Jaguar Health Isn’t a Healthy Investment, but It Could Be a Profitable One

Diarrhea is no joke particularly because it always seems to occur when you least need it, such as during a job interview. However, this symptom can be an unfortunately recurring issue for patients of chronic diseases. Jaguar Health (NASDAQ:JAGX) is at the forefront of addressing such problems with Mytesi (crofelemer), the only FDA-approved diarrhea treatment for adults with HIV/AIDS. Ironically, JAGX stock is having quite the run of its own.

A scientist holding up her biotech experiment in a small Petri dish.

Source: Shutterstock

In the year-to-date, Jaguar Health shares have gained a stunning 53%. Over the trailing six months, JAGX stock has earned stakeholders a paper profit of over 253%.

Considering that approximately 1.2 million people in the U.S. had HIV in 2018 and many millions more are infected annually around the globe, Jaguar has a sizable potential consumer base.

Further, the company plans to develop and commercialize crofelemer to address inflammatory diarrhea for sufferers of long-term novel coronavirus symptoms. But is that enough to justify the meteoric rise in JAGX stock?

Not if you’re InvestorPlace contributor Mark Hake, a man who knows how to dive into the numbers. Hake questions the series of capital raises and business deals that add unnecessary complexity to Jaguar’s investment thesis.

Specifically, he raised alarm with Jaguar’s Napo subsidiary – with which it developed crofelemer – going public via a non-U.S. special purpose acquisition company.

“Are you kidding?” quipped Hake. “There is no benefit to having a subsidiary listed on an obscure stock exchange across the world. If the company needs money for some reason, it should just sell more shares on NASDAQ.”

In my colleague’s analysis, this demonstrates “signs of a company in financial disarray.” Hake goes on to claim that there isn’t an overarching plan dictating the company’s financial future.

“There seems to be no rhyme or reason about what they are doing to raise money, how much they need or when it is needed,” he wrote.

You may not necessarily agree. However, it’s important to cool your jets and think rationally before forking over your hard-earned money on a speculative investment.

The Speculative Case for JAGX Stock

Warnings about risky investments only end up enticing many folks – that’s just human nature. We want what we can’t have and slapping a taboo image only increases desirability. When many humans feel this way, there may be an opportunity.

You can’t ignore that side of the equation for JAGX stock, no matter how fundamentally flawed the underlying company is.

Further, the crofelemer treatment potentially fills a niche that we haven’t discussed much. Obviously, you have the two leading Covid-19 vaccines from Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA), along with other promising preventative solutions coming down the pipeline.

Further, companies like Gilead Sciences (NASDAQ:GILD) and Regeneron Pharmaceuticals (NASDAQ:REGN) are providing therapeutics on the front end.

But a backend therapeutic for lingering symptoms of Covid-19 survivors? That’s something we collectively haven’t paid too much attention to. Still, it’s a viable market that could spark upside for JAGX stock.

According to Scientific American:

Long-haul COVID patients carry their symptoms well beyond what we’ve come to understand as a “normal” course of recovery. It can last for weeks. For some long haulers, it has been months—and counting. And to the consternation of physicians and nurses on the front lines, the symptoms of these patients often present as so varied and relatively common that they defy a solid COVID-related diagnosis.

More worryingly, experts believe that a “surprising number” of Covid-19 survivors are so-called long haulers of lingering symptoms. That in and of itself is a huge problem. But as the Scientific American article implies, it can be a troubling source of patient-clogging in the national healthcare system.

The last thing you need during a pandemic is to have the very people you just helped come back with problematic issues. With crofelemer’s new indication, it can possibly alleviate one of the more debilitating (and socially embarrassing) long-haul symptoms.

Should You Take a Shot with Jaguar Health?

To be frank, I’m not crazy-gung-ho on JAGX stock. As Hake and many others have noted, Jaguar Health’s inner workings are questionable if not outright problematic. However, as a speculative wager with money you can afford to lose, I think there’s an upside opportunity here.

First, lingering Covid-19 symptoms is an underappreciated topic. Despite the encouraging vaccine rollout, there will be many more people who will get infected – the Super Bowl could be a super-spreader event across the nation, for instance – and that opens the door for long-haul cases. Sure, it’s cynical but it’s a narrative that benefits JAGX stock.

Second, the market sentiment has shifted strongly toward a risk-on posture. While you can argue fundamentals until you’re blue in the face, when you have the masses willing to pile into a trade, your protests – unless you’re truly influential – will be for naught.

I’m not suggesting that Jaguar is a long-term investment. But as a short-term trade, yes, I believe JAGX stock is a buy.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.

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.

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