This morning brought devastating news for investors in Vallon Pharmaceuticals, Inc. (NASDAQ: VLON). The stock saw an ugly plummet from $7.35 to $2.14 in a matter of an instant. Albeit, trading only for a little over a month, the stock has fallen to the lowest it has ever been, as of the present current market session. The loss hits hard, given that VLON was performing favorably, climbing over 67% on a tumultuous bull since late January. Market participants were betting heavily on VLON’s growth, taking long positions, only to be awakened by jolting news this morning. The fall links directly to news coming in this morning regarding results on its ADHD SEAL Study.
SEAL Study on Vallon’s ADAIR
Early this morning, the management of Vallon Pharmaceuticals communicated the disappointing results of the SEAL study conducted on ADAIR. The drug, which was Vallon’s prime program, was being developed as an abuse-deterrent for those suffering from ADHD. The SEAL study is one that evaluates abuse liability and tolerability, which is evidently critical for the continuation of ADAIR. Within the study, the treatment failed to meet its primary endpoints, deeming it fit for use as an abuse-deterrent.
The ADAIR program was fundamental to the success of Vallon, being pushed as critical since April last year. The company anticipated a successful outcome in the SEAL study, which was the final stage prior to its NDA filing. Being the basis of further growth and financial support, it’s no surprise that the news saw an almost instantaneous plummet. With nothing substantial to anchor further strategic prospects towards, market participants find little to attach optimism to. This severely reduces prospects of an upward reversal for VLON, unless management shifts gears soon enough to re-instill hope.
Vallon’s Pipeline
Any remaining prospects for growth and a potential climb presumably link to Vallon’s pipeline of candidates. None of these are in their mature stages, as ADAIR had been, and therefore were not financially as prioritized. The company had acquired a number of patents that could now see funding, however little of these show significant promise. In fact, most of the patents Vallon was focusing on related to its ADAIR development.
Conclusion
The fall of VLON is a classic case study of why firms need to diversify their prospects. This is especially true for a company as risky as a pharmaceutical, where the risk of uncertainty remains high. VLON, putting all its eggs in one basket paid the price for its short-sighted strategy. The SEAL study results, triggered a hard plummet, with few other strategic prospects moving forward.
