Why did this ASX biotech stock explode 36% today?

This ASX nano-cap healthcare share has leapt 47% in just a week.

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Scientist looking at a laptop thinking about the share price performance.

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ASX biotech stock PainChek Ltd (ASX: PCK) rocketed 36% higher this afternoon, prompting the ASX to issue a price query.

The Painchek share price hit a new 52-week high of 4.6 cents today. It has since slipped back to 4.3 cents at the close of trade.

The biotech stock's upward bolt today followed the same trajectory as two other micro-cap healthcare shares that charged higher this morning after releasing news updates.

ASX asks biotech to 'please explain' share price skyrocket

In its price query, the ASX referred to PainCheck's ascension from a closing price of 2.9 cents on 19 September to 4.5 cents at the time.

It also noted a "significant increase in the volume of PCK's securities traded on 20 September 2023 and today".

The ASX biotech responded by saying it knew of no reason for the stock's rapid rise.

The company confirmed it had no undisclosed news to declare.

Painchek said it was "possible that the market may be reacting to the recent issue of shares as part of the placement that was announced on 14 September 2023".

$3.55 million placement to fund product development

The ASX biotech stock has leapt 47% since announcing a successful $3.55 million capital raise among institutional, professional and sophisticated investors last Thursday.

Painchek will use the funding to continue developing its smartphone-based medical device application.

The company has an app called Painchek Universal, which allows patients who cannot self-report their level of pain to communicate this to their carers.

The app uses artificial intelligence and facial recognition to detect pain levels.

The company said it will use the placement funds for the following key purposes:

  • Continue the international commercialisation of the Adult App in aged care and for the hospital and homecare sector
  • Submit Adult App US FDA De Novo regulatory clearance application for US market entry with
  • established US partners
  • Commence commercialisation of the Infant App, including novel vocalisation technology
  • Complete a core technology upgrade and obtain ISO27001 certification

The ASX biotech company issued an investor presentation for stockholders on 14 September.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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