Certain risks are inherent to biotech; the fact that most clinical
compounds fail in human testing being foremost among them. Small
biotechs have additional challenges, including limited resources when it
comes to driving site and trial enrollment and attending to other
details. And then there are the "unforced errors" - mistakes and
missteps that occur at companies of all sizes, but can hit smaller
biotech companies much harder given their typical smaller cash balances
and margins of error.
Aptose Biosciences (NASDAQ:APTO) hasn't done a lot since my last update
on the company to inspire confidence. Slow progress with a key
early-stage clinical study of APTO-253 can be forgiven as an inevitable
part of the process, but the subsequent clinical hold due to mistakes
that apparently tie back to prior management is not so easily forgiven.
I've cut my fair value estimate roughly in half, as I believe the
breakdown in biotech valuations coupled with uncertainties and concerns
about the clinical hold and trial progress with APTO-253 will make
financing more expensive. I still believe there's a chance that APTO-253
proves to be a worthwhile drug, and the partnership with the Moffitt
Cancer Center is interesting, but an already skittish biotech market is
not going to be kind to a micro-cap biotech with one lead candidate in
early-stage development and a trial that is not currently enrolling. I
would note, though, that none of the issues affecting Aptose really
speak to the quality or potential of the lead drug (APTO-253) and
aggressive investors who can tolerate the volatility and risk shouldn't
ignore the story solely for those other issues.
Read the full article here:
Aptose Needs To Get Moving
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