EPIX Pharmaceuticals, Inc. (PINK:EPIX) stock recently made an exclusive one day stand which resembled a pump and dump play. The story behind this move is slightly different though.
The buying wave was partially a late reaction to the $20 million funding announced by Karyopharm Therapeutics Inc. on November 20, 2010. The stock price didn’t twitch on the day of announcement because the two companies are not yet related by anything more than the same persons historically involved with both companies: Dr. Sharon Shacham, a former Senior Vice President of Drug Development of Epix and Michael G. Kauffman, the former CEO of both Epix Pharmaceuticals and Predix Pharmaceuticals, which is now a part of EPIX.[BANNER]
Speculations on popular financial forums spread the rumors on a possible merger of Epix and Karyopharm. This created the head and shoulders intraday pattern, which resulted in a serious price roll down and heavy losses for the blindfolded traders that bought into the rumors.
Officially no merger intentions have been announced. These speculation were based on the previous deals, like the merger of Epix and Predix Pharmaceuticals in 2006. Predix was founded by Dr. Shacham.
On its own, Epix Pharmaceuticals is hard to evaluate since the company hasn’t filed anything worthwile with the SEC since mid 2009. Their latest available quarterly filling depicted massively leveraged balance sheet and heavy net losses, making it a very risky investment.
