PULM Plunges 32.5%: Merger Uncertainty and Bearish Technicals Spark Investor Frenzy

Summary
• Pulmatrix (PULM) slumps 32.5% intraday to $2.51, hitting a 52-week low of $2.32
• Merger with Cullgen faces regulatory delays, with 'no solicitation' clause waived
• Technical indicators (RSI 37.63, MACD bearish) amplify fears of failed approval
• Biotech sector diverges as Amgen (AMGN) gains 1.33%, underscoring PULM’s isolation

Pulmatrix’s stock has imploded amid regulatory uncertainty surrounding its merger with Cullgen, triggering a 32.5% intraday drop to $2.51. The stock’s collapse to a 52-week low of $2.32 has sent shockwaves through the biotech sector, with technical indicators and cash flow concerns deepening investor pessimism. As the market grapples with the implications of a stalled merger and dwindling liquidity, the stock’s trajectory now hinges on regulatory clarity and sector dynamics.

Merger Uncertainty Sparks Investor Flight
Pulmatrix’s 32.5% intraday plunge stems from its decision to waive the 'no solicitation' clause in its merger agreement with Cullgen, permitting both parties to explore alternative transactions. This move, while not altering the core terms of the merger, has introduced regulatory and strategic ambiguity. Investors are reacting to the heightened risk of delayed or failed approval from the China Securities Regulatory Commission (CSRC), compounded by the company’s dwindling cash reserves ($4.8M as of Q3 2025) and lack of near-term revenue drivers. The stock’s collapse reflects a loss of confidence in the merger’s viability and the company’s ability to execute its pipeline, particularly with PUR3100 and PUR1800 in early-stage trials.

Biotech Sector Mixed as Amgen Gains 1.33%
The biotech sector remains polarized as Amgen (AMGN) gains 1.33% intraday, contrasting with PULM’s struggles. While PULM’s merger uncertainty drives its decline, sector peers like Amgen benefit from stable earnings and pipeline visibility. This divergence highlights the market’s focus on execution risk in speculative biotech plays versus established players with diversified revenue streams. PULM’s isolation underscores the fragility of its business model amid regulatory and liquidity headwinds.

ETF and Technicals Signal Short-Term Downtrend
• MACD: -0.178 (bearish divergence from signal line at -0.150)
• RSI: 37.63 (oversold territory but lacks bullish reversal confirmation)
• Bollinger Bands: Price at $2.51 (below lower band at $3.757)
• 200D MA: $5.80 (price at 48% discount)

The technical landscape for PULM is overwhelmingly bearish. With RSI in oversold territory and MACD signaling bearish momentum, the stock is primed for further downside. Key support levels at $2.32 (intraday low) and $2.61 (52-week low) could trigger stop-loss cascades. While no options are listed for immediate trading, investors should monitor the 200-day MA ($5.80) as a critical resistance level. A break below $2.32 could accelerate the decline toward $2.61, testing the 52-week low. Aggressive short-sellers might consider XBI (Biotech Select Sector SPDR) for sector exposure, though XBI’s 1.33% intraday gain highlights PULM’s divergence from sector peers.

Backtest Pulmatrix Stock Performance
The performance of PULM (iShares MSCI USA Momentum Factor ETF) after a -33% intraday plunge from 2022 to now has shown mixed results in the backtest. While the 3-day, 10-day, and 30-day win rates are relatively high at 45.57%, 45.15%, and 42.89%, respectively, the maximum return during the backtest period is only 3.85%, which suggests that the ETF has struggled to recover from the significant intraday plunge.

Act Now: Position for a Prolonged Downtrend
Pulmatrix’s 32.5% drop is a warning shot for investors. With the merger in limbo and technical indicators pointing to continued weakness, the stock is at risk of a prolonged bearish phase. The biotech sector’s resilience, led by Amgen (AMGN) with a 1.33% intraday gain, contrasts sharply with PULM’s struggles. Immediate action includes tightening stop-losses below $2.32 and avoiding long positions until the CSRC decision or a catalyst emerges. Watch for a breakdown below $2.61 to confirm a new downtrend, while the 200-day MA at $5.80 remains a distant psychological hurdle.