Frequency Therapeutics Inc. (NASDAQ: FREQ) shares were absolutely crushed in Tuesday’s session. The catalyst for the 78% tumble was interim data from its hearing loss study. Although the initial move down was massive, there was a small recovery in Wednesday’s session that many might recognize as a proverbial dead cat bounce.

A dead cat bounce is a temporary short-lived recovery of asset prices from a sharp drop. The name is based on the idea that even a dead cat will bounce if it falls far enough and fast enough.

In terms of the results, the company reported topline, day-90 data from its FX-322 Phase 2a study (FX-322-202). The interim results show that four weekly injections in subjects with mild to moderately severe sensorineural hearing loss (SNHL) did not demonstrate improvements in hearing measures versus placebo.

FX-322 is Frequency’s lead product candidate, designed to regenerate auditory sensory hair cells in the cochlea and improve hearing in patients with SNHL.

While word recognition scores increased across all groups, repeated weekly injections appeared to dampen the hearing benefit observed compared to other single-injection studies. The Phase 2a interim results also showed an unexpected apparent level of hearing benefit in the placebo group that did not occur in previous trials and exceeded well-established published standards, potentially suggesting bias due to trial design. Considering these challenges observed in the Phase 2a study design, management concluded that there was no discernible hearing benefit of FX-322 over placebo.

Excluding Wednesday’s move, Frequency Therapeutics stock had vastly underperformed the broad markets with a decline of about 55% in the past 52 weeks. Year to date, the stock was down about 77%.

Frequency Therapeutics stock traded up about 11% to $8.90 early Wednesday before pulling back again. The 52-week range is $7.91 to $58.37, and the consensus price target is $29.67.

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