BOSTON ( TheStreet) -- Rexahn Pharmaceuticals (RNN) jumped 24% to $1.84 a share Monday after a web site that promotes biotech penny stocks to retail investors told subscribers the stock was a "solid bet" to reach $10 or more by the end of the year.
The same web site, BioMedReports.com, last promoted Rexahn heavily one year ago with repeated promises that the small drug developer was close to signing a $1 billion drug licensing deal that would propel the stock to $15. Those reports helped fuel a speculative run in Rexahn shares from 70 cents to more than $3. The promised licensing deal never happened and Rexahn's stock price crashed to below $1 a share.
Rexahn's lead drug, Serdaxin, is an antidepressant that failed a mid-stage clinical trial last year. Despite the negative results and the inability to find a partner, Rexahn elected to move ahead with a larger phase II study of Serdaxin in patients with major depressive disorder. Results from the new Serdaxin study are expected late in 2011.
On Monday, BioMedReports was back promoting Rexahn to its subscribers and promised a new report on the stock today:"Given what just happened to Clinical Data, RNN has become the next candidate in line for positive FDA developments in the anti-depressant market. There is little doubt about that and I will go into why that is important for RNN step-by-step. So as a mid-to-long term investment, this is very solid bet. I will explain in detail why this can become a $10+ stock by the end of the year," BioMedReports said in its Monday alert. The FDA approved Clinical Data's (CLDA) antidepressant Viibryd at the end of January. BioMedReports send its alert on Rexahn to subscribers at 12:48 pm ET Monday. At that time, Rexahn shares were trading around $1.50, flat on the day, but the stock quickly spiked, hitting an intraday high of $1.90 before closing Monday at $1.84. Trading volume was light but surged after the BioMedReports alert, with more than 5 million shares trading hands by the end of Monday -- almost six times normal. Rexahn shares were up 3% to $1.90 in Tuesday pre-market trading.