The spike began after the six-person company announced it had entered into a multi-year services agreement with Merck KGaA.
One day after Bloomberg highlighted a 6,000 percent spike in share prices over three days for U.K.-based Physiomics PLC, the stock is down more than 50 percent this morning, falling to £8.00 per share.
The stock rally began on Tuesday with prices climbing from 95 cents per share to a high of £25 per share on Thursday. The spike began after the six-person company announced it had entered into a multi-year services agreement with Germany-based Merck KGaA. The German company said it intended to use Physiomics’ virtual tumor platform to simulate the effect of anti-cancer drugs. Physiomics said it had been working with Merck KGaA since 2012 and had completed 12 projects involving pre-clinical and clinical predictions. Other projects are in progress, the company said on Tuesday.
Physiomics said the deal with Merck validates of the company’s Virtual Tumor. In the announcement, Physiomics said it believes its ability to “successfully model the combination effect of treatments having different mechanisms of action at the cellular level and its ability to scale this up to allow meaningful predictions of overall tumor growth” provided unique and valuable insights.
Following the initial announcement of the agreement with Merck, the share prices for the tiny U.K, company soared. On Thursday, Physiomics issued a cautionary statement that the agreement with Merck KGaA may not be worth more than the €500,000 ($596,000) over the first 12 months. The company said it believes the agreement represents a key milestone between the companies and “reflects the value that it has been able to add over five years of working with this key client.”
The €500,000 is equivalent to about 60 percent of Physiomics’ net operating expenses for the financial year ended June 30.
When the deal with Merck KGaA was announced, Physiomics Chief Executive Officer Jim Millen said: “We are very proud to be working with Merck, one of the world’s top pharmaceutical companies, in an area as important and rapidly growing as oncology, and we believe this agreement marks the beginning of a new, longer-term relationship with this important client.”
Physiomics’ Virtual Tumor platform provides several key benefits, including the potential to improve response and survival rate in the clinic through enhanced drug potency. Additionally, the company said it believes the platform will transform clinical decision making in terms of dose and scheduling, as well as provide a greater understanding in how changes in scheduling and doses of drug combinations affects the “dynamics of tumor burden.”
