Moleculin Biotech Inc (NASDAQ:MBRX) Just Strenghened Our Bull Thesis

Moleculin Biotech Inc (NASDAQ:MBRX) is one that we last looked at towards the end of June. At the time, the company had just run from $0.75 a share to around $1.52 a share and we highlighted this stock as one to keep an eye on near term. Specifically, we suggested that a host of 2017 catalysts could compound the action we were seeing and boost the stock further.During the few days subsequent to our initial coverage, our thesis was validated. The company ran up to highs just short of four dollars a share.These prices didn't last long, however. By July 10, Moleculin had dipped back to $1.30 and – as things stand – goes for $1.53.That the highs didn't hold, however, doesn't really matter that much. Not in the grand scheme of things, at least. The key thing for Moleculin was running up above one dollar a share and maintaining its price above this threshold for 10 consecutive trading days. If it could do that, it would shed its NASDAQ delisting threat and – with it – shed the potential for a near-term reverse split.Alongside the catalysts we outlined in our previous coverage, this reverse split risk removal was key to our longer-term bullish thesis. Shareholder sentiment was (or at least had been) relatively weak for some time based on the idea that a reverse split could be just around the corner and, not only this, but the same risk was limiting new entrants into the stock (who wants to buy a company just before it splits?).At market open today, Moleculin put out the release were looking for.The company announced on July 12 that it had received notice from NASDAQ that it had regained compliance with the exchange's listing requirements, with said compliance rooted in the minimum bid price requirement under NASDAQ Listing Rule 5550(a)(2) for continued listing on The NASDAQ Capital Market.The takeaway: Moleculin is in compliance with the minimum bid price requirement and NASDAQ considers the matter closed.This is great news for shareholders and should serve to relieve a large portion of downside pressure from Moleculin in the wake of its announcement. As such, and based on the pressure relief, we maintain a strongly bullish thesis on the company heading into the latter half of 2017 and beyond.What is particularly important now is that markets are focused squarely on fundamental developments (trial related catalysts, specifically) as far as the reward side of the equation is concerned and, in turn, that the risk side of the equation is limited to (outside of the potential for the catalysts hitting press as negative, of course) the standard capital burn risks associated with a biotechnology at this end of the space.The company had $8.8 million cash on hand at March 31, 2017, which isn’t terrible and will almost certainly fund G&A expenses for the next six to eight months, but it isn't going to be enough to initiate a fresh clinical program for its now lead asset, a cancer treatment called WP1234.As such, will likely see a capital raise at some point over the next few months (at the outside, it could be very near term) so as the company can bank the funds necessary to get underway with the trial in question.That's a risk, sure – dilution is never ideal from a shareholder perspective.With share structure concerns in the rearview mirror for now, however, and for the foreseeable future at that, the potential for dilution is a relatively light cross to bear.Bottom line here is that it's rare at this end of the sector to see a company drag itself out of a delisting position with fundamental advance and concurrent share price appreciation. Moleculin has achieved just that and – for us – this makes it very much one to watch going forward.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 angieetzel via FlickrDisclosure: We have no position in MBRX and have not been compensated for this article.