DFFN Stock: Diffusion Flies on COVID-19 News

Diffusion Pharmaceuticals Inc (NASDAQ: DFFN) is screaming for the top in the market this morning, and for good reason. The company announced positive results from a Phase 1 clinical study of an investigational COVID-19 therapy. Here’s what’s going on:

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DFFN Announces Positive COVID-19 News

In the press release, Diffusion Pharmaceuticals announced the completion and topline data from an open-label Phase 1b clinical trial of trans sodium crocetinate (TSC). The treatment was provided to hospitalized COVID-19 patients with confirmed hypoxemia, the most common cause of tissue hypoxia. 

In the release, DFFN went on to explain that the primary objective of the study was to assess the safety and tolerability of TSC administered on a more frequent dosing regimen Moreover, the company looked into the pharmacokinetics of TSC after dosing, relative improvements in body oxygen levels, and other parameters related to COVID-19. 

The company went on to explain that patients were separated into four cohorst of six patients. All patients in any dose cohort received the same intravenous doses of TSC. Also, all patients in the study received intravenous doses of TSC every six hours for a minimum of five days and a maximum of 15 days. 

Importantly, no dose-limiting toxicities or adverse events were observed in the trial. Moreover, the results of the trial are consistent with determinations following analysis of safety data from each of the other dose cohorts across the trial. 

Finally, DFFN said that the secondary endpoints are still being assessed, with complete results becoming available in the second quarter of 2021. 

Management Commentary

In a statement, Chris Galloway, M.D., Chief Medical Officer at Diffusion Pharmaceuticals, had the following to offer: 

We are grateful to the patients and the dedicated healthcare providers who volunteered to participate in this critically important study. We believe TSC’s diffusion-enhancing mechanism of action has the potential to provide benefits in numerous medical conditions complicated by hypoxia, including COVID-19. The safety, tolerability, and repeat escalating-dose pharmacokinetic data obtained from this study will support our broader TSC development program.

What Analysts Think About DFFN Stock

Unfortunately, DFFN stock is not necessarilly a favorte among analysts. At the moment, there’s only one analyst weighing in on the stock, doing so with a Hold rating. 

Risks to Consider Before Buying DFFN Stock

If you’re thinking about buying Diffusion Pharmaceuticals stock, you’re going to have to be open to risk. After all, no matter what stock you buy, risk will be involved, it’s just part of investing. When it comes to DFFN stock, the most significant risks to consider include:

  • Clinical & Regulatory Risks. Diffusion Pharmaceuticals is a clinical-stage biotechnology company. That means that the success of the company is largely dependent on success in clinical trials and eventual approval from regulatory authorities to sell their treatments. At these early stages, an investment in the stock is a highly speculative one and a huge bode of confidence for the management team at DFFN. 
  • Penny Stock. DFFN stock is a penny stock. As a result, it is known for high levels of volatility, which makes timing trades difficult. To make matters worse, high levels of volatility could lead to significant short-term losses. 
  • Capital Risk. As a clinical-stage biotechnology company, DIffusion Pharmaceuticals doesn’t generate any revenue through the sale of products. As a result, it relies on the money it has in the bank. Should the well in the bank account dry up, the company will likely look to capital markets as a way to raise funds, resulting in the dilution of existing shareholder value and declines in the stock price.  

Final Thoughts

Sure, there are risks to consider before investing in Diffusion Pharmaceuticals, but if you find a risk-free investment, I’m all in. The fact of the matter is that investing comes with risk. 

With that said, DFFN is becoming a more exciting stock by the day. With the positive safety and efficacy data from TSC, the company just made a major step in the development of the drug, a process that may be sped up dramatically due to the need in the medical community. 

Should secondary endpoint, or efficacy, data be positive, this stock could fly ahead. All in all, DFFN stock is one to watch closely.