One of the more remarkable turnaround stories from among pharmaceutical stocks has been that of Sorrento Therapeutics Inc (NASDAQ:SRNE). In February 2018, the stock had been trading at $10.65 a share to around $1.50 a share and the market cap went below $300 million as well.
However, 2019 has been quite different and the stock surged to as much as $5.09 a share in January after it emerged that a private equity firm was prepared to acquire Sorrento for $1 billion. However, that euphoria soon passed and the stock retracted. That being said, the stock has bounced back nicely in recent times.
The stock has now gone to $8.15 a share and the market cap of Sorrento now stands at $1.67 billion. The stock has gained significantly in recent days and one of the major triggers came on Monday. The United States Food and Drug Administration granted the clearance to Sorrento to start the Phase 2 clinical trial with coronavirus patients suffering from severe breathing difficulties.
This is a major development for Sorrento considering the commercial potential of the product. In addition to that, it also puts Sorrento in a select group of companies with Gilead Sciences, Moderna and Inovio Pharmaceuticals.
Sorrento has had wild ups and downs over the past few years but experts believe that the latest bullish pattern could be different from the ones in the past. Hence, it could be worthwhile for investors to keep an eye on the Sorrento stock and keep track of the latest developments around it. The stock has managed to display strong momentum and it remains to be seen if it can continue to do so in the coming days. Ultimately, the forward momentum in the stock is going to be sustained through more positive developments but at this point of time, the stock has been making interesting moves.
One of the biotech stocks that have come into focus this week is that of Heat Biologics Inc (NASDAQ:HTBX), which had traded higher on Thursday and touched $3 a share. It is interesting to note that although the current average recommendation for the stock is a moderate buy, the average price target is $4 a share and hence there could be more upside in store.
In the previous 52 weeks, the Heat stock has declined by 4.65% and at the same time, the S&P500 gained 0.29%. The reason behind the company’s turnaround is grounded in its latest earnings reports.
In the latest quarter, Heat Biologics managed to produce a profit of as much as $6.03 million and revenues rose to $0.9 million as well. At this point, it has a negative free cash flow of $5.81 million but EBITDA for the period stood at negative $5.06 million, which is not bad when compared with rivals. At this point, Heat has 82.70 million outstanding shares and a short ratio of 0.9. Another important factor to keep in mind with regards to Heat Biologics is that that company is all set to expand its operations and move into COVID 19 vaccine research.
The company, which has primarily been involved with cancer treatments, is apparently going to use its own platform to create the vaccine. While it is true that Heat remains a loss-making company, it should be noted that there is cash available from secondary equity offerings. Hence, the funding needed for research might not be a problem. There are many companies already involved in the COVID 19 vaccine space but the potential market is so big that there could well be space for multiple products. Back in June, the company announced that the first patient had been treated with its antibody product candidate PTX 35. The product had been developed by the company subsidiary Pelican Therapeutics.
One of the best ways of identifying stocks is by watching the market closely and tracking the stocks which have delivered gains. One such stock could be that of Onconova Therapeutics Inc (NASDAQ:ONTX), which has rallied strongly over the course of the past week.
During that period, the Onconova stock has rallied by as much as 150% and perhaps it could be worthwhile for investors to take a closer look at the recent developments. Back on July 10, the company announced that the compensation committee at the company approved cash-settled SAR as well as cash settle PSU to its employees.
However, that is not the only development that needs to be taken into consideration when looking into the rally in the Onconova stock. Earlier on in July, the biopharmaceutical company published the results from the Phase 1 study of oral rigosertib in combination with standard dose azacitidine for treating patients suffering from myelodysplastic syndrome (HR-MDS) or acute myeloid leukemia (AML).
It is a significant milestone for the company and if the product manages to produce encouraging results in the next stages of the trials, then it could propel the company to new heights. The Phase 1 study was primarily looking to determine the safety of the combination and the dosage required in the Phase 2 trial.
While these are all important developments and perhaps had to contribute triggers to the latest rally, investors also need to consider a development from June. Back on June 23, the company announced that it started a Phase I/IIa study of oral rigosertib with Bristol-Myers Squibb’s BMY Opdivo (nivolumab) for the treatment of metastatic KRAS mutated (KRAS+) lung adenocarcinoma.
The company’s lead candidate Rigosertib is a phase III small molecule and the initiation of the study was another major milestone for the company as it tries to further fire up its pipeline of candidates. Investors could do well to keep an eye on these varied developments over the coming weeks.
One of the more interesting companies to have emerged in recent years is that of Kronos Advanced Technologies Inc. (OTCMKTS:KNOS) and in recent times the company has made some notable moves. The company is involved in the product development and production space and is primarily known for having revolutionised the way in which air is moved, filtered and sterilized.
Earlier this month, the company announced the launch of the 1-800-SAFE AIR Independent Sales Rep program, by way of which the company intends to sign up as many as 200 sales representatives across the United States in the third fiscal quarter.
The move from Kronos is aimed at selling a larger volume of its products through a new sales channel altogether. Kronos went for the program in response to feedback from both customers and shareholders. Kronos is going to supply the sales representatives with marketing materials, online marketing support, and also marketing videos.
In addition to that, the sales representatives will also get incentives which include promotional items and special pricing. At this point in time, the company is considering several online portals for the purpose of recruiting new independent sales representatives.
While the launch of this program could prove to be a long term positive, there was another important announcement from the company this month. Kronos announced last week that it has decided to transform the company into a Public Benefit Corporation. This implies that the well being of the consumers is the primary concern of the company rather than profitability.
The Chief Transformation Officer of Kronos Advanced stated that the company wishes to become one of the few publicly traded firms which put the interests of the customers above profit. It is a major move for the company and it remains to be seen how it is going to have an effect on its operations in the months to come.
One of the stocks that gathered momentum on Tuesday was that of the biotech firm Aptevo Therapeutics Inc (NASDAQ:APVO). It came about primarily due to the emergence of positive news regarding the company’s business. The company revealed that it has engaged the services of Piper Sandler in order to sell the royalty payment streams and milestone payouts for two of its products.
Engages Piper Sandler to Sell its RUXIENCE and IXINITY(R) Royalty Streams & Milestones
The products in question are IXINITY and RUXIENCE. The company had announced last month that its royalty payments for RUXIENCE from pharmaceutical giant Pfizer is going to be in single digits and will take into consideration the net sales of the product in the European Union, Japan, and United States. The royalty term is for 7 years.
On the other hand, the royalty payments for IXINITY are going to be paid by Medexus Pharmaceuticals and will take into consideration the net sales of the product in Canada and the United States. The royalty term is going to run until 2035 and payments are going to be made on a quarterly basis.
Aptevo could also be entitled to a milestone payment of $11 million. Royalty payments can be a highly lucrative source of income for companies like Aptevo and there has been a buzz around the company ever since the company made the announcement regarding the royalty payments back on June 25.
The Chief Executive Officer of the company Marvin L. White stated that the royalties will provide Aptevo with much needed non-dilutive cash so that it can work on its other products. He went on to state that the decision to sell the royalties and milestones to Piper Sandler is consistent with Aptevo’s quest to further strengthen its financial position.
At the end of the day, it takes a lot of money to fund the research and development of new medicines and the latest move from Aptevo has naturally excited the market.
Over the course of the past few months, many biotech companies have seen their stocks soar on the back of their efforts to create medicines or vaccines for the coronavirus pandemic. One such stock if Ibio Inc (NYSEAMERICAN:IBIO), which has gained as much as 490% so far as it pushes to bring a COVID 19 vaccine to the market.
What to Expect Now?
The secret sauce for iBio is its proprietary technology called Fast Pharming that allows it to produce vaccines in bulk and hence, gives it a competitive edge over its peers. That has attracted some institutional investors to the company but ultimately its weak balance sheet remains a matter of concern.
However, it could be worthwhile to take a closer look at Fast Pharming for anyone who is interested in iBio. The technology streamlines the production process considerably and leads to greater efficiency. Moreover, it also makes iBio an attractive proposition for those companies which are developing a COVID 19 vaccine but do not yet have the capability of scaling up production considerably.
At this point in time, the company is collaborating with Beijing CC Pharming, Infectious Disease Research Institute. That being said, it should be borne in mind that iBio has not managed to win a contract yet.
At this point, the company has one of the lowest market caps in the biotech sector, and on top of that its free cash flow, as well as margins, have been in the negative territory. Hence, the iBio stock has managed to do much better than its fundamentals suggest. However, the research and development investment has to be ramped up by iBio if it wishes to be a major player in the sector. Now that many companies are working on COVID 19 vaccines, iBio has emerged as a potential winner due to its Fast Pharming technology. It can churn our as much as 500 million doses of the vaccine a year and that is a significant figure. Investors could do well to keep an eye on the developments.