A little-known penny stock is among the market’s top movers today. Axcella Health (NASDAQ:AXLA) stock surged by as much as 280% on news that it has been granted an important new patent. Today, the U.S. Patent and Trademark Office (USPTO) granted the biotech company approval for Candidate AXA1125, a treatment for long Covid-19 effects.
After a month of slowly declining and no actual growth catalysts, AXLA stock is finally on the rise, displaying significant growth. However, this doesn’t necessarily mean that it will stay at these levels.
What do investors need to know about this biotech stock that is making waves today? Let’s take a closer look at its recent patent progress.
What’s Happening With AXLA Stock
If you don’t know the name Axcella Health, don’t worry. Most people probably don’t, outside the biotech space. AXLA stock hasn’t done much in the past few months, despite a superficial surge on Aug. 22. Today, however, it has spiked by impressive margins.
It’s certainly true that today’s patent update is a promising development for Axcella. With Covid-19 cases rising again, demand for treatments is likely to increase. This puts it in a position to rise in the coming months if its new product proves effective. As the company’s statement notes:
“AXA1125 is a novel composition of EMMs designed to simultaneously support metabolic, inflammatory and fibrotic pathways associated with fatigue. Axcella was previously granted patents related to AXA1125 with claims covering methods of use and compositions. In particular, Patents Nos. 10,201,513, 10,471,034, 11,129,804, and 11,602,511 cover the AXA1125 compositions, including pharmaceuticals and nutritional supplements.”
That said, it will likely be difficult for investors to overlook the fact that AXLA stock still trades at only 40 cents per share, even on a day of 200%+ gains. It can be difficult for penny stocks to inspire confidence, especially when a company has gone months at a time without any clear innovation. Axcella is likely to continue trending downward, at least in the short term.
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Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
