Penny stock investors have made a nice profit on AIM ImmunoTech (NYSE:AIM) in 2020. In the last 12 months, AIM stock is up 115%. Going back just a little further to the start of 2020, the stock has climbed over 300%. And at various times in 2020, shares of AIM ImmunoTech were trading much higher than that.
The reason for the interest is that the company is in the trial phase to see if its flagship drug, Ampligen will gain approval to help mitigate fatigue-related symptoms of COVID-19.
The biotech and pharmaceutical sector garnered significant attention in 2020 due to the race for treatments for the novel coronavirus. While it is unquestionably good news that there are multiple vaccines being administered, there remains much that the medical community is learning about the novel coronavirus.
One area under exploration is the “long hauler” phenomenon. That is, individuals who have recovered from the respiratory effects of COVID-19 but suffer lingering symptoms. One of the most common of those is extreme fatigue. This fatigue is consistent with those afflicted by myalgic encephalomyelitis, also known as chronic fatigue syndrome (ME/CFS).
Taking Aim at These Symptoms
The conventional wisdom suggests that if the fatigue of COVID-19 long haulers is presenting with symptoms similar to that of ME/CFS, perhaps the two conditions could be managed in similar ways.
This is where Ampligen comes in. Ampligen is an infusion therapy that is currently the world’s only approved therapeutic for ME/CFS. The only problem is that at this time, Ampligen is only approved for use in Argentina. The company is currently pursuing its New Drug Application (NDA) for Ampligen with the U.S. Food and Drug Administration (FDA). And the company announced on Feb.16, 2021 that it had received approval from the Ethics Committee in the Netherlands to start a Phase One clinical study on the safety of Ampligen as an intranasal therapy.
A Potentially Large Addressable Audience
Before considering an investment in AIM stock, it’s fair to consider the size of its addressable market. According to MEAction.net, there are approximately 15-30 million individuals worldwide who suffer from ME/CFS. At least 1 million of those are in the United States.
Bullish investors are pointing to the SARS epidemic in the early 2000s. Perhaps not surprisingly, nor coincidentally, approximately 40% of SARS survivors reported symptoms that parallel ME/CFS.
This would seem to be likely with Covid-19 as well. In January 2021, Harvard Medical Professor Dr. Anthony Komaroff wrote that if just 5% of the 21 million Covid-19 cases in the U.S. (as of that date) developed lingering symptoms the number of people with ME/CFS would double in the next two years.
What’s the Risk?
Ironically, the vaccine presents a risk. If the vaccine is as effective as hoped, it should present the onset of COVID-19 symptoms which should, in theory, prevent individuals from developing the long haul symptoms. While that doesn’t take away the addressable audience that has ME/CFS, and the percentage of those who are already long haulers, it may make AIM stock a little less attractive in the short term.
Plus, it’s clear that the vaccine rollout is taking precedent. So it’s fair to say Ampligen won’t move swiftly through trials.
How to Play AIM Stock?
Like many penny stocks, AIM is not widely covered by the analyst community. However, the stock does receive a buy rating from the two analysts that provide a rating. At this time, AIM stock has a price target of $3 which would be a gain of over 67% from its current level.
AIM Immunotech is addressing a health condition that afflicts millions of patients worldwide. And it has the potential to have a tremendous first-mover advantage. However, Ampligen still has several hurdles to clear before it will be approved by the FDA. That doesn’t automatically mean the stock is not a buy, it just means you should temper your expectations and manage any position you take accordingly.