This year has all been about wearing masks, maintaining social distancing, and staying at home. As this coronavirus pandemic overshadowed everything, it’s easy to forget about other dreadful diseases. And that’s why many of us missed the epic rally of the tiny TSX stock Trillium Therapeutics (TSX:TRIL)(NASDAQ:TRIL).
Top TSX stock: Trillium Therapeutics
Trillium Therapeutics is a $1.6 billion biotech company that develops innovative therapies for the treatment of cancer. Trillium stock was trading at a little over than $1 back in January, and the stock crossed $27 levels in late November.
That’s more than a 1,900% gain within a year. If you had invested $10,000 in this TSX stock early this year, you would have made $200,000 by the end of November.
Tech giant Shopify stock has returned 160% this year. The gains of even the top-performing tech stock look smaller now. In comparison, the TSX Composite Index has returned 4% in 2020.
What drove the rally?
Trillium’s science focuses on CD47, a molecule that tumours use to evade the immune system. According to the biotech company, it aims to reveal the tumour cells and make them visible to the body’s immune system using CD47.
The company has two drug candidates that have already shown promising results in the phase-one trials.
Why is this big? Beyond the recent phase-one trials’ encouraging results, some bigger pharma companies could be closely eyeing these developments. Back in March, Gilead Sciences bought a biotech firm called Forty Seven for US$5 billion. It was working on the treatment of cancer using the same CD47 approach.
The global pharma giant Pfizer has invested $25 million in Trillium in September 2020.
Financials and outlook
Beyond its innovative approach to treat cancer, Trillium is currently a loss-making venture. For the nine months ended September 30, 2020, the company reported total revenues of $115,000, a fall of more than 7% compared to a year-ago period. Loss notably widened to $173 million in the same period.
The company is sufficiently capitalized with $300 million cash to take on further trials. It intends to take the phase-two program in heme and solid tumour malignancies next year.
Importantly, the financials and valuation would take a sidestep if the late-stage clinical trials continue to show promising results. Gilead’s recent purchase created enthusiasm among biotech companies, which might help Trillium stock to trade higher going into 2021.
While the world is busy observing the COVID-19 vaccine developments, this cancer specialist went ahead and significantly outperformed broader markets. Pfizer and Moderna are spearheading the COVID-19 vaccine race. Moderna stock has risen almost 730%, while Pfizer is up just 10% this year.
After the steep rally, Trillium stock has fallen more than 40% so far in December. Investors can expect extremely high volatility with this stock, given the underlying uncertainties and its size. Investors with a big appetite for its large swings can consider Trillium stock for superior returns.
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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 Vineet Kulkarni has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Gilead Sciences, Shopify, and Shopify.