You may not have heard of Genprex (GNPX), but the company hopes that one day everyone will hear about its treatments. That’s why they’re on Timothy Collins’ long-term radar.
“I've been a big fan of the clinical-stage cancer and diabetes gene therapy company Genprex and other times I've been critical," Collins wrote recently on Real Money. It's one of those few stocks where I've taken both these positions with a shorter-term view, while not wavering in my belief of the long-term story."
Collins added, "the company has been dealt some tough hands, but is still at the table. It raised money at a ridiculously low valuation that nearly destroyed everyone's faith. Why? As I understand it, the company expected its first Food and Drug Administration fast track approval some time before it did the raise… But the company did receive its fast track," testing approval.
Ultimately, if late, the company won the go ahead. "It doubled down on good news, acquiring the right to a very young, but potentially promising diabetes treatment, and did so with little capital at risk," Collins said.
"But just as the company prepared for enrollment of a potentially pivotal clinical trial, Covid spread rapidly around the globe. Next came the delta variant. And then omicron. Pandemics don't exactly make late-stage cancer patients eager to visit any area outside of what they can control.”
For now, Collins sees the story of a company with a potentially strong product (both in financial and humanitarian value). They’re priced below their true worth due to factors outside their control. Issues such as regulation and global events can still cause short-term disruptions to a business, but when the product is sound, the long-term prospects can remain quite strong.
That’s what Collins sees here.
“Rather than packing up and calling it quits, Genprex has pressed forward and secured another FDA fast track designation for its systemic gene therapy Reqorsa with Keytruda."
There's been some upside to the delays since "the lack of trials also kept the burn rate reasonable. Nearly a third of the current market sits in cash. The company ended the September quarter with $42 million in cash… If shares trade back above $2.75, it could get intriguing as a long trade again in addition to a long-term hold.”
