The biotech stock market is currently in a tough spot, with many companies facing suppressed valuations. We’ve listed six public companies trading with a market cap below their cash in hand.
A range of factors are driving down company valuations in the public biotech market, such as soaring inflation, geopolitical instability and the threat of economic recessions around the world.
In the last year, hundreds of biotech companies have been in the unusual position where their total share value is lower than the amount of cash they have on hand, known as trading below cash. Trading below cash can happen when companies hit a negative newsflow, including worsening macroeconomic outlooks, negative clinical results, layoffs and delays with regulatory agencies.
When a company is trading below cash, this can attract investors looking for a bargain. However, it can also be a sign of stormy waters in store for the company.
With the help of company information collected by GlobalData, we’ve listed some of the most striking examples of companies in the U.S. and Europe that are trading below cash.
While many of these companies are hitting tough times, they might end up as fair investment options in the long term. However, aspiring biotech public investors beware: always remember to seek expert investment advice before jumping on any opportunity.
Achilles Therapeutics PLC
Headquarters: U.K.
Market cap: $72.05 million
Cash (as of third quarter of 2022): $179.9 million
The cell therapy player Achilles went public in early 2021, and its stock price has fallen by almost 90% since then. The company is developing T-cell therapies for cancer that target protein markers called neoantigens, which could lead to very selective therapies.
Achilles is testing its precision cell therapy in two ongoing phase 1/2a trials: one in patients with advanced non-small cell lung cancer and the other in patients with recurrent or metastatic melanoma. The firm is also running other programs in preclinical testing.
In Achilles’ third quarter report, the company lamented the translation of its books and records from British pounds sterling into U.S. dollars, as the pound is currently very low against the dollar.
Atea Pharmaceuticals Inc.
Headquarters: U.S.
Market cap: $435.2 million
Cash (as of third quarter of 2022): $665.0 million
The Boston-based company Atea Pharmaceuticals has had a rollercoaster ride in the last 12 months.
In October 2021, the antiviral developer was slammed by the failure of its lead COVID-19 drug in a phase 2 trial, dropping its stock price by more than 60%. Further phase 3 results cast doubt on the drug’s ability to alleviate Covid symptoms. However, the company saw promise in the phase 3 trial’s secondary endpoint, where the drug reduced hospitalization in patients with COVID-19.
As a result, Atea plans to test its lead candidate antiviral in a phase 3 trial by the end of 2022. The trial will recruit at least 1,500 high-risk, non-hospitalized patients with mild or moderate COVID-19, and will test the drug’s impact on all-cause hospitalization or death.
In addition, the company is developing other drugs for the treatment of dengue and hepatitis C.
Fortress Biotech Inc.
Headquarters: U.S.
Market cap: $94.5 million
Cash (as of third quarter of 2022): $210.6 million
The Florida native Fortress Biotech has eight medicines on the market, including drugs for the treatment of excessive underarm sweating and severe acne. The company has another 30 programs being developed in-house and at partner and subsidiary firms.
It’s not plain sailing for the company however, as the U.S. Food and Drug Administration (FDA) rejected its lead candidate intravenous tramadol for the management of postoperative pain. The rejection came once in October 2020 and a second in June 2021.
One advanced program in Fortress’s portfolio is an antibody in co-development with Checkpoint Therapeutics; the partners expect to apply for market approval in 2023. Another advanced program is a small molecule candidate in phase 3 testing for the treatment of the skin condition papulopustular rosacea. Fortress and its partner Journey Medical are expecting data from a phase 3 trial early in 2023.
Kodiak Sciences Inc.
Headquarters: U.S.
Market cap: $426.3 million
Cash (as of third quarter of 2022): $537.4 million
Kodiak is a Californian biotech developing treatments for retinal conditions. The firm’s lead candidate, named tarcocimab tedromer, is currently being tested for the treatment of conditions including wet age-related macular degeneration and diabetic eye diseases.
In February 2022, Kodiak hit a bump when tarcocimab failed to treat wet age-related macular degeneration in a phase 2b/3 trial. Public investors reacted badly to the disappointing performance, dropping Kodiak’s stock price by more than 80%.
In August 2022, however, the company reported positive phase 3 results for the same drug for the treatment of a different eye condition called retinal vein occlusion.
The mixed fortunes for Kodiak in 2022 make it a favorable speculative option for some investors.
Pharvaris NV
Headquarters: The Netherlands
Market cap: $102.7 million
Cash (as of second quarter of 2022): $211.1 million (€201 million)
Pharvaris is developing oral drugs to treat and prevent the rare genetic condition hereditary angioedema (HAE). At present, the majority of treatments for HAE are injected, so oral medicines could allow a more comfortable alternative for patients.
Pharvaris hit an obstacle in August 2022, when the FDA halted the clinical testing of the company’s pill in two phase 2 trials. The FDA made its decision on unspecified non-clinical data, and requested that Pharvaris carry out rodent toxicology studies. The company expects to communicate further with the FDA regarding the clinical hold going forward. Meanwhile, Pharvaris’ stock price remains around half of what it was before the company announced the clinical hold.
Vaccitech PLC
Headquarters: U.K.
Market cap: $94.7 million
Cash (as of third quarter of 2022): $200.1 million
Ever since the University of Oxford and AstraZeneca began developing the COVID-19 vaccine, Vaxzevria, the U.K.-based Vaccitech has been closely involved in the process. The firm receives a share of all milestone and royalty income related to Vaxzevria.
Amongst other technologies, Vaccitech also harnesses the same adenoviral vector technology as Vaxzevria for the development of vaccines. The firm has candidates in the pipeline for the treatment of solid tumors and chronic viral infections, in addition to the prevention of viral infections such as MERS.
Vaccitech is beginning a phase 2b trial of a lead candidate for the treatment of chronic hepatitis B virus infections, and is expecting to report efficacy data from an ongoing phase 1b/2a trial in the same program. The company also plans to review the efficacy of a vaccine in a phase 1b/2 clinical trial for the treatment of human papillomavirus-related cervical lesions.
Thanks to company tips from Fady Riad, CEO of Centurion Life Sciences; Dylan Van Haaften, Managing Director at Bryan, Garnier & Co; and Alex Cogut, Head of Healthcare Equity Research at Bryan, Garnier & Co.
