What: A day after it fell a little over 10%, Celldex Therapeutics (NASDAQ:CLDX) is up about 10% in the last hour of trading Tuesday after an analyst initiated coverage with a buy. On the other hand, bluebird bio (NASDAQ:BLUE) is up about 10%, for apparently no reason.
Welcome to biotech, Fools.
So what: While Monday's decline in Celldex Therapeutics appeared to be for no reason, it looks like the increase today might have an actual news item driving it.
Maybe. Again, it's a biotech.
The research firm H.C. Wainwright initiated coverage of Celldex Therapeutics with a buy rating. What's a little unusual about initiating a buy rating now is Celldex Therapeutics is on the verge of releasing a decision from the Data Safety and Monitoring Board on the interim look at the company's ACT IV trial testing Rintega in glioblastoma.
The analyst could have just waited until the results were announced to initiate and not jeopardize a wrong opinion, suggesting the analyst is fairly confident that the trial will come back positive -- either at this interim peek at the data or when the final data is released later this year.
While the analyst's call might be part of the movement, there's probably some momentum thrown in there too, which is likely why bluebird bio was also up. The broader biotech index tracked by the iShares Nasdaq Biotechnology ETF (NASDAQ:IBB) was up 3.8% late in the day, outpacing the Dow and Nasdaq indexes.
Now what: If you're a long-term investor, it's probably best to just not check the daily changes in biotech stocks these days. Double-digit moves -- up and down -- on no news seem to be par for the course, but the data -- and eventually regulatory approvals and sales -- are what's going to drive Celldex's and bluebird bio's share price in the long term.