Enmd-2076

ABOUT:
"CASI Pharmaceuticals, Inc. is a biopharmaceutical company. The Company is focused on the acquisition, development and commercialization of therapeutics for cancer and other medical needs. It operates through the development of targeted therapeutics for the treatment of cancer segment. Its ENMD-2076 is an orally active, Aurora A/angiogenic kinase inhibitor with a kinase selectivity profile and multiple mechanisms of action. Its Marqibo is a sphingomyelin/cholesterol liposome-encapsulated, formulation of vincristine sulfate. Its ZEVALIN (ibritumomab tiuxetan) injection for intravenous use is a CD20-directed radiotherapeutic antibody. Its EVOMELA is an intravenous formulation of melphalan being investigated by Spectrum in the multiple myeloma transplant setting. ."
PIPELINE:
ENMD-2076
MARQIBO
ZEVALIN- is a U.S. Food and Drug Administration (FDA)-approved product indicated for the treatment of patients with relapsed or refractory, low-grade or follicular B-cell non-Hodgkin’s lymphoma (NHL) and is currently marketed in the U.S. by Spectrum Pharmaceuticals, Inc. (Spectrum). The Company previously acquired greater China rights to ZEVALIN® from Spectrum and intends to launch ZEVALIN® in China as soon as the confirmatory trial is completed and marketing approval is received from the NMPA. This was from a PR in Feb 2019. No PR as of yet confirming trial has been completed so still to be announced.
EVOMELA- It is the only approved and commercially available melphalan product in China.
2ME2
CID-103
With 6 different drugs in the pipeline, and only 1 PR in 2020 about them (CID-103 clinical trial application) I believe there have to be more PRs coming this year announcing results of various phases- i.e., has not popped yet.
Recent Catalysts:
August 14- Estimated Date of Earnigns Report (https://www.marketbeat.com/stocks/NASDAQ/CASI/earnings/)
July 22- CASI Pharmaceuticals prices equity offering:
its public offering of 20M at $1.90/share, for gross proceeds of $38M.
Underwriters have an option to purchase up to an additional 3M shares.
The offering is expected to close by July 24.
Net proceeds will used for working capital and general corporate purposes.
July 24- CASI Pharma CEO buys nearly $7.9M in shares
Chairman/CEO, Wei-Wu He, bought nearly $7.9M worth of the company's stock.
He directly purchased 2,952,426 shares on Wednesday at an average price of $1.90, bringing direct beneficial ownership to 4,836,523 shares, according to an SEC filing. He also indirectly bought 1,200,000 shares at the same price via ETP Global Fund.
Also, President Larry Zhang bought 20,153 shares at an average price of $1.90 on Wednesday, making up his entire direct beneficial holding in the company.
Pursuant to the Underwriting Agreement, our directors and executive officers entered into agreements in substantially the form agreed to by the Underwriters providing for a 90-day “lock-up” period with respect to sales of specified securities, subject to certain exceptions.
Note: Lock-up periods are usually 180 days. The fact that this is only 90 days stands out to me. Makes me think the swing trade is medium length with impending positive results on the horizon. No point in buying nearly 8M shares and then the stock price rises on good PRs about pipeline only to not be able to sell for another 90 days.
May 11- Their last earnings (10-Q) reported Q1 GAAP EPS of -$0.09 beats by $0.02. Revenue of $3.41M beats by $2.62M. Cash and cash equivalents of $53.9M
To me this is all good news, beating expectations, revenue, and plenty of cash available on hand. Not to mention they just added another 43.7 million from the most recent offering.
TA:
Looking at MA200 and MA50, there is an emerging golden cross (https://marketchameleon.com/Overview/CASI/StockChart/OneYear?tech=volume&ma=50_200)
From the chart you can also see the market responds favorably to very favorably for earnings and catalysts.
This isnt necessarily a stock that I would buy as soon as you read this DD. Obviously, do your own research yada yada not financial advise, etc. etc, but this is a stock I would add to a watch list.
Note however the offering just ended 07/24th so I would expect the price to slowly rise back to the market's "fair value" where it was before the offering- especially on AH news that the CEO purchased ~8M shares.
From Stockinvest- CASI Pharmaceuticals lies in the lower part of a very wide and strong rising trend in the short term, and this may normally pose a very good buying opportunity. If the lower trendfloor at $1.91 is broken, it will firstly indicate a slower rising rate, but may also be a early warning for a trend shift. Given the current short-term trend, the stock is expected to rise 15.73% during the next 3 months and, with 90% probability hold a price between $2.21 and $3.52 at the end of this period.
IDK what formula stockinvest is using for their probability (90% chance...) but considering how the closing price Friday was 1.94 - a"90%" chance of making money is better than most pennies.
Speaking of Insider Activity:
https://www.marketbeat.com/stocks/NASDAQ/CASI/insider-trades/
https://fintel.io/n/us/casi?__cf_chl_jschl_tk__=0d417bad1c6b1aff5271d94f3dd0aeb862adfc68-1595685504-0-AYqPpOWP4q3NuPx52xN3TE8LMscOeEvRLxvfXtM-79eGBPDzOgXVrAbOPmg6-kNJ5fRVTsaWcUMgBjuz2lSrINg3YEQsZzm6X-gyxPAedt-O4IhTstM2Nk9L7OLXQ7p0anZkYIStzMN7H0qf1WppHd3nxJtJkmtJbPI_bnC-iNUCsbCH8FVlNHAmpC2i1VKZK9Ls0EX2B40_gPyiFwCbLheVKN2sOh6JD_cwhwPK38osJ9TSL2iEgrCedL0z8UauqgDDW1u7rjQqb_CJgRvBHT_4WFyOfDKsupjP5MipcdMi0CXXwwWV200ojB-FBbPhBZ7krnk8poH91znOHVb0vvTkmBPlcC7_OUDYsczWS9eb
Institutional Buying:
https://www.marketbeat.com/stocks/NASDAQ/CASI/institutional-ownership/
https://fintel.io/so/us/casi
Short Interest:
https://fintel.io/ss/us/casi
Year over Year Info
Product Sales:
Revenues consist of product sales of EVOMELA that launched during August 2019. Revenue was $4.1 million for the year ended 2019 compared to $0 for the year ended December 31, 2018.
Costs of Revenues:
Costs of revenues were $3.9 million for the year ended December 31, 2019 compared to $0 for the year ended December 31, 2018. The increase is due to the launch of EVOMELA that occurred during August 2019. Costs of revenues have been impacted by a transitional supply agreement that is in the process of being modified with an alternate manufacturer. We expect the unit cost of inventories of EVOMELA to be considerably reduced in the future.
Research and Development Expenses:
Research and development expenses for the year ended December 31, 2019 were $9.7 million, compared with $8.5 million for the year ended December 31, 2018. The increase in R&D expenses primarily reflects higher regulatory costs associated with our ANDAs in 2019, costs incurred with the development of CID-103 and higher consulting and manufacturing related services.
Selling and Marketing Expenses:
Selling and marketing expenses for the year ended December 31, 2019 were $3.1 million, compared with $0 for the year ended December 31, 2018. The increase is due to selling costs related to the commercial sales of EVOMELA that began during August 2019.
Net Loss:
Net loss for the year ended December 31, 2019 was $45.4 million compared to $27.5 million for the year ended December 31, 2018. The increase is primarily due to the Company’s growth in China to support the Company’s 2019 commercial product launch of EVOMELA, as well as costs associated with the acquired Black Belt and Octreotide licenses.
RISKS:
Obviously there a lots of risks as with all penny stocks. Most concerning is that even though this is a "US-based" company, it mainly services China- although some of its pipeline has been approved by the US FDA so that is a plus- please note: im bag holding CJJD so bias caution might/is present although combing through their press releases i dont see any about delaying earnings or any other bullshit for investors.
Another obvious risk is their NET LOSS: 45.4M 2019 compared to 27.5M in 2018 dispite having their first commerically availble product.
From 10-Q: "Our business has been and may continue to be adversely affected by the COVID-19 pandemic....We currently rely on a single source for our supply of EVOMELA. We have not yet experienced any significant impacts or interruptions to our supply chain as a result of the COVID-19 pandemic. However, if the supplier refuses or is unable to provide such product for any reason (including the occurrence of an event like the COVID-19 pandemic that makes delivery impractical or prompts the declaration of a “force majeure” or similar event under the applicable supply contract), we would be required to negotiate an agreement with a substitute supplier, which would likely interrupt manufacturing of EVOMELA, cause delays or increase our costs."
I am concerned about the lack of PRs about their other pipleline drugs. I stated earlier this might be good for investors as PRs come out about them, historically suggested, the price should go up when they go out- but with some many products in the pipeline you'd think something more than 1 PR would have came out in the first half of 2020.
RISK/REWARD ANALYSIS:
Little information about me, I swing trade, from anywhere to a week to months. I have no problem averaging down on companies I "believe in" -or more so, I believe in my DD about the company. No aggregated data to back up but I have found pretty good success so far in this strategy. I think its important to know that and I dont consider this a day trade opportunity or a 1-2 day swing- unless you get "lucky."
I believe this is a company to put on a watchlist, get a feel for the price flow and daily movements and buy in when you feel the time is right.
The fact that the CEO bought 8M shares, coupled with a lack of PRs this year about their EXTENSIVE pipeline makes me think that something is on the horizon. But like i stated before, they have a 90 day lock up period so it might not be on the near horizon. But gives one plenty of time to get a better feel for the company so they can be well informed if and when they do make a position.
At the very least, stock is at a discount due to very recent equity offering- so if you play equity offerings this might not be a bad play to get into ASAP and sell as the price returns to its fair value price and not even wait for a PR or catalyst.
Estimated Earnings Report coming out on 08/14 so that leaves 2-3 weeks to buy in at the right time. Market has responded favorably to latest ER.
Any sort of "hype train" for upcoming ER seems to be 3-4 days prior to report- based on year chart.
Conclusion (TL;DR)
stockinvest reports a 90% probability hold a price between $2.21 and $3.52 at the end of this period.
Currently closed at 1.94 on 07/24- the last market day as of writing this.
One of the few penny stocks Ive seen with an actual commercially available product, let alone the ONLY available product in China (EVOMELA).
R&D along with Net Loss were higher YoY- I optimistically speculate this is due to increase in other products in Pipeline since there would be no need to R&D a commerical product already available.
Partner the above with the lack of PRs about most products in pipeline in 2020, along with the CEO's purchase of nearly 8M shares last week makes me think something big is coming out in the second half of the year.
They have not converted to fighting COVID19 like other biopharm companies have, so I wouldnt call this a covid play. I dont think this will be the next IBIO. But i do think I will make money off of this company. and thats what I really care about.
My current plan is to buy in under 2.50, and depending on how much closer to 2 dollars I can get in the next 2 weeks, I will continue to buy shares leading up to the earnings call. I usually try to secure profits at 10% but as the market has responded favorably to past earnings reports, I will hold position leading into the earnings call report (see previous comment about "hype train") and set profit stops at 3.
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Best of luck and happy trading! Let me know if you decide to get in on this and let me know how it goes.
As per usual, any constructive feedback on my DD is greatly appreciated!!