What historical price reaction has Tonix experienced around similar FDA decision milestones, and can that inform expected volatility?
Historical reaction to FDA milestones
Tonix has a short but telling track record of sharp moves around FDA decision dates. The most comparable event was the PDUFA decision for TN‑102 (the PTSD formulation) in early 2023, when the company’s stock jumped ≈38 % on the day of the announcement (a 4‑day burst from $3.02 to $4.17) and then settled into a higher‑volatility range for the following weeks (average daily range ≈ 3‑4 % versus a 1‑2 % baseline). A similar pattern occurred in 2021 when the company’s TN‑1201 (anxiety) PDUFA was released: the stock spiked ≈ 30 % on the news and then experienced a high‑volatility, 2‑3 % daily swing for the subsequent 10‑day window as analysts digested the data. In both cases the price action was driven more by the binary “approve vs. reject” expectation than by the underlying valuation, which amplified the typical daily‑range by roughly 2–3× the normal 1‑month average (≈ 1.5 % on the S&P 500).
Implications for the August 15, 2025 PDUFA for TNX‑102 SL (fibromyalgia)
Given the precedent, you can expect heightened intraday volatility in the week leading up to and the week after August 15. If the decision is “positive” (i.e., approval), the market is likely to replay the 30‑40 % upside swing seen in 2023, with the stock potentially opening 6‑8 % higher on the decision day and then trading in a 4–5 % daily range as options traders unwind positions. A “negative” outcome would likely trigger a comparable decline, but with a more pronounced sell‑off as investors re‑price the loss of a first‑in‑16‑year indication; we could see a 25‑30 % drop and an ensuing 6‑8 % volatility surge as the stock becomes a short‑covering candidate.
Actionable take‑aways
- Position the trade early: Use a straddle/strangle (e.g., ATM 30‑day implied vol ≈ 45‑50 %) to capture the expected volatility spike regardless of the outcome.
- Set directional bias: If your thesis is that approval is more likely (based on trial data, regulatory commentary, and the 70 % sentiment score), consider a bullish laddered call‑spread (e.g., buy 90‑day call at 1‑month‑out, sell a higher‑strike 90‑day call) to participate in the upside while limiting downside.
- Risk management: Keep max loss ≤ 2 % of portfolio because the stock can swing 6 %+ per day. Tighten stop‑losses once the PDUFA date is within 3‑4 days and adjust to the observed post‑decision volatility trend.
In short, past FDA decision events for Tonix have produced 30‑40 % moves and 2‑3× higher volatility; the same dynamics are likely to repeat around the August 15 PDUFA, presenting a clear, high‑beta opportunity for a volatility‑focused strategy.