Company Overview
Tonix Pharmaceuticals Holding Corp is a clinical-stage biopharmaceutical business dedicated to finding, licensing, acquiring, and developing medications and diagnostics to treat, prevent, and alleviate human disease and suffering. Its product candidates include immunology, uncommon disease, infectious disease, and central nervous system (CNS).
Tonix’s immunology portfolio includes biologics for organ transplant rejection, autoimmunity, and cancer, such as TNX-1500, a humanized monoclonal antibody targeting CD40-ligand that is being developed for the prevention of allograft and xenograft rejection as well as the treatment of autoimmune diseases. Tonix’s rare disease portfolio includes the treatment of Prader-Willi syndrome with TNX-2900 (intranasal potentiated oxytocin).
What happened ?
Tonix said that enrollment in phase 3 studies for its primary pipeline candidate, TNX-102 SL, would be halted. The trial’s Independent Data Monitoring Committee (IDMC) advised the termination due to a worse-than-expected interim analysis, claiming little benefit to patients above what they would experience with a placebo.
The drug’s destiny is now unknown, but investors are undoubtedly angry – or at the very least perplexed – with management. Even as recently as early June, the business provided preliminary results indicating that TNX-102 SL was more effective than a placebo in lowering fibromyalgia pain. It’s unclear what transpired in the trial between June and late July to alter the account so drastically, and Tonix hasn’t provided any information.
Then there’s the issue of TNX-102 SL being studied in late-stage clinical studies for PTSD, Alzheimer’s illness, and alcohol use disorder. The medication was initially intended to treat fibromyalgia, not these additional diseases. More importantly, it was created to enhance sleep quality. If the fibromyalgia study findings are as terrible as they appear to be at the moment, the medicine may not fare much better in other illness contexts with similarly difficult (but altogether different) comorbidities that may interfere with restful sleep.
Tonix’s board of directors approved a 1-for-32 reverse stock split to increase the share price. This action was required to meet the stock’s $1 minimum bid requirement in order for it to be listed on the Nasdaq Stock Exchange.
Tonix’s shares had lost roughly two-thirds of their value year to date prior to the announcement of the reverse split. The reverse stock split inflates the share price artificially. Unfortunately, it makes no difference to the underlying causes of the sharp fall. Tonix currently has no items on the market and is burning through funds.
Is it time to sell TNXP?
While Tonix’s stock will most likely take some time to recover from its recent lows, the company does have a few projects in the works that could provide future growth.
It has a particularly interesting range of early-stage coronavirus treatments. While Tonix’s two coronavirus vaccine candidates may struggle to achieve market share by the time they are approved (if they make it that far), Tonix’s medicines for acute coronavirus infections and protracted COVID potentially cover much-needed holes in the therapy landscape. Yet, it’s critical to note that the epidemic may be gone before some of these programs make it through clinical trials, unless the company can gain regulatory approval for a faster speed of development.
All of this is to say that investors should be aware that banking on the company’s comeback is extremely risky. After all, biotech has no products on the market and will not for at least another couple of years.
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