Looking to trade small cap biotech news? Here’s our roundup of what to keep an eye on this week in the space.
It’s going to be a big week for a number of companies in the small cap biotech space. Here’s a look at the three that have the biggest potential for revaluation – KemPharm Inc (NASDAQ:KMPH) and Cellceutix Corp (OTCMKTS:CTIX).
KemPharm Inc (NASDAQ:KMPH)
First up, KemPharm. This company is developing an abuse deterrent version of a currently available opioid pain management treatment called hydrocodone. Opioid abuse has become a huge problem in the US, and costs the government billions of dollars a year in legal and medical cost burden, and KemPharm is attempting to allay some of these costs through its candidate, KP201/APAP.
The drug is a mix of hydrocodone and acetaminophen, which has a ligand attached to it. The ligand means it cannot be activated until it reaches the gastrointestinal tract, which in turn, means it can’t be ground up or dissolved. These are the two primary methods of abuse, and stopping patients from being able to use the drug in this way (KemPharm hopes) is an effective way to counter the abuse epidemic.
An FDA appointed advisory panel is set to convene on May 5, 2016, and offer up its opinion as to whether the agency should approve KP201/AOP for general marketing. If the panel says yes, the FDA will likely (but not definitely) approve the drug come PDUFA, which is slated for June 9.
Cellceutix Corp (OTCMKTS:CTIX)
This Massachussetts based development stage biotech is working on a chronic psoriasis treatment called Prurisol. The drug is currently in a phase II trial to investigate its efficacy and tolerability, and Cellceutix has said it expects to report topline data from the trial very early May. The assumption here is that “very early May” means this coming week, and so we’ve got it on our watch list moving forward.
The company currently holds a market capitalization of a little over $222 million, and doesn’t yet generate revenues, so it’s a risky allocation. Having said this, if topline comes out positive, chances are we’ll see an instant revaluation. Upside potential of circa 30% on good news. Downside, probably similar.
If the trial shows efficacy, and in the absence of any severe adverse events, expect the initiation of a phase III sometime before the close of 2016 to compound the data driven upside momentum.
DISCLAIMER: There is a substantial risk of loss with any speculative asset, especially small cap stocks. The opinions expressed are those of the author, and do not constitute recommendations to buy or sell a stock. Do your own research before committing capital.