Shares of pharmaceutical specialist Tenax Therapeutics (NASDAD:TENX) are skyrocketing on Monday amid encouraging regulatory news. More specifically, with a focus on addressing cardiovascular and pulmonary diseases with high unmet medical need, Tenax has received clearance for its investigational new drug (IND) application for its pulmonary hypertension therapeutic. As a result, TENX stock is up by more than 300% as of this writing.
According to a press release, Tenax announced that the U.S. Food and Drug Administration (FDA) “reviewed and cleared” its IND application for TNX-103 “for the treatment of pulmonary hypertension with heart failure with preserved ejection fraction (PH-HFpEF).” This development will allow the company to proceed with the “first of two Phase 3 studies.”
The company’s underlying LEVEL Study (LEVosimendan to Improve Exercise Limitation in PH-HFpEF Patients) should launch in the fourth quarter of this year. Naturally, after an awfully rough outing so far this year, this news is bolstering sentiment in a major way for TENX stock.
“We could not be more pleased with the results of our collaborative, productive discussions with the FDA, which provide a clear path to starting LEVEL, including mutual alignment with respect to the primary efficacy endpoint and expected patient enrollment,” said Tenax President and CEO Chris Giordano.
Notably, Tenax and its contract research organization (CRO) partner have “already selected more than two-thirds of the research sites targeted to participate in the LEVEL Study,” per the press release.
Huge Implications and Massive Risks for TENX Stock
Fundamentally, TENX stock is soaring today on the positive implications that Tenax’s underlying therapeutic commands for serving a critical unmet need. According to the press statement, PH-HFpEF has an “estimated prevalence” of more than 2 million patients in North America by 2030. Even more pressing, no FDA-approved treatments exist for the condition.
Against a broader backdrop, Grand View Research points out that the global pulmonary arterial hypertension therapeutic market reached a valuation of $7.3 billion last year. Further, experts project that, by 2030, the sector could hit a valuation of $11 billion, representing a compound annual growth rate (CAGR) of 5.32% from projected 2023 levels.
On a relative scale, the size of this potential opportunity could be massive for TENX stock. As of this writing, Tenax carries a market capitalization of around $15 million, a legitimate nano-cap enterprise. As a result, this incredibly small pharma can easily skyrocket on encouraging news, as it is demonstrating today. At the same time, TENX is also subject to severe risk.
Even with Monday’s astounding rise, TENX stock has hemorrhaged more than 60% over the past 12 months. Over the past five years, TENX has also lost more than 99%. Subsequently, the heightened short borrow fee of 83.3% might make the pharma a target for speculation. Still, any investor even remotely thinking about Tenax should exercise extreme caution.
Why It Matters
At the moment, TipRanks shows no analysts covering TENX stock. However, on March 7 of this year, one Roth MKM analyst did initiate coverage of Tenax with a “buy” rating and $6 price target. Assuming this analyst still believes in that assessment, the forecast would imply over 820% upside potential.
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On the date of publication, Josh Enomoto did not hold (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.
