Jaguar Health (NASDAQ:JAGX) is a commercial-stage pharmaceutical company focusing on developing gastrointestinal products for human and animal use. JAGX stock is up 143% year to date, prompting fresh interest in this microcap.
It remains a high-risk, high-reward stock since fundamentals are weak. But there are a few positive headlines you should know about.
The company sources its product through rainforest areas. Its main product, Mytesi, is a botanical drug for treating non-infectious diarrhea in adults with HIV/AIDS on antiretroviral therapy. Lechlemer is another product under development, a second-generation anti-secretory agent for the treatment of cholera.
Jaguar also received $5 million of non-dilutive financing. Separately, JAGX stock regained compliance with NASDAQ listing requirements. Both of these events have acted as catalysts to push the stock higher.
There are also talks that Jaguar is looking to spinoff subsidiary Napo EU to trade on the AIM Italia exchange. It is reportedly looking into taking the special purpose acquisition company, or SPAC, route.
Rumors are rife that the shell company in the deal is Post Pandemic Recovery. Andreea Porcelli, the founder, and CEO of Swiss Growth Forum, an invitation-only conference hosting company, leads the SPAC on the hunt for a merger target.
In summary, more things are going in favor of JAGX stock than against it. I would initiate a small position and take advantage of the short-term catalysts.
JAGX Stock Is Finally Moving the Needle
Jaguar had a troubling IPO back in 2015. It managed to sell just three million shares in a public offering of $20 million. At the time, its main offering was Canalevia, an oral plant-based drug candidate used to treat cancer therapy‑related diarrhea (CTD) in dogs.
According to the Animal Cancer Foundation, it’s approximated that there are six million new cancer diagnoses made in dogs each year. Although estimates vary, 25% of the dogs getting chemo treatment also suffer from CTD. Right there, the company has a sizeable market, and we are still not talking about Mytesi.
Mytesi “is a non-opioid, non-antibiotic, non-addictive drug approved for chronic use” for adult patients with HIV/AIDS. Its chemotherapy version does not interfere with the administration and function of chemotherapy drugs.
Instead, it normalizes water flow in the GI tract and does not alter gastrointestinal motility. The company is running a Phase 3 trial in this indication. So far, the U.S. Food and Drug Administration (FDA) has found the results of the company’s safety studies acceptable, giving hope for Phase 3 clinical data.
The novel coronavirus pandemic has proven to be a tailwind for several stocks in the pharma space. Now that vaccines are rolling out, we see several companies that went hyperbolic, slowly losing steam.
However, Jaguar Health is connected in a curveball way to the pandemic. Tens of thousands of people who have recovered in the U.S. still suffer from a lingering illness. There are now referred to as post-COVID “long haulers.”
One of the issues that these long-haulers will suffer from is diarrhea. The company is looking to get conditional marketing approval from the European Medicines Agency (EMA) for Mytesi to address this issue.
InvestorPlace contributor Ian Bezek covered comments on the matter by Jaguar’s CEO Lisa Conte. She believes that the market offers an excellent opportunity for the company since Europe is far friendlier to Emergency Use Authorization (EUA) for Covid-19 treatments.
Incidentally, access to the European markets is considered one of the main driving forces behind the rumored SPAC deal between Napo EU and Post Pandemic Recovery. If the deal goes through, the company has a better chance to get the nod to market and distribute its products in Europe.
It’s easy to dismiss JAGX stock as just another beneficiary of the equity bull market. However, in reality, the company has made significant strides during the last year. It has several short-term catalysts that can push it upward. Products have potential and have proven themselves in clinical studies.
The only thing going against it is that the topline hasn’t grown by a substantial margin. Moving forward, this is the main area that the company needs to concentrate on. It needs a string of sterling quarterly reports to confirm its position as a viable investment.
If that does not occur, then shares could go south once again. However, I believe the stock deserves a small position in your portfolio because of all the positive developments in the last few months.
On the date of publication, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.