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EPIX Stock Gains 11.6% on Insider Buys
Stock Analysis & Ideas

EPIX Stock Gains 11.6% on Insider Buys

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ESSA Pharma has seen its share price shoot up by 11.6% in the past five days, buoyed by strong insider interest. Let us delve into the details.

Shares of ESSA Pharma (NASDAQ: EPIX) have tanked 22% in the past month, while the short interest in the stock stood at 4.5%. However, shares have been on an upswing in the past five days, going up by 11.6% following corporate insiders’ buying of the stock.

EPIX is a clinical-stage pharmaceutical company that develops novel therapies for the treatment of prostate cancer.

The pharma company has seen an uptick in insider interest with BB Biotech AG, holding a more than 10% stake in EPIX, loading up on its shares. BB Biotech bought shares worth $945,000 on July 20 and $1.7 million on July 18, respectively.

BB Biotech effectively now holds 5.8 million EPIX shares, currently valued at $19.3 million after the above two transactions.

Another insider, Partners LP, having a more than 10% stake in ESSA, has also loaded up on the stock, buying shares worth $11.4 million. Currently, this insider’s total stake in EPIX is valued at $57.6 million.

Insiders are positive about the stock, with corporate insiders buying shares worth $14 million in the past three months.

In addition to the Insider Trading tool, a list of Daily Insider TransactionsInsiders’ Hot Stocks, and Top Corporate Insiders are available on TipRanks, which might interest investors.

ESSA Also Has ASDPs in Place

On June 30, ESSA announced that its President and CEO, David R. Parkinson, and its EVP and COO, Peter Virsik, have established Automatic Securities Disposition Plans (ASDPs), in compliance with securities legislation in the United States and Canada.

As a part of this plan, up to 808,333 shares of ESSA may be sold at “prevailing market prices over the course of the approximately 12 months that the ASDPs are expected to be in place,” and sales of the ASDPs will start from August 17 onwards.

Investors Seem Optimistic about ESSA

Short interest indicates the number of shares that have been sold short by investors but have not yet been closed out.

A high short interest indicates a pessimistic stance on the part of investors. However, in the case of ESSA Pharma, investors seem to be optimistic. According to Nasdaq data, as of June 30, there was short interest totaling 2,243,450 shares, a drop of 4.5% from the total of 2,349,260 shares on June 15.

Investors are upbeat about the stock following its Q1 results.

ESSA’s Q1 Results & Positive Update of EPI-7386

ESSA’s lead clinical candidate is EPI-7386, “a first-in-class N-terminal domain (NTD) androgen receptor inhibitor” used in the treatment of prostate cancer. The initial data from the Phase-1a dose escalation study of EPI-7386 indicated that this drug was “well-tolerated, exhibited a favorable pharmacokinetic profile, and demonstrated initial anti-tumor activity in a heavily pretreated group of patients.”

ESSA expects to start a Phase-1B expansion study in the third quarter of this year.

While the company did not earn any revenues in Q1, ESSA’s losses narrowed to $10.9 million in Q1 from a loss of $13 million in the same period last year. Moreover, as of March 31, ESSA Pharma had cash reserves of $181 million, reflecting the financing of around $150 million in February 2021 and of $48.9 million in July 2020.

ESSA anticipates that this “cash position is expected to be sufficient to fund current and planned operations through 2024.”

Wall Street’s Take on EPIX

Wall Street analysts are unanimously bullish about EPIX with a Strong Buy consensus rating based on three Buys. The average EPIX price target of $22 indicates a triple-digit upside potential of 568.7% at current levels.

Bottom Line

It appears that the bullishness of corporate insiders, investors, and analysts alike regarding EPIX is warranted going by its Q1 results and positive update from EPI-7386.

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