GLYC - GlycoMimetics: Stock Price Drop Brings Great Speculative Trade Opportunity

2023-03-08 23:20:14 ET

Summary

• Independent Data Monitoring Committee interim analysis concludes that the phase 3 study, using uproleselan in combination with chemotherapy for the treatment of relapsed/refractory AML patients should continue as planned.
• Last event to trigger final results from the phase 3 study, using uproleselan in combination with chemotherapy for the treatment of relapsed/refractory AML patients expected 1st half of 2024.
• With the latest cash raise of $32.9 million in net proceeds, biotech now has enough to fund its operations into Q4 of 2024.
• Potential to expand uproleselan towards other AML patient populations such as those who are unfit treatment naive patients and those who have secondary AML.

GlycoMimetics ( GLYC ) is a great speculative biotech play to look into. The reason why I state that is because its stock price dropped after the company announced that it would raise cash. Not only that, but another reason for the drop is that if the results were compelling enough then it could have released them earlier than expected. The stock price has dropped by 54% since the announcement of the cash raise and change in date for the data release back on February 14, 2023. However, I believe that there is still a good chance of seeing compelling data and for the stock to possibly recover. That's because the DMC could have completely gone the other way if data was shown to be very bad, in that it could have just recommended that the study should be stopped entirely due to lack of efficacy. While this means there is no "home run" with the reviewed data, allowing the study to be stopped early due to overwhelming efficacy, there is still a chance to improve clinical patient's survival outcomes. This drop in the stock price means that long-term investors now have a great opportunity to buy in. Especially, since GlycoMimetics now believes that it has enough cash on hand to fund its operations until Q4 of 2024. The continuation of the phase 3 study using uproleselan, for the treatment of patients with relapsed/refractory acute myeloid leukemia ((AML)) means high risk/high reward remains in play. A downside is that the last event in this late-stage study is not expected to be triggered until the 1st half of 2024, which means that results from this phase 3 study won't be released until that time. Depending upon market conditions, the stock could see further decline before the actual release of data. Regardless, GLYC stock price drop creates an opportunity for traders/investors who want to get in on such a speculative biotechnology stock at a lower price point.

Phase 3 Moves Forward After DMC Interim Analysis Review

The phase 3 study that GlycoMimetics has deployed is for the use of uproleselan, which is being used for the treatment of patients with relapsed/refractory acute myeloid leukemia ((AML)). This trial has completed enrollment of about 388 patients who were randomized to receive either of the following:

• Uproleselan in combination with chemotherapy
• Chemotherapy alone

The primary endpoint of this phase 3 study is overall survival ((OS)) over a 5-year period. Where some disappointment came from investors might have been with the latest update of this late-stage trial. Whereby the independent Data Monitoring Committee ((DMC)) didn't halt the study completely for compelling data, but at the same time still recommended that it continue as planned . I can see why this would be disappointing, because it is not a "home run" so to say. Still, this doesn't mean that the results are not going to be good enough to possibly move forward with. The DMC still recommended that the study continue as planned. As I noted above, if it felt that treatment with uproleselan was worthless, it could have just recommended to stop the study due to lack of efficacy. While still highly speculative on the final outcome, the takeaway is that the DMC saw no reason to stop the study entirely due to the drug not being effective at all. Another consideration for the share price falling is the length of time it would take for the final results to be released from this phase 3 study. With the conclusion of the interim analysis, results from this late-stage study are now not expected to be released until the 1st half of 2024. Therefore, it is quite possible that some traders/investors don't want to wait that long.

Financials

According to the 10-Q SEC Filing , GlycoMimetics had cash and cash equivalents of $51.6 million as of September 30, 2022. It believed that it would have enough cash to fund its operations for at least the next 12 months. However, it chose to raise cash as I highlighted in the beginning above. Which is likely another reason why the stock price may have declined the way it did, along with the other factors I noted in this article. It stated that in Q4 of 2022 it sold a total of 11,776,784 shares of common stock under its existing "at-the-market" ((ATM)) sales facility. From this ATM, it raised a total of $32.9 million in net proceeds from it. While this cash raise hurts investors in the short-term, there is a positive takeaway from it. That being, with the newly added cash, it believes it should be able to fund its operations into Q4 of 2024. This is a good thing considering that the final expected event from the ongoing phase 3 study, using uproleselan for the treatment of patients with relapsed/refractory Acute Myeloid Leukemia ((AML)), is expected to be released by the 1st half of 2024.

Risks To Business

There are several risks that traders/investors should be aware of before investing in GlycoMimetics. The first major risk to consider would be with respect to the ongoing phase 3 study, which is using uproleselan in combination with chemotherapy for the treatment of patients with relapsed/refractory AML. While the independent DMC concluded that this late-stage study should continue as planned, there is no guarantee that a final positive outcome will be achieved. Again, it was disappointing that the DMC didn't halt the study early due to compelling efficacy, but at the same time does not mean that the trial will surely fail. The success of this phase 3 trial is still speculative nonetheless, but there will be an opportunity for traders/investors to get in at a great entry point. If not now, then there might be some point in time to find a good entry point before the 1st half of 2024. Another risk to consider is that uproleselan has already been partnered out with a Hong Kong Pharmaceutical company by the name of Apollomics . That is, this biotech has licensed the ability to develop and commercialize uproleselan GMI-1687 for Mainland China, Hong Kong, Macau and Taiwan, also known as Greater China. GMI-1687 is another clinical candidate in the pipeline for the treatment of patients with Sickle Cell Disease [SCD] vaso-occlusive crisis and AML. The reason why this remains a risk is because if the phase 3 study in the 1st half of 2024 fails to deliver promising results, then its highly likely that Apollomics could end up shredding this deal. This means that GlycoMimetics would not be eligible to receive $179 million, along with tiered royalties, from this deal.

Conclusion

The final conclusion is that GlycoMimetics is a great speculative biotech play to look into. The stock price dropped for a few reasons noted above, such as financing, trial not being stopped immediately due to compelling efficacy, and the extended wait period as final results are now not expected to be released in the 1st half of 2024. Still, there was a positive takeaway from the independent DMC review that was completed, which is that the phase 3 study with uproleselan should continue as planned. One other risk to mention is that there is another ongoing phase 2/3 study, which is using uproleselan for the treatment of older adults with newly diagnosed AML who are fit for chemotherapy. When the National Cancer Institute [NCI] is ready to release event-free survival data from this study, then it will do so. Not only that, but at that time, GlycoMimetics could choose to reopen recruitment for a phase 3 study for this program as well. Another item to consider is that there are two investigator-sponsored clinical trials which are being advanced as well. Both of these studies are targeting other AML patient populations, which are unfit treatment naive patients and those who have secondary AML. Based on the interim analysis update from the independent DMC to continue the phase 3 study with uproleselan as planned, plus the ability to expand this drug to several other AML patient populations, these are the reasons why I believe that GlycoMimetics is a great speculative biotech play to look into.

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