When we looked at GeoVax Labs Inc (OTCMKTS:GOVX) towards the end of last month, the company was trading for in and around $0.06 a share and we put forward the suggestion that – at that price – it might be nice discount exposure to what we saw as some real potential for long-term gains.
We noted that the company was working on a potentially game-changing HIV drug and that these sorts of drugs can often drum up quite a lot of excitement in news media if they are able to show a degree of early-stage efficacy – purely because an indication like HIV is a very large unmet need globally and is also one that numerous companies are working on but that very few have been able to crack.
Fast-forward a few weeks and the company just put out a fresh update as relates to the program in question and – on the back of the update – has kicked off the run we suggested might be just around the corner.
At the close of play on Wednesday, GeoVax went for $0.093 a share. That is a 55% run on the price at which we suggested that the company might be nice buy and a close to 17% run during the session on Wednesday alone.
So what’s next?
Well, we’re going to stand by our long-term thesis on the stock and reinforce our expectations for this company continuing to appreciate as we head into the start of 2018 and beyond.
However, with the latest update, we are able to substantiate this thesis a little more solidly than we were able to a few weeks ago.
So let’s do that.
For those new to this company, the core of its pipeline is a vaccine called the GOVX-B11 vaccine. The GOVX-B11 vaccine consists of two vaccine components – a recombinant DNA vaccine and a recombinant live MVA virus vaccine. The idea is that the recombinant DNA vaccine component of the asset can prime a person’s immune response, while the MVA component boosts the immune response.
Across a variety of trials, the company is investigating both the efficacy of this vaccine in and of itself as well as the longer-term efficacy of the vaccine when boosted with various proteins and it’s this program the latest update addressed.
For anybody looking for the details, the update is available here.
By way of a quick summary, however, the announcement basically said that all of the programs are on track and that one of the lead programs, a phase 1 human clinical trial evaluating late boosts of GOVX-B11 for clade B HIV, which is the dominant subtype of HIV found in the Americas, Western Europe, and Australasia, has closed enrollment.
So why is this exciting?
Well, essentially because it suggests that we could see data from this trial near term. HIV trials are known for lasting quite a while but enrollment started on this one relatively early and there is often the potential for interim releases based on viral load and viral shedding in the patients that are under investigation because HIV patients generally require constant monitoring.
In a trial like this, one that’s set up to investigate the impact of the drug as compares to the legacy standard of care data, it will be relatively simple to ascertain whether there is any effectiveness boost brought about by the investigator asset as compares to the current SOC.
There still remains risk on this one, of course, and as is generally the case in the biotechnology sector – it’s rooted in cash burn.
GeoVax had just $343,826 on hand at September 30, 2017, meaning we’ll almost certainly see a capital raise (and, by proxy, some degree of dilution) over the coming months.
Even with this dilution risk in place, however, there’s still plenty to support a long-term bull thesis on the stock and – in turn – plenty to support the argument that even with the latest gains in place, this one still looks cheap.
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Image courtesy of NIAID via Flickr
Disclosure: We have no position in GVAX and have not been compensated for this article.