We came across a bullish thesis on NeuBase Therapeutics, Inc. (NBSE) on ValueInvestorsClub by savvystockguy. Previously David Einhorn talked about this stock in his fund’s annual letter. Here is what he said:
“One already-public investment that we have never discussed is NeuBase Therapeutics (NBSE), which we invested in a couple years ago at an average price of $3.96. The combination of the frothy environment for companies with large addressable markets and NBSE’s own pre-clinical progress leaves us surprised that NBSE hasn’t yet joined the “story stock” party. NBSE is a “platform” company with a technology called PATrOL, which develops highly targeted therapies that increase, decrease or change the protein function of genes. By addressing all of the causal mechanisms underlying rare and common diseases – including cancer – PATrOL consolidates the capabilities of highly-valued gene silencing, gene editing and gene replacement companies in a single unified platform. NBSE’s emerging therapies also feature the best precision in engaging misbehaving genes of any technology, which is critical to eliminating “off-target” engagement with healthy genes elsewhere in the genome and to ensuring well-tolerated medicines. The company’s laboratory successes over the last couple years suggest that PATrOL could be a breakthrough technology that addresses many types of diseases. Like DNMR, the addressable market is immense. While there is a long path from here to products on the market, NBSE’s current market capitalization of less than $200 million prices in little chance of success. We think the risk-reward is asymmetrical. NBSE ended the year at $6.99.”
Now that NBSE lost a chunk of its value, it may be a good time to take a second look at this stock. Click here for the full thesis that was published on VIC. Below we summarized the NBSE bullish thesis:
The Pittsburgh-Pennsylvania, USA-headquartered NeuBase Therapeutics, Inc. (NBSE) is an early-stage biotechnology company that is in the process of accelerating the genetic revolution with a new class of precision genetic medicines. The next generation of gene silencing therapies is being developed by NBSE with its flexible and highly specific synthetic antisense.
NBSE’s various under-development therapies aim to treat rare genetic diseases and cancers caused by mutant genes. The accelerated pace of new cases of these diseases has created remarkable interest in the progress and development of NBSE over the past few years. In addition to meaningful rise in cancer cases, there is significant interest in new and distinct therapies for treatment options. NBSE is well-positioned to offer suitable novel therapies, and has thus ensured a rapidly growing ready market for its products. It has also built a strong intellectual property portfolio with some key acquisitions in the recent past.
The rapid growth in the research and development had led to the need to raise capital. The underwriters worked out the usual aggressively suppressed price allowing their customers to enter the NBSE stock at an attractive level. The depressed level now seems to have become a near-term bottom for the stock. The company still enjoys reasonable cash and suitable market opportunities.
NBSE’s location in the Pittsburgh Innovation District in the United States is a tremendous advantage. The region is well-known for its support of leading-edge technologies, talent, world-class amenities, entrepreneurial activities, and easy access to capital that aids various companies to write success stories. The region’s eco system and support has made NBSE one of the most promising and creative companies in the health sector.
The analyst feels the current stock price is mirroring extreme pessimism, and could pretty much double back to its level prior to sharp fall recently. With continued progress in the works, NBSE, currently a micro cap stock ($200 million market cap) can be noticed by the Street for much bigger participation.