Myos Rens Technology (MYOS) Stock: A Micro-Cap Opportunity?

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MYOS Corporation Common Stock (NASDAQ: MYOS)

Myos Rens Technology soared just under 20% on Friday as the market continues to digest information from the recently published, peer reviewed study of the human clinical trial of Fortetopin®, the company’s proprietary myostatin-reducing agent. The peer reviewed article was published in the Journal of the American College of Nutrition.

MYOS Deserves An Introduction

MYOS is an emerging and developing micro-cap stock, trading within a 52 week range of $1.23 and $4.40 per share. MYOS has a tiny public float of just 1.3 million shares and total outstanding shares at slightly over five million shares as of August 2016. Shares trade on the Nasdaq CM and volume for the stock is low, at roughly 20K shares per day.

MYOS is an emerging bio-nutrition and biotherapeutics company focused on the discovery, development and commercialization of products that improve muscle health and function essential to the management of sarcopenia, cachexia and other degenerative muscle diseases. The company is further studying its products as an adjunct to treat obesity.

The company is most intently focused on its Fortetopin trial and is currently conducting human trials.

MYOS’s Fortetopin Demonstrates Efficacy On Skeletal Muscle Growth

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Fortetopin® is the company’s flagship product and is a myostatin-reducing agent. A myostatin is a protein produced and released by myocytes that acts on a muscle cells’ autocrine function to inhibit both growth and cell differentiation.

Last month, MYOS announced that the results of its twelve week, double blinded, placebo controlled study of Fortetopin were peer reviewed and published in the Journal of the American College of Nutrition. Results indicated that over the course of the study, the effects of Fortetopin on skeletal muscle growth on the human studies that received the compound showed significant gains in lean body mass and muscle thickness, while those patients in the placebo controlled group did not.

The results in the human trial serve to validate earlier research performed in rodent models. Neerav D. Padliya, Ph.D, and Vice President of Research Alliances of MYOS Rens, stated, “In addition to demonstrating Fortetropin’s positive impact on lean muscle mass, we were able to gain valuable insight into its mechanism of action in the body — in particular, its effects on mTOR and ubiquitin signaling, which play important roles in the function of muscle tissue.”

To break it down further, the positive results demonstrated that a significantly lower dose of Fortetopin®, about a 40% decrease from the currently recommended dosage level, still provided results that are statistically significant in decreasing serum myostatin levels. Evidence supports the fact that a decrease in serum myostatin levels directly correlates with an increase in lean muscle mass.

What Now For Myos And Fortetopin?

Myos expects to leverage off of these positive results, peer reviewed and published, with an aggressive commercialization strategy for Fortetopin®. The benefits of Fortetopin®, combined with physical exercise should have significant therapeutic benefit for patients needing to increase muscle mass, bone density and for the control of serum glucose and triglyceride levels.

The company intends to initiate additional studies with Fortetopin to explore the benefits that the drug may have on aging, quality of life and longevity.

MYOS By The Numbers

From MYOS’s most recent quarterly filing for the quarter ending June 30th, the company listed cash and cash equivalents of $3.7 million dollars, with total working capital reported to be $4.3 million dollars.

MYOS posted a net loss of $2.7 million dollars for the six month period, essentially unchanged from 2015. Net cash used for operations during the six month period totaled approximately $2.1 million dollars.

In the filing, MYOS indicated that they believe the company to have enough working capital and working capital resources from operations and existing financial arrangements to meet operating and working capital requirements for the next twelve months.

The company has approximately 319K warrants issued at exercise prices ranging from $7.00 per share to $34.50 per share, substantially higher than current prices.

MYOS Stock And Its Future

As discussed, MYOS is a micro-cap stock that may be susceptible to share price swings based on its tiny public float and overall low outstanding share count. With positive results, peer reviewed and published, the risk to the downside may be muted for the time being, with the potential to drift higher a strong possibility.

MYOS, like other micro-cap stocks, will face growing pains and share liquidity issues. However, if the company continues to publish additional positive results related to their on-going and future trials, the share price can benefit materially from the low public float.

Although a potentially safe investment at these levels, investors should be cautious about risking too much capital into a stock like MYOS. Even with the stock churning at these current levels, the wait for a meaningful move higher might take a while, leaving other potential opportunities for an investor potentially ignored.

With no data to suggest immediate headwinds for the company and with enough cash to last through the next twelve months, MYOS is worth the look. As always, keep track of the data and keep an eye on the potential for dilution down the road.

Fortetopin does bring the possibility of securing license and partnership agreements in the near future. With the support of a peer-reviewed publication in hand, the future for MYOS can be bright.

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