This Surging Small-Cap Biotech Has One Very High-Profile Investor

One of the hottest stocks in 2024 is Humacyte (HUMA), which has surged 163% year-to-date. Valued at $890 million by market cap, Humacyte is engaged in the business of developing and manufacturing implantable, bioengineered human tissues, advanced tissue constructs, and organ systems. 

Despite its stellar returns in 2024, Humacyte stock is down 56% from all-time highs, allowing you to buy the dip. Let’s see what’s driving Humacyte stock higher in recent months. 

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A Major Milestone for Humacyte 

Humacyte is a clinical-stage pre-revenue company and recently achieved a major milestone with the acceptance of its Biologics License Application (BLA) as it is seeking approval for the Human Acellular Vessel (HAV) from the Food and Drug Administration (FDA). 

Humacyte explained that the FDA has completed the pre-licensing inspection of its manufacturing facilities in North Carolina, and the company remains on track with commercial launch preparations for the HAV in vascular trauma. 

HUMA Stock Has Tripled Since April

Notably, Quiver Quantitative flagged a trade by Senator Tommy Tuberville in HUMA stock on April 16. Since the initial report of the senator's purchase, the biotech stock has more than tripled. Quiver Quantitative reports that Humacyte is a company that makes implantable human tissues and has tested its tech in Ukraine in the treatment of combat injuries.

That caught the Quiver team's eye because Tuberville sits on the Armed Services Committee, and is the only politician they've noticed trading the stock. With Humacyte’s long-term success, like most other clinical-stage biotechs, tied to the ongoing FDA review of its key offering, Tuberville’s buy-in is certainly noteworthy given his prime committee placement. Though Tuberville has already booked some profits on this investment, Quiver estimates he still holds more than $100,000 in the biotech company. 

During its Q1 results, Humacyte stated the BLA submission was supported by positive results from the V005 Phase 2/3 clinical trial and real-world evidence from the treatment of wartime injuries in Ukraine. It explained, “The HAV was observed to have higher rates of patency, or blood flow, and lower rates of amputation and infection, as compared to historic synthetic graft benchmarks.”

What is the Target Price for HUMA Stock?

Humacyte’s operating expense run rate in Q1 was similar to the year-ago period, which stood at $26.6 million. Comparatively, research and development expenses stood at $21.3 million for Q1, up from $17.3 million in 2023. 

Humacyte ended Q1 with $115.5 million in cash. Total net cash provided in the March quarter stood at $35.1 million in Q1, compared to an outflow of $20.2 million in the year-ago period. Humacyte’s increase in net cash provided was driven by $43 million in net proceeds from a public equity offering and $20 million from a funding arrangement with Oberland Capital Management. Humacyte expects its balance sheet cash to finance operations for at least 12 months, while the HAV might be approved by August 2024. 

Analysts tracking HUMA stock expect the company to end 2024 with $2.95 million in sales, while the top line is forecast to surpass $30.8 million in 2025. Comparatively, its adjusted losses are forecast to narrow from $1.07 per share in 2023 to $0.99 per share in 2024 and $0.82 per share in 2025.

Out of the six analysts covering HUMA stock, five recommend “strong buy” and one recommends “hold.” The average stock price target for HUMA is $8, just fractionally higher than current prices.

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Similar to other pre-revenue biopharma companies, Humacyte is a high-risk, high-reward investment. Investors bullish on the company's development may consider taking a small position in HUMA stock. 

On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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