For the second day in a row, Sirtex Medical Limited (ASX: SRX) shares have delivered a substantial gain. After having risen by 5.4% on Monday, the stock has surged another 6.8% today taking its share price to $26.32.
Although Sirtex's shares remain well below their 52-week high range of $39, they have made a significant recovery since bottoming out at $14.80 in mid-March. Investors had all but priced in a positive result from its SIRFLOX study, but punished the stock when it reported a result that had not been expected.
Indeed, nothing has changed between now and then, except that the market may have become more rational regarding the company's prospects. While the primary endpoint of the study was not achieved, the secondary endpoint of showing a statistically significant improvement in progression free survival in the liver was achieved.
While the initial trial result certainly wasn't what the market had been hoping for, investors have likely turned their attention toward the release of further information on the results, which will be delivered later in May at an American oncology conference.
Should you buy Sirtex?
Given the strength of the rebound experienced by Sirtex's shares since that fateful day back in March, it is clear that the market overreacted to the results.
While long-term investors could still find some value in the shares, the final results could still reveal some surprises which could see the shares fall. As such, Sirtex is no stock for the more risk-averse investor at its current price.
