Drug Stock: Bright Minds Biosciences Inc. (NASDAQ: DRUG) experienced an extraordinary surge in its stock price, jumping over 100% in early trading on Friday following the announcement of a $35 million private placement. This marks the latest twist in a week of wild volatility for the Vancouver-based biotech firm, which focuses on psychedelic drug development.
The company revealed plans to issue common shares at $21.70 each, with prefunded warrants offered at $21.699. The funds raised will be used to support research and development efforts, particularly for its pain treatment drug, and provide working capital.
Bright Minds’ stock saw a massive increase earlier this week, soaring more than 3,000%, with shares reaching a peak of $38.49 on Tuesday. This dramatic rise has been linked to speculation of a potential short squeeze, similar to the one seen with GameStop in 2021.
In response to the stock’s meteoric rise, Bright Minds issued a statement on Tuesday, asserting that it was “unaware of any material changes” that could explain the surge. However, by Wednesday, the company announced promising preclinical results for its compound BMB-201, which showed comparable efficacy to morphine in pain models. The rapid sequence of events has drawn attention, raising questions about the company’s disclosure practices.
Bright Minds’ stock volatility, coupled with the $35 million private placement, has pushed its market cap to over $200 million, with shares continuing to fluctuate in early Friday trading. Investors and analysts are closely watching for further developments as the company moves forward with its research in the burgeoning psychedelic drug space.
With the significant growth in its stock price, Bright Minds Biosciences’ DRUG stock has become a focal point for biotech investors and traders, drawing attention to its potential as a major player in the psychedelic drug market.
This private placement is subject to regulatory approvals and may close in multiple tranches. The company has indicated it will file an SEC registration statement to register the new shares for resale
