XTL Biopharmaceuticals Ltd (NASDAQ: XTLB) is rocketing in the premarket hours this morning, trading on gains that are better stated in multiples than percentages. However, this tiny, $15 million market cap company hasn’t issued any news, leaving many scratching their heads, wondering why it’s flying.
The gains seem to be the result that shows the market in which the company operates is growing. Here’s what’s going on:
Skip to What You Want to Read
- What Is XTL Biopharmaceuticals?
- Report Points to Growth in the Recombinant Proteins Market
- Risks to Consider Before Buying XTLB Stock
- Final Thoughts
What Is XTL Biopharmaceuticals?
XTL Biopharmaceuticals is a clinical-stage biotech company that’s working on the development of novel therapeutics for indications with large unmet needs. In particular, XTLB is focused on the development of therapeutics that treat autoimmune diseases.
Importantly, the company’s research involves the use of recombinant proteins to assist in targeted treatments of these severe medical conditions.
Report Points to Growth in the Recombinant Proteins Market
With XTLB being focused on the use of recombinant proteins as an option for patients suffering with autoimmune diseases, a recent report may be the cause for the dramatic run in value today.
A report by Research and Markets outlined growth and opportunity in the recombinant proteins market. According to the report, the global recombinant proteins market is expected to climb to be worth $1.7 billion by the year 2026. That’s incredible growth, considering that the market is only expected to drive around $1 billion in revenues this year.
Importantly, the report points to increasing government investments in the recombinant proteins space, suggesting that there may be grants up for grabs in the future. Moreover, there’s quite a bit of R&D spending going on in the space, and with the tiny market cap of XTLB, this may set the stage for an acquisition down the line.
The bottom line here is simple. A report showed that the recombinant proteins market is vast and growing. Moreover, XTL Biopharmaceuticals not only focuses on development in the market, but is clearly undervalued when compared to its peers. As such, not only does the market itself provide a strong long-run opportunity, the company is becoming a takeover target in an industry where massive pharma companies are spending huge dollars on R&D.
Risks to Consider Before Buying XTLB Stock
If you’re thinking about buying XTLB stock, it’s important to consider the risks. After all, there’s no such thing as an investment without risk. Some of the most significant risks to consider include:
- Capital Risk. XTL Biopharmaceuticals is in clinical stages and unable to generate revenue through product sales. So, the company has to survive with the funds it has in the bank. Should this not be enough, the company may move forward with a public offering, leading to the dilution of existing shareholder value.
- Clinical & Regulatory Risk. XTLB is a clinical-stage biotechnology company. That means that it is at the mercy of clinical data and regulatory opinion. Should either of these make a turn negative, the stock could experience significant declines.
- Pennies. Finally, XTLB is a penny stock. As a penny stock, there are increased risks to consider. One of the major risks being volatility. Sure, volatility is fun on the upside, but it can also be very painful on the downside.
While there are risks to consider, there are also plenty of reasons to be excited about XTL Biopharmaceuticals. The company is on the cutting edge of innovation in an industry that is expected to be worth $1 billion this year and grow substantially in the year ahead.
Moreover, with the serious undervaluation on the stock, it makes a great takeover target as large players in biotech spend huge amounts of money on recombinant protein research. All told, this could become a massive win, making XTLB a stock that’s well worth watching.