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GlycoMimetics Stock Has Substantial Upside

Chris Lau

GlycoMimetics (NASDAQ:GLYC) issued a second quarter earnings report that investors will like. It beat consensus estimates on earnings. Its cash position was at high enough levels to cover future operational needs. And the company announced a number of clinical studies that demonstrate it continues to develop treatments for cancer patients.

GlycoMimetics ended the second quarter (Jun. 30, 2018) with $229.4 million in cash. In the quarter, it finalized its Phase 3 development program for GMI-1271 (uproleselan) in treating older patients diagnosed with AML (acute myeloid leukemia).

This follows its May announcement of a Cooperative Research and Development Agreement with the National Cancer Institute. In its press release, CEO Rachel King said:

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“The unique mechanism of action of uproleselan allows for the potential treatment of not only relapsed/refractory AML patients, but also older, newly diagnosed AML patients who are considered to be either fit or unfit for intensive chemotherapy. If successful, we believe that the combination of these trials could position us to offer a new standard treatment across the continuum of care in AML.”

In its Phase 3 clinical study for rivipansel, which treats sickle cell disease, the company, along with its strategic partner Pfizer (NYSE:PFE), continued enrolling patients. The study currently has 75% enrollment and will be completed in early 2019. The companies expect top-line data will be available in the second quarter of 2019.

Second Quarter Financial Results

GlycoMimetics sold 8.05 million shares in March 2018 to net $128.4 million. This effectively doubled the companies cash and cash equivalents from last year, to $229.4 million. R&D costs rose a modest $9.3 million, up from $5.7 million. GlycoMimetics faced higher drug manufacturing costs in preparation of the Phase 3 clinical trial of uproleselan.

G&A expenses stood at $2.8 million, which is similar to last year’s level of $2.5 million.

Products in the Pipeline

Uproleselan demonstrated better-than-expected remission rates and overall survival during its Phase 1 clinical trial. Investors bid the stock higher in the last year partly because the FDA granted uproleselan a Breakthrough Therapy designation for treating adult AML patients.

When the company gets to Phase 3, it will implement a comprehensive development program. If it gets good study results, GlycoMimetics could have a drug that treats a wider clinical spectrum of AML.

Rivipansel, which is closest to getting to market for GlycoMimetics, has many indications. The first is the “vaso-occlusive crises” (VOC) of sickle cell disease (SCD). The drug works by reducing cell adhesion, activation and inflammation.

These are thought to contribute to reducing blood flow during VOC. If the study confirms that the drug interrupts VOC, patients treated with it could be discharged from the hospital sooner.

GMI-1359 is a drug that interferes with molecular adhesion of cancer cells in bone marrow. GlycoMimetics determined in preclinical studies that targeting E-selectin and CXCR4 could raise the efficacy of treating cancers such as AML and MM (multiple myeloma) or solid tumors metastasizing to the bone.

Bottom Line on GLYC Stock

Analysts are unanimously bullish on GLYC stock. In the coverage given to the stock over the last eight months, five analysts have a “buy” call. The price target ranges from $21-35, according to Tipranks.

Conservative investors may want to invest in a mega-cap drug manufacturer like Pfizer instead of a microcap like GlycoMimetics. Since July, Pfizer “bounced” from its moving averages at $36 to close at yearly highs of $41. GLYC stock moved the other direction.

It has yet to shake off the drop in March 2018. With no products on the market, the company is riskier. But look at companies like Sarepta Therapeutics (NASDAQ:SRPT) or Exact Sciences (NASDAQ:EXAS). Once these companies launched a drug to market, revenue grew steadily, and the stock rewarded its patient investors. The same could happen for investors in GLYC stock.

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