It’s been a big day for investors in Phio Pharmaceuticals (NASDAQ:PHIO), unfortunately on the downside. This afternoon, PHIO stock has declined nearly 20% on a couple of key announcements.
The first key news item today is the release of preclinical data for its tumor cell-killing INTASYL treatment. This news was generally positive, with the company showing enhanced efficacy from its in vivo treatment.
However, while the company acknowledged that clinically recognized results were seen with this dual inhibition treatment, “a high rate of immune-related adverse events limits the utility of systemic use of this combination of products” was reported by the company’s chief medical officer. The company cited the need for an improved safety profile for this treatment to proceed forward.
To make matters worse, the company then followed up with a funding announcement. Phio expects to raise $2 million at a direct offering, priced at the market. Reportedly, the company has entered into a definitive agreement to issue more than 350,000 shares at $5.65 per share, which was below the stock’s close yesterday.
Given that PHIO stock is trading significantly below these levels now, let’s dive into whether this is a stock worth considering here.
Is PHIO Stock Worth a Buy Here?
Like all early-stage biotech companies, Phio Pharmaceuticals is a company that provides investors with a high-risk, high-upside option to consider. The company’s INTASYL RNAi platform, which is aimed at improving the efficacy of killing tumor cells, certainly has plenty of potential upside. Of course, whether this treatment ultimately becomes successful will depend on the company’s ability to produce a safe end product.
Thus, there’s significant operational risk with this company right now. Adding fuel to the fire, dilution risk tied to share issuances could adversely affect early-stage investors looking to get in right now.
It appears many market participants are viewing today’s news as a reason to stay on the sidelines for now. If more positive developments emerge, the narrative could quickly change. But today, unfortunately, PHIO stock is one of the worst performers for good reason.
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On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
