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  • Catalysts Should Propel Aldeyra Therapeutics Higher 0 comments
    Jul 30, 2014 3:09 PM | about stocks: ALDX, BPTH, BIIB, OPXA

    Biotechnology company Aldeyra Therapeutics (NASDAQ: ALDX) announced first quarter results ending 31 March 2014 a few weeks ago. Net income during the first quarter of the fiscal year 2014 amounted to $0.4 million, compared to the net loss it incurred in the prior year. The company has yet to report revenues. Its profit is attributed to the gains from derivative instruments.

    (click to enlarge)During the period, the company ramped up its research and development efforts spending $0.44 million in the first quarter, higher than the previous year's $0.14 million. President and CEO Todd C. Brady said that the past few months have been exciting for the company. It has recently received $11 million from its initial public offering in May of this year. This will provide the necessary resources to fund its planned clinical trials for its flagship product, NS2 in Sjogren-Larsson Syndrome and acute anterior uveitis.

    He further added that the data show that the two clinical trials in 2015 will be promising for the company since these orphan diseases provide a good opportunity for the company in the future.

    New Addition In The Russell Microcap Index

    In May 2014, the company was able to successfully seal its IPO with the sale of 1.5 million shares at the price of $8 per share. Since the listing of Aldeyra on the Nasdaq, its share price has plummeted to around $4 per share.

    It seems that the market does not buy the investment thesis that there will be a huge potential in the company in the long-run. Another problem is the lack of awareness in the financial community. At the current market capitalization of $27 million, bigger funds in the investment space would shy away from the stock. Further, investment analysts and research firms would not cover the stock as they could generate substantial income for a micro-cap biotechnology company.

    Thus, the latest development on its inclusion in the Russell Microcap Index is a welcome relief for its investors. In fact, the index is best known for adding companies that it sees reputable and have the potential to outperform the market. Aldeyra joins other potential biotechnology stocks like Bio-Path Holdings (NASDAQ: BPTH) and Opexa Therapeutics (NASDAQ: OPXA). Both Bio-Path and Opexa Therapeutics are seen as good plays in the biotechnology sector.

    Management Changes

    Recently, it has hired a new chief financial officer to manage the company's finances. It appointed Steve Tulipano as its new CFO commencing June 2014. Mr. Tulipano has a strong track record in managing finances during clinical trials having served Javelin Pharmaceuticals as CFO, which eventually led to the Javelin acquisition by Hospira in 2010. He also held the role as director of corporate accounting at Biogen Inc. (NASDAQ: BIIB).

    These developments provide a clear signal to the market that the company is serious with its future growth plans. However, it will take a few years tell whether the company will be a strong contender in the biotechnology space.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: ALDX, BPTH, BIIB, OPXA
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