Genomic therapeutic specialist Salarius Pharmaceuticals (NASDAQ:SLRX) screamed higher Tuesday, with shares gaining 160% before paring back some of the gains to around 90%. Although no catalyst is apparent, the biotechnology firm revealed details about its at-the-market (ATM) offering recently. Likely, investors are speculating on SLRX stock that an improvement in funding is the main obstacle obstructing its therapeutic goals.
According to the company’s website, Salarius specializes in gene dysregulation therapeutic research. The biotech notes that in certain cancers, “the proteins that regulate gene expression become dysregulated. They may incorrectly turn cancer-promoting genes on and cancer-suppressing genes off, which can lead to disease development and progression.”
To combat this undesirable dynamic, Salarius has developed two classes of drugs that address this dysregulation: targeted protein inhibitors (TPIs) and targeted protein degraders (TPDs). Presently, the company is in the early clinical stages of research and development.
SLRX Stock May Receive a Financial Lifeline
According to an amendment to its S-3 document filed with the U.S. Securities and Exchange Commission (SEC), Salarius revealed that on July 9, it received a notification from researchers at the University of Texas MD Anderson Cancer Center (MDACC) that a patient in the center’s sponsored clinical trial evaluating one of the biotech’s therapeutics suffered a serious and unexpected adverse reaction.
Per the standardized procedure, the entities notified the U.S. Food and Drug Administration (FDA). Subsequently, the regulatory agency requested that MDACC put the aforementioned clinical trial on hold. Salarius intends to support MDACC researchers in analyzing available data and responding to FDA-submitted questions.
On a separate matter, on July 19, Salarius decided to close its ongoing Phase 1/2 clinical trial in an effort to preserve cash. The statement also mentioned that the board of directors was looking to explore potential strategic alternatives.
In the same amendment document, management revealed that it entered into an ATM offering with Ladenburg Thalmann, an investment bank. Under the terms of the agreement, Salarius has the potential to raise up to $810,973 in additional capital.
It’s possible that speculators pumped money into SLRX stock in anticipation that Salarius may receive this financial lifeline.
Risky but Somewhat Sensible Wager
It cannot be stressed enough that SLRX stock is a speculative entity. Even with the blistering run today, the market capitalization sits at less than $2 million. However, because of the modest valuation, an influx of nearly $1 million could shift the paradigm. That may also be what speculators are thinking.
To be sure, the broader genomics sector is a compelling one. According to Grand View Research, the global ecosystem reached a valuation of $32.65 billion last year. Experts project that the segment could expand at a compound annual growth rate (CAGR) of 16.5% from 2024 to 2030. At the forecast culmination point, the genomics market could be worth $94.86 billion.
For context, the global biotech market hit a valuation of $1.55 trillion last year. However, the anticipated CAGR from 2024 to 2030 is 13.96%, meaning that there is a higher percentage growth opportunity in the genomics segment. This framework, too, could be playing a role in the rise of SLRX stock today.
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On the date of publication, Josh Enomoto 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
