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Palatin Technologies, Inc (PTN) is priced at pennies, but it is making big gains in percentages. On Friday, 25 November 2016, the stock was trading at $0.694, up 18.67% or $0.1092. In early morning trading on Monday, 28 November 2016, the stock advanced a further 5.25%. It was up $0.04 at $0.72 per share. At current prices, this company is worth an estimated $74.98 million. It has a -1.23 price/earnings ratio and a – $0.56 earnings per share. What’s interesting about this stock is that analysts have issued forward guidance of $5.67 for the stock over 1 year. The 52-week trading range for the stock is bearish at $0.36 on the low end and $0.86 on the high end.

So Why Is Palatin Technologies Rallying of Late?

Palatin Technologies is a biopharmaceutical company. It is one of a handful of industries that is making rampant gains under President-elect Donald J. Trump. There are also fundamental factors strengthening this company’s stock price. Several important financial results have been announced, and the efficacy of certain medications have proven positive. For example, Phase 3 Clinical Trials of an HSDD drug (hypoactive sexual desire disorder), known as Bremelanotide are positive. The results are statistically significant and clinically meaningful. The efficacy component of the drug trials was completed in Q3 2016. In terms of financial transactions, gross proceeds totaling $9.25 million were recorded in August 2016 and net proceeds amounted to $8.5 million.

Q1 2017 Results and Future Prospects for Palatin Technologies

The company also announced Q1 2017 financial results. A net loss of $13.1 million was reported which translates into -$0.08 per share. These results were attributable to the financial quarter ending September 30, 2016. This compares unfavorably to the net loss of $12.4 million and the -$0.08 EPS for the same period a year ago. The reasons for the negative performance of the company is increased expenses relating to the development of Bremelanotide. Of equal importance is the zero revenue stream for the fiscal quarters ending in September 2015 and September 2016.

This begs the question: Why is the stock price rising when negative earnings are being posted?

Biopharmaceutical companies are sink or swim propositions. Massive investment is needed to get a drug through clinical trials for release to the market. Once a drug has shown promise, the investment is a mere blip on the radar. There was a sharp increase in operating expenses quarter on quarter between September 30, 2016, and September 30, 2015. The company’s cash position (investments and cash equivalents) amounted to $10.2 million for September 30, 2016. This was $0.8 million better than the last quarter. However, current liabilities are now $6.6 million greater at $20.5 million. The good news is that Palatin Technologies is fully confident that the capital on hand will be sufficient to get the company through the quarter ending December 31, 2016.

Short-Interest Growth in November

Palatin Technologies Inc., had a short interest in the amount of 2,882,683 shares. This is the equivalent of 1.5% growth from 31 October 2016. According to the figures, 3.6% of PTN stock are short sold. Some positive news has surfaced about the company, including a surprise buy rating by Roth Capital. They issued guidance of $4 per share. Canaccord Genuity has issued guidance of $6 per share and has also given the stock a buy rating. However, S&P equity research was less generous and issued a downward revision on its rating from $0.61 per share to $0.55

As a day trader, you will be heartened by the frenetic buying activity on the stock. In Q2 2016, Vanguard Group Inc increased its shareholding in the company by 1.2%. Much the same is true of National Asset Management Inc which increased its position by as much as 71.4% during Q3 2016. While the firm’s market cap is just $74.98 million, the 50-day moving average is well beneath the current price, at $0.55. The 200-day moving average is also below the current price at $0.54. While the numbers are negative for now, the success of Phase 3 clinical trials is a big plus for the stock.