Although the stock's been working on the effort for a while, Trius Therapeutics, Inc. (NASDAQ:TSRX) may have sealed the deal yesterday with the move to $5.47. With that $0.14 advance, TSRX pushed above the key 200-day moving average line - again - after making yet another higher low. With this third push above a key long-term indicator against a backdrop of a news catalyst, Trius may well be one of this week's best prospects.
Trius Therapeutics is a biopharma company. It's best known for its antibiotics, but its lead investigational drug tedizolid phosphate is the big story here. This drug is important, as it could be a strong solution for methicillin-resistant Staphylococcus aureus, or MRSA. The company recently wrapped up the second phase of a Phase 3 trial, and TSRX expects to hear back with a yay or nay from the Food and Drug Administration; the due date for the final decision is March 31st. Bear in mind, however, that the FDA has announced a handful of recent drug decisions ahead of schedule.
As for the likely outcome, tedizolid phosphate is likely to be approved. Most drug trials that make into the late-Phase 3 stage end up winning approval, and Trius announced last month that the trial did indeed reach its endpoint targets, giving the company a winning contender in the $9 billion MRSA market.
Though the news has yet to become official, the chart's saying - traders are saying - an approval is likely. The stock's rallied pretty well since December despite the fact that the company announced a dilutive financing around that time. It suggests the market feels that Trius Therapeutics is better off with that funding since it can use that money to start mass-marketing tedizolid phosphate. In other words, the ROI on that dilution is more than worth the downside.
Bottom line? Take the hint TSRX shares are dropping at face value. We've seen higher highs and higher lows since December... a streak that's been strong enough to put the stock back above all of its key moving averages, with a lot more room to run.