With the current news surrounding inflation, the possibility of raising interest rates, and concerns of supply chain constraints has the led the market to have a risk off attitude with many quality companies recently retreating from their all-time highs. And because of this recent sell off some companies whose business model and financial performance are still firing on all cylinders are now trading at discounts when compared to their future potential. In the long-run, companies with superior business models, innovative products and a strong management team will see their share prices rise as the market rewards businesses who outperform. Today, investors should be on the look-out for these companies who are currently trading at large discounts but whose business performance is currently stronger than ever.
One such company that has retreated off their 52-week high yet through their recent press releases is showing investors flawless execution of their business plans is Hoth Therapeutics, ticker symbol HOTH. This biotechnology company is focused on finding, investigating, developing, and commercializing novel therapeutic treatment options. Hoth firmly believes that the medicine and treatments patients are administered to treat diseases should not make you sicker than the disease itself. The company aims to accomplish this goal through seeking out what they feel have been largely overlooked drugs that still have a high promise to provide a better or new treatment method for patients.
For such a young biotech company Hoth has a very impressive investment portfolio of drugs, treatment options and even medical devices leading them to have over 11 different products in their current pipeline. Their pipeline aims to treat a wide array of ailments including eczema, chronic wounds, asthma, acne, COVID-19, cancer, and more.
Hoth Therapeutics Partners with North Carolina State University to Further Develop mRNA Therapeutic Treatment Option HT-KIT
Hoth Therapeutics made headlines very recently announcing a confirmed Sponsored Research Agreement with North Carolina State University. The research will be led by Dr. Glenn Cruse and will focus on the research and development of Hoth’s HT-KIT, a novel therapeutic for the treatment of mast cancer cells. More specifically, the partnership will explore dose and dosing frequency for treatment of aggressive mastocytosis (which is a rare skin disease that occurs when the body contains too many mast cells) and mast cell neoplasms (which is a tumor of the immune system that leads to a group of disorders usually resulting in manifestations on the skin). Not only will this research expand the therapeutic potential of HT-KIT it will also provide valuable insights of using HT-KIT to treat other cancer types.
Through New Contracts with Pharmaceutical Development Company WuXi STA Hoth Accelerates Production and Formulation Operations
The company has also announced they have entered into two new contracts with STA Pharmaceutical (a subsidiary of WuXi AppTec) for the process development and manufacturing of the active pharmaceutical ingredient (API) of HT-KIT, allowing Hoth to accelerate the development and commercialization of their new treatment option. This new agreement should drastically improve and fast-track the development of HT-KIT with STA’s large operations and PMO manufacturing scale-up capability. STA has the unique combination of providing their clients an end-to-end platform specializing in API and formulation within one facility for oligonucleotide peptides and their conjugates.
With the winding down of 2021 the development process and manufacturing of HT-KIT API is already in progress with the company forecasting a completed small batch in Q1 of 2022. Once this is completed, Hoth intends to move immediately into formulation development (with the end result of HT-KIT to be used as a parenteral formulation for injection).
Hoth has made great headway with a product that has the potential to treat millions who are suffering from a wide array of diseases. And with the now exponential increase of manufacturing capability HT-KIT is closer to reaching the end consumer than many may have originally anticipated.
Thoughts on Valuation
Source: Google Finance
Hoth was trading yesterday around $0.7300 well off their 52-week high of $3.50 a share. The company has an incredibly long pipeline of treatment options in various development stages, as well as no debt and a cash balance of just over $14 million, leaving them the operational room required to fund operations and invest into further developing the treatment options they feel have the most potential. Despite all the impressive statistics above Hoth still only has a market cap of $17.3 million, which equates to barely a sliver of the market they are serving. And with a promising drug pipeline with products such as HT-KIT paired with the large increase in production capacity today’s price could well be a bargain for what Hoth Therapeutics could be worth in the near future.
In its current state the market has a lot of uncertainty ahead of itself. It remains to be seen what will come with rising inflation rates and the overarching shadow of rising interest rates. However, companies who are creating products that have the potential to change the world and can do so with operational efficiencies and strong margins will prosper regardless of the macroeconomic conditions. Hoth Therapeutics is one such company and is currently trading at a large discount in relation to their business prospects. The recent success with their HT-KIT treatment is proving to investors they are firing on all cylinders and aggressively pursuing the therapeutics that have the highest potential upside. Investors should take note of these recent successes and be sure to add Hoth Therapeutics to their watchlists.