While the biotechnology space offers speculators potentially wild gains, it’s also a source of much heartache. And publicly traded newcomer Milestone Pharmaceuticals (NASDAQ:MIST) provided investors a generous dosing of both sentiments over the past 15 months. For instance, early in the year, MIST stock was full of promise. However, that narrative quickly collapsed due to unfavorable clinical results.
Will the back half of 2020 bring better luck?
To start, Milestone Pharmaceuticals is a clinical-stage biopharmaceutical firm dedicated to addressing patients with paroxysmal supraventricular tachycardia or PSVT. According to Milestone’s website, PSVT is a “rapid heart rate condition characterized by intermittent episodes of supraventricular tachycardia (SVT) that start and stop suddenly and without warning.”
Currently, the standard of care for PSVT is to administer adenosine. However, adenosine has two main problems. First, it must be administered by a qualified medical professional. Second, reports indicate many patients suffer distressing side effects from adenosine. Should this method not be appropriate, medical professionals may administer calcium channel blockers or CCBs.
While CCBs impose milder symptoms on patients, this solution shares a similar problem with adenosine: the need for professional administration. However, Milestone proposes that its product, etripamil, can be self-administered by nasal spray when an SVT attack occurs. Should etripamil prove effective, it can facilitate a host of holistic health outcomes, primarily allowing patients to stay home.
Under normal conditions, this is a profound catalyst for MIST stock. After all, nobody really enjoys going to the hospital or acute care clinic. Further, patients can potentially enjoy significant cost savings.
As well, the novel coronavirus incentivizes those with underlying medical conditions to shelter in place, again bolstering the case for MIST stock.
A Wild Ride for MIST Stock
If that’s the case, why are shares of Milestone Pharmaceuticals all over the map? In June 2019, MIST stock jumped substantially higher before cratering. Following the devastation of the initial Covid-19 crisis, MIST popped higher in July of this year. But since Aug. 7, shares are again printing red ink.
Welcome to the world of speculative biopharmaceuticals! Though Milestone offered the possibility of replacing in-clinic solutions for PSVT with a self-administered product, a clinical study of etripamil revealed that it missed its primary endpoint. In lay terms, etripamil failed to deliver desired health outcomes over a longer, five-hour period.
However, etripamil hit its secondary endpoint, delivering a desired effect within a shorter, 45-minute span. Additionally, etripamil “demonstrated a positive safety profile” consistent with at-home use.
Unfortunately, that wasn’t enough for MIST stock. Investors wanted to see Milestone break through on its primary goal. The disappointment plummeted MIST shares in late March.
However, Milestone received a reprieve from the Food and Drug Administration. Specifically, the earlier tests of etripamil “could fulfill the efficacy requirement for the Company’s NDA [new drug application] for etripamil in patients with PSVT” by incorporating “the first 30 minutes after drug administration as the primary endpoint.”
This lifeline immediately skyrocketed MIST stock, although it fell significantly short of breaking even with March’s average price point. Unfortunately, the enthusiasm was short lived, with bulls raising the market value up to Aug. 7.
From there, MIST stock entered a bearish trend channel. After the company released its second quarter of 2020 earnings report, shares still kept sliding. Likely, investors became increasingly concerned about cost outlays given the earlier disappointments.
As well, if etripamil is only effective in shorter periods, it may impinge upon its apply-from-home angle.
An Interesting Gamble but a Gamble It Is
Out of the many speculative pharmaceutical companies I’ve covered over the years, Milestone has substance. Therefore, as a wild wager with “dumb” money, MIST stock could work out for you. After all, etripamil hit its secondary endpoint and imposes milder side effects, which is a concern with adenosine.
However, not hitting the primary endpoint raises concerns about ultimate efficacy. If a patient can only be stabilized through a self-administered product but still needs to go to the hospital, it somewhat defeats the purpose.
Finally, PSVT is not a common condition. According to a 1998 medical study, only 570,000 people had PSVT in the U.S., with a run rate of 89,000 new cases per year. Even so, we would still be talking about a patient count less than 3 million today, all other things being equal.
Therefore, Milestone really needs to hit it out of the park with etripamil. If not, MIST stock could end up back in the doldrums.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.