The stock market was generally higher on Wednesday, with light trading activity due to the Veterans Day holiday. Market participants continued to have high hopes for a recovery from the worst of the coronavirus crisis, despite the fact that COVID-19 case counts continued at elevated levels throughout the U.S. and in many parts of the world.
Tech stocks rebounded overall, giving that segment a much-needed lift after a considerable downdraft in recent days. Just before 11:30 a.m. EST, the Dow Jones Industrial Average (^DJI 0.48%) was up 68 points to 29,489. The S&P 500 (^GSPC 0.31%) rose 26 points to 3,571, and the Nasdaq Composite (^IXIC 0.22%) gained 178 points to 11,732.
There's a stock that few people had ever heard of before today that became the big winner on Wednesday morning. At the same time, though, there's another company that made a move it's done countless times before, and investors aren't happy about it happening yet again. Below, you'll learn about both of those stocks and what their prospects look like down the road.
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A prime stock
The big winner on the day was Five Prime Therapeutics (FPRX). The biotech stock soared more than 250% as of late Wednesday morning, having been up as much as 350% earlier in the session.
Five Prime is a biotech company that currently has a candidate treatment that it hopes will help in the fight against stomach cancer. The drug, called bemarituzumab, produced solid test results in a phase 2 clinical trial. Specifically, researchers were looking to see if the treatment would improve progression-free survival among stomach-cancer patients, as well as median overall survival and overall response rate. Bemarituzumab produced statistically significant improvements in all three endpoints.
Five Prime was obviously happy about the positive results, noting that its strategy in targeting what's known as the fibroblast growth factor receptor 2 has promise in fighting other forms of cancer, as well. The company has found that the receptor is overexpressed in many other types of cancer, including certain forms of lung, breast, ovarian, and pancreatic cancer.
Five Prime partner Zai Lab (ZLAB 25.47%) also saw solid gains, but its much larger size limited its stock-price rise to 14%. Nevertheless, the news is good for both companies, and it'll be interesting to see what comes next for bemarituzumab and Five Prime's fight against cancer.
Aurora Cannabis is going to pot -- again
Meanwhile, shares of Aurora Cannabis (ACB 5.68%) pulled violently back from their recent gains, falling more than 20%. The downdraft for the pot stock came as the company resorted to a strategy that it's used several times before, each time hurting shareholders.
Aurora decided to take advantage of the recent rise in its stock price to raise more capital through a secondary offering. After announcing the offering late Tuesday, Aurora said it had successfully priced 20 million units at $7.50.
It's bad enough that the stock had closed at $8.30 per share Tuesday afternoon. What's worse is that the units Aurora sold aren't just shares. Each unit contains a share plus one-half of a warrant to purchase additional Aurora stock at $9 per share, with investors getting until March 2024 to decide whether to exercise their warrants.
Aurora has been ruthless in diluting shareholders with repeated offerings. Despite some signs that marijuana stocks might be turning the corner, Aurora's unit sale once again reminded shareholders that it might not be the best play on pot in the market today.
