With so much attention pointing once again to the again-escalating U.S.-China trade dispute, it’s easy to overlook Bio-Path Holdings (NASDAQ:BPTH). However, the oncology specialist is easily one of the best-performing investments of 2019. Year-to-date, BPTH stock has gained a mind-blowing near-500%.
More importantly, a fundamental catalyst supports the dramatic rise in valuation. A favorable clinical trial of the company’s acute myeloid leukemia drug lifted Bio-Path stock from the doldrums. This news has obvious positive implications, as this particular cancer has a market size of $701.6 million. Overall, leukemia’s market value will likely hit $12 billion in a few years.
At the same time, biotechnology firms are hardly stable investments. While BPTH stock currently enjoys the afterglow of a promising trial, it could just as easily go awry. After all, if cancer research was straightforward, we’d already have a cure.
Invariably, though, the skyrocketing Bio-Path stock commands our attention. Should you buy into this winning streak, or is this hand destined to cool? Here are three pros and three cons to consider:
Pro #1: A Possible Breakthrough Could Further Boost BPTH Stock
I’m not breaking new ground when I say that cancer is an uncomfortable subject. However, acute myeloid leukemia is a nasty strain. The disease spreads very rapidly if left untreated. By entering the bloodstream, this cancer can affect the liver, spleen, central nervous system, and testicles.
The latter may have caught the attention of Wall Street’s men, who fueled the spike in BPTH stock.
In all seriousness, though, the latest clinical trial offered encouraging data. Out of 17 patients in the study, 11 responded to Bio-Path’s prexigebersen drug. And of those 11, five experienced a complete response.
Pro #2: Bio-Path Stock Levers Profound Technologies
A thousand years from now, I’m sure that our future progeny will look back on us with macabre fascination for how we treated cancer by blasting patients with radiation. I can’t help but bring up the obvious question: doesn’t radiation cause cancer?
Fortunately, much smarter people than I have answered this inquiry. Bio-Path’s solution is their proprietary DNAbilize platform. In short, this enables oncologists to precisely deliver cancer-killing therapies to affected cells without nuking the patient.
Such technologies lever a broader impact on this industry. Some patients simply don’t have the physical strength to endure chemotherapy or radiology. DNAbilize is a lifesaver on multiple fronts, further bolstering the case for Bio-Path stock.
Pro #3: BPTH Probably Already Hit Rock-Bottom
I’m not always comfortable with the argument that a particular stock has priced in all the bad news. Unless you’re privy to insider information — at which point you shouldn’t act on that info — you just don’t know if more nasty stuff lies ahead.
However, I can’t imagine BPTH stock falling even more than it already has. Bear in mind that shares used to trade for well over $500 just a few years ago. With that context, BPTH appears like a bargain, even with this year’s mooning.
Con #1: Shares Used to Trade at $500-plus
On one hand, the ability to buy Bio-Path stock for pennies on the dollar appeals to many contrarians. But those with a critical eye will argue that a reason exists for the meltdown.
Let’s look even further back. In early January 2014, BPTH stock was on the cusp of clearing $1,000. In May of 2008, and just prior to the Great Recession, it hit four digits.
The argument that “it can’t get any worse” failed these early investors “bigly.” You don’t want to repeat their mistake.
Con #2: Bio-Path has Tough Competition
While Bio-Path’s DNAbilize platform appears profoundly impressive, it’s not the only party in town. BPTH is riding the broader category of gene therapy, or the targeted delivery of disease-fighting therapies. But other names, including CRISPR Therapeutics (NASDAQ:CRSP), Roche Holding (OTCMKTS:RHHBY), and Editas Medicine (NASDAQ:EDIT) compete aggressively in this sector.
Given the historical volatility in BPTH stock, I want some reassuring factors that I can depend on. Unfortunately, Bio-Path doesn’t have a moat, which makes me jittery about its sudden rise.
Con #3: Biotech is Incredibly Volatile
Right now, everyone has mad love for Bio-Path stock because of its unexpected ascent. However, I’ve seen this story play out before in this wild market segment. All it takes is one bad trial to undo years of effort and research.
Plus, BPTH stock has two obstacles regarding its drug pipeline. Management must demonstrate that their therapies can consistently beat placebo, which is no easy task. Plus, they have to show that their solutions are superior to the competition. Again, that’s no gimme.
Bottom Line on BPTH Stock
Admittedly, I see the both the technical and fundamental potential for BPTH, and I’m personally intrigued. However, I keep going back to the inherent volatility of the biotech industry and Bio-Path stock. Yes, it enjoyed a positive paradigm-shift, but it could just as easily go sour.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.
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