Stocks’ Details

Humanigen, Inc.

Business Update: Humanigen, Inc. (NASDAQ: HGEN) is a biopharmaceutical company that prevents and treats an immune hyper-response ‘cytokine storm’ with its drug candidate lenzilumab. The market capitalization of the company as on 04 January 2021 stood at ~$806.24 million. In a recent update, HGEN announced that it has secured a U.S. patent for lenzilumab, which helps in preventing cytokine storm and neurotoxicity related to CAR-T cell therapy.

Q3FY20 Financial Update: The company incurred a net loss of $30.8 million during the quarter, compared to $2.4 million in the previous corresponding quarter. This can be attributed to higher R&D costs during the given period, due to increased technology transfer expenses and material manufacturing costs of lenzilumab for the Phase 3 clinical study.

Q3FY20 Financial Performance (Source: Company Reports)

Outlook: The company expects its expenses to increase further in Q4FY20, as a result of securing additional manufacturing capacity for the production of its drug, lenzilumab. It also anticipates the initiation of commercial preparation activities for submitting an EUA in Q1FY21. 

Stock Recommendation: The company expects R&D expenditure to double in Q4FY20 as it plans to expand the Phase 3 clinical study, and continue the production of lenzilumab. HGEN gave a return of 28.67% in the past three months, a return of 58.74% in the past one month. The stock of HGEN is trading above its average 52 weeks’ trading range of $22.39-$7.75. On a technical analysis front, the stock of HGEN has a support level of $14.5 and a resistance level of $16.2. Considering the current trading levels, steep price movements in the past months and the absence of revenue generation, we suggest an 'Avoid’ rating on the stock at the closing price of $15.62, down by 10.74% as on January 4, 2021.

Yumanity Therapeutics, Inc.

Completion of Reverse Merger: Yumanity Therapeutics, Inc. (NASDAQ: YMTX) is a biopharmaceutical company that develops and discovers innovative, disease-modifying therapies for neurodegenerative diseases. The market capitalization of the company as on 04 January 2021, stood at ~US$181.20 million. On December 22, 2020, the company has undergone a reverse merger, with Proteostasis Therapeutics, Inc stockholders’ approving business integration with Yumanity Therapeutics, Inc. The combined entity started operating under the name Yumanity Therapeutics, on the Nasdaq Capital Market on December 23, 2020, under the ticker symbol “YMTX”. 

Q3FY20 Financial Update: YMTX reported a net loss of $8.2 million during the quarter, compared to a net loss of $12.8 million in the prior corresponding period. There was a decrease in R&D expenses to $1.2 million, as compared to $10.1 million in Q3FY19. This was due to a decrease in clinical-related research activities during the quarter.  

Q3FY20 Financial Performance (Source: Company Reports)

Outlook: The company had a cash position of $40.8 million as on September 30, 2020 and believes its cash equivalents and short-term investments are sufficient to fund its operations in the next one year.

Stock Recommendation: In regards to the merger, Proteostasis’ Board of Directors has finalized a reverse stock split of the Proteostasis common stock at a ratio of 1-for-20. YMTX gave a negative return of 19.86% in the past three months and a negative return of 12.00% in the past one month. The stock of YMTX is trading above its average 52 weeks’ trading range of $22.38-$0.87. On a technical front, the stock of YMTX has a support level of $16.5 and a resistance level of $18.2. Considering the current trading levels, net loss during the period, low revenue visibility and completion of the reverse merger, we suggest an ‘Avoid’ rating on the stock at the closing price of $17.95, up by 5.59% as on January 4, 2021.

Aprea Therapeutics, Inc.

Results of Primary Endpoint from Phase 3 Trial: Aprea Therapeutics, Inc. (NASDAQ: APRE) is a biopharmaceutical company that develops and commercializes novel cancer therapeutics that reactivate mutant tumor suppressor protein. The market capitalization of the company as on 04 January 2021, stood at ~$100.21 million. As per a recent update, the company announced the results of Primary Endpoint from Phase 3 Trial of Eprenetapopt in TP53 Mutant Myelodysplastic Syndromes (MDS). As per reports the trial was not successful to meet its primary endpoint of complete remission (CR) rate.

Q3FY20 Update: The company has not generated any revenue from product sales and expects the same in the near future. Total operating expenses increased to $12.23 million in Q3FY20 from $7.21 million in the pcp. Net loss during the period was at $12.31 million.

Q3FY20 Financial Performance (Source: Company Reports)

Outlook: Though the result of the phase 3 trial was not in company's favour, it believes that eprenetapopt can offer clinical benefit to patients with TP53 mutant malignancies. APRE will continue to monitor and analyze the data and follow up with patients, who are still receiving the study treatment.

Stock Recommendation: There was an increase in R&D expenses during Q3FY20, owing to the continued development of eprenetapopt in the ongoing clinical trials. APRE gave a negative return of 82.29% in the past three months and a negative return of 82.44% in the past one month. The stock of APRE is trading close to its 52 weeks’ low level of $4.73. On a technical front, the stock of APRE has a support level of $3.9 and a resistance level of $5.2. Considering the current trading levels, widening of net losses and failure of Phase 3 Trial of Eprenetapopt, we suggest an ‘Avoid’ rating on the stock at the closing price of $4.73, down by 3.86% as on January 4, 2021.

Lightbridge Corporation

Patent Approval in Eurasia: Lightbridge Corporation (NASDAQ: LTBR) is an advanced nuclear fuel technology company. The market capitalization of the company as on 04 January 2021 stood at ~$23.42 million. As per a recent update, the company has received a patent in Eurasia for its innovative nuclear fuel assemblies. The metallic fuel makes existing and new nuclear power plants more efficient and cost-competitive.

Q3FY20 Highlights: The company had a decent cash position of $17.4 million as on September 30, 2020, with no net debt. R&D expenses decreased by ~$0.5 million during Q3FY20 from the pcp, due to transition of work related to Enfission. Operating loss during the period came in at $3.07 million, against $2.52 million reported in the pcp.

Q3FY20 Financial Performance (Source: Company Reports)

Outlook: The company is optimistic in its prospects, as well as for the US nuclear power industry. It is witnessing increased government support for advanced nuclear technologies, in order to compete and win projects globally.  

Key Risks: The operations of the company are capital intensive and it has to depend on external funding to continue its R&D activities. The company produces fuel in metallic form and is enriched to higher levels, which might require modifications to the existing nuclear infrastructure and therefore could impact the commercialization of its technology.

Stock Recommendation: As of September 30, 2020, the company maintained a decent working capital position of $15.8 million. LTBR gave a return of 2.46% in the past three months and a return of 12.12% in the past one month. The stock of LTBR is trading below its average 52-week trading range of $8.55-$1.71. On a technical analysis front, the stock of LTBR has a support level of $3.95 and a resistance level of $5.2. Considering the current trading levels, comfortable balance sheet position, positive outlook on the sector and the key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $4.16, down by 1.65% as on January 4, 2021.

Comparative Price Chart (Source: Refinitiv, Thomson Reuters)

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