Humanigen Stock Spikes Up On Recent Discovery

Humanigen Stock Spikes Up On Recent Discovery

Humanigen (NASDAQ:HGEN) may well have managed to land an item that was the Holy Grail of biomedical developments through most of 2020, although it's not much less useful today than it was this time last year: a Covid-19 vaccine. Reports out of the company suggest that the phase 3 clinical trials went well, and Humanigen will be putting that data to use accordingly, in every sense of the concept.

The Most Valuable Report of All

Humanigen's stock was up 54.5% at one point, thanks to the word about the successful phase 3 clinical trials of its drug lenzilumab. With these results in hand, Humanigen's next stop, reports note, is to the Food and Drug Administration, where it will seek emergency use authorization to get its drug in play.

The reports note that lenzilumab works by specifically targeting a cytokine—a kind of protein involved in cell signaling—that has been found to cause serious problems in Covid-19 patients. The cytokine, dubbed GM-CSF, may be the primary cause of some of the larger, more life-threatening combinations. So by disabling GM-CSF, it will reduce the impact of Covid-19 accordingly and make it a much more survivable proposition. Not that it wasn't already, but it's still likely to serve as extra peace of mind.

The results from the treatment are pretty impressive; the estimates given for “invasive mechanical ventilation and / or death” for the treatment group was pegged at 15.6% by Kaplan-Meier estimates, while the placebo group was expected to see 22.1%. With lenzilumab, those rates dropped to 9.6% and 13.9% respectively.

Improving Analyst Posture

While the discovery of lenzilumab was definitely a big step forward for Humanigen, it wasn't the only thing giving the company some extra loft. The broader analyst perspective, as noted by our latest research, suggests a field of analysts taking an increasing interest in the company, and over the last few months as well.

Coverage seems to have begun fairly recently for the company, with little data from before September 2020. It started off well, though, with just one “buy” recommendation making up the field. By the end of 2020, though, that had swelled to five “buy” recommendations. With February's figures, though, a “hold” recommendation was added, and remains so through to today, where the company has five “buy” ratings and one “hold” to its credit.

Within those ratings, though, comes a little something extra: Cantor Fitzgerald, which has had an “overweight” rating on the company since last October, called the lenzilumab data a “homerun”, and one that could “...translate to blockbuster sales in Covid-19 this year.”

Still Plenty of Market Left

It would be easy to dismiss Humanigen's Covid-19 vaccine development here; after all, we've already got several such entrants into the field, including Pfizer (NYSE:PFE), Moderna (NASDAQ:MRNA), and a few others besides. However, as we've seen from vaccination take-up rates, the trend rates have been moving upward about as rapidly as new supply can hit the market. At last report, about one in three people in the United States has had at least one dose of the vaccine so far, which leaves a good chunk of two out of three left. There will always be a certain component of the population that wants out, of course; between religious objections, medical concerns, and the sheer distrust of vaccines that have existed for less than a year and have no long-term studies to support their impact, there's a clear non-zero portion that's just plain out.

However, between a hefty dollop of unvaccinated and interested in the US, and the much larger worldwide market—only about 4.1% of the world has had at least one dose of the vaccine so far—there's still plenty of market that has gone unchallenged so far, and leaves plenty of opportunities for Humanigen to get in on the action. Considering further that the company has plans to release an extra five million shares of common stock into the field, that might ordinarily tamp down enthusiasm, but with a product like this backing up the issues it shouldn't have a lot of negative impacts. Such a move was probably necessary to accommodate the interested buyers and also give Humanigen a big new war chest to work with as it moves to production.

The fact that there are plenty of motivated customers certainly doesn't hurt matters, and with Humanigen currently selling at $20.56 a share, it might be just the time to get in on a Covid-19 vaccine purveyor at a bargain price. Cantor's assessment is likely correct here; a Covid vaccine is likely to be a “homerun” product by any stretch of the imagination, especially these days. Between that and a surprisingly low share price, those interested in buying a literal piece of the recovery narrative may have a good thing going here.

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Companies in This Article:

CompanyCurrent PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Humanigen (HGEN)$0.00-100.0%N/AN/AN/AN/A
Pfizer (PFE)$26.10-1.3%6.44%35.27Moderate Buy$32.00
Moderna (MRNA)$41.41-2.3%N/A-7.12Hold$75.58

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