Shares of Acasti Pharma, Inc. (ACST) have dropped 23.7% year-to-date, trading at $2.44 on Monday.
This comes upon disappointing results from some clinical trials, and a reverse stock split.
To boost its stock price, the company will need to produce some facts to trigger some optimism on the market. Without this, shares will are unlikely to move significantly from their current levels. Thus, I am neutral on this stock for the time being.
Following its merger with Grace Therapeutics, Inc., on Aug. 27, 2021, Acasti is now a late-stage specialty biopharmaceutical company focusing on rare and orphan diseases. Previous to the merger, Acasti was a clinical-stage developer of an omega-3 fatty acids-based treatment for patients with severe hypertriglyceridemia (i.e., very high levels of triglycerides in the blood).
Acasti now develops novel delivery technologies to improve the effectiveness of currently marketed treatments for post-herpetic neuralgia, subarachnoid hemorrhages, and ataxia-telangiectasia. (See ACST stock charts on TipRanks)
Q1 FY2022 Results
Acasti reported a net loss of $3.1 million, or $0.01 per common share for the three months ended June 30, 2021, compared to a loss of $4.7 million ($0.05 per share) a year ago.
The company reported nearly $60 million in cash on hand and cash equivalents, which it projects as enough to fund another two years of development and research activities.
Poor Long-Term Perspectives
Acasti was working on treatments for patients with severe hypertriglyceridemia, but it suspended activities following disappointing data from two clinical trials called TRILOGY 1 and TRILOGY 2.
This produced a sharp drop in the stock price, which required a corporate action consisting of an 8-to-1 reverse stock split to comply with the Nasdaq minimum bid price rule again, effective on August 27.
There is a plan in the works to combine the data from TRILOGY 1 with the data from TRILOGY 2. From the pooling, the company could derive better statistics, and potentially study the treatment further.
If successful, these solutions could produce some upside in the stock price in the short-term. However, such a likelihood is low.
Wall Street’s Take
The stock has a TipRanks Smart Score of 1 out of 10, indicating that the stock returns are likely to underperform the overall market.
This is the result of a very negative investors sentiment, and negative technicals.
Disappointing results from clinical trials threw the stock down. Alternatives are being examined to raise the value of the stock.
The price should continue to trade approximately in line with current values going forward.
Disclosure: At the time of publication, Alberto Abaterusso did not have a position in any of the securities mentioned in this article.
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