Vericel Corp. (NASDAQ: VCEL)
Vericel Corp Spikes On News Of FDA Approval
On Wednesday before the market opened, shares of VCEL, a leading developer in autologous cell therapies, were being bought up on volume following the announcement that the Food & Drug Administration (FDA) has approved MACI for the treatment of symptomatic cartilage defects in the knee’s of adults. This is great news for the company who has been working on this treatment for the past couple of years in a SUMMIT clinical study, which has proved beneficial in the long-term with patients who are suffering from cartilage defects. Patients were also offered the option of participating in the three year follow-up study where a majority opted to do. The clinical study had statistically significant improvements in their patients and has the potential to add great value to VCEL’s bottom line, but more importantly to the patients who will benefit from the treatment.
The way the treatment works is they take cells from the patient and place them onto a bioresorbable porcine-derived collagen membrane that is surgically implanted over the damaged part of the knee where the cells can get to work while the membrane is slowly absorbed by the body. The reason this is so important is because it is the first treatment like this to be approved by the FDA.
Looking at the daily chart above you’ll see that shares of VCEL gapped up on heavy volume and well above the $3 resistance level following the FDA approval news. VCEL is considered a low float stock with only 19 million shares in the float and if buyers keep bidding up prices we could see a really nice pop at the open. Expect shares to be more volatile than normal with increased spreads and fast action. This could be a great candidate for a gap-and-go trade above pre-market highs that was at $4.75. If it can’t break those highs then we could be looking at shares heading back towards the $3 level.
Shares are trading well above their 200-day moving average that is currently sitting at $2.73 and if prices can hold at these higher levels we will eventually see a golden cross on the daily chart when the 50-day moving average crosses over the 200-day moving average. This is a bullish technical and something that traders and investors will want to keep an eye on. Typically on big gaps like this we will see a pullback to support before continuing higher. There is additional support at the $3.60 level with plenty of resistance at the $6 and at $6.69 where prices spiked to last time. With this much action in the pre-market there will be a lot of traders watching this today, so you can expect prices to be volatile and full of trading opportunities for scalpers.
Moving forward, traders should keep a close eye on Vericel Corp as they have been making significant improvements to their company and the services and products they offer. This could add excellent growth opportunities heading into 2017 and will definitely be on my radar. Some positive comments from the CEO, Nick Colangelo, from the press release of the FDA approval:
“Bringing an important new therapy to orthopedic surgeons and patients is a significant milestone for Vericel, and I would like to thank the FDA for working closely with us to make MACI available for these patients,” said Nick Colangelo president and CEO of Vericel.“We believe that the introduction of MACI, along with investments to expand our commercial organization and implement new patient support programs, positions Vericel to generate significant growth in 2017 and beyond.”
If you’re looking for a cheap stock with excellent growth potential then you need to check this candidate out.
This author has no positions in any stock mentioned and does not plan to open any positions in any stocks mentioned for at least 72 hours after publication of this article.