BST Trade Alert – September 4, 2015
Recommendation:
Buy NewLink Genetics (NASDAQ: $NLNK) up to $50.00 per share.
About the Company:
NewLink Genetics was established in 1999 and focuses on immunotherapy for cancer treatment. When the company first started, they were focused on either the ability of a tumor to suppress the immune system or the immune system itself, being unable to recognize the cancer. After researching, they discovered that successful immunotherapy would come from treating both of these immune system failures.
NewLink Genetics in a company of over 100 employees with scientists from the National Cancer Institute and other professionals involved in marketing and product development.
Although, primarily focused on cancer, NewLink Genetics is also expanding their focus to include infectious diseases caused by Ebola viruses. They currently have a vaccine for the Ebola virus that could be very profitable.
Last quarter they had a net loss of $14.1 million. That’s typical among developmental stage biotech stocks.
But they do have some money coming in…
They received a $20 million milestone payment from Merck in February as part of the Ebola vaccine development.
NLNK will continue to lose money as they advance their product candidates through late-stage clinical trials, pursue regulatory approval of their product candidates, and expand their commercialization activities in anticipation of one or more of their product candidates receiving marketing approval.
About the Drug:
Trials of the single-dose VSV-EBOV vaccine began in March in Guinea, one of the three West African nations affected by the Ebola outbreak. Results from the interim analysis in the vaccine trial show it to be 100% effective in individuals within about 10 days of administration to a person without the infection.
In short, if this vaccine works, it will stop the spread of Ebola.
About the Market for This Drug:
The 2014 Ebola epidemic is the largest in history, affecting multiple countries in West Africa. There have been 8,996 cases of the virus and 4,493 deaths.
That means roughly half of all people that contract the virus will die. That is a scary fact… And the demand for a vaccine is sure to be very profitable.
About the Potential Catalyst:
Phase II and III clinical trials of VSV-EBOV are currently under way and results are expected in the coming weeks.
The drug is being tested in the “ring” vaccination method, according to the World Health Organization. So far, over 6000 frontline healthcare workers have received the vaccine.
According to John-Arne Rottigen, Director of Divisions of Infectious Disease Control at the Norwegian Institute of Public Health and Chair of the Study Steering Group, “The premise is that by vaccinating all people who have come into contact with an infected person you create a protective ‘ring’ and stop the virus from spreading further. This strategy has helped us to follow the dispersed epidemic in Guinea, and will provide a way to continue this as a public health intervention in trial mode.”
Needless to say, if this vaccine is approved, it would be a jackpot for NLNK.
About the Shares:
NLNK is currently trading for $44.63. The stock is up 74% over the last year. But it has pulled back 24% from the 52-week high of $58.73.
The stock is in an uptrend and the recent pullback is a good buying opportunity to pick up shares of NLNK at a discount.
Key Facts:
Company: NewLink Genetics
Ticker: NLNK
Recent Price: $44.63
Market Cap: $1.28 billion
Average Daily Volume: 473.77K shares
Chart:
Category: BST Trade Alert
