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Moleculin Biotech Inc (NASDAQ:MBRX) Just Cleared A Major Hurdle

Moleculin Biotech Inc (NASDAQ:MBRX) Just Cleared A Major Hurdle
Written by
Chris Sandburg
Published on
September 5, 2017
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Moleculin Biotech Inc (NASDAQ:MBRX) has settled down a bit since we last covered it and currently trades in and around $2.55 a share for a market capitalization of a little over $51 million. The current period of consolidation, however, isn't going to last long – things are moving fast with this stock and it's only a matter of time before we see a return to the overarching upside momentum. MBRX Daily ChartA recent development is drawing some considerable speculative volume towards Moleculin and, as markets reopen after the Labor Day break in the US, we could see the stock break to the upside.Here is what the company just announced and what it means for the stock and its shareholders going forward.For those new to Moleculin, the company is a biotechnology stock that is working to develop a portfolio of cancer treatments. Its lead asset is rooted in a subgroup of chemotherapy agents called anthracyclines, which is the most effective group of anticancer treatments that developed and is currently used to target a range of different types of cancer, including leukemias, lymphomas, breast, stomach, uterine, ovarian, bladder cancer, and lung cancers. With its own take on an anthracycline, Annamycin, Moleculin is targeting first of the cancers on that list – leukemia – and specifically, a type of leukemia called relapsed or refractory acute myeloid leukemia, more commonly referred to as AML.And it's this asset, in this indication, to which the recent development relates.August 29, Moleculin announced that it filed with the Food and Drug Administration (FDA) an Investigational New Drug (IND) application to study Annamycin in the treatment of AML. Some reading might already be aware that this is the second time Moleculin has submitted this application. For those new to the story, the company initially submitted an IND back in 2016 but the agency in the US turned it down, requesting certain revisions to the protocol, additional information, and additional data related to Chemistry, Manufacturing and Controls (CMC).Moleculin had to collect some fresh data ahead of a resubmission and there was a large degree of uncertainty surrounding both its ability to do so and if it was able to, how much it would cost the company along the way. This served to put some pressure on Moleculin's share price throughout the first half of 2017 and, during this period, we highlighted the fact that when the company did finally submit this pressure would ease and we would likely see a spike in market capitalization as and when it was reported.That's what we expect this week. The company believes that it has answered the concerns of the FDA and, assuming it is correct, we should see a phase 1 trial initiation during the fourth quarter of this year. Additionally, another reported a couple of weeks ago, Moleculin also sat down with the European Medicines Agency (EMA) to discuss a similar initiation in Europe.As both of these files rollout, and as patients start to receive doses of Annamycin under the trial protocol, Moleculin is going to start flagging up on biotechnology traders' radars and should appreciate in value accordingly.That's the upside – the primary risk with this one right now is rooted in dilution. In the most recent earnings conference, management reported that the company expects it has enough cash to last it through to the second quarter of 2018, but with a clinical trial initiation on the cards near term, there's every chance that we will see a raise during the late fourth this year quarter or early first quarter next. It's not too big of a deal – the cash will be used to fund the company through to the completion of the clinical trial, which would serve up a major catalyst if the data points to efficacy – but it's a risk that needs considering nonetheless.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on MBRX, sign up below!Image courtesy of GreenFlames09 via FlickrDisclosure: We have no position in MBRX and have not been compensated for this article.

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