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What's Behind Nanocap Biotech Myomo's 400% Rally In 2 Days?

Myomo Inc (NYSE: MYO) shares ran wild Tuesday and the momentum continued in Wednesday's session. 

Benzinga · 02/05/2020 20:33

Myomo Inc (NYSE: MYO) shares ran wild Tuesday and the momentum continued in Wednesday's session. 

German Insurance Coverage Secured

Myomo, a wearable medical robotics company that offers expanded mobility for those suffering from neurological disorders and upper limb paralysis, said late Monday the Statutory Health Insurance in Germany has approved MyoPro for patients on a case-by-case basis.

MyoPro is a powered upper limb orthosis that supports the arm and restores function to the weakened or paralyzed arms of patients suffering neuromuscular disease or injury.

Myomo said Barmer, a major German health insurer, is covering the cost of MyoPro provided through certified orthodontics and prosthetics clinics in Germany.

For the third quarter ended Sept. 30, the company reported nearly flat revenues as the number of units sold declined.

The coverage in Germany bodes well for the company, as it would make the device affordable, likely increasing the number of units sold.

Myomo Says No Developments To Explain Rally

Myomo issued a statement Wednesday and said it is unaware of any events that would account for the stock's "recent trading volatility."

Myomo "believes it is prudent to advise the market of this given recent fluctuations of its stock price."

Attention Biotech Investors: Mark Your Calendar For These February PDUFA Dates

Myomo's Crazy Ride

The nano-cap stock, which closed Monday's session at $6.05, opened higher on Tuesday and rallied to a high of $35 before trimming part of the gains and yet settling 115% higher at $12.99.

About 4.44 million shares exchanged hands compared to the average volume of 9,500.

Myomo effected a 1-for-30 reverse split of shares on Jan. 30.

Short interest in the stock isn't elevated, with the short percent of float at 3.69% and the short interest ratio at 2.6 days, according to shortsqueeze.com. However, the number of shares shorted has increased 28%.

Some of the follow-through buying in the shares may have to do with short covering.

Myomo shares were advancing 66.16% to $21.65 at the time of publication Wednesday.