PULM Plummets 36% Amid Merger Uncertainty and Bearish Technicals: A Biotech Meltdown Unfolds

Summary
• Pulmatrix (PULM) crashes 36.02% to $2.38, hitting a 52-week low of $2.32
• Intraday range spans $2.32 to $3.63, with turnover surging to 187,366 shares
• Merger with Cullgen faces regulatory delays, triggering investor panic

Pulmatrix’s stock has imploded on Friday, driven by a combination of regulatory uncertainty surrounding its merger with Cullgen and bearish technical indicators. The stock’s 36% collapse has left it trading near its 52-week low, with key support levels under siege. As the biotech sector remains polarized—Amgen (AMGN) gains 1.47%—investors are left scrambling to assess the fallout from PULM’s strategic and technical breakdown.

Merger Uncertainty Sparks Investor Flight
Pulmatrix’s 36% 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, PULM Struggles
The biotech sector remains polarized, with Amgen (AMGN) rising 1.47% on Friday, highlighting PULM’s divergence from sector peers. While PULM’s merger uncertainty drives its bearish trend, broader biotech indices remain resilient, supported by positive earnings and pipeline advancements. This contrast underscores the idiosyncratic nature of PULM’s sell-off, which is tied to regulatory and strategic risks rather than sector-wide headwinds.

Bearish Setup: ETFs 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 $2.38 (below lower band at $3.76)
• 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 $2.31 (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 $2.31, testing the 52-week low. Aggressive short-sellers might consider XBI (Biotech Select Sector SPDR) for sector exposure, though XBI’s 1.47% 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 -36% 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 45.64%, 45.23%, and 42.74%, respectively, the maximum return during the backtest period is only 3.88%, which suggests that the ETF has struggled to recover from the significant intraday plunge.

Act Now: Position for a Prolonged Downtrend
Pulmatrix’s 36% 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 1.47% 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 $2.31 to confirm a new downtrend, while the 200-day MA at $5.80 remains a distant psychological hurdle.