One day after doubling in price, NeoTherapeutics Inc.'s stock fell 31% Thursday after the biotechnology company elaborated on the risks and costs of its attempt to develop a drug for Alzheimer's disease.
NeoTherapeutics fell $6 to $13.25 as 3.2 million shares were traded. On Wednesday, the stock doubled to $19.25 after reporting encouraging results for a treatment of Alzheimer's disease.
Officials at the Irvine company said the results reported Wednesday had been disclosed previously. The company also said it would need additional funding to complete all the required tests of the drug, and that it does not have a licensing agreement with a pharmaceutical company for the drug. Such agreements are common when a small biotechnology company has a promising drug.
"It's pure, pure speculation," said Steve Lisi, a biotechnology analyst at Mehta Partners. "People who bought [NeoTherapeutics] at $18, I don't know what they were doing or what they were thinking."