There is a world beyond the “Soulstring Selects”, a place and time that is filled with joy and angst, highs and lows, and all of the minutia in between. It’s a place that is abundant with opportunity, but also exposes trespassers to the perils of the land. This is a place called Penny Land, and it can be a treacherous place to live. One stock that is preparing to move away is BioLineRX (BLRX), and at $1.00 per share, it is already on its way.
BioLine Is A Leader Amongst The Micro’s
While many opportunities exist to place bets in stocks trading at roughly a buck or under, only a select few make the cut to being an invest-able vehicle. BLRX is one of those invest-able stocks. I am not professing that the land of pennies is replete of massive upside potential from a day trading standpoint, because that opportunity does exist. But, only on a traders roulette wheel can one find a stock, do no research, and expect the investment to gush out a gain many points higher from the purchase price. Those stocks are the slot machines of trading, and just like the one-armed bandits in casinos, penny stocks also pay the winners from the losses of others.
BLRX is an invest-able stock – one that has strong management and a portfolio of intellectual property that is attracting partnerships and collaborations from major players in the biotech world. While BLRX might still be a resident of Penny Land, it is one of the ruling families of that universe.
Ante Up For BLRX
BLRX is primed for success. In fact, they are already well on their way to getting there. Although the stock is trading at about a buck a share, the significant agreements and clinical advances at BLRX will eventually grab some traction and, inevitably, move the stock higher.
If you can’t take my word for it, take the word of Novartis, Genentech, Merck, and Perrigo, each of whom have signed collaborative deals with BLRX. Plus, these collaborations are diversified, which offers investors comfort that multiple projects can and will be advanced simultaneously.
Novartis is building the collaborative effort with BLRX to leverage into joint development opportunities for BLRX’s Israeli assets. Genetech is working with BLRX for its immunotherapy and multiple oncology indications, with a focus on BL-8040 & Atezolizumab. Merck wants a piece of the immunotherapy program for pancreatic cancer. As for Perrigo, they have secured the out-licensing of European rights for BL-5010 and are obligated to two OTC product launches.
Not a bad list of collaborative deals for a one-buck chuck. In fact, these kind of collaborative associations are rarely seen in stocks trading many multiples higher. Either BLRX is being upstaged by the 500 million share volume giants that stroll the land, or investors simply have not yet paid attention to the milestones being made at the BLRX compound. Thus, they sit and wait, getting stronger by the quarter.
BLRX, Here’s Why They Should Own Your Respect
BLRX should own your respect. To begin with, BLRX has a strong balance sheet. Yes, you read that correctly, BLRX is not expecting to need to go to the loan officer any time soon. As of June 2016, BLRX had $42 million dollars of cash, a cushion that provides an operational runway clear through 2018 and into the first part of 2019. And this is assuming that no additional deals or collaborations are consummated along the way.
Mid and large pharma alike are paying respect to BLRX, a welcome lead for the retail buyer. Novartis, who owns 9% of the company stock, provided BLRX with a $10 million dollar up-front payment, has an additional non-dilutive $5 million dollar option fee, and will pony up 50% of the remaining R&D expenses up to proof of concept, for which Novartis gets a right of first negotiation for full out-license of products upon clinical POC. The Novartis deal provides BLRX shareholder value along with the ability to tap Novartis for clinical support and expertise. And, this deal only covers the Israeli-sourced drug candidates.
Perrigo partnered with BLRX back in 2014. In that deal, Perrigo licensed rights for OTC indications in Europe, Australia, and other territories. Under the agreement, Perrigo is obligated to bring two OTC products to market, one of which they completed for an indication to treat warts. The collaboration led to a CE mark being issued for that first indication and led to a single product launch. They still owe one more.
Additionally, BLRX has commenced partnership discussions with Perrigo relating to its product specific retained rights and additionally retains full rights to all manufacturing and development data generated by Perrigo. In that sense, BLRX holds most of the cards. Plus, BLRX retains all rights to the US and worldwide markets for all OTC indications that come through the Perrigo deal.
The additional collaborations with Merck and Genentech are just as impressive, with BLRX retaining tremendous value in each of the agreements.
BLRX Has A Plan
A penny stock with four collaborations and a plan? Yes, BLRX is indeed a focused company. To that effect, many of the milestones are near-term, with an enviable list of events scheduled during the remainder of 2016.
In addition, the BLRX calendar is strong well into 2017. Below is a list of events anticipated in the coming months and investors should be interested to know that the list is not all inclusive.
Milestones expected in 2016:
- obtain a regulatory pathway determination for its BL-7010 compound
- initiate a phase II trial for its pancreatic cancer indication, BL-8040
- continue its immunotherapy agreement with Genentech
- continue its immunotherapy agreement with Merck
- complete the phase II trial for AML
- BL-5010 skin lesion CE mark approval
- BL-5010 first product launch
Milestones expected in 2017 include:
- partial results in its pancreatic cancer study
- phase Ib trial initiation for ML
- second product launch and completion for BL-5010
- initiate a phase Ib trial for BL-8040 to treat solid tumors
To spell it out in greater detail, Merck and Genentech have signed a phase IIa agreement to study and advance BL-8040. BLRX has been in dialogue and have secured understandings with the FDA and EU agencies for understandings about additional trials. Investors will hear partial results of the phase IIa study, in collaboration with Merck and Genentech. BLRX investors will further be updated on the commencement and completion of its efficacy study for BL-7010. And, not to be left out, investors are expecting additional collaboration and partnerships for 4-5 new projects as well as 1-2 additional IND filings.
In full disclosure, there is a lot more on the plate for BLRX in both 2016 and 2017. I simply picked out some of the highlights.
BLRX Must Be A Bloated Share Printing Press
Typically, bloated outstanding share counts and millions of dilutive warrants come as part of the standard diet in Penny Land. However, not at BLRX.
BioLineRX has 56 million shares outstanding and 65 million on a fully diluted basis. A majority of shares are owned by US investors, accounting for approximately 70% of the O/S. As stated earlier, Novartis owns 9% of the stock outstanding.
The company adds strong management and a team of 50 employees, with almost 75% of them holding advanced degrees. Plus, the company enjoys coverage from respected analysts at JMP, Roth, and Maxim.
Average volume for BLRX stands at roughly 400K shares per day and has a 52-week trading range between 71 cents and $1.63 a share.
Back in August, BLRX was trading at 80 cents a share and has been trending higher ever since. The stock has spiked on heavy volume on at least two news-generated occasions and traded above $1.40 per share before retreating back to current levels.
To be fair to the many that live in Penny Land, there has been quite a downdraft in biotech stocks in recent weeks, and, once the risk-off trade was put on, small and promising companies like BLRX have not been immune to the undertow that drags down everything it can catch. However, once the tide settles and calm heads once again rule the day, BLRX is in a position to advance higher with the rest of the good guys.
Ante Up Your Pennies Now, BLRX May Change Classes
For investors, much of the risk at BLRX has been mitigated because of their strong balance sheet and numerous collaborations. The fear of watching an investment get wiped out in Penny Land is remote for BLRX investors. No hype here, just the facts.
Providing fair value to stocks is becoming a less reliable art form, and speculating on them is still a win/loss proposition. Hence, the way to successfully invest in Penny Land stocks is to get to know them, and here is what investors should know about Bioline.
BLRX is going to launch more products and will add new partnerships, statements which are BLRX guided. BLRX will also advance clinical trials, a known fact. The company is cash-funded all the way through the early part of 2019, an additional known fact.
Is there any wonder why I consider BLRX to be a leader in the land? Forget the Penny Land monsters and impersonators that prey upon the retail weak and uninformed. Those stocks are for day traders who can sit at the screen and catch the brief rally before giving back the gains at closing time.
Don’t misunderstand me, though, I like those stocks too. It’s just that with bill’s to pay, it’s no longer comfortable to own those stocks and leave my computer screen to get a ham sandwich at the same time. At my ripe age, I can still run, but sprinting is another story, at least anything over ten yards. So, I leave the fast trades to the kids looking for their first million by trading stocks that cost .0045 a share.
BLRX is an invest-able stock that should be trading higher, at least in my humble opinion. But, even if the stock languishes at these levels for the next quarter or two, I can live with it. There are too many milestones for BLRX that should not be ignored by investors. To cast the known variables aside and look elsewhere for a lower priced chance-of-a-lifetime stock would be foolish.
I don’t mind paying the lower rent in Penny Land, and, for the time being, BLRX is a friendly neighbor. However, I see them packing boxes, perhaps with the confidence that they will be moving on up, to a deluxe apartment in the sky, in a town called Dollarsville.
Penny Ante is a weekly addition to Kenny Soulstring’s editorial column, featuring promising stocks that trade at or below $1.00 per share (give or take a penny or two).
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