A Look At Orphazyme's Volatility Ahead Of Thursday's PDUFA Catalyst

After sobering down in the past three sessions, shares of Danish biopharma Orphazyme A/S ORPH have taken off yet again.

The Curious Case of The ‘Orphazyme Rally:' Orphazyme became the latest muse of retail traders, who pushed the stock to an all-time intra-day high of $77.77 last Thursday. That the gain came with no catalyst or news is a testimony to the frenzied retailed buying by retail traders, led in large part by the Reddit trading community.

Although the stock came back from this stratospheric level, it still settled the session with a gain of over 300% at $21. Over the next three sessions, the stock gave back half of these gains.

The stock is gathering momentum yet again, having opened Wednesday's session lower and moving sideways until late morning trading. It began spiking towards the end of the morning, being halted for trading twice on the way up.

Related Link: Attention Biotech Investors: Mark Your Calendar For June PDUFA Dates

Buying The Rumor? Orphazyme has a make-or-break catalyst Thursday in the form of a PDUFA decision date for its arimocolmol for the treatment of Niemann-Pick Disease Type C, a rare, progressive neurodegenerative disease.

Arimocolmol has been developed by CytRx Corporation CYTR and licensed to Orphazyme.

Orphazyme is a one-trick pony, given its pipeline consists of the in-licensed arimocolmol, which is being evaluated for Niemann-Pick Disease Type C, amyotrophic lateral sclerosis and Gaucher disease.

In a corporate presentation in late May, the company said it has begun commercial launch plans for arimocolmol, anticipating FDA approval coming through. The company also announced Miplyffa as the brand name for the pipeline drug.

Orphazyme's stock move in the near term depends on which way the PDUFA catalyst goes. If the approval comes through, the stock could still pullback, as it seems to have priced in a positive verdict, thanks to the rally in the runup to the decision.

A negative verdict may wipe away much of its market capitalization.

At last check, Orphazyme shares were up 90.25% at $19.12.