Where has the month of February gone? I discussed Jaguar Health (NASDAQ:JAGX) and JAGX stock on Feb. 1. Now, I’m tasked with discussing the biotech as we enter March. Down 25% through Feb. 25, it might be a good idea for investors to give up on its stock despite the potential of a special purpose acquisition company (SPAC) spinoff.
Here’s why I feel this way.
What’s Changed for JAGX Stock?
The main thrust of my last article was that I felt there wasn’t enough information available about the potential spinoff of Jaguar Health’s Napo Pharmaceutical unit to make an objective assessment of its entire business and the opportunity that lay before it: notably, a merger between Napo and the Post Pandemic Recovery SPAC.
Since my Feb. 1 piece, InvestorPlace has published eight articles about Jaguar. I’m hopeful that one or two of them can fill in some of the blanks. Maybe I misinterpreted some of the information that was available to me at the end of January.
InvestorPlace’s David Moadel discussed the potential spinoff on Feb.16. Hopefully, he’ll clear things up for me. Nope. His article had more to do with Jaguar Health’s plans to get Mytesi, the company’s treatment of diarrhea for people with HIV/AIDS, approved for European use to treat diarrhea in Covid-19 long-hauler patients.
That’s an interesting factor in evaluating the company’s future potential. If the long-hauler treatment is part of Napo EU and the SPAC merger happens, the SPAC tie-up would naturally add value to JAGX stock.
The Dragon SPAC
This brings me to InvestorPlace web content producer Sarah Smith’s Feb. 18 article. Smith helped me fill in some of the SPAC details.
According to Smith, Jaguar Health issued a press release the same day, stating that it had signed a Memorandum of Understanding (MOU) with the Dragon SPAC’s lead sponsor, led by New York City-based impact investor Josh Mailman. The MOU states that Napo EU will be the intended merger target of the SPAC.
Who is Josh Mailman?
According to a 2010 article in Fast Company, Mailman is the son of a self-made conglomerate-builder from Utica, New York. He’s pursued impact investing since the early 1980s. Josh Mailman granted Stonyfield Farms co-founder Samual Kaymen some funds to begin making organic yogurt with Gary Hirshberg. The rest, as they say, is history.
“I love finding businesses that can address social problems and make money, thereby having the ability to more easily scale than groups dependent on the largess of the rich,” Mailman told the magazine.
So, the man behind Dragon is real, and his pursuit of businesses that solve social problems is admirable.
Details Still Murky
Apparently, Napo EU now has a website, although the details on the site are pretty slim. No information’s been made available about Dragon SPAC on NapoEU.com.
Am I the only one who thinks it strange that people recommend this $260-million market-capitalization stock with so few details about the SPAC?
I guess so.
Sagard Capital Partners L.P. filed a Schedule 13G on Feb. 12. It states that the investment manager owns 2.8% of Jaguar Health. I mention this because Sagard is part of Power Corporation (OTCMKTS:PWCDF), a Montreal-based holding company controlled by the Desmarais, one of Canada’s wealthiest families.
A big investment firm like Power wouldn’t invest if they didn’t know all there was to know about NapoEU’s potential merger partner.
I guess investors can relax.
InvestorPlace contributor Muslim Farooque believes that the potential for this penny stock is real.
However, investors should probably wait to get more information on the effectiveness of Mytesi for use with Covid-19 long-haulers and Lechlemer, its drug candidate intended to treat diarrhea in Cholera patients.
If those are all that and a bag of chips, Farooque is on board.
Me, I’m still not convinced. However, Sagard’s involvement suggests I’m worrying far too much.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.