NanoViricides Inc (NYSEAMERICAN: NNVC) is flying in the market this morning, and for good reason. The company announced strong pan-coronavirus effectiveness of two COVID-19 clinical drug candidates. Here’s what’s going on:
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- NanoViricides Announces Positive COVID-19 News
- A Short Squeeze In Play
- Risks to Consider Before Buying NNVC Stock
- Final Thoughts
NanoViricides Announces Positive COVID-19 News
As mentioned above, NanoViricides is flying in the market this morning, trading on gains that are best stated in multiples. The gains come after the company announced strong pan-coronavirus effectiveness of two COVID-19 clinical drug candidates.
As a result of the positive news, the company expects to submit a pre-IND application with the FDA relatively soon.
The first drug is known as NV-CoV-2, which is a broad-spectrum anti-coronavirus clinical lead candidate for the treatment of COVID-19 patients. The treatment is based on the nanoviricides platform developed by NNVC.
The company said it is also in the process of developing a drug known as NV-CoV-2-R, a drgu that combines the power of both NV-CoV-2, and Gilead Sciences’ remdesivir in a single drug.
NNVC went on to explain that both, NV-CoV-2 and NV-CoV-2-R are expected to work against most, if not all, coronaviruses and their variants, based on the company’s findings on their preclinical effectiveness.
NV-CoV-2-R was designed to attack both the virus reinfection cycle outside cells and the virus replication cycle inside cells. As a result, the company believes that the treatment could be a cure for COVID-19 by attacking the total virus lifecycle.
Moreover, NNVC said that NV-CoV-2 and NV-CoV-2-R were found to be highly effective in comparison to remdesivir against two distinctly different coronaviruses in their new cell culture studies leading toward a pre-IND application.
A Short Squeeze In Play
While the news from NanoViricides on its own is exciting, the news becomes more exciting when the short squeeze conversation comes into play.
Prior to today’s news, NNVC traded with a short volume ratio of 23%. That’s incredibly high, suggesting that the 100%+ gains seen today are, in part, the result of the announcement and, in part, the result of a short squeeze.
Moreover, this short squeeze could push the stock far higher. At the moment, there are under 10 million shares in the company’s public float. That means that the supply of shares is incredibly low. As the law of supply and demand suggests, when supplies are low and demand is high, dramatic gains are the likely result.
As shorts continue to race to cover, demand for shares will only increase. With such a limited supply, the gains in multiples we’ve seen this morning may just be the tip of the iceberg.
Risks to Consider Before Buying NNVC Stock
NNVC stock is an exciting play at the moment, but if you’re thinking about jumping in, there are risks that should be considered. After all, there’s no such thing as a risk-free investment. Here are the most significant risks to think about before buying:
- Volatility. NNVC stock is known for generating quite a bit of volatility. Volatility is always fun on the upswing, but can be painful on the downswing. Moreover, it can make the timing of entrances and exits very difficult.
- Clinical-Stage. NanoViricides is a clinical-stage biotechnology company. As a result, it is at the mercy of clinical trials and regulatory opinions. Should either one of these turn negative, significant declines could be the result.
- Profitability. Finally, as a clinical-stage company, NNVC is not able to sell its treatments. As a result, it must survive on the money it has in the bank. If that’s not enough to get it to approval and profitability, dilutive offerings may be on the horizon.
Sure, there are risks to consider before diving into NNVC stock. However, those risks may be outweighed by the potential for significant gains ahead. In the short term, the short squeeze could send the stock flying much higher. In the long term, should the company’s therapeutic candidates prove effective, significant growth could be ahead. All in all, NNVC stock is one to watch closely.