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Why Clene Stock Skyrocketed Today

By Prosper Junior Bakiny - Feb 3, 2021 at 5:14PM

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One Wall Street analyst has high hopes for the biopharmaceutical company.

What happened?

Shares of Clene (CLNN 2.49%), a clinical-stage biopharmaceutical company, soared by as much as 108.9% on Wednesday and ended the trading session up by 101.7%. The company did not report any news, but we can probably attribute the stock's gains to the bullish sentiments of a Wall Street analyst.

So what 

Clene focuses on developing treatments for neurodegenerative diseases such as multiple sclerosis, amyotrophic lateral sclerosis, and Parkinson's disease. The company's leading pipeline candidate is CNM-Au8, which is being studied as a potential treatment for all three of those conditions. There are few treatment options for these illnesses, and if CNM-Au8 proves safe and effective in clinical trials, it could become a major cash cow for Clene. Roth Capital analyst Elemer Piros sees this opportunity as a major reason to consider buying shares of the healthcare company. 

Man on a ladder drawing an upward-bound graph on a board.

Image source: Getty Images.

Piros initiated coverage on Clene's stock with a buy rating and a price target of $24. Even after Wednesday's rally, the company's shares were trading hands for just $13.21 apiece, meaning the analyst's price target still represents a significant upside for the stock. Piros thinks CNM-Au8 could become a blockbuster drug with annual sales above $1 billion in the market for amyotrophic lateral sclerosis alone. And he sees an opportunity of more than $10 billion in the market for multiple sclerosis.

Now what

Clene could certainly have a bright future. It is going after difficult targets with its leading pipeline candidate, CNM-Au8, which has already shown some success in clinical trials. However, investors should remain cautious. A lot can still go wrong for the company: regulatory roadblocks, negative results from late-stage clinical trials, etc. For now, interested investors would be wise to keep their positions in this healthcare stock relatively small. 

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