Jaguar Health Has a Strong Outline, But the Story Is Unclear

There’s a lot of noise surrounding Jaguar Health (NASDAQ:JAGX), causing a lot of speculative interest in JAGX stock. In the last 12 months, the stock is up 300% with most of that gain taking place in the last two months.

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Jaguar Health occupies a niche space in the emerging plant-based therapeutic market. The company proudly states that much of its library of 2,300 medicinal plants is sustainably harvested from the rainforests. Nevertheless, the stock has made some noise with a possible use of its flagship drug, Mytesi, as a Covid-19 therapeutic.

Along that line, the company has also announced it is including its newly formed Nano Pharmaceuticals business into a somewhat ill-defined SPAC that includes the licensing rights for Mytesi.

But price movement like investors see with JAGX stock reminds me of reading an outline. There’s a lot to like, but will it become a cohesive story?

The Pipeline Is Small

When things get noisy surrounding a stock like JAGX it’s always a good idea to step back and look at what you know. In the case of Jaguar Health, the company has one product on the market. That drug, crofelemer, is licensed under the brand name Mytesi in the United States is the only FDA-approved diarrhea treatment for adults with HIV/AIDS.

Josh Enomoto wrote about Jaguar Health and answered a question that came to my mind. There are approximately 1.2 million people in the U.S. alone that had HIV in 2018. When you consider the global market, there’s an addressable market that is currently underserved.

Jaguar Health is also seeking FDA approval for Canalevia, its canine-specific formulation of crofelemer for chemotherapy-induced diarrhea (CID) in dogs. The company cites an addressable market of about 6 million dogs.

The company also has its Entheogen Therapeutics Initiative (ETI). According to the company’s website this will “support the discovery and development of novel, plant-based medicines derived from psychoactive plants”. The goal is to potentially treat a range of mental health disorders. The Aspen Brain Institute says the psychedelic drug market is potentially a $100 billion market opportunity and may grow at more than 16% annually and reach $6.85 billion by 2027.

Could Mytesi Be a Covid Therapeutic?

A key reason that Jaguar Health is garnering the attention of traders is that the one drug with FDA approval, Mytesi, may prove effective in combating the noninfectious diarrhea that is a “long hauler” symptom for some who have recovered from Covid-19.

This is an area where investors need to be very careful. Obviously, if the company can get Mytesi approved as a treatment for post-Covid-19 relief, it has the potential to generate significantly more revenue. As of now, the addressable market for Mytesi is relatively small in the big picture.

Of course, the opposite is also true. Investors saw many biotech companies such as throw their hat into the Covid-19 vaccine race. Many did not make it to the finish line. One of those companies, iBio (NYSEAMERICAN:IBIO) is of particular interest in relation to Jaguar Health because of its plant-based, FastPharming process.

And then there’s this. Like my InvestorPlace colleague Will Ashworth, Jaguar Health was a new name to me. But as Ashworth points out in detail, Jaguar has included Mytesi as part of a licensing deal with the Post Pandemic Recovery SPAC to which it is merging its Napo Pharmaceutical business.

The Story of JAGX Stock Is Still Being Written

Like many penny stocks, there is a story behind Jaguar Health stock. The company has a focus on plant-based medicine developed from plants in the rainforests. Those are two factors that should delight socially conscious investors. This is particularly true for those who are receptive to treatments outside the realm of traditional medicine.

At around nearly $3 per share, a small position in JAGX stock won’t put you at much risk. But before committing to Jaguar Health as anything more than a trade wait until the company writes a few more chapters so you can see if it’s a plot you can get behind.

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

Chris Markoch is a freelance financial copywriter who has been covering the market for seven years. He has been writing for Investor Place since 2019.

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