Given that developing biotechnology companies are more susceptible to swings in stock price than established ones, investors might want to keep an eye on happenings at next month’s American Association for Cancer Research Annual Meeting in New Orleans. Of the eight public companies that will discuss clinical trial results, half qualify as small caps or lesser.
Depending on what investors learn, the biggest moves—up and down—are likely to come from the small players. The reasons for their volatility are many, including intense speculation, the number of shares available and a larger percentage of shares held short, according to a paper published in 2018 by Ethan J. Hugstad, a professor at the University of Northern Iowa.
The company with the smallest valuation-$72 million—that will be sharing trial results is Checkmate Pharmaceuticals Inc. (CMPI, Financial), a seven-year-old Cambridge, Massachusetts-based biotech. Its poster presentation will focus on patients who have been treated with the antitumor drug vidutolimod for melanoma and non-small lung cancer.
The company’s shares could certainly use a shot in the arm. At $3.43, its 52-week high of $15.30 is a distant memory. However, Checkmate is rated a strong buy by all three analysts, with an average target price of more than $18, reported Yahoo Finance.
Transgene SA (FRA:TGNA, Financial) has a valuation of $171 million, and at just more than $2, the shares are in the middle of their high and low over the past year. The French company will be presenting a poster showing promising preliminary phase I data for a vaccine for ovarian cancer and head and neck cancer.
Caption: Investors in the small biotechs presenting at the AACR Annual Meeting in New Orleans next month are hoping for news that will bump up share prices.
China’s Ascentage Pharma (HKSE:06855, Financial) will be the meeting’s most active participant, presenting the results from six preclinical studies of the company's five cancer drug candidates. Analysts think Ascentage has good upside potential, pegging its average target price at more than $8 a share, about four times higher than where the stock is now.
Adagene Inc. (ADAG, Financial) of San Diego will showcase four different posters that highlight preclinical results of the potential best-in-class profiles of three differentiated preclinical product candidates. A micro-cap, Adagene has had the bottom fall out of its stock since it went public last February at $19 a share. Shortly thereafter, it hit about $27 before beginning a steep descent to its current price of $4.77.
Gracell Biotechnologies Inc. (GRCL) is another micro-cap that will grace the meeting, slated to display early clinical results of a first-in-human investigator-initiated trial of a drug that illustrates the uniqueness of its proprietary platform known as TruUCAR. Like many of its fellow presenters, Gracell shares have run into hard times, sliding from a 52-week high of nearly $25 all the way down to $2.88. Analysts have assigned the stock a target price of more than $33, so they evidently see something most investors don’t.
Two well-known names are on the meeting agenda. Amgen Inc. (AMGN, Financial) will share the long-term outcomes from a trial evaluating its drug Lumakras, a lung cancer treatment that received accelerated approval from the Food and Drug Administration last year. The California-based biotech will also provide preclinical results on its antibody for use in treating NSCLC and epithelial ovarian cancer.
Another industry giant will also make its presence felt. Eli Lilly and Co. (LLY, Financial) will reveal data from development programs for pirtobrutinib, for leukemia, and Verzenio, a medication aimed at overcoming resistance when combined with endocrine therapy for a type of breast cancer.