Here's Why Trevena's Stock Bolted Higher By 72% Today

What: Shares of Trevena , a clinical-stage biotech specializing in the development of ligands targeting g-protein coupled receptors, rose by as much as 72% today on sky high volume after the company announced that its experimental pain medication,TRV-130, met itsprimary endpoint of reducing average pain scores in patients in the acute postoperative setting (following "tummy tuck" surgery) compared to placebo. The company said that TRV-130 also had a more manageable side effect profile than morphine as well, assessed on conditions such asnausea, vomiting, and hypoventilation.

So what: Previously,TRV-130 was shown to be superior at reducing pain when compared against placebo and morphine in another mid-stage study, especially at higher doses. But most importantly, this experimental drug was able to reduce pain quicker and for longer periods of time than currently available treatments. Today's top-line data thus adds another line of evidence that TRV-130 may indeed have what it takes to become a first-in-class pain med, even potentially displacing morphine in the acute care setting.

Now what: Trevena plans on launching a pivotal late-stage study for the drug as a treatment for acute pain in early 2016, according to the company. Given how quickly these types of trials proceed and the consistency observed in terms of pain scores across its mid-stage trials so far, there's a decent chance that the drug could be under regulatory review by mid to late 2017.

Unfortunately, the company only had $106 million in cash, cash equivalents, and marketable securities at the end of the second-quarter, meaning that it may have to find additional funds to advance TRV-130 into late-stage testing. As such, I think this spike in share price is probably going to be accompanied by a sizable secondary offering, which may represent a second chance for investors, like myself, that missed this catalyst to initiate a position at cheaper prices.

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