Heat Biologics Inc (NASDAQ:HTBX) Is Today's NASDAQ Focus

Heat Biologics Inc (NASDAQ:HTBX) has been on a steady downtrend for the past few months. Problems with its clinical trials and a new equity offering have contributed to the downward pressure. Now, investors are asking what's next as shares are below $1 in penny stock territory and the company is facing a NASDAQ delisting.HTBX is an immuno-oncology company developing novel therapies that activate a patient’s immune system against cancer. Heat’s highly specific T cell-stimulating platform technologies, ImPACT and ComPACT, form the basis of its product candidates. These platforms, in combination with other therapies, such as checkpoint inhibitors, are designed to address three distinct but synergistic mechanisms of action: robust activation of CD8+ “killer” T cells (one of the human immune system’s most potent weapons against cancer); reversal of tumor-induced immune suppression; and T cell co-stimulation to further enhance patients’ immune response. Currently, Heat is conducting a Phase 2 trial with its HS-410 (vesigenurtacel-L) in patients with non-muscle invasive bladder cancer (NMIBC) and a Phase 1b clinical trial with its HS-110 (viagenpumatucel-L) in combination with an anti-PD-1 checkpoint inhibitor to treat patients with non-small cell lung cancer (NSCLC).Last month, HTBX halted enrollment at 16 participants in the HS-410 monotherapy arm of its Phase 2 study in non-muscle invasive bladder cancer (NMIBC). It began enrolling patients in early 2015 in response to the global shortage of standard-of-care Bacillus Calmette-Guerin (BCG), since resolved. The 16 patients can continue treatment with HS-410 monotherapy per the study protocol. Top-line six-month results should be available in Q4.The company's decision does not impact the other three arms in the trial which is evaluating HS-410 in combination with BCG for the treatment of NMIBC. Top-line results (one year data) are also expected in Q4. The trial was placed on partial clinical hold by the FDA on February 3 due to the misidentification of a cell line, but the issue was addressed and the hold was lifted on February 10. HS-410, based on the company's proprietary ImPACT immunotherapy platform, is designed to generate certain immune cells, CD8+ killer T cells, that attack cancer cells.Last week, HTBX announced a public offering of 9.1M shares of common stock and warrants to purchase up to 6.825M shares of common at a combined price of $0.75. Each share of stock will be sold with a warrant to purchase 3/4 of a share at $1. Gross proceeds will be ~$6.8M. Closing date is March 23. Net proceeds will fund the completion of its Phase 2 study of HS-410 in bladder cancer, the advancement of its Phase 1b study of HS-410 in non-small cell lung cancer, the licensing or acquisition of complementary products, working capital and general corporate purposes.While the equity raise does help firm up the company's capital base, the offering is being done at the bottom of the range. This price for the offering is drastically below the 50-day and 200-day moving averages at $1.81 and $3.98, respectively. The company should have done this offering a long time ago. This is just another example of how badly mismanaged HTBX has become.Currently trading at just a $5.75 million market cap, shares of HTBX could bounce from these levels. While we don't feel the company is a long-term hold, it has become quite oversold and the additional cash raised will allow the company to fund the completion of its Phase 2 study of HS-410 in bladder cancer and the advancement of its Phase 1b study of HS-410 in non-small cell lung cancer. We are hoping that the problems with its clinical trials are over and that the company posts some positive results this year. Shareholders have a right to be disappointed. We will be updating Insider Financial as soon as we know more. For continuing coverage on HTBX, sign up for our free newsletter today and get our next hot stock pick!Disclosure: We have no position in HTBX and have not been compensated for this article.