Advaxis, Inc. (NASDAQ: ADXS) is having a rough day in the market today, trading on losses of more than 12% early on. While these large losses are concerning to some, the truth of the matter is that the stock may be presenting a strong opportunity. Here’s what’s going on:
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Day Traders Have Been All Over ADXS
While the last material news issued by Advaxis was on September 9, 2019, the stock ran in value over the past couple of trading sessions as day traders locked onto the ticker. Today, the stock is down, but this is a natural reaction.
At the end of the day, when day traders push a stock for the top, profit taking is going to happen once it gets there. Traders obviously believe that we’ve hit the top, based on the declines today. Nonetheless, this may be a very big opportunity.
On September 9, 2019, ADXS issued ints quarterly results. There are a few big pieces of news that came with the release, suggesting that several catalysts are on the horizon.
First and foremost, the company said that it completed enrollment of the first dose level in Part A of a Phase 1/2 clinical trial. The trial is assessing ADXS-503 as a potential monotherapy for patients with non-small cell lung cancer.
In the release, ADXS said that the trial is set to begin enrollment in the second dose level of Part A and will do the same for Part B. In Part B, Advaxis is goiing to combine ADXS-503 with a checkpoint inhibitor.
This will lead to multiple catalysts. First and foremost, when the enrollment begins in the second dose level of Part A and Part B, limelight will shine down on Advaxis, likely leading to gains. Moreover, these earlier stage studies don’t tend to take too long. So, we can expect to see quick turnaround with interim and primary data, opening the door to more potential gains.
It’s worth mentioning that the company has also been very busy presenting data. Positive data from the Phase 1 ADXS-NEO study was presented, with preliminary data showing strong reactions to treatment. To date, ADXS-NEO is showing strong safety, tolerability and efficacy data, setting the stage for more data and development-driven catalysts ahead.
Finally, the company has also recently presented data with regard to its ADXS-PSA candidate. Recent study of the candidate shows that with or without pembrolizumab, strong survival results were seen. This is yet another asset that’s likey to lead to several catalysts ahead.
Addressing The Elephant In The Room
On the message boards around the web, we see the bulls arguing that this is a great opportunity while the bears argue that the company can’t afford to continue. This is a common statement among clinical-stage biotechnology companies because large investments are needed to push assets through development before any real money can be made.
First and foremost, I want to say that when it comes to Advaxis, there will be need for funding down the road. It’s the crux of clinical-stage biotechnology companies, but it’s a necessary evil.
With that said, funding won’t be necessary in the near term. In the last quarter, the company brought in around $17 million from an underwritten public offering. Moreover, ADXS is working to reduce its expenses. In fact, in the last nine months, the company reduced expenses by $24.6 million year over year.
With continuation of reduced spending in mind, combined with funds on hand and funds received from the recent offering, ADXS has the funding that it needs to make it through several likely-positive catalysts. So, while there may be valid concern over a fund raise in the future, there’s a very real opportunity to enjoy growth ahead of any likely raise.
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