Hello my friends I hope your biotech investing has been running smoothly, and you have not pulled all of your hair out. Of course with all the world problems it has caused quite a selloff in the biotechs this last week but the best play would be to find biotechnology stocks that have the best science and stick long term with those stocks. There has been quite a stir lately about Rexahn Pharmaceuticals (NYSEMKT:RNN) , and the bears have been rehashing old bad news on why investors should stay away from Rexahn Pharmaceuticals. My lovely article today that you will hopefully like very much ( hint hint lol) will explain why I will still remain bullish on Rexahn through the month of March and for the long term. I will do something different today, so yes if it looks disorganized haha it is because I’m trying a new format for this article so try and be lets say open minded.
The first bear thesis on Rexahn deals with Archexin and the fact that it failed to start in 2009 because of the bad trial design and low recruitment of patients. Quite honestly do I even need to refute this bear thesis? For starters this trial never got started underway so we can’t claim that it failed as a drug compound, because it was never tested to begin with. Maybe the chief scientific officer wasn’t able to determine the right dosage for the population to be tested and the trial design was not good so management chose not to initiate the trial. Quite frankly it was better they didn’t waste investor money running a trial that had a faulty trial design. Also if the patients would have been difficult to recruit why run the trial? The bear thesis is just that a faulty thesis so they can continue to short the stock and make money. The other bear thesis on Archexin was that the phase 2 trial was unreliable because there was no placebo control arm for the results that were released for Archexin in phase 2a against pancreatic cancer. That is totally false because the claim is that Archexin failed in the trial because it used old historical placebo control which is gemcitabine. I don’t quite understand this because gemcitabine is standard of care for pancreatic cancer patients so that bear thesis to me is dead. The fact that gemcitabine combined with Archexin produced 9.1 months median survival benefit is bullish to me. What the bear thesis doesn’t tell you is that Abraxane which was developed by Celgene Corp produced median survival of 8.5 months, so if Rexahn in a small study was able to produce 9.1 months that is pretty substantial extra median survival.
Lets say for giggles (cause we are funny people lol) that Archexin doesn’t work out just to hypothesize for the bear thesis. Rexahn has two other more promising clinical compounds. One of those compounds is known as RX-3117. So you may ask , ” what is the bear thesis for RX-3117?” Well the bear thesis for RX-3117 is that it is a bad compound , and is the reason why Teva pharmaceuticals abandoned it, also Rexahn will have a hard time finding a partner for it as it claims to be in multiple partner talks. Lets debunk this with a big ”NO NO” ( see what I did there lol, okay yes moving on) The reason for Teva leaving the compound was put in response in this article quote:
“RX-3117 appears to have potential in various indications, but does not align with Teva’s new Oncology strategy”
Quite frankly there is no bad side in this, Teva had also struggled with other compounds and failures of its own in the clinic so maybe at the moment they didn’t want to use their money in an unwise manner. The bear thesis to demonize this statement is just that to make it look bad to help their short position in the stock. Rexahn management claims to be in talks with several partners that are interested in the compound, while nobody knows for sure how true this is all we have to do is look at what RX-3117 is. RX-3117 is a nucleoside compound which is very desired by pharmaceutical companies because of its diversity to treat various diseases like HIV, hepatitis C, hepatitis B etc. So therefore we have to conclude that if Rexahn was able to develop a nucleoside analogue compound that can shrink solid tumors without affecting healthy human cells than many big pharma companies should be interested in this compound. Which is my belief that there is a possibility that Rexahn should find a partner interested in testing out RX-3117 to possibly help these patients with limited treatment options.
This brings me to the last compound for Rexahn which is known as Supinoxin. Why I like Supinoxin is that it is a phosphorylated p68 RNA helicase, and that is has shown some remarkable pre-clinical results. Matter in fact Supinoxin showed potent activity in cancer cells that were resistant to gemcitabine, cisplatin, and docetaxel. Also for the fact that Supinoxin is an RNA compound which a lot of biotechs have been showing excellent results in. Also as stated by the CEO for Rexahn Peter D. Suzdak that Supinoxin is already being tested in the 4th dose level group. The fact that they are able to continue to higher dosage without sacrificing efficacy to me is pretty bullish. Nobody knows for sure in biotech how results can come out, but I believe that the results for Supinoxin may show some substantial anti-tumor activity. These results are expected sometime before the end of March, and with positive results should create a higher share price.
Now I’m not going to tell you whether or not you should buy Rexahn, this is because I’m not a bully ( Just kidding lol). It is because I want investors to do the proper due diligence on the stock and look at the risks and determine for themselves if it is worth it. For me IMO I am bullish on the upcoming phase 1 Supinoxin (also known as RX-5902) Results, and believe that investors may have a chance to come out well owning this stock for the long term. As I have mentioned many times biotech is speculative so it is good to invest in if you understand the risks. The problem though is that since biotech is so speculative short sellers are able to scare people to sell out of their positions, and not be able to make up their own mind. You have to ignore the noise and go off of your due diligence and what your gut tells you not what some article writer that is short the stock tells you to do. I hope I have not bored you (maybe some of you have slept through some of this wall of text rofl I hope not) but research for yourself is key in the biotech industry. Invest Wisely, and Remember “Due Diligence Creates The Best Picks In The Biotech Sector”!