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Why Clearside Biomedical, Inc. Stock Gained 66.1% March

By Keith Noonan – Apr 13, 2018 at 8:40AM

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Promising trial results helped trigger a short squeeze and sent the biotech's shares soaring.

What happened

Clearside Biomedical, Inc. Stock (CLSD -0.69%) stock rose 66.1% in March, according to data provided by S&P Global Market Intelligence.

CLSD Chart

Data source: CLSD data by YCharts.

The company published an update on March 5 reporting promising phase 3 trial results for its drug CLS-TA as a uveitis-related macular edema treatment. Clearside Biomedical is a small-cap company with a valuation of roughly $300 million that had heavy short interest prior to the announcement, so the favorable news regarding the efficacy of CLS-TA sent shares soaring and prompted additional momentum as short-sellers moved to cover their positions.

A close-up of a man's face, focused on one of his eyes.

Image source: Getty Images.

So what

In one trial, 46.9% of patients who received CLS-TA saw dramatic improvements on vision-test performance. These test subjects were able to identify at least 15 additional letters on the standardized vision exam, while only 15.6% of patients in the placebo group saw the same improvement. Testing also showed little in the way of negative side effects for the drug. Approximately 11.5% of study participants reported increased intraocular pressure, but this side effect was not considered to present significant risk. The encouraging trial data suggests that Clearside Biomedical's CLS-TA drug could be poised for approval as an uveitis-related macular edema treatment.

Now what

The company will release more in depth results from its recent CLS-TA trials at an upcoming medical conference. On the heels of the promising macular-edema treatment trial results, attention turns to whether the FDA will approve the marketing of CLS-TA and for what purposes. Clearside expects that it will submit a new drug application for CLS-TA to the regulatory agency in the fourth quarter of 2018, and it's also testing the drug as a treatment for macular edema associated with retinal occlusion and plans to report preliminary results from these trials in the same time window.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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