The share price of Nuvation Bio Inc (NUVB) has fallen by more than 17% so far in 2021, missing its benchmark index heavily.
There is potential, however, for a strong rebound within the 12 months. I am bullish on this stock.
Based in New York, this biotechnology developer is working on innovative therapies for forms of cancer that are difficult to treat.
The flagship product candidate of the company is a molecular therapy that targets specific enzymes that have a role in the proliferation of tumor cells, leading to various forms of cancer. (See NUVB stock charts on TipRanks)
Q2 Results
Operating activities are not yet generating profits, as the company is not currently selling any treatments.
In the second quarter of 2021, Nuvation Bio posted a net loss of $0.09 per share, due to spending for research and development, and the sustainment of costs for covering general and administrative expenses.
Future Therapies, Current Strategy
Conventional anti-cancer therapies are a part of a sector where conditions are very difficult for small, clinical-stage companies. That suggests Nuvation Bio would be better off developing therapies that are complementary to conventional treatments, rather than competing with them.
The future is therefore promising.
Nuvation Bio's innovative oncological therapies will enable conventional treatments to cause the least amount of undesirable effects. From the patient's standpoint, this is as important as the treatment of the disease.
In fact, by granting control over the tumor growth by inhibiting the proliferation of tumor cells, these innovative therapies will increase the effectiveness of oncological treatments, along with the wellness of patients.
To have more chances to develop successful treatments, Nuvation Bio will evaluate its lead product candidate -- called NUV-422 -- on a wider range of patients suffering from various forms of cancer. Approval for the commercialization of NUV-422 may be granted sooner than expected as a result. If this happens, it may have interesting implications for the value of the stock on the market.
The existence of $807 million in cash and short-term securities, as of June 30, can support the development of the company's products pipeline for five years and beyond.
Wall Street’s Take
In the last three months, one analyst (Matthew Luchini of BMO Capital) assigned a Buy rating to this stock. So, Nuvation Bio Inc. is a Moderate Buy. The average NUVB price target of $17 implies upside potential of 80.47% from current trading levels.
Summary
Nuvation Bio is a clinical-stage biotech developer of therapies for the treatment of difficult cancers. This market segment offers interesting opportunities. From its strategy, it seems that the company wants to start seizing them quickly.
Any relevant update with regard to the development of NUV-422 could produce significant upticks for the share price, which seems cheap after falling in 2021.
Disclosure: On the date of publication, Alberto Abaterusso did not have any positions in the securities mentioned in this article.
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