Five reasons Repros Therapeutics (RPRX) is hitting 52-week highs:
1. Rare among biotechs, its funding needs have been met. Last year, Repros agreed with Efficacy Capital to allow the fund to buy up to 40 percent of the outstanding shares. Despite the credit crunch, Efficacy infused $15 million to the firm and agreed to buy more should RPRX need it. The agreement is here.
2. Short interest remains over 660,000 shares, down from over 900,000 a month ago. True float is only 8 or 9 million shares. While shorting cash strapped biotechs going into financings was a lucrative strategy last year, the shorts may have been caught. Data on shorts is available here.
3. With a market cap flirting with $200 million, critical mass of the firm is reaching a point where it becomes of interest to healthcare and other mutual funds.
4. Short time frame: RPRX expects to file a New Drug Application for one use of Proellex this year and two other NDA’s next year. The pipeline is here.
5. Possible blockbuster drug: Proellex appears to be of value in treating uterine fibroids, endometriosis, and related anemias. These are large markets and there is no currently existing pharma therapy without serious side effects. Androxal, which appears to be useful in treating low testosterone in men, could be valuable as well.
Disclosure: Author holds a long position in RPRX