Midatech Pharma Soars After Announcement of Drug-Therapy Breakthrough
Midatech Pharma (NASDAQ: MTP) just released results illustrating the potential of its Q-Sphera technology to formulate proteins into an injectable drug-therapy. Upon the news, shares rose 75% premarket and is currently trading up over 35% as of noon Thursday.
Midatech Pharma is a UK based biotechnology company centered on the research and development of oncology as well as rare disease products. One of their current products is the Q-Sphera technology. This technology involves the use of 3D printing techniques to encapsulate drugs in microspheres which are then injected to form depots in the body. The depots will then release the drug within the body over predictable periods of time, ranging from one week to several months.
The potential for this technology is significant. The company believes that no other organization has been able to successfully deliver therapeutic proteins over extended periods of time using methods capable of commercial scaling. They also believe that the opportunities the results could open up for the Q-Sphera technology has massive potential as a significant figure of the latest generations medicines are protein based. Reformulation of these medicines to be long-acting injectables could provide significant medical benefit to patients, physicians and payors.
Midatech Pharma is currently looking forward to the next steps, which will be to further optimise the drug loading and dissolution profile for encapsulated monoclonal antibodies. In addition to the Q-Sphera technology update, the company also began discussions with potential licensing partners for MTD211, a schizophrenia treatment marketed under the brand name Rexulti.
Based on the recent news, Midatech Pharma seems worth looking into. However, historically earnings have fallen 8.1% per year, over the last 5 years. They also have a cash runway of less than a year and revenue is less than $1 million. These sorts of figures are not uncommon to see in the healthcare industry but the trend is clear: Midatech is losing money and has been for quite some time.
Yet many investors seem excited over the company and their future plans. While it is true that the balance sheet isn’t pretty, many investors are ecstatic at the recent results and the potential it holds. If the company’s technology continues to produce positive results, and assuming that everything gets approvges and distributed effectively, then the share price and financial situation of the company may be able to end the downward trend it has been seeing thus far.
The stock skyrocketed over 75% pre market today and opened at $3.46, reaching a high of $3.61 later in the morning. It’s currently up over 35% as of noon Thursday. However, in the long term, share prices are down over 98% over the past 5 years. In the past year, prices have been extremely volatile, generally bouncing within the $1.80 to $2.50 range. Despite the massive gains today, shares are still down from its 52W high of $7.07.
Overall, the company’s future looks interesting. Many investors have hopped on in the hopes of its Q-Sphera technology as well as other products taking off, yet the risk is undoubtedly quite high. So what are your thoughts? Leave them down below!
Written by: Jessica Fang