GT BIOPHARMA INC (EPA:GTBP) is currently on the advanced trial stage in some of its drugs. Despite this, there has been a lot of pullback in the company’s share price with a downward trend been exhibited in recent periods due to a reverse stock split that took place in August 2017. A trend which can be seen below:
This article will dive further into the stock, assessing its potential upside based on its strategy and financial performance. We want to bring out our view on the benefits accruing to an investor investing in this stock for either the short or long term.
Having said this, it is important for us to briefly review the company for readers with rudimentary knowledge of its operations.
GT Biopharma Inc: An Overview
GTBP is a biotech company, a significant player in the medical diagnostics and research industry. The company has focused its research mainly on developing innovative drugs for the treatment of cancers and central nervous system diseases which are currently some of the most prevalent chronic diseases in the world. GT Biopharma’s focus on this segment has borne fruit in recent times given that the company has made significant breakthroughs in the field, some of which will be discussed later in this piece.
The company has positioned itself in the industry as a force to be reckoned with, merging forces with some of the largest industry players in the industry. This is in addition to the merger between Oxis and Georgetown Company, both of which bring onboard intensive research in the medical field. Moreover, it has formed strategic relationships with some of the world’s leading cannabinoid researchers and institutions to advance its technologies such as the One World Cannabis Pharmaceutical.
The company seeks to grow globally through pioneering research in drugs that can help ease the pain of many suffering individuals worldwide. The potential upside associated with such a breakthrough will be very high, compensating for the risk associated with a failure in the drug.
Key Medical Breakthroughs
Georgetown has a large portfolio of drugs, having developed drugs that treat motion sickness, rare muscular diseases as well as pain medication. However, lead drug candidate, OXS-1550 (DT2219ARL), is a novel drug that binds to targets and destroys cancer cells, due to the action of the drug’s cytotoxic payload focusing on specific cancer cells while leaving healthy cells alone. The drug has currently demonstrated success in the human trials for people with leukemia.
OXS-1550is currently being assessed by the FDA as new drug applications with the application in 15 to 18 months, which would allow GT Biopharma, Inc. to start marketing the drug shortly thereafter.The company is looking forward to the successof the above stated phase.
GTBP’s Chief Executive, Anthony Cataldo, is quoted saying:
“The enrollment of four patients in the Phase 2 trial is a key step for the company and a milestone for the promising technology.The product performed well in Phase 1 studies of blood cancers and we look forward to providing a targeted immunotherapy product that has the capability of treating a number of different liquid tumors”
The above mentioned drug promises a lot for the medical industry as well as the company. Such advances are bound to bring great returns to the company over the short and long term.
The financial provisions
The company has, for the period till June 2017, made a loss of $5.91 per share which is lower than the loss per share made for the six-month period till June 2016 on a pro-rata basis of about $15.9 due to a strategy adopted by the company to cut its costs. GTBP’s selling, general and administrative expenses fell by over $800,000 between June 2016 and June 2017. Moreover, the losses are attributable to lack of revenue generation over both periods as they await the approval by the FDA to commercially produce the drugs.
The company has invested most of its equity in research and development with the research and development expenses standing at 17% of the total expenses as at June 2017. The nature of the industry demands that the company expend more in R&D with the expected payoff being significant for successes in any of their products.
Finally, the entity completed a reverse stock split of 1:300 on August 2017. This action is significant given that it will begin trading on the NASDAQ at the end of this year. This share consolidation represents a positive move by the entity given that they will begin trading during a period where their drugs are expected to have been approved, presenting a great move for traders to make a kill on the company’s share surges.
The strategy adopted by the entity seems fluid and strong as they seek to benefit from being the first-mover in an industry that rewards research breakthroughs with a heavy premium. Over the long term, it is expected that the company will further grow with the approval of its drug by the FDA, a factor which will boost their revenues and eventually their total profits and growth potential.
GTBP is a story of the breakthrough in the medical diagnostics and research fields. It represents the strides made in the medical sector and in the treatment of chronic diseases. Investment in the company is bound to pay off both in the short and long term for investors.
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Disclosure: We have no position in GTBP and have not been compensated for this article.