BioPharmX Corporation (NYSE American: BPMX) is a Silicon Valley-based specialty pharmaceutical company, which seeks to provide products through proprietary platform technologies for prescription, over-the-counter, and supplement applications in the health and wellness markets, including dermatology and women’s health.
BioPharmX has successfully completed a phase 2b trial for BPX-01 and is preparing for phase 3 trials in acne. The company is currently conducting a feasibility study for BPX-04 in rosacea and is preparing for a phase 2 trial. When the company released clinical data for both products recently, the shares gained significantly but have levelled off in recent trading sessions.
On April 26th, the company announced financial results for the quarter and year ended January 31, 2018. The past one year has been filled with numerous milestones and accomplishments for BioPharmX. The company achieved significant clinical milestones, including a successful Phase 2btrial for BPX-01 for acne and the launch of the BPX-04 rosacea program. Furthermore, BPMX was granted three patents from the United States Patent and Trademark Office with numerous patents pending, which demonstrates the robust product pipeline of the company.
Analysts tracking the stock believes that the company is well poised for significant value creation via efficient development and commercialization especially given the fact that BPX-01 and BPX-04 share a novel topical delivery system to carry a minocycline gel to the target area in the skin and will be catering to a large, growing market with significant unmet needs.
Moreover, the company has a presence in a segment which is consolidated right now. In fact, BioPharmX is the first company to develop a topical gel formulation of minocycline that reaches not only the epidermis where rosacea manifests itself but also more in-depth into the pilosebaseous unit, where acne develops. By applying minocycline topically, a patient may reduce the systemic uptake of minocycline and focus the drug’s beneficial effects on the skin where they are needed most.
The market cap of just $46.8 million and share now ruling at $0.24, can move to a level of about $1.50 in next six months or so. Considering all this, the company is in an extremely favorable risk-reward position, and value investors should consider exposure in this sector as the backdrop remains favorable. On the flip side, the company is exposed to the risk associated with any biotech play.
About BPX-01 and BPX-04:
BPX-011 and BPX-041 are hydrophilic (non-oil-based) topical gels with fully solubilized minocycline that have been shown to penetrate the skin to deliver the antibiotic to its target. Following positive results from its previously announced phase 2b dose range study of BPX-01 in acne, BioPharmX continues with phase 3 clinical study plans for BPX-01 for the treatment of inflammatory lesions of acne.
Excerpts from the recent presentation supporting demand drivers for the products:
· Dermatologists favor medicines that make it easy for patients to follow treatment programs. By reducing the risk of adverse effects and antibiotic resistance, the topical BioPharmX formulations may fulfill needs currently being addressed by a combination of oral antibiotics and topical therapies
· The fact that this unique hydrophilic delivery system effectively delivers minocycline in a targeted way without the adverse effects associated with either oral antibiotics or many alternative topical products holds exciting promise.
· Oral minocycline has been widely used since the 1970s, but the pharmaceutical industry has not previously been able to develop a stable, topical formulation of fully solubilized minocycline, which produces less resistance than other tetracycline-class antibiotics commonly used for these diseases.
Pipeline Progress:
Fourth Quarter 2018 Results:
Expenses: For the fourth quarter ended January 31, 2018, total operating expenses were $3.6 million, compared with total operating expenses of $4.3 million in the prior fiscal year’s fourth quarter.
Net loss for the fourth quarter of 2018 was $3.8 million, or $0.03 per share, compared with a net loss of $5.2 million, or $0.09 per share, during the prior fiscal year’s fourth quarter.
Full Year Financial Results
Expenses: Total operating expenses for the fiscal year were $16.7 million, compared with $18.0 million in the prior fiscal year. The decrease resulted primarily from lower expenditures for the company’s clinical trial activities related to BPX-01.
Net loss for the fiscal year was $16.6 million, or $0.19 per share, compared with a net loss of $18.5 million, or $0.52 per share, during the prior fiscal year.
Liquidity and financial flexibility: Cash and cash equivalents as of January 31, 2018, were $7.6 million. Additionally, BioPharmX reported that after the end of the year and through the date of this press release, the company received $7.0 million in cash through warrant exercises subsequent to January 31, 2018.
Key risk factors and potential stock drivers:
· Successful completion of the upcoming milestones would lead future direction for the company. Any adversities related to these forthcoming milestones might adversely impact the overall investor sentiments.
· BPMX is still an early stage entity and has not yet generated revenue and will likely operate at a loss as it grows its market position and seeks ways to monetize it. The company’ prospects are significantly dependent on BPX-01 and BPX-04, which might have limited sales potential initially.
· BPMX has a history of operating losses. Therefore, any time or cost overrun in its ongoing R&D activities and its impact on business & financial profile will remain a key business sensitivity factor.
Stock Chart:
Comments:
- On Wednesday, June 6th, 2018, BPMX was at $0.24, on volume of 1.1 million shares exchanging hands. Market capitalization is $46.846 million. The current RSI is at 55.01
- In the past 52 weeks, shares of BPMX have traded as low as $0.10 and as high as $0.548
- At $0.24, shares of BPMX are trading above its 50-day moving average (MA) at $0.22 and above its 200-day moving average (MA) at $0.21
- The present support and resistance levels for the stock are at $0.23 & $0.26 respectively.
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