Risky Bet for Speculative Investors By TipRanks
I am neutral on GlycoMimetics (NASDAQ:), as its attractive stock price and high potential pipeline are offset by the high risk in its investment thesis.
GlycoMimetics (NASDAQ:) is a clinical-stage biotechnology firm that focuses its efforts on glycobiology-based therapeutics and treatment for cancers.
GlycoMimetics is committed to improving cancer patient’s lives by developing small-molecule, glycomimetic products. (See GLYC stock charts on TipRanks)
GlycoMimetics is developing an investigational drug candidate, uproleselan, a specific antagonist for E-selectin, for the potential treatment of acute myeloid leukemia, and the candidate is being evaluated for efficacy across different types of patient populations.
GMI-1359 is a chemokine receptor CXCR4 and E-selectin antagonist. The company has also begun Phase 1b clinical studies to assess its candidate.
GlycoMimetics recorded an increase in research and development expenses to $10.2 million for the second quarter of 2021, as compared with $9.9 million on a year-over-year basis. This was due in large part to an increase in Phase 3 of the clinical trial of Uproleselan for patients suffering from relapsed/refractory AML in Australia, Europe and the US.
There is no doubt that many biotech companies lose their money over the years, even if they discover a new mineral or treatment. But investors need to be careful of companies who are spending their money too fast.
According to GlycoMimetics’ second quarter of 2021 report, the company has a cash pile of $119 million with zero debt. Although it appears that the company is in a relatively good place, investors must consider what obstacles it may face when raising cash to fund faster growth.
Keep an eye on the company’s performance over the coming quarters to gauge investor interest. GlycoMimetics shares are difficult to value because it has no cash reserves and is not profitable at the moment.
Wall Street’s Take
From Wall Street analysts, GlycoMimetics earns a Moderate Buy analyst consensus, based on two unanimous Buy ratings in the past three months. The upside potential is 541.6%, according to the $14.50 average price target.
Summary and Conclusions
GlycoMimetics looks like an interesting opportunity at the moment. The stock offers huge upside potential. The stock, however, is extremely risky and burning cash quickly at an alarming rate. It is also not yet profitable.
The stock is likely to either be a great investment or very profitable. This stock is best for speculative investors. Even then, it would be wise to keep a modest position.
Disclosure: Samuel Smith held no positions in any company mentioned in this article as of the publication date.
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