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Can ContraVir Sustain This Move in a Shaky Health Care Sector?

ContraVir Pharmaceuticals Inc. (NASDAQ: CTRV) led the bulls’ charge in the market on Monday, with shares practically doubling in what was thought to be a shaky health care sector. The company announced preliminary data regarding the unique properties of CMX157, a highly potent lipid prodrug of the successful antiviral drug tenofovir (TFV). CMX157 was shown to be 60-times more active than TFV against the hepatitis B virus (HBV), based on in vitro studies.

There are a couple of questions that remain, considering this move. The first is if this stock has run too much? And the second of whether this move is sustainable?

CMX157 is a novel lipid acyclic nucleoside phosphonate that delivers high intracellular concentrations of the active antiviral agent tenofovir diphosphate. It has completed a Phase 1 clinical trial in healthy volunteers, demonstrating a favorable safety, tolerability and drug distribution profile.

The United States is expected to see more than a 15% rise in hepatitis B patients through 2033, and there are about 350 million chronic HBV patients worldwide. ContraVir expects that it will meet its timelines, so that it is positioned to treat these patients and capture this growing market.

Looking at the range on the day, shares have been everywhere between $3.23 and $6.27, with Friday’s closing price at $2.11. What’s incredible is that shares were pumped up as high as roughly 200% early Monday morning, but in early afternoon were hovering around 100% up.

With the recent market concerns over the pricing and valuation of companies within the health care sector, pharmaceuticals and biotechs specifically, many of the stocks have sold off leading to a very volatile sector.

So far in 2015, apart from this session, ContraVir shares have underperformed the market and are down 5%. However within the past 52 weeks, the stock is up over 134%.

Shares of ContraVir were trading at $4.24 Monday afternoon. The stock has a consensus analyst price target of $6.80 and a 52-week trading range of $0.65 to $6.28.

Some 23 million shares had moved by 1:20 p.m. Eastern, compared to an average daily volume near 50,000.

By Chris Lange