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Shares of Phio Pharmaceuticals Corp. (PHIO) nearly quadrupled on Monday after the biotech firm announced promising results from its Phase 1b trial for the cancer immunotherapy PH-762, designed to enhance the immune system's ability to target tumors.
However, the nanocap stock reversed course on Tuesday, plunging over 50% following news of a registered direct offering.
Phio revealed agreements to sell 1.1 million common shares at $3 each, with a concurrent private placement issuing short-term warrants to purchase 2.1 million shares at the same price.
The combined transactions are expected to generate approximately $3.2 million in gross proceeds, earmarked for working capital and other corporate purposes.
Despite the sharp decline, retail investors remain optimistic, as evidenced by a Stocktwits poll where nearly 50% of over 900 participants believe the stock has "more room to run."
Around 34% foresee a pullback, while 13% are uncertain due to the stock's volatility.
Retail sentiment on Stocktwits turned 'extremely bullish' on Tuesday, with many users predicting a post-offering rally fueled by Phio's low float and the potential of its drug pipeline.
Some highlighted the company's ongoing trial progress, while others saw the price drop as a buying opportunity.
Like many early-stage biotech firms, Phio has yet to generate revenue. However, its latest financial report showed narrowed losses of $1.5 million for the quarter ended Sept. 30, compared to $2.8 million a year earlier.
The company reported $5.4 million in cash, down from $8.4 million a year earlier but more than $4.7 million at the end of the previous quarter.
The stock has lost nearly 50% of its value over the past year but has seen retail interest soar. The number of new followers on Stocktwits jumped by over 9%, while message volume increased more than 1,600-fold.
With a short interest of 3.8% and ongoing developments in its PH-762 trial, retail investors remain laser-focused on updates about higher-dose concentrations and further enrollment milestones.
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