Infectious disease and cancer treatment development specialist Aptorum Group (NASDAQ:APM) has made it the company’s business to address severely unmet medical needs. Nano-cap APM stock, while certainly not widely known to market participants, might be of interest to biotech investors seeking a fascinating up-and-comer with a unique pipeline.
As far as small biotech companies go, Aptorum is surprisingly diversified in its focus. So far, the company claims to have obtained “11 exclusively licensed technologies in the areas of neurology, infectious diseases, gastroenterology, oncology, surgical robotics and natural health.”
What attracts some traders to tiny biotech firms like Aptorum is the potential for a major regulatory breakthrough. It only takes one approval from the U.S. Food and Drug Administration (FDA) to cause a lesser-known biotechnology stock to skyrocket.
APM stock actually did skyrocket recently, though this event wasn’t linked to a regulatory drug approval. This price spike got Aptorum some attention from Wall Street, but should investors add it to their watch lists?
A Closer Look at APM Stock
As InvestorPlace contributor Sarah Smith observed, APM stock holders had an amazing day on Sept. 29. In fact, the share price jumped more than 500% during that trading session. It was an astounding sight to witness as APM touched the $10 level.
We’ll take a closer look at what caused that share-price spike. For the time being, though, it’s worth noting that the daily trading volume for APM stock increased dramatically on that particular day.
However, that level of interest in APM stock wasn’t meant to last. The very next day, APM shares tumbled to $2.75 and the daily trading volume plummeted. Over the next several trading sessions, the trading community kept APM near that price level.
Thus, unfortunately APM is a penny stock once again (defined by the U.S. Securities and Exchange Commission as a stock trading under $5 per share). This begs the question of what caused all of the fuss in the first place.
A Mention of Covid-19
In 2020, and particularly among biotech stocks, sometimes all it takes is a mere mention of the novel coronavirus pandemic to get Wall Street interested in a company.
Evidently, APM stock is a case in point. Aptorum has been developing innovative medical technologies for years. The company’s pipeline includes treatments and diagnostics for high-need areas such as liver cancer, Alzheimer’s Disease and Parkinson’s Disease.
I’d hate to suggest that Wall Street heartless, but traders didn’t seem to care too much about Aptorum’s pipeline until Aptorum Group Chief Medical Officer and Executive Director Clark Cheng mentioned the Covid-19 pandemic.
“With the significant worldwide disruption caused by the COVID19 pandemic and the current global focus on antimicrobial resistance, further to our recent joining with the BEAM alliance 2, Aptorum Group expands its potential infectious disease liquid biopsy diagnostics capabilities in synergy with its current infectious disease platform,” Cheng said. “And supports worldwide antimicrobial stewardship policies (ASPs).”
What This Means for Investors
Cheng is referring to Aptorum’s recent launch of its infectious disease liquid biopsy diagnostics subsidiary, Aptorum Innovations. Along with this is an in-licensing arrangement with Accelerate Technologies to “co-develop novel molecular-based rapid pathogen identification and detection diagnostics (‘RPIDD’) technology.”
Aptorum Group had been addressing infectious diseases already. Yet, this new subsidiary and in-licensing agreement suggest that Aptorum will pivot toward treatment solution development for the coronavirus.
So now, we can add APM stock to the rapidly growing list of coronavirus stocks. Smith’s assessment cuts to the core as APM is “far from a safe bet, but it sure is an interesting one.”
Personally, I view this as a wait-and-see type of scenario. Even if Wall Street only needed a passing mention of the pandemic to spark massive (albeit brief) interest in APM stock, I’m looking for clinical results as the true benchmark of success for Aptorum Group in this endeavor.
The Bottom Line
There’s no assurance of safety if you’re planning to invest in APM stock now. As this story develops, the trading community will want to see concrete results.
And without those results, there’s little to support APM stock beyond hope and speculation.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.