Alkido Pharma Trading 30% Below Cash Value Despite Positive Indications

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The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Biotechnology development company AIkido Pharma Inc. AIKI recently released its 1st-quarter report, which revealed the strongest balance sheet in the company’s history with approximately $102 million in cash and cash equivalents.

It also shows a market capitalization of $73 million — trading approximately 30% below cash value.

Investors typically view trading below cash value as a sign of trouble. Some may assume that the company’s burn rate is too high to sustain itself or expect uncertainty about the true cost of its liabilities.

The company does not believe that this is a fair assumption given its history of successful acquisitions, substantial runway, and plans to pursue additional strategic initiatives and emerging opportunities to further diversify the risk.

History of Successful Acquisitions

AIkido has a diverse portfolio of small-molecule anti-cancer therapeutics. To further diversify and improve its balance sheet, the company has made value-enhancing acquisitions advancing in their respective timelines such as DatChat, Convergent Therapeutics, and Hoth Therapeutics.

  1. DatChat Inc. DATS is a personal privacy platform focused on encrypted communication, internet security, and digital rights management. Recently, DatChat went public, spelling big news for AIkido as it owns 525,000 shares of the company, which it purchased for $1,000,000. As of October 1, DatChat shares closed at $11.93, well higher than its initial public offering (IPO) price and representing a more than 600% return or an additional $3.4 million added to AIkido's balance sheet.
  2. AIkido acquired an equity interest in Convergent Therapeutics Inc. in January and Convergent is working to develop technology related to next-generation, dual-action peptide receptor radionuclide therapy (PRRT) for prostate cancer, which is covered by multiple issued and pending U.S. patents. The therapy is currently in advanced human trials relating to prostate cancer treatments using PRRT that targets the prostate-specific membrane antigen (PSMA) present on prostate cancer cells.
  3. Hoth Therapeutics Inc. HOTH, a biopharmaceutical company that focuses on developing therapies for dermatological disorders, is an AIkido Pharma spinoff. Its current assets have shown promise in a range of illnesses and diseases, including cancer, acne, inflammatory bowel disease, asthma, COVID-19, atopic dermatitis, skin toxicities associated with cancer therapy, chronic wounds, psoriasis, Alzheimer’s disease, and pneumonia.
  4. Recently, AIkido announced that it secured an early equity interest in telehealth company Kerna Health, a next-generation digital health monitoring, and virtual care company that is exhibiting growing momentum. The company is developing a large backlog of shared-revenue executed contracts that is already at the $25 million mark in Pro forma shareable revenues and, with additional in-process contracts, could grow to $50 million in the short term and $400 million after that.

Recent Drug Portfolio Developments

AIkido is also developing its own products and has made considerable developments recently, including:

  1. An exclusive patent license agreement with Silo Pharma Inc. SILO for technology that covers the use of psilocybin for cancer patients. The technology is covered by 4 patent applications already on file with the U.S. Patent and Trademark Office (USPTO).
  2. AIkido’s broad-spectrum antiviral platform has shown progress in optimizing drugs to treat influenza, COVID-19, Ebola, and other viral infections. The initial 2 lead compounds have been optimized using computer-assisted learning through 2 rounds of chemical modifications to achieve druglike properties required to move the compounds into animal testing. In addition, a 3rd lead compound has been identified and will be subjected to computer-assisted optimization.
  3. In April, AIkido announced positive early results from a prostate-specific membrane antigen study indicating that developing radioligand therapies can be an alternative cancer treatment and provide positive outcomes for patients with advanced prostate cancer. This reinforces AIkido’s confidence in the radiopharmaceutical space, PSMA, and its investment in this technology.

Carrying the Momentum

AIkido seems to have been careful with its acquisitions, and its growth strategy is to continue its momentum with a clear focus on monetization and liquidity events for its shareholders.

The company has extended its runway for further investment in drug development while continuing to maintain its commitment to a low cash burn with utilized cash from operations in 2020 of just over $4 million and just over $1.2 million in the 1st quarter of 2021.

The company recently withdrew its registration statement, which may have indicated that it has pulled its ability to raise money as it has ample capital to fund research activities that are currently underway and selectively pursue additional emerging opportunities.

To learn more about AIkido Pharma, visit its website here.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.

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