It’s been an eventful few months for the pharmaceutical company Jaguar Health (NASDAQ:JAGX). Investors bid up JAGX stock after announcing plans to develop a drug to treat gastrointestinal problems among people who are recovering from Covid-19.
Additionally, it has plans to develop and commercialize a drug to relieve diarrhea from cholera. Jaguar Health appears to be building a nice head of steam of late, but there is nothing concrete at this stage.
Five years ago, JAGX stock was at $1,900, but after severe falls and a couple reverse splits, shares are now at just $3. However, with its two drug candidates’ announcement, the stock’s three-month return is at a mind-boggling 1,450%.
If Jaguar Health can successfully prove these drugs’ safety and effectiveness, it could potentially open a massive new market opportunity.
New Growth Drivers
Jaguar has a couple of catalysts that could steer it out of the rut it has been in for the past few years. The first is its drug Crofelemer, which can help patients with inflammatory diarrhea. Moreover, it’s being tested on patients who recovered from the coronavirus but still experience its symptoms. The drug’s potential effectiveness as a “Covid-19 long-hauler” is what has lit a rocket under JAGX stock.
The company discusses a potential merger opportunity with the Swiss Growth Forum, a sponsor of European SPAC Post Pandemic Recovery Equity. Jaguar plans to have its subsidiary, Napo, merge with the SPAC in Europe, granting the new company exclusive rights to Crofelemer.
Napo will receive a fee of $2 million to $10 million. Additionally, it will also receive a 30% to 49.9% equity stake in the new company with another $20 million to develop the drug. Jaguar is already exploring conditional marketing for the drug in Europe to fast-track the clinical review process.
The other drug in its pipeline is Lechlemer, a plant-based candidate for relieving diarrhea symptoms from cholera. The National Institute of Allergy and Infectious Diseases (NIAID) is supporting the company in developing the drug. It receives pre-clinical services from the institute in conducting a 28-day toxicology and safety study in dogs. The company believes that Lechlemer has potential as a second-generation anti-secretory agent for multiple gastrointestinal diseases.
Potential Market Opportunity
The potential for Jaguar’s vaccine candidates is immense. Over 100,000 cholera-related deaths occur each year, and there are currently more than 5 million cases. Moreover, one in 10 people tends to develop complications related to the disease. Therefore, if Lechlemer proves to be effective, it could open a massive market opportunity for JAGX stock.
Worldwide there are 1.7 billion cases of childhood diarrhea each year, with roughly 525,000 deaths. Hence, the successful development of Crofelemer opens up a massive revenue stream for Jaguar.
You also have Crofelemer’s potential effectiveness as a Covid-19 long-hauler. Covid-19 was the biggest story of 2020 and the uncertainties surrounding the virus is what complicates things. More than 110 million Covid-19 cases have been reported so far, which is a number that continues to rise. Moreover, those who have recovered have complained about its side effects, which beckons the question about its long-term impact.
Jaguar CEO Lisa Conte estimates that approximately 15% of the world’s population could experience long-term Covid-19 symptoms. Therefore, we are looking at another multi-million-dollar revenue stream for Jaguar down the line.
Final Word on JAGX Stock
Jaguar Health’s drug candidates could potentially open up multimillion-dollar revenue streams for the company. Things are looking good so far in terms of progress on both the drug candidates; however, nothing can be said before the efficacy results are in. With its subsidiary’s planned merger, it is likely to have sufficient funds to take its development pipeline past the finish line.
All in all, JAGX stock has a lot of potential, but it’s best to wait for more concrete information regarding its product pipeline.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article.