Milestone Pharmaceuticals Plummets 38%—What’s Behind the Sell-Off?

• Milestone’s stock crashed 37.96% to $1.5883 after announcing a public offering and FDA PDUFA delay
• FDA re-submission accepted but approval now pushed to December 2025, contingent on RTW funding extension
• Shares gapped down from $1.76 open to $1.46 intraday low amid dilution fears and regulatory uncertainty

Milestone Pharmaceuticals (MIST) triggered a 38% sell-off as market participants grappled with dual catalysts: a dilutive public offering and a delayed FDA approval timeline. The stock’s plunge to $1.5883—a 37.96% drop from yesterday’s close—underscores investor skepticism about the biotech’s ability to navigate funding risks and regulatory hurdles. The FDA’s acceptance of its CARDAMYST submission, while positive, was overshadowed by the simultaneous announcement of a $75M royalty deal extension and a risky equity offering that could dilute existing shareholders.

Dilution Fears Overshadow FDA Progress
The precipitous decline stems directly from Milestone’s dual announcements: a proposed public offering of common shares and warrants, and an FDA approval timeline pushed to December 2025. Investors penalized the stock due to concerns over equity dilution from the offering—potentially flooding the market with new shares—and the extended regulatory uncertainty. While the FDA’s acceptance of its CRL response was constructive, the need to secure RTW funding through December 2025 heightened execution risks. Technicals worsened as price breached the $1.60 support, triggering algorithmic selling that amplified the rout.

Bullish Puts and Technical Levels Signal Short-Term Pain
• Technical Indicators:
• RSI: 85.59 (Overbought, signaling near-term exhaustion)
• Bollinger Bands: Below lower band ($1.4081), indicating oversold status
• MACD: Histogram at 0.0572 (Bullish divergence but price action lags)
• 200-day MA: $1.6881 (Broken support zone)

Traders should focus on the $1.46–$1.73 range as MIST navigates its funding and regulatory crossroads. Short-term resistance rests at the $1.76 open price, while the $1.4081 lower Bollinger band offers potential support. The AMGN sector leader’s -1.61% decline suggests broader biotech caution.

Top Options Plays:
1. MIST20250815P1.5 (Put Option):
- Strike: $1.50 | Expiry: Aug 15 | Delta: -0.357 | Theta: -0.00178 | Gamma: 0.7299
- Turnover: $1,970 | Leverage: 10.63%
- Why: High gamma and reasonable theta make this a prime play for continued downside. A 5% drop to $1.51 would yield a $0.00 payoff, but gamma’s sensitivity amplifies gains if volatility spikes.

2. MIST20250919P1.5 (Put Option):
- Strike: $1.50 | Expiry: Sep 19 | Delta: -0.353 | Theta: -0.00124 | Gamma: 0.5687
- Turnover: $2,485 | Leverage: 7.97%
- Why: Longer duration and higher turnover volume make this a safer bet for investors betting on prolonged weakness. A December expiry pullback could validate this contract’s mid-term appeal.

Action Hook: Aggressive bears should stack MIST20250815P1.5 puts ahead of the August expiration, targeting a $1.40 breakout for maximum leverage.

Backtest Milestone Stock Performance
The MIST ETF has demonstrated resilience following a significant intraday plunge of -38%. The backtest data shows a 3-day win rate of 46.01%, a 10-day win rate of 47.44%, and a 30-day win rate of 48.40%. While the returns over the short-term time frames are relatively modest, with a maximum return of 2.66% over 30 days, the ETF has a history of positive performance in the aftermath of such dramatic drops.

Critical Decisions Loom for MIST’s Survival
Milestone’s fate hinges on its ability to secure FDA approval by December 2025 and execute its public offering without catastrophic dilution. While the stock’s 38% drop reflects near-term pessimism, traders must monitor the $1.4081 Bollinger floor and the AMGN sector’s biotech trends. Investors should prioritize puts until the FDA’s December decision removes uncertainty. Watch for a $1.40 breakdown or a sudden equity offering halt—either could redefine MIST’s survival odds.