The biotechnology space is cutthroat and not for the faint of heart. All projects that are undertaken will face major issues at one point or another, and most projects will come very close to failing. However, the ones that make it through the process have a chance of being very rewarding.
Aptose Biosciences (TSX:APS) is a top Canadian company in this industry. It is a clinical-stage biotechnology company developing targeted agents to address unmet medical needs regarding cancer. Some of the listed diseases the company intends to tackle include chronic lymphocytic leukemia, non-Hodgkin’s lymphoma, acute myeloid leukemia, and myelodysplastic syndrome.
In April 2020, Aptose presented an update on CG-806, a drug the company is developing with CrystalGenomics that addresses B-cell and myeloid tumours, which will treat non-Hodgkin’s lymphoma and acute myeloid leukemia, respectively. The company reported that the drug is showing promising results in selectively inhibiting target proteins. The effects of the drug are currently being assessed at different dosage levels.
Because the products Aptose intends on developing currently remain in the clinical stage, this means the company has no revenue. However, the company is still financially secure. Aptose has no debt and only a very small amount of liabilities on its balance sheet. However, the company has about $80 million in cash, which is more than enough to cover costs for the next few years.
To further ensure Aptose has access to sufficient capital to see its projects through, it has enlisted the help of CrystalGenomics, as stated previously, and Ohm Oncology for three of its therapies. It is not uncommon to see biotech companies collaborating to develop therapies because of the capital-intensive nature of this industry. For example, Vertex Pharmaceuticals collaborates on many different therapies including four different in vivo approaches to tackle different diseases including cystic fibrosis and myotonic dystrophy.
Aptose stock has been performing very well lately, as the company continues to move forward with its product development. Over the past year, its stock has increased 261%. This growth places the company as one of the top-performing companies in Canada over the past 52-week period.
At this point in time, is Aptose a buy? Most would say no. There are different stages that companies undergo throughout their lifetime: product development, product launch, proof of product demand in the market, revenue growth, etc. It is generally not advised to invest before the market approves of a certain product and shows that there is a demand for it. This is because the stages before that point are very speculative in nature and inherently carry a lot of risk.
However, scientists have much more data than they have ever had before. In addition, technology is the most advanced it has ever been. Because of these things, the biotechnology industry is growing faster than it ever has before. So, we could potentially see Aptose roll out these products sooner than expected.
The COVID-19 pandemic may have also given the industry a kick, as there seems to be increased awareness in companies involved in drug discovery, genetic testing, and so forth. Aptose is still in clinical stages, so there should not be any rush to jump into this company. However, it may be a good idea to add it to your watch list. The company is working on therapies that could be life changing to so many people. This could be a money-making stock.
Are you looking for more stocks that could hit big?
Motley Fool Canada's market-beating team has just released a new FREE report that gives our three recommendations for the Next Gen Revolution.
Click on the link below for our stock recommendations that we believe could battle Netflix for entertainment dominance.
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 Jed Lloren has no position in any of the stocks mentioned. The Motley Fool recommends Vertex Pharmaceuticals.