GLYC - GlycoMimetics: Insider Buying Continues And Chart Looks Healthy

2023-05-30 08:02:30 ET

Summary

• GlycoMimetics' Phase 3 study of uproleselan for acute myeloid leukemia is expected to continue until early 2024, with the FDA seeking more information on survivability rates.
• Insider buying and technical momentum indicators suggest a bullish outlook for the company's stock, currently trading at $1.85 per share.
• The drug has the potential to be used in combination therapies for various cancer treatments, but investors should consider the risks and only allocate a small portion of their portfolio to GlycoMimetics.

I wrote a bullish note on GlycoMimetics ( GLYC ) in early January here , as the company was pushing the FDA to review its data of patients living much longer than expected in a Phase 3 study of Uproleselan to fight advanced AML leukemia. Management was hoping for fast-track designation to move more quickly into commercial sales of its drug invention (as were investors), as a best-case scenario.

Large-scale insider buying and a sharply higher share quote on monster volume grabbed my attention at the time.

Unfortunately, the FDA decided to keep the Phase 3 study intact until late 2023 to early 2024, to get more information upon full completion of the original trial design. The logic is survivability rates should be quite clear by early 2024, at which point another review of the data will take place.

Specifically, this is what the company's press release stated on February 15th, 2023:

GlycoMimetics, Inc. today announced the independent Data Monitoring Committee (DMC) reviewed the interim utility analysis of its Phase 3 study of uproleselan in relapsed/refractory (R/R) acute myeloid leukemia (AML) and recommended the study should continue to the originally planned final overall survival event trigger.

We thank the independent DMC for its recommendation and are strongly encouraged as the blinded pooled survival data continues to show patients living longer than historical benchmarks. Going forward, survival duration for new events in the study will be greater than 14 months since the last patient was randomized, giving us confidence in the potential for uproleselan to improve outcomes for people living with R/R AML," said Harout Semerjian, Chief Executive Officer of GlycoMimetics.

We are proud to be advancing a novel treatment with significant potential to address the urgent unmet medical need in this acute leukemia, and we look forward to continuing the study to the originally planned final overall survival analysis, now expected within the first half of 2024.

The interim utility analysis was added to the study in the fall of 2022 as blinded pooled survival data showed patients living longer than expected based on the historical benchmarks used to design the study. The plan for the independent DMC to review efficacy and safety data at approximately 80% of planned survival events was cleared with the U.S. Food and Drug Administration.

When designing the interim analysis, the company amended the protocol to create the opportunity to achieve unblinding at around 80% of survival events while maintaining the integrity of the final analysis should the DMC recommend the study continue to the final overall events trigger. The interim analysis plan required a high statistical threshold to be met for the independent DMC to recommend unblinding, reserving approximately 95% of the study's statistical power for the final analysis.

GlycoMimetics also announced it had issued new shares for capital to finance early-stage operations until the end of 2024. The ATM facility raised $32 million in cash, selling shares between October and early February. Both news events hit the stock price hard, with a dump from over $4 to $1.50 a share over the next few days of trading.

Insider Buying

So, where does this stock stand today? I remain optimistic that uproleselan could be approved for leukemia use by the second half of 2024. And, insiders (who know more about trial results and future approval prospects) have continued purchasing shares since mid-February. Below is a Nasdaq exchange table of company officer/director and major shareholder trading activity over the last four months, buying at prices under $2, with one minor sell trade. If optimism at corporate headquarters didn't exist, I would likely avoid this name personally.

Technical Momentum Picture

Even after the 50% off sale from early February, the current quote of $1.85 per share is TRIPLE the lows of September. From a technical perspective, the turnaround in price during May, back above its 50-day and 200-day moving averages is quite bullish, especially in the face of a flat U.S. equity market generally.

Other chart positives include the strong upturn in price after reaching a low 10 score on the 21-day Average Directional Index (circled in green below). This low-volatility, share supply/demand balance reading was quite similar to the July bottom and subsequent rebound in price.

The super-strong On Balance Volume zigzag higher from early November is also hard to ignore (marked with a blue arrow). Essentially, volume buying has continued, even after the disappointing FDA decision announced in mid-February.

Lastly, 14-day Ease of Movement calculations have been sky-high since October (boxed in red). This indicator is telling us even mild levels of buying interest are able to turbocharge price change.

Taken together, the momentum picture is still quite bullish. My review of the trading stats is buyers are overwhelming sellers, although price has yet to spike back to early-year highs.

Final Thoughts

If you want to review a truly optimistic take on the company, Seeking Alpha contributor StocksnSocks penned his uniquely bullish view on uproleselan in early May here . His thinking is the GlycoMimetics invention could be used as a combination therapy with other drugs in a number of cancer treatments beyond leukemia, because of its patient safety characteristics with few major side effects.

He believes a variety of positive catalyst news events for the stock could appear in coming weeks. And, if this optimism proves out, a significant share quote jump could be approaching during the summer. Below is his bullish conclusion:

Our outlook on GLYC and what we believe the company will achieve this year. Please note that the following below are only our opinions in which the company has not yet publicly guided on:

• We believe sometime in June/July, the company will engage with a large pharma in a co-development deal for Uproleselan in all HCST transplantation settings, with GMI-1687 as the backup target.
• We believe the MM trial being run by The Washington University School of Medicine (GLYC is named as a co-collaborator) will be successful with the primary endpoint (change/improvement in diarrhea) and will additionally show success in the exploratory endpoint of MRD negativity.
• It's our opinion this data will presented at EHA 2023 in June (EHA abstract titles will be revealed May 11th) with the company receiving breakthrough designation in frontline/pre-treatment MM around the same time.
• Based on the above, we think the company will seek/file an AA based on the above MM trial before the end of Q3 this year.

Also, we believe the frontline AML study being run by The National Cancer Institute in conjunction with The Alliance for Clinical Trials in Oncology , will see positive topline data (HR. 0.64 or better) which could be presented as a "late breaker" at EHA 2023 - EHA late breakers will be revealed June 1st.

Of course, there are serious funding risks in this equity, if trial results do not play out as expected. Assuming no real benefit from uproleselan is proven, shares could fall to zero or close to it by late 2024.

Therefore, GlycoMimetics should only be weighted as a very small gamble in your portfolio. Any position size beyond 1% of your total investment funds would be taking on unwarranted risk, in my opinion. GLYC represents something akin to a lottery ticket, where you have to assume a total investment loss is the most probable outcome.

I rate shares a Buy , under the assumption investors are only putting in a very limited amount of capital. If FDA approval of uproleselan becomes reality next year, and the company has not been acquired by a large pharmaceutical business, a share price above $10 is not impossible (from today's low $115 million market cap and $1.85 quote).

Thanks for reading. Please consider this article a first step in your due diligence process. Consulting with a registered and experienced investment advisor is recommended before making any trade.

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