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Fear a Recession in 2020? Buy This Cheap Biotech Stock

Test tubes
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Aptose Biosciences (TSX:APS) is a science-driven biotechnology company advancing highly differentiated agents to treat unmet medical needs in life-threatening cancers, such as acute myeloid leukemia, high-risk myelodysplastic syndromes, and other hematologic malignancies.

Based on insights into the genetic and epigenetic profiles of certain cancers and patient populations, Aptose is building a pipeline of novel and targeted oncology therapies directed at dysregulated processes and signaling pathways in cancer cells. The company’s strategy is intended to optimize efficacy and quality of life by minimizing the cytotoxic side effects associated with conventional therapies.

The company has a price-to-book ratio of 6.56 and market capitalization of $189 million. Debt is very sparingly used at Aptose Biosciences, as evidenced by a debt-to-equity ratio of just 0.06.

The company’s product pipeline includes cancer drug candidates that exert potent activity as standalone agents and that enhance the activities of other anticancer agents without causing overlapping toxicities. The company believes that these products can emerge as best-in-class agents that deliver single agent benefit, and that could serve as part of a combination therapeutic strategy for specific populations of cancer patients.

Management believe that many drugs currently approved for the treatment and management of cancer are not selective for the specific genetic alterations that cause the patient’s tumour and hence lead to significant toxicities due to off-target effects. Aptose’s strategy is to develop agents that target underlying disease-promoting mutations or altered pathways within a patient population.

The company intends to apply this strategy across several therapeutic indications in oncology, including hematologic malignancies and solid tumour indications.

Aptose has one clinical-stage program, one late preclinical program, and a third program that is discovery stage and partnered with another company. Aptose’s leadership team comprises accomplished industry, financial, and clinical research professionals who are dedicated to building a comprehensive anticancer drug pipeline and clinical development programs focused on targeted therapeutics directed against dysregulated oncogenic processes in patients with life-threatening hematologic malignancies.

The company is committed to the development of anticancer drugs that target aberrant oncologic signaling that underlie a particular life-threatening malignancy. The company adopts a targeted approach to impact the disease-causing events in cancer cells without affecting normal processes within cells.

Such an approach requires that the company first identify critical underlying oncogenic mechanisms in cancer cells and then develop a therapeutic that selectively impacts such oncogenic mechanisms. Further, Aptose recently created a small molecule targeted drug that is under development as a novel therapy for curing cancer.

In the most recent quarter, the company reported a net loss of $6.8 million ($0.12 per share) compared with $5.5 million ($0.16 per share) for the same quarter last year. The company has cash resources and investments equivalent to $30.2 million. Based on current operations, cash on hand, and committed capital, the company has sufficient resources to fund all planned operations, including research and development, until the end of 2020.

If Aptose Biosciences is successful at treating life-threatening cancers, the stock could see a huge increase in value, and shareholders will be richly rewarded.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Nikhil Kumar has no position in any of the stocks mentioned.

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