Kitov Pharma Ltd. (NASDAQ: KTOV) is an innovative pharmaceutical drug development company. Leveraging deep regulatory and clinical-trial expertise, Kitov’s veteran team of healthcare and business professionals maintains a proven track record in streamlined end-to-end drug development and approval. Kitov’s NT219, a novel patented small molecule designed to overcome cancer drug resistance, is currently in pre-clinical development. In addition, Kitov’s flagship combination drug, Consensi™, treating osteoarthritis pain and hypertension simultaneously, was approved by the FDA for marketing in the U.S and is partnered in the U.S., China, and South Korea. By lowering development risk and cost through fast-track regulatory approval of novel therapeutics, Kitov plans to deliver rapid ROI and long-term potential to investors, while making a meaningful impact on people’s lives.
The shares of KTOV continue to experience a surge in volumes after the company reported the significant breakthrough of gaining FDA approval for its lead drug candidate, Consensi™, as well as the excellent progress that the company has made in its NT-219 pre-clinical development program during 2018.
Furthermore, Kitov is working productively with Coeptis Pharmaceuticals and its outstanding team to launch Consensi™ in the U.S. market to create better patient compliance and improved treatment for people living with osteoarthritis pain and hypertension. Additionally, the management is very satisfied with the on-target execution of its NT-219 oncology program and look forward to initiating clinical trials later this year. Also, from a liquidity standpoint, After the end of 2018, Kitov has successfully raised a net of $5.5 million through an offering in January 2019.
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Excerpts of Management Commentary:
We are committed to continuing to unlock substantial value in our business by leveraging our team’s deep regulatory expertise and drug development experience, complemented by targeted business development efforts, in order to maximize the potential of our therapeutic candidates. We strengthened our balance sheet recently with the additional gross financing of $6 million in January 2019 as we progress with our goals to achieve a major clinical milestone with NT-219.
Expected Significant Upcoming Kitov Milestones for 2019:
Key & unique differentiating factor of the company:
Analysts’ views: Research firms are positive about the performance of KTOV with most of them predicting a possible re-rating over the near to medium term. Per marketbeat.com, Their average twelve-month price target is $12.50, suggesting that the stock has a potential upside of 900.00%. 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.
About the Consensi and commercialization plan:
- Consensi™, a combination drug that simultaneously treats pain caused by osteoarthritis and treats hypertension, is comprised of two FDA approved drugs, celecoxib (Celebrex®), a non-steroidal anti-inflammatory drug (NSAID) for the treatment of pain caused by osteoarthritis, and amlodipine besylate (Norvasc®) a drug designed to treat hypertension. Hypertension is one of the side effects of using NSAIDs including celecoxib.
- Consensi™, under patent protection in the U.S., until 2030, and will be the only NSAID whose labeling indicates a reduction of blood pressure and consequent risk reduction of heart attack, stroke, and death. The therapy may contribute to improved patient compliance and improved patient health, thereby lowering overall health care costs.
- Kitov currently has three signed licensing and distribution agreements for the drug in the U.S., China, and South Korea. The Company believes that successful commercialization of Consensi™ in the U.S. by Coeptis Pharmaceuticals will be a transformational value-creating event for Kitov.
- A novel small molecule that prevents, reverses, and delays resistance to anti-cancer drugs
- Demonstrated outstanding efficacy in patient-derived xenograft (PDX) models
- The favorable response received from FDA in pre-ND meeting
- Ongoing preclinical work; IND expected in 2019
- Initial dose escalation clinical study in combination with approved oncology drugs expected H2/2019
- A long-term strategy to develop NT-219, in combination with other oncology drugs for additional indications, either alone or in collaboration with strategic partners
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Financial Results for the Year Ended December 31, 2018
- Research and development expenses for the year ended December 31, 2018, were $5.3 million, an increase of $0.7 million, or 15.2%, compared to $4.6 million for the year ended December 31, 2017. The increase resulted primarily from higher expenses in 2018 associated with NT-219 preclinical and CMC development. Kitov expects a similar level of R&D expenditure, mainly for the development of NT-219, in 2019.
- Kitov’s operating loss for the year ended December 31, 2018, amounted to $7.8 million, compared with an operating loss of $12 million for the year ended December 31, 2017, a 35% decrease. The decrease in operating loss reflects $1 million in revenue in 2018 and the significant decrease in general and administrative expenses as mentioned above during 2018 offset by an increase in research and development expenses.
- Kitov’s net loss for the year ended December 31, 2018 amounted to $5.6 million, compared with a net loss of $12.9 million for the year ended December 31, 2017 as a result of the decrease in operating loss mentioned above, finance income of $2.3 million in 2018, mainly a result of decrease in fair value of derivatives compared to finance expenses of $1 million in 2017, primarily a result of increase in fair value of derivatives.
- Kitov held $6.7 million in cash, cash equivalents, and short-term bank deposits as of December 31, 2018. After the end of 2018, Kitov raised a net of $5.5 million through an offering in January 2019.
Key risk factors and potential stock drivers:
- Successful commercialization of Consensi would lead future direction for the company. Any adversities related to this might adversely impact the overall investor sentiments.
- KTOV is still an early stage entity and has not yet generated meaningful revenue and will likely operate at a loss as it grows its market position and seeks ways to monetize it.
- KTOV 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.
- The company has a dependence on funding from public offering which could potentially dilute the value for existing holders.
- On Friday, March 15th, 2019, KTOV closed at $1.25 %, with a substantial average volume of 2.2 million shares exchanging hands. Market capitalization is $23.695 million. The current RSI is trending at 53.67
- In the past 52 weeks, shares of KTOV have traded as low as $0.56 and as high as $3.81
- At $1.25, shares of KTOV are trading above its 50-day moving average (MA) at $1.22 and below its 200-day moving average (MA) at $1.64
- The present support and resistance levels for the stock are at $1.16 & $1.34 respectively.
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