The future of medicine may have to wait; Vaccinex Inc (NASDAQ:VCNX), a biotech company pioneering biotherapeutics that it hopes will treat grave diseases like cancer, is struggling to tread water in the market after a relatively lackluster IPO. Investors across the market appear to be shunning Vacinnex, thanks in part to its recent losses, and shares of the company are trading down after its recent market debut.
Here are the inside details on Vaccinex’s IPO, and how the biotech company is hoping to get out of its current predicament and begin churning out treatments that can help it become profitable.
Vaccinex is trading down
After Vaccinex (NASDAQ: VCNX) originally debuted on the market with an expected price range of $12 to $15 per share, the company is now trading down after investors found themselves lukewarm on its long-term prospects. According to filings made with the SEC, the biotech company originally had ambitions for a market debut that could generate as much as $45 million, but the company is trading at $11.45 as of press time and shows little potential to spike upwards anytime soon.
According to the prospectus issued ahead of its market debut, Vaccinex was hoping that its cutting-edge therapeutics and antibodies, which aim to tackle a large range of health issues stemming from cancer to autoimmune diseases, would enamor investors. As a matter of fact, however, the market has greeted the biotech company rather coldly, doubtlessly in part because of its profitability woes. In the last year alone, Vaccinex reported net losses of some $24.1 million, a dismal figure likely to act as a gut punch for investors looking for a cash-cow. The company’s market cap, hovering somewhere around $154 million, will help it endure in the meantime, however.
Like many biotech companies, Vaccinex is a clinical-stage company whose long-term potential is of far more interest to investors than its short-term profitability. The biotech company is racing to produce antibodies and cutting-edge medical treatments that will help patients with a wide range of issues and will thus be expected to spend countless years undergoing costly and arduous testing trials. The potential for profit is huge, however; though Vaccinex’s clinical trials doubtlessly cost an arm and a leg, the company could market to the millions of Americans and international customers with cancer and autoimmune diseases of all stripes when it has sound products.
Right now, Vaccinex is hoping that the money from its market debut can be used to perfect its SEMA4D antibodies, which could potentially prove to be a miracle to those with Huntington’s disease. The company is weighed down with heavy debts like most biotech companies, however, and will have to use a significant chunk of the change from its IPO to pay down existing debts.
An insider IPO
It should be noted that Vaccinex’s IPO was in-part defined by the fact that insiders intended to scoop up some $30 million of shares during the offering. By and large, however, its IPO proved to be a bit of a fizzle on the market; despite the fact that Vaccinex’s unique antibodies are drawing coverage and stand to very valuable in the future years, the company just hasn’t enamored investors in the way it had hoped to.
According to the company’s website, Vaccinex stands alone in the market when it comes to chasing down a treatment for cancers and autoimmune diseases by relying on Semaphorin-4D, which means it would doubtlessly corner the market in the event its clinical trials prove to be rousing successes. Investors familiar with companies like CouponBirds will understand that such businesses as Vaccinex often endure for countless years without producing many meaningful clinical results, however; the company’s fate could very well depend on how well its antibodies hold up during scrutiny in clinical testing trials.
The fact that the company debuted at the lowest end of its expected range and that subsequent trading saw its share value dip should be indicative of the fact that Vaccinex is nowhere near completing its clinical testing trials.
The company’s antibody treatment solutions appear enticing but could very well still be years away when it comes to actually getting a viable product out on the market. Coupled with the lackluster performance of its stock during the IPO, and it’s fair to say that Vaccinex will be struggling with its debt and revenue problems for the foreseeable future. 2018 may have been a banner year for biotech IPOs thus far, but Vaccinex is failing to hit the market when it comes to impressing the open market. The company’s timely clinical trials and existing debt burdens are likely to weigh it down in the future, too. While Vaccinex’s unique approach to treating certain diseases makes it worth watching in the long-term, the biotech company shouldn’t be expected to be making any notable progress in the market soon.