Why Tonix Pharmaceuticals Is Down 19% Today

Tonix Pharmaceuticals Holding (NASDAQ: TNXP) shares are down 19.1% as of 3:42 p.m. ET Friday, following through on the sharp intraday reversal of Thursday's price surge. The stock was prodded much higher by Thursday's report that the U.S. Food and Drug Administration (FDA) had granted one of the company's drugs an important designation, but traders are now suggesting that rally was too bold.

The drug in question is TNX-2900, or intranasal potentiated oxytocin, meant to treat Prader-Willi syndrome, a genetic disorder that affects children's sensation of hunger. The FDA granted TNX-2900 an orphan drug designation this week, meaning the agency recognizes the therapy addresses an underserved or completely unaddressed illness. Tonix Pharmaceuticals was up as much as 89% at one point Thursday on the news before settling back to a full-day's (from close to close) gain of 32%.

That big pullback from Thursday's peak should have been interpreted as a warning. With lots of pent-up profits still not locked in, investors continued shedding this overextended stock today.

Source Fool.com