Moleculin Biotech, Inc.

MBRX Details

Pricing of Public Offering: Moleculin Biotech, Inc. (NASDAQ: MBRX) is a preclinical and clinical-stage pharmaceutical company which is engaged in the advancement of anti-cancer drug candidates. On February 3, 2021, the company announced the pricing of its common stock offering of 14,273,684 shares to the public at an offer price of $4.75 per share. Moreover, the underwriters have been offered to purchase up to 2,141,052 additional shares.

MBRX Inks a Deal with Catalyst: In another update, MBRX stated that it has inked a deal with the contract research organization, Catalyst Clinical Research (Catalyst). The latest agreement will aid MBRX to handle its US clinical trial to research the capability of Annamycin to cure soft tissue sarcoma (STS) that has metastasized to the lungs.

Reverse Stock Split: On January 29, 2021, the company informed the market that it has filed a certificate of amendment with the Secretary of State of the State of Delaware in regard to a reverse stock split of its common stock at a ratio of 1-for-6. Post this effect, the company’s common stock started trading on The Nasdaq Capital Market from 1 February 2021 under the ticker symbol “MBRX” on a post-split basis.

Q3FY20 Financial Update: MBRX reported a net loss of $3.39 million during the quarter, compared to a net loss of $4.14 million in the prior corresponding period. There was an increase in R&D expenses to $4.4 million, as compared to $2.78 million in Q3FY19. This was due to an increase in clinical-related research activities during the quarter.  

Q3FY20 Financial Performance (Source: Company Reports)

Outlook: The company remains on track to advance WP1066 and report positive data from both its adult and pediatric Phase 1 clinical trials.  The company also plans to submit an IND approval for a COVID-19 clinical trial via preclinical testing of WP1122 in 1HFY21.

Key Risks: MBRX operates in a highly competitive environment, which is subject to ongoing significant changes, including business consolidations, new strategic alliances, market pressures, and regulatory and legislative pressures.  Also, higher expenditure and adverse currency translations add to the woes.

Stock Recommendation: As of September 30, 2020, the company-maintained a decent liquidity position, with cash balance of $12.8 million. MBRX gave a negative return of ~12.94% in the past one month and a positive return of ~16.9% in the past three months. The stock of MBRX is trading below its average 52 weeks’ trading range of $11.82- $1.94. On a technical front, the stock of MBRX has a support level of ~$3.83 and a resistance level of ~$8.99. Considering the current trading levels, healthy balance sheet position, decent outlook and the key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $4.91, up by 2.29% as on February 8, 2021.

MBRX Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

SELLAS Life Sciences Group, Inc.

SLS Details

Business Update: SELLAS Life Sciences Group, Inc. (NASDAQ: SLS) is a late-stage clinical biopharmaceutical company that is engaged in the development of new cancer immunotherapeutic for a wide range of cancer indications. Recently, the company informed the market about its business and clinical progress in 2020 and provided expected 2021 milestones. In 2020, the company began the pivotal Phase 3 REGAL study of GPS in patients with Acute Myeloid Leukemia (AML) in the United States and Europe and also revealed vital clinical data in the same patient cohort from Phase 2 study. 

In December 2020, SLS informed the market regarding its preliminary clinical data for GPS in arrangement with checkpoint inhibitors in two solid tumor signs in patients with increased solid cancers who had drained their standard therapy options. In the same month, the company announced that it had inked a license agreement with 3D Medicines Inc., for the development and commercialization of GPS in China.

Clinical Development Pipeline (Source: Company Reports)

Financial Highlight: At the end of 31 December 2020, the company’s preliminary and unaudited cash balance stood at ~$35.3 million. In 2020, the company strengthened its balance sheet with gross proceeds of ~$47.9 million from the sale of securities, exercise of warrants, and the upfront payment from 3D Medicines. It is expected that the proceeds from these operations will substantially boost the GPS clinical programs of SLS.

Stock Recommendation: The stock of SLS gave a positive return of ~284.47% during the span of three months and 190.83% in the past six months period. The stock of the company is currently trading close to the average of its 52-weeks trading range of $1.46 - $19.38. Current ratio of the company stood at 2.21x in Sep’20 as compared to the industry median of 7.07x. On a technical front, the stock of SLS has a support level of ~$9.2 and a resistance level of ~$12.3. Considering the spike in the stock price over past months, current trading levels, and low current ratio, we are of the view that most of the positive factors have been discounted at current juncture. Hence, we suggest investors to wait for better entry level and give an “Expensive” rating for the stock at the closing price of $10.15, up by 9.61% on 8 February 2021.

SLS Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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