After receiving some positive commentary from an analyst, shares of TherapeuticsMD (NASDAQ:TXMD), a drug maker focused on women's health, rose 18% as of 11:00 a.m. EDT on Tuesday.
Shareholders can thank Jay Olson, an analyst at Oppenheimer, for today's price action. Olson upgraded TherapeuticsMD stock from "Perform" to "Outperform" earlier today and gave shares a $10 price target. That target implies 100% upside from yesterday's closing price of just over $5.
Olson's bullishness is based on the hope that the company's upcoming meeting with the FDA will produce positive results. He believes there's a better than average chance that the company will resubmit TX-004HR within the next few weeks. If true, that could mean the drug could be on the market in just a few months.
Given the upbeat projection and bullish price target, it's easy to understand why shares are rallying today.
We learned a few months ago that the FDA's rejection of TX-004HR was based on concerns about the lack of long-term endometrial safety data. At the time, management was adamant that the FDA did not bring up any concerns related to the drug's chemistry, efficacy, or manufacturing, which is why they believe they still had a realistic shot at regulatory success in the future.
Can management convince the FDA to give them another shot? Only time will tell. However, until we know more, I'm content to watch this story unfold from a safe distance.