NeuroMetrix (NASDAQ: NURO) specialises in the development and production of devices for treating neurological issues. Yet, following the stock’s performance over the past week, what many of its investors are probably most in need of is a treatment for whiplash.
The stock opened that day at $4.03, reaching a high of $12 before ultimately closing at $10.04, with more than 282 million shares changing hands – up from less than a million shares traded the day before.
And investor interest kept the stock trending higher, helping it hit its 52-week high of $38.58 on July 22 (an 857% increase from its July 20th opening price) before closing trading for the week at $20.97 on July 23.
The following Monday, however, the release of a study on the effectiveness of Quell caused NeuroMetrix stock to take a nosedive back down and saw the stock fall 53% from its recent high, closing trading on July 26th at $18.15.
Quell sits at center of interest in NeuroMetrix stock
At the center of the sudden flood of interest in NeuroMetrix’s stock is Quell, an over-the-counter wearable neurostimulator for the treatment of chronic pain for people suffering from fibromyalgia – a condition where sufferers experience constant musculoskeletal pain throughout their bodies, along with memory, sleep and mood issues.
Scientists believe that fibromyalgia is related to the way an individual’s brain interprets sensations, with the brains of people suffering from the disorder processing both painful and nonpainful signals in an abnormal way. Between 2% and 6% of the U.S. population suffer from fibromyalgia – as many as 15 million people, and NeuroMetrix currently boasts the only non-drug, non-invasive device available for this population.
Roughly the size of a credit card, Quell is essentially a transcutaneous electrical nerve stimulation (TENS) system that uses a microchip to provide targeted, high-powered nerve stimulation to wearers on a 24-hour basis. Being part of the FDA’s Breakthrough Device Program not only expedites the timeframe for the device to receive FDA approval and make it to the general market, but could also position it to be among the treatments eligible for reimbursement through Medicare – an upside that caught the attention of investors.
Breakthrough in treatment of fibromyalgia
“The breakthrough device designation is an important milestone in the company’s effort to make Quell technology available to people living with fibromyalgia,” said Shai N. Gozani, NeuroMetrix’s CEO following the FDA classification. “We are moving forward with a regulatory filing that could position us to launch Quell for this indication in the second half of next year.”
Just a few days earlier, following the company’s announcement of its second quarter results, Gozani said he anticipated moving Quell towards a commercial launch in 2022.
Lacklustre results from recent tests
But lackluster results from recent tests dampened that enthusiasm and took a bit of the wind out of investors’ sails. According to the results of the three-month double-blind study, there was no difference experienced among the general study group between wearers of the active device and those wearing placebos.
Yet, the study did find that participants with higher pain sensitivity did experience some benefit from the device. Though the study’s mixed results seem to have cooled investor sentiment towards NeuroMetrix a bit, and trading activity has calmed significantly since last week, long-term holders of the stock are still well positioned.
Though NeuroMetrix’s stock has fallen more than 50% from its high last week, closing at $16.04 in its most recent day of trading on July 29th, the stock is still up close to 300% from where it was trading prior to the July 20th announcement of its FDA classification.