Tonix Pharmaceuticals Stock Belongs in the Biotech Dustbin

New Jersey-headquartered clinical-stage biotech firm Tonix Pharmaceuticals (NASDAQ:TNXP) is a love-it-or-leave-it type of company among financial market traders. Judging by the price trajectory of TNXP stock, though, it appears that more traders would rather leave it than love it.

medicine research , pharmaceutical background, TNXP stock
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Tonix is evidently cooking up a treatment or a vaccine for many different types of medical issues. These range from alcohol use disorder to Covid-19, to fibromyalgia, smallpox, depression and cocaine intoxication, among others.

Is Tonix Pharmaceuticals “diversified,” or does the company just lack focus? Also, prospective investors might wonder how whether Tonix is viable as a business, fiscally speaking.

The outlook doesn’t look positive, given the company’s recent financial results. At the end of the day, it doesn’t just make sense to invest in an unprofitable business like Tonix Pharmaceuticals.

TNXP Stock at a Glance

Did you ever look at a stock price chart, and it says that a stock was once worth tens of thousands of dollars, but is now worth 20 cents?

Typically, this means that the stock never really traded in the tens of thousands of dollars, but that the company enacted one or more reverse share splits.

So, don’t let the charts mislead you. Tonix Pharmaceuticals has, in fact, enacted multiple reverse share splits.

That’s usually not a good sign. It’s also not a great sign that TNXP stock recently sank to 20 cents. Sometimes, the Nasdaq exchange is known for de-listing companies if their stock shares trade under $1 for too long.

Getting de-listed from the Nasdaq exchange would be disastrous for Tonix Pharmaceuticals. The company’s shares could then be listed on an over-the-counter exchange, but this would be like getting demoted from the major leagues to the minor leagues.

In any event, TNXP stock was never really worth $20,000. Today, questions might be raised about whether the stock is even worth 20 cents.

No Guarantees Here

Small-capitalization (cap) biotech-market investing is already fraught with risk. Granted, this risk can be alleviated somewhat when investors arm themselves with recent financial data.

Biotech businesses typically issue press releases about the progress they’re making on various drugs and other treatments. Tonix Pharmaceuticals’ most recent press release highlights the latest progress on a number of pharmaceutical products.

However, these products aren’t commercially available to the public yet. Getting full Food and Drug Administration (FDA) approval, and then marketing and selling these products, is an uncertain and expensive proposition.

There are no guarantees that Tonix Pharmaceuticals will succeed in these endeavors. At the very least, it will require considerable capital resources. So is the company in a good position to provide those resources?

Delving Into the Data

As we dig deeper, the company’s fiscal profile seems inadequate.

For example, in a Form 10-K which covers fiscal-year 2020, Tonix Pharmaceuticals warned, “We anticipate that our existing cash and cash equivalents will enable us to maintain our current operations through March 31, 2022, but not beyond.”

And, here we are in March of 2022. Also, there’s a Form 10-Q which appears to be current as of 2021’s third quarter. Reportedly, Tonix Pharmaceuticals incurred a net earnings loss of $33.4 million in fiscal year 2020. Then, in fiscal-year 2021, the company’s net loss totaled $62.7 million.

Finally, Tonix Pharmaceuticals just issued the aforementioned press release, which mentions the company’s updated fiscal stats.

Unfortunately, Tonix’s net earnings loss widened to $29.6 million in the fourth quarter of 2021, compared to the net loss of $17 million from 2020’s fourth quarter.

The Takeaway for TNXP Stock

The recent financial data on Tonix Pharmaceuticals doesn’t look good at all. Investors should consider Tonix’s widening net earnings loss before taking a position.

Then, they should seriously think about the multiple reverse share splits that the company has enacted. Again, these are not positive signs.

I give TNXP stock an “F” in my Portfolio Grader.

All in all, it would be a herculean task to try to defend a long position in TNXP stock. Therefore, prospective investors would be wise to seek biotech-market wealth elsewhere.

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On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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