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Small Biotech Cortexyme Briefly Doubles in Red-Hot Trading Debut

Small Biotech Cortexyme Briefly Doubles in Red-Hot Trading Debut

(Bloomberg) -- Lingering doubts about a trade deal between the U.S. and China failed to dampen investor enthusiasm or the sizzling debut of freshly-minted biopharmaceutical Cortexyme Inc..

The drugmaker that is studying potential treatments for degenerative diseases, including Alzheimer’s disease, saw its stock surge on the first day of trading -- briefly doubling before paring those gains to about 70%.

In the process, the South San Francisco, California-based company saw its market value jump to $750 million in late afternoon trading.

Small Biotech Cortexyme Briefly Doubles in Red-Hot Trading Debut

The red-hot debut came amid a small flurry of public offerings by peers. NextCure Inc. saw a strong first session, gaining more than 35%, while shares in fellow small-cap drugmaker Axcella Health Inc. dropped by roughly 25%. A fourth small-cap health stock, Applied Therapeutics Inc., was expected to start trading today as well.

Cortexyme’s strong performance comes in the same week as small-cap drugmaker Trevi Therapeutics Inc.’s lackluster IPO. Trevi’s 21% decline on Tuesday placed it among the five worst debut sessions of any U.S. pharmaceutical initial public offering since at least 2008, according to data compiled by Bloomberg.

To contact the reporter on this story: Bailey Lipschultz in New York at blipschultz@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Scott Schnipper

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