Equillium, Inc.

EQ Details

Business Update: Equillium, Inc. (NASDAQ: EQ) is a clinical-stage biotechnology company with a deep understanding of immunobiology to develop products to treat severe autoimmune and inflammatory disorders. The market capitalization of the company as on 08 June 2021 stood at ~$221.86 million. As per a recent update, the company will collaborate with Oxford University and Kennedy Institute of Rheumatology to look into the role of CD6-ALCAM pathway and Itolizumab in rheumatic diseases.

Favorable Data from Phase 1b Equalise Study: EQ has announced positive top-line data from the Type A group of the EQUALISE study in patients with systemic lupus erythematosus (SLE). The study reflected that itolizumab, a monoclonal antibody selectively targeting the CD6-ALCAM pathway, was safe and within tolerable limits.

Q1FY21 Performance Update: The R&D expenses during the quarter was at $5.9 million, compared to $4.7 million in the previous corresponding period. This was due to an increase in clinical development expenses with regards to the EQUATE and EQUALISE studies. The net loss during the quarter stood at $9 million as compared to a loss of $7.8 million on the pcp. It ended the period with a cash position of $104.1 million as of 31 March 2021.

Q1FY21 Financial Performance (Source: Company Reports)

Key Risks: The company's line of business exposes it to prudent regulatory measures, and as such, it has to bear the risk of R&D costs and expenses. 

Outlook: The company expects to have EQUALISE Phase 1b study interim data from Type B patients (lupus nephritis), in the second half of FY21. It also anticipates EQUIP Phase 1b study top-line data in uncontrolled asthma during the second half.

Stock Recommendation: The stock of EQ is trading below its average 52-weeks’ levels of $27.05-$2.53. The stock of EQ gave a positive return of ~154.66% in the past one year and a positive return of ~58.178% in the past six months. On a technical analysis front, the stock of EQ has a support level of ~$6.24 and a resistance level of ~$8.28. Considering the high trading levels, recent rally in the stock price, muted financial performances and the key risks associated with the business, we suggest investors to book profit and give a 'Sell' rating on the stock at the closing market price of $7.64, up by 3.1% as on June 08, 2021.

EQ Daily Technical Chart, Data Source: REFINITIV

Interpace Biosciences Inc.

IDXG Details

New Offering in Digital Spatial Profiling Services: Interpace Biosciences Inc. (Other OTC: IDXG) is engaged in the provision of personalized medicine and offers specialized services from early diagnosis and prognostic planning to specific therapeutic applications. The market capitalization of the company as on 08 June 2021 stood at ~$41.16 million. The company has recently announced that Interpace Pharma Solutions, a subsidiary of IDXG, will provide a new offering in Digital Spatial Profiling services by using the novel GeoMx testing platform. This will enable the company to measure protein and nucleic acids with a high level of precision, from whole tissue to single cell.

Q1FY21 Results Update: The company has delivered resilient performance during the period with an increase of ~9% in net revenue to $9.8 million, when compared to the previous corresponding period. There was an improvement in the gross margin to ~46%, from a level of ~33% during the same period under consideration. The loss from continuing operations stood at ~$4.2 million during the period. It had a cash balance of $3.3 million, net of restricted cash as of 30 April 2021.

Strategic Alternatives for Maximizing Shareholder Value: The company has been performing well, but the management is of the view that the same has not been reflected in the value of its share price. In this regard, it will plan for a review of the company’s business units and look for alternatives to maximize shareholders value. Guggenheim Securities, LLC is acting as a strategic advisor in this process.

Uptrend in Revenue (Source: Analysis by Kalkine Group)

Key Risks: Despite an uptick in the revenue, the company has been reporting losses, which poses a risk to the sustainability of the business in the long-term.

Outlook: The company expects Q2 revenue to exceed $11 million and believes that it is on track to exceed full year FY21 revenue growth of ~35%. On the back of decent performance, it has moved up its target for EBITDA breakeven from Q4FY21 to Q3FY21.

Stock Recommendation: On 3 May 2021, the company has announced that eviCore Healthcare has updated their laboratory management guidelines to include positive coverage for ThyGeNEXT® and ThyraMIR®. The stock of IDXG is trading close to its 52-weeks’ levels of $10.420. The stock of IDXG gave a positive return of ~251.21% in the past nine months and a positive return of ~221.20% in the past six months. On a technical analysis front, the stock of IDXG has a support level of ~$9.33 and a resistance level of ~$10.42. Considering the current high trading levels, recent rally in the stock price, decline in current ratio of the company and the key risks associated with the business, we suggest investors to book profits and give a ‘Sell’ rating on the stock at the current market price of $10.15, down by 2.22% as on June 08, 2021.

IDXG Daily Technical Chart, Data Source: REFINITIV

Note 1: The reference data in this report has been partly sourced from REFINITIV

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

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