Biotech stock plunges 1,446% after inexplicable rise

Bright Minds Biosciences, whose stock had been thinly traded until this week and was trading at just over $1, plunged on Wednesday after a meteoric rise in premarket trading.

Bright Minds shares DRUG CA:DRUG fell 34% to $25.36 in premarket trading after posting an explosive 1,446% rise on Tuesday that resulted in a market cap of $143 million.

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Bright Minds issued a news release late Tuesday in which the Vancouver, British Columbia-based company said it was “not aware of any material changes in the company's operations that would explain the recent increase in market activity.” It said it was responding to a request from the Canadian Investment Regulatory Organization.

The company said it focuses its research and development on drugs based on its expertise in 5-HT or serotonin-mediated diseases.

It started a phase 2 trial of a drug to treat a group of drug-resistant epilepsy disorders. Bright Minds, which has not reported revenue, said last month that it could maintain operations until 2026.

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