Back on May 23, 2017, we took a look at Kadmon Holdings Inc (NYSE:KDMN) in this piece. At the time of our coverage, the company was down more than 75% since its initial public offering (IPO) back in 2016, and the majority of this depreciation was rooted in some bad press surrounding embattled biotech company Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Specifically, the two companies had an agreement that appeared – at a glance – to benefit both on the back of price hikes of a drug called Syprine, an approved treatment for a condition called Wilson’s disease, which is characterized by the toxic accumulation of copper in the liver and can lead to death.The drug is essentially a lifeline for these patients and, between 2010 and 2015, the price for 100 tablets rose from around $650 to more than $21,000. Kadmon released a report saying it was developing a generic version in 2016, but certain terms associated with the development pathway, and the link with Valeant, as well as a bit of background on some execs at Kadmon, made the whole thing look a little suspicious. In turn, this made the company an easy target for short attacks, and by proxy, selling pressure.We argued that things were not as they seemed at first glance, however. Look a little deeper into what actually went on and Kadmon is far from at fault, a statement underpinned by numerous factors that we recommend readers take a look at here.As it turns out, it seems markets are finally coming around to our opinion, and it's taken less time than we thought. When we put forward our argument for Kadmon's innocence in the situation, the company traded for around $2.40 a share. It subsequently declined to end of May lows at around $2.25, but throughout June, has appreciated considerably, reversing the overarching downside momentum and gaining strength in line with our bull thesis. On Wednesday, Kadmon hit intraday highs of $3.68 a share and closed out for $3.56 – gains of 50% and 48% respectively for anyone who picked up exposure when we highlighted this company as being one to watch.So, with the gains logged, what's next? Can the stock continue to run?We think so.Earlier this month, the company put out preclinical data from a new study of one its lead asset classes – what are called GLUT inhibitors – in the treatment of autoimmune and inflammatory conditions. The data was strong, and serves as a deep-pipeline set of numbers with which to backup primary assets at events like Jefferies, at which management took the stage to a strong market response earlier this month.What is really going to drive this one, however, is the spate of catalysts set to hit press throughout the remainder of 2017.Data from a phase II study of KD025 in an indication of chronic graft-versus-host disease is due during the third quarter of the year. Data from another phase II, investigating the same asset but this time in idiopathic pulmonary fibrosis (IPF), will follow the first, set for read out in the fourth quarter of 2017. Yet another KD025 phase II will also read out in the fourth quarter, this time in a moderate to severe chronic plaque psoriasis indication.There's also a phase II initiation set for third quarter, which will see the company kick off an investigation into a drug called Tesevatinib in an indication of autosomal dominant Polycystic Kidney Disease (ADPKD). Tesevatinib is also under investigation right now in recurrent glioblastoma (brain cancer) and EGFR-mutant non-small cell lung cancer (NSCLC) that has metastasized to the brain.Put simply, this company has one of the most expansive clinical programs on the market for a company of its size, and the only thing that was weighing on it in advance of all these catalysts hitting press was the downside pressure from the Valeant situation. Now that that pressure has lifted, and if these catalysts come in as positive (early-stage data suggests that at least one or two of them should) then there is clear room for upside reevaluation throughout the remainder of this year, with multiple shots on goal.Of course, an extensive clinical program costs money, and this always brings with it the the threat of dilution for shareholders. In this instance, however, things look pretty good. At the end of the first quarter, Kadmon had a little over $43 million cash on hand – enough to take it through to at least the numerous catalysts outlined above, and likely into early to mid 2018, removing any near-term dilution risk.Know the whole story: catch up on our previous KDMN coverage here.We will be updating our subscribers as soon as we know more. For the latest updates on KDMN, sign up below!
Image courtesy of NICHD via Flickr
Disclosure: We have no position in KDMN and have not been compensated for this article.
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