Shares of PolarityTE (NASDAQ:PTE), a commercial-stage biotech focused on regenerative medicine, were up 16% as of 11:20 a.m. EDT on Monday. The jump came in the wake of a report from Piper Jaffray stating that the FDA is closing its investigation into the company's manufacturing processes.
The FDA has been investigating one of PolarityTE's manufacturing facilities since the summer of 2018. Piper Jaffray recently published a research note stating that the has agency concluded its investigation and has updated the status of the case to "Voluntary Action Indicated."
This news should come as some relief to PolarityTE's bulls, as it indicates that no enforcement action will be taken by the agency.
Since PolarityTE is a heavily shorted stock -- more than half of the company's shares outstanding have been sold short -- it isn't surprising to see that this news is lifting its share price higher.
PolarityTE looks like it is in the clear as it stands today, but that doesn't mean that it will be smooth sailing for this company moving forward. My Fool.com colleague Maxx Chatsko has previously pointed out that PolarityTE has a dicey history and that it has engaged in some questionable business practices in the past. That alone is reason enough for me to believe that investors should focus their attention on more promising companies.