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Pulmatrix Inc (NASDAQ:PULM) Is Staging A Recovery

Pulmatrix Inc (NASDAQ:PULM) Is Staging A Recovery
Written by
Chris Sandburg
Published on
August 16, 2017
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Back in June, we put forward this argument as to why Pulmatrix Inc (NASDAQ:PULM) was dramatically undervalued. Our thesis was rooted in the potential of the company's technology to drive value-add catalysts across the coming 24 months and the overlooking of this potential by wider markets. At the time, the company was trading for a little over $2.45 a piece. This was a premium over the price at which we first highlighted this one ($2.22, earlier in 2017) but down considerably on the highs in and around $7 recorded back in February.During the eight weeks subsequent to our coverage in June, Pulmatrix has lost some of its strength, reaching lows of $1.47 at the end of last week. Early this week, however, the company has bounced considerably and looks to be staging something of a resurgence. At first glance, there doesn’t look to be any immediate reason why the company is running, but it is; Pulmatrix stock is up close to 90% on its start of the week pricing.Take a look at the company's most recent SEC filings, however, and things become a little clearer. The company just filed this presentation with the SEC. It's an August pipeline update and it's exactly the sort of thing we were looking for as far as potentially getting this one moving was concerned.We can only highlight catalysts to a certain audience. Sure, this offers our readers an opportunity to pick up an exposure to a company before wider markets turn on to its potential, but for a company like Pulmatrix to actually get moving, it needs to make markets aware of what it's doing and where the value is coming from near to medium term.With the presentation we just linked to, the company has done just that.Specifically, we're looking at two 2018 catalysts as driving value from a pipeline perspective and a potentially nearer term catalyst (perhaps as early as before the end of this year) as driving immediate revenue potential.For those new to this stock, Pulmatrix is a biotechnology company that has developed a technology that allows it to alter the formulation of various inhalable drugs so as to improve upon the administration characteristics of the drugs in question. The technology works by reducing the size of the particles that are inhaled, helping to avoid things like compound clumping (which is where the drug collects at the back of the throat) and reducing the dose requirement based on the fact that the smaller particles have a higher surface area and allow for a more concentrated individual dosing.Right now, Pulmatrix has two drugs that account for its two lead programs, one called PUR1800 that's investigating the iSperse technology in COPD and another called PUR1900 that's doing the same but in allergic bronchopulmonary aspergillosis in patients that have asthma. The former is a phase II and the latter is a phase I.It's these two trials that are going to bring with them the catalyst over the next twelve months.Specifically, we're looking at the completion of a phase II study of the 1800 asset during the second half of 2018 and topline to follow shortly after. If the data is positive, it will pave the way for a pivotal trial in this indication (that's at worst, at best it may be enough to pick up approval by way of an SPA) and will also serve as proof of concept to support licensing efforts for the technology to third parties.The second catalyst is data from a phase IB in the 1900 asset, set to hit press during the first half of next year. Again, there's a good chance that this one will support an advance straight into pivotal.Further, we don't need to wait that long for out-licensing opportunities to hit the tape. The company is already working on one such program with an asset called PUR0200, a Spiriva formulation US alternative, and we should see some development on that front before the end of this year.Cash is always a concern at this end of the market and there's a dilution risk between now and end next year, even with the $10 million on hand recorded at the end of June. There's enough upside on offer, however, with the catalysts outlined above, to make any dilution well worth bearing for an investor looking to get in ahead of wider markets and before the recent bounce really takes hold.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 PULM, sign up below!Image courtesy of Jack Lawrence via FlickrDisclosure: We have no position in PULM and have not been compensated for this article.

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