Aptose Biosciences Inc.

Sufficient Resources to Fund All Planned Operations: Aptose Biosciences Inc. (TSX: APS) is a biotechnology company which develops targeted medicines and personalized therapies for the precision treatment of life-threatening cancers. As on 19 May 2020, the market capitalization of the company stood at CAD 946.68 million.

Quarterly Performance (For the Period Ended 31 March 2020): During the quarter ended 31 March 2020, the company reported a net loss of USD11.5 million as compared to USD5.5 million in the pcp. This was a primary result of an increase in stock-based compensation, a combined increased in program costs and related labor costs on CG-806 and APTO-253 development programs, and higher cash-based general and administrative expenses. In the same time span, total cash and cash equivalents and investments were USD90.0 million. Despite external turmoil caused by the COVID-19 pandemic, the company continued to advance its clinical programs, CG-806 and APTO-253. Both the drugs demonstrated favorable safety profiles and have generated proof of pharmacologic activity and early indications of clinical activity. 

Quarterly Financial Highlights (Source: Company Reports)

Aptose Biosciences Establishes New At-The-Market Facility: The company has recently entered into an equity distribution agreement with Piper Sandler and Canaccord Genuity, wherein APS will  issue and sell common shares of the company through “at-the-market” distributions on the Nasdaq Capital Market. Under the ATM, no common shares will be sold on the Toronto Stock Exchange or on other trading markets in Canada. 

Stock Recommendation: Aptose has made significant progress in 2020 and is progressing well on its clinical fronts. Based on its current operations and available cash on hand and capital will provide the company with sufficient resources to fund all the planned operations including research and development into 2022. As per TSX, the stock is currently inclined towards its 52-week high of CAD12.62. On a TTM basis, the stock is trading at a price to book value multiple of 7.9x, higher than the industry average (Healthcare) of 4.9x and seems a little overvalued. Considering the volatility in returns, trading levels and softer market conditions, we have a watch stance on the stock at the closing market price of CAD10.6 on 19 May 2020.

APS Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Liminal BioSciences Inc.

LMNL Stock Gets Beaten Down: Liminal BioSciences Inc. (TSX: LMNL) is a global biopharmaceutical corporation that supplies technologies for Bioseparations while also developing its orphan drugs, plasma-derived therapeutics and small-molecule therapeutic products targeting unmet medical needs. As on 19 May 2020, the market capitalization of the company stood at CAD250.25 million.

Quarterly Performance (For the Period ended 31 March 2020): During the quarter ended 31 March 2020, the company reported a decline in its revenues to CAD1.1 million, from CAD2.3 million for the first quarter of 2019. The decrease was principally due to the decline in the revenues from the sale of plasma. In the same time span, net loss from continuing operations went down to CAD27.7 million.  The decrease was mainly driven by the decrease in finance costs reflecting the lower amounts of indebtedness. The company also reported a healthy liquidity position with cash and cash equivalents of CAD36.6 million. During the first quarter, the company did not face any material impact of COVID-19 on its underlying business operations or financial condition.

What to Expect: The company is leveraging its digital tools to limit the disruption caused by COVID-19 on business activities. The company remains committed to advancing its work in discovering, developing, and commercializing novel product candidates for patients suffering from diseases. Liminal BioSciences has also leveraged its experience in bioseparation technologies through Prometic Bioproduction Inc. to isolate and purify biopharmaceuticals from human plasma. It expects to resubmit a BLA with the FDA seeking approval to treat patients with congenital plasminogen deficiency.

Stock Recommendation: The company has taken substantial steps to safeguard its operations from the spread of the novel coronavirus. The stock of LMNL gave a negative return of 15.2% in the past three months and a negative return of 6.77% in the past one month. During 1H20, gross margin of the company stood at 38%, lower than the industry median of 87.4%. In the same time span, EBITDA and net margin of the company witnessed a substantial decline over the previous half. On a TTM basis, the stock is trading at a price to book value multiple of 3.2x, higher than the industry median (Healthcare) of 2.5x. The stock is trading close to its 52-week low, however, seems slightly overvalued on the basis of price to book value multiple. Considering the trading levels, volatility in returns in the past six months and softer market conditions, we have a watch stance on the stock at the closing market price of CAD10.68 on 19 May 2020.

LMNL Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Disclaimer

The advice given by Kalkine Canada Advisory Services Inc. and provided on this website is general information only and it does not take into account your investment objectives, financial situation and the particular needs of any particular person. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. The website www.kalkine.ca is published by Kalkine Canada Advisory Services Inc. The link to our Terms & Conditions has been provided please go through them. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations later.