Advaxis, Inc. (NASDAQ:ADXS) is one of the stocks that is attracting significant attention in the healthcare sector. Strategic investments supported by positive ratings are some of the catalysts fuelling the stock’s upside action. The stock is already up by more than 100%, from one-year lows, as it continues to recoup losses accrued over the past year.
ADXS Share Price Analysis
Renewed investor interest stems from the announcement that the company generated a net income of $12.8 million, compared to a net loss for the same period last year. The biotechnology company has also seen it’s market sentiments inch higher on providing a positive update about its clinical pipeline.
Equity research firm Zacks initiating coverage of the stock with a buy rating is another catalyst that continues to strengthen investor confidence in the stock. The rating upgrade underlines a positive outlook, as the company continues to enjoy a phase of robust growth.
The stock is still engulfed in a long-term bear trend having shed more than 90% in market value in 2018. However, investors sentiments have improved in the recent past helping avert a further slide.
A spike to the $0.51 mark has opened the door for further rallies to the $1 a share mark, seen as the immediate resistance level. Considering the long-term bear trend, Advaxis remains susceptible to further drops while trading below the $0.90 mark.
Advaxis bills itself as a late-stage biotechnology company focused on the development and commercialization of antigen delivery products. The company is currently working on therapies targeting various HPV-related cancers for head and neck cancer.
Why is Advaxis Surging
Zacks Research initiating coverage of the stock with a buy rating all but validates a spike in share price as well as market sentiments. The upgrade translates to improving underlying business that continues to excite the market. Investors appreciation to the improving business explains the surge in share price.
The company reporting stellar financial results for the quarter ending January 31, 2018, affirms the buy rating. During the quarter, Advaxis generated a net income of $12.8 million or $0.18 a share, compared to a net loss of -$20.5 million or $0.49 a share reported a year earlier.
Clinical Trial Milestones
In addition to earnings growth, the company achieved a significant milestone in the development of its pipeline of products. During the quarter, the company initiated the first clinical trial using a novel and proprietary approach for cancer treatment. The company has since enrolled its first patient, under the ADXS-503 Phase ½ clinical trial.
“We expect 2019 will be an important and eventful year for Advaxis due to the amount of information we anticipate generating from our programs. In order to ensure our various programs progress to data readout, we are continually evaluating ways to increase our cash runway by controlling expenses and generating cash from potential out-licensing and/or financing transactions,” said CEO, Kenneth Berlin.
However, the company has suffered a significant blow on the U.S Food and Drug Administration, placing a clinical hold on the Phase 3 clinical trial of AIM2CERV for axalimogene. With the partial hold, the company will have to provide additional information to ascertain AXAL chemistry, manufacturing as well as control measures.
Amidst the clinical hold, the FDA has not cited any safety issues in relation to the trails already carried out.
“We reached an important milestone with our ADXS-HOT program last month when we enrolled the first patient in the ADXS-503 Phase 1/2 clinical trial. [..]We continue to be very excited about our ADXS-HOT program and anticipate filing two additional INDs for drug constructs from this program during 2019,” said Mr. Berlin.
Advaxis bounce back from all-time lows is well supported by improving fundamentals. Robust earnings growth is one of the credentials that affirm the company’s ability to generate significant shareholder growth.
In addition, the company has achieved significant milestones on the development of its pipeline of drugs targeting various types of cancer. A buy rating from a reputable research firm is another positive that continues to affirm the stock’s long-term prospects as it continues to bottom out.
That said Advaxis is an ideal risk-reward play as it continues to rise. The stock is trading at a discount relative to its long term prospects.
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Disclosure: We have no position in ADXS and have not been compensated for this article.