CRTX will prioritize the development of a different treatment for Alzheimer's disease
Cortexyme Inc (NASDAQ:CRTX) is plummeting today, last seen down 31.1% at $6.25, after the U.S. Food and Drug Administration (FDA) placed the company's application to start a study of its lead drug for Alzheimer's disease on hold. This development follows a late-to-mid-stage study, which revealed COR388 failed to improve overall cognitive function in patients. In turn, the company is looking to implement a cost reduction program, and will prioritize the development of a different treatment for the illness.
The equity earlier fell to a record low of $5.60, a far cry from its Aug. 10 all-time high of $121.98. Overhead pressure from the 40-day moving average has kept a tight lid on CRTX over the past few months, with the shares now pacing for their fifth-straight loss. Longer term, the security carries a massive 83.3% year-over-year deficit.
Short sellers are firmly in control. Short interest rose 5.3% in the most recent reporting period, and the 8.87 million shares sold short make up 44.5% of CRTX's available float, which is equivalent to almost four days' worth of pent-up buying power.
Headwinds could keep blowing for Cortexyme stock, should there be a shift in the options pits. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 50-day call/put volume ratio of 4.99 sits higher than 96% of readings from the past year. This indicates long calls have been more popular than usual of late.
Drilling down to today's options activity, 5,495 calls and 3,014 puts have crossed the tape so far, which is triple the intraday average. The most popular contract by far is the January 2023 5-strike put, where positions are currently being opened, followed by the April 15 call.