GlycoMimetics Inc. (GLYC) focuses on discovering and developing biotechnological solutions via novel glycomimetic drugs for treating carbohydrate biology-based diseases. A glycomimetic molecules mimic a carbohydrate’s structure and can be designed to inhibit certain disease-related carbohydrate functions. It can be therefore used to help address inflammation, infection, and even cancer.
The main value for GLYC comes from its intellectual property library and its brain trust of bright and innovative bioscience and biotechnology minds. The company has several promising innovations going through the development and testing pipeline right now. If successful, they could unlock significant value for investors at current prices. (See GlycoMimetics stock chart on TipRanks)
GLYC has a particularly promising opportunity in acute myeloid leukemia (i.e., “AML”) therapy right now. It looks highly promising after its strong showing in its Phase 2 trial. Its Phase 3 results will be released next year as the Uproleselan Phase 3 trial is currently underway.
That said, the downside risk to the company is great. If it fails to successfully gain approval for its AML therapy, its potential for generating strong shareholder returns will significantly dampen. This makes it a highly speculative stock. The company had $132.5 million in cash after Q1, which should enable it to run its R&D operations for quite some time, especially given that it only spent $15.4 million in the first quarter. However, ultimately the fate of the company rests on the outcome of its AML therapy Phase 3 trial.
GLYC’s valuation is quite expensive, barring a positive AML therapy outcome, given that it is generating losses and bleeding cash flow right now. However, the value of the AML therapy – if it were to be successful – could cause the value of the company to increase by many multiples of its current market cap.
Ultimately the outcome for this stock is highly binary: either the Phase 3 trial is successful and shares surge higher to many multiples of their current price, or it is a failure and the company will lack any meaningful path to profitability in the near future, likely resulting in a steep selloff in its shares.
Wall Street’s Take
From Wall Street analysts, GLYC earns a Strong Buy analyst consensus based on 3 Buy ratings in the past 3 months. Additionally, the average analyst GlycoMimetics price target of $14.50 puts the upside potential at a whopping 522.3%.
Summary and Conclusions
GLYC is a highly speculative investment right now as its outcome is highly binary. If investors believe there is a strong chance that the Phase 3 trial will be successful, the stock is incredibly cheap right now. However, if the therapy ultimately proves unsuccessful, then shareholders are likely to experience significant losses.
Given that the Phase 2 results were so promising, and analysts are unanimously extremely bullish on the stock right now, it looks like GLYC could be a very attractive speculative buy that could make investors a phenomenal return on their investment. However, investors must remember that the outcome remains uncertain, and the downside potential is significant.
Disclosure: On the date of publication, Samuel Smith had no position in any of the companies discussed in this article.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.
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