Moleculin Biotech Inc

MBRX Details

Moleculin Biotech Inc (NAQ: MBRX) is a clinical-stage pharmaceutical company, that focuses on the development of oncology drug candidates for the treatment of highly resistant tumors and viruses in the United States. Its lead drug candidate is Annamycin that is in Phase 1/2 studies for the treatment of relapsed or refractory acute myeloid leukemia (AML) and cancers metastasized to the lungs. Moleculin Biotech, Inc. was incorporated in 2015 and is headquartered in Houston, Texas.

Why should Investors make an EXIT?

• Announcements on clinical trials and related observations: On January 18, 2021, the company announced the updates on the independent safety review of certain preliminary data for the first 30 patients in the three Phase 1 clinical trial with ongoing tests, concluding there was no evidence surfacing of cardiotoxicity. This still got a very long process, subject to various tests and approvals.
• No operating income: The company failed to give any updates on the revenue projections for the upcoming quarter, which leaves the investors hanging in the middle of nowhere.
• Declining cash balance: the Lack of cash-generating activities, lay stress on the cash outflows to keep the operations running, and thus the September FY21 quarter witnessed a decrease in cash balance to USD 75.18 million from previous quarter balances of USD 79.51 million.
• Equity dilution for fundraising or interest cost to raise debt: The business operations can only sustain if the cash burn rate is carried off for the next few quarters. For that, either equity dilution or debt raising are the two most obvious ways, besides depending upon the grants. The period for trials and approvals is long enough and the changes in between can make the process go in vain at times. The uncertainty related to the outcomes are the biggest headwind for such company

Stock Recommendation:

MBRX's stock price tumbled 45.94% in the past three months and is currently heading towards the South without showing any fresh signs of revival. Both the long-term trend forecasting indications, that is 50 DMA & 200 DMA are clouding the stock prices, which implies the strength in the stock is more towards depleting the positive returns of the investors. The relative strength index is below 30, which is in the oversold zone and this is the only hope for the short-term traders to play for a slight pullback. These types of pullbacks are a trap, hence it's advisable to stay put from these technical patterns. 

The regulatory environment and the declining stock prices with no operating revenues in hand make this stock a weak play. Considering the most obvious fundraising options in hand and the risk associated with them, we recommend a "Sell" rating on the stock at the current price of USD 1.46, down by 1.46% as of January 27, 2022  01:13 PM ET.

MBRX Daily Technical Chart (Source: REFINITIV)

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

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