the markets opened, EYEG stock was recording a growth of roughly 37 per cent at the time of writing this (11.53AM EST).

The surge came as the company announced the appointment of a new CEO and revealed its plans to purchase private pharma firm Bayon Therapeutics. The biotech firm saw about 10 million of its shares change hands in the first hour of the trading session in the wake of this announcement. 

Dr Brian M Strem has taken up the role of the new CEO and president of EyeGate. Prior to this, he was the co-founder and the managing director of Bayon Therapeutics.

EyeGate Pharma is a clinical-stage firm that specializes in different eye diseases and disorders. It plans to acquire Bayon Therapeutics, which also deals in eye-related treatments, for nearly US$ 7.1 million or 2.2 million common shares. 

Let us look at the biopharma firm’s stock performance and fundamentals.

EyeGate Pharmaceuticals, Inc. (EYEG:US, NASDAQ: EYEG)

EyeGate’s share was trading in the bearish zone as on Monday, posting a one-year decline of about 34 per cent.

At the previous closing price of US$ 3.12 apiece, the biotech stock was down over 36 per cent year-to-date.

The stock is currently moving at US$ 4.72 apiece and is still down 42 per cent against its one-year high of US$ 8.18 apiece (recorded on December 21, 2021). 

EyeGate Pharmaceuticals stock was moving inactively for the past 50 days, with an average trading volume of 30,427 shares, as against its total listing shares of around 7.097 million. 

EyeGate Pharma's One-Year Price Against Moving Average Multiple Chart. (Source: Refinitiv)

As per Monday’s closing price, the eye therapy provider’s share price was down almost 37 per cent against its 200-day simple moving average, representing a bear market.

However, the current price trajectory has rebounded and surpassed the moving average multiple as on July 27 (10:40 AM ET). 

The stock may recover further if and when it acquires Bayon Therapeutics, under the new management. It could also expand its R&D operations and therapeutics across the US. 

In the first quarter of 2021, the company reported cash and liquidity of US$ 6.61 million, up almost six times against US$ 1.186 million in the fourth quarter of 2020.

The surge in cash and cash equivalents came as the company raised nearly US$ 8 million through a private placement of its shares. The research and development (R&D) expenses rose to US$ 1.28 million in Q1 2021, up against 0.93 million a year ago. 

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