(Bloomberg) — Shares of Apellis Pharmaceuticals Inc. suffered their worst two-day drop ever after confirming reports that some patients experienced severe inflammation after treatment with the eye drug.
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The decline is welcome news for traders betting against Apellis. The biopharmaceutical firm’s stock fell 24% on Tuesday, extending its two-day slide to 53%, erasing roughly $5.2 billion in market value.
Short sellers made about $414 million in paper profits during the period, according to data from S3 Partners LLC. That has pushed the group to a 0.66% yield in 2023, or paper profits of about $51 million, from a loss of about $363 million on Friday.
Before the sudden selloff, Apellis had risen for seven straight months and was up 63% this year through Friday̵[ads1]7;s close. Until this week, it was among the best in the Nasdaq Biotech Index.
Apellis shares plunged a record 38% on Monday after reports circulated that the American Society of Retina Specialists had sent a memo to its members regarding six cases of retinal vasculitis after using the company’s eye drug Syfovre. The stock extended those losses into another day after confirming the matters in a filing with the US Securities and Exchange Commission.
“While these events give us pause and should not be dismissed out of hand, it may be premature to conclude that this warning is going to have a significant negative impact on Syfovre’s adoption,” HC Wainwright & Co. analyst Douglas Tsao wrote in a note to investors.
Tsao added that he would have to revise this stance and Syfovre’s competitive position if more reports come in showing that the incidence of vasculitis is increasing meaningfully.
–With assistance from Matt Turner.
(Updates share movement at the end of the market)
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