AIM Stock Is a Moonshot That Lacks the Fuel

The stock’s recent spike is driven solely by hope and hype

The threat posed by the coronavirus won’t be eradicated without a vaccine. But a vaccine is months if not perhaps a year away. With that in mind, I can kind of understand an investor wanting to invest in AIM ImmunoTech (NYSEAMERICAN:AIM). Here’s my basic logic for AIM stock.

AIM Stock is a Moonshot That Lacks the Fuel

First, the novel coronavirus has ground our world’s economy to a halt.

Second, the world as we know it can’t get back to business until there is, at the very least, some successful antiviral solutions for the virus.

Third, AIM ImmunoTech has a potential treatment with its drug candidate, Ampligen.

Finally, AIM stock is priced at a level that is incredibly appealing. Why not take a chance on a stock that jumped 40% in one weekend?

But the problem is, as InvestorPlace’s Vince Martin pointed out, AIM ImmunoTech has no proven track record of getting a drug to market. This is despite that the company has been in business for a quarter of a century.

And there is incredible competition in the race to finding a treatment for the coronavirus. That competition, and the company’s own financials, are two reasons our own Will Ashworth compared investing in AIM stock as comparable to buying a lottery ticket.

Can Ampligen Work?

The simple answer is that it might. AIM ImmunoTech’s CEO announced in February that, in a study involving mice, Ampligen offered “significant efficacy” against the SARS (severe acute respiratory syndrome) virus. The SARS virus is “genetically related” to the current coronavirus.

The company has also signed a material transfer and research agreement with Shenzen Smoore Technology. Shenzen makes vaping devices. The agreement allows the companies to investigate the possibility of delivering Ampligen via a vaping device to treat coronavirus patients.

And, if the company shows similar success in clinical trials with humans, Ampligen may be able to clear some safety hurdles because of Ampligen’s success in other trials targeting either cancer or chronic fatigue syndrome.

However, despite being in business since 1996, ImmunoTech has been unsuccessful at bringing Ampligen to market. One reason for that is the company is cash poor in a sector that requires the ability to spend massively.

But the Clock Is Ticking

Putting aside the crowded field for developing treatment for the novel coronavirus, the real solution remains a vaccine. And that’s why the window for investors getting huge gains from AIM stock remains small.

In fact, according to White House health advisor Dr. Anthony Fauci, Moderna (NASDAQ:MRNA) is “on track” to conduct the first human trial for a potential vaccine. Fauci went so far as to call Moderna’s potential vaccine as the “ultimate game changer” when it comes to beating the pandemic.

And that means that even if everything breaks right for ImmunoTech and Ampligen, by the time it’s ready to go to market, there will probably be a vaccine.

The Bottom Line on AIM Stock

A broken clock is right twice a day. All AIM has to do is be right once. But while the other is a certainty, Ampligen is not. AIM is hoping to deliver a moonshot, but they lack the money and the proven track record to pull it off.

At this point, chasing coronavirus stocks should really be the domain of day traders. Perhaps they can make a quick profit. I suppose, as a speculative investment, it can’t really hurt you to invest in AIM stock. But the chances of the company actually getting a viable seat at the table for treatment of the novel coronavirus is a risk that’s not worth taking.

Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019. As of this writing, Chris Markoch did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2020/04/aim-stock-is-moonshot-but-no-fuel/.

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