It’s a topic that very few people enjoy discussing. Nevertheless, because cancer is such a prevalent condition — medical research indicates that 1 in 2 women and 1 in 3 men will develop the disease in their lifetime — it’s an unavoidable subject.
Adding to the urgency is the World Health Organization (WHO), which states that cancer is a leading cause of death worldwide, “accounting for nearly 10 million deaths in 2020.” While the WHO emphasizes that one-third of deaths are attributed to “tobacco use, high body mass index, alcohol use, low fruit and vegetable intake and lack of physical activity,” this number leaves a large portion of cases outside of individual control.
As well, the American Cancer Society notes that disease rates for specific organs and demographic categories have increased over the last several years. Amid this morose environment, though, the organization provides a powerfully encouraging statistic: between the peak of 1991 through 2015, the death rate for men and women combined dropped 26%.
This favorable decline is a testament to the effectiveness of biotechnology and pharmaceutical research and development. Still, much work remains to be done, which is where the initial public offering (IPO) of Nuvectis Pharma, Inc. enters the frame. Focusing on unmet needs in the oncology space, Nuvectis is one of the feel-good stories of this week.
When Is the Nuvectis Pharma IPO Date?
Because of a relatively quiet period for the 5 business days ending Dec. 3, it’s possible that Nuvectis Pharma might face a relatively uncontested public market debut. With the IPO space cooling down somewhat from the hectic surge it enjoyed throughout most of this year, the pharmaceutical firm could command the lion’s share of the spotlight.
A few weeks back on Oct. 28, Nuvectis, a Phase 1-ready company, disclosed the terms of its IPO, which involves the distribution of 2.3 million shares at a price range between $12 and $14. At the midpoint, Nuvectis will raise $30 million, translating to a fully diluted market value of $157 million.
Founded in 2020, the company emerged quickly to attract enough attention to justify a public offering. Shares will trade on the Nasdaq under the ticker symbol NVCT, inking its debut on the IPO calendar on Dec. 1. ThinkEquity represents the sole bookrunner for the deal.
As with every other public launch in the latter portion of 2021, NVCT stock enters the arena at both an intriguing and perplexing juncture. On one hand, the surge of interest in IPOs is largely a net positive for any enterprise seeking access to the capital market. According to a recent Bloomberg report, global IPOs blew past the $600 billion barrier in the best year for debutantes on record.
Even the riskier avenues toward going public — the now ubiquitous special purpose acquisition company (SPAC) — have enjoyed tremendous demand. On paper, this enthusiasm bolsters the case for NVCT stock.
At the same time, SPACs in particular have not performed up to snuff with major benchmark indices in the year so far. Many investing newcomers — of which there were plenty according to The Wall Street Journal — found themselves caught unaware of the unique dynamics associated with SPACs, such as warrant exercising and their subsequent dilutive effect on shares outstanding.
While these shell companies generate headlines when they go sour, their traditional counterparts have not all been successful either. Moreover, investors irrespective of their preferred asset category must contend with 2 pressing headwinds: fears of inflation and the potential widespread threat of the omicron variant of COVID-19.
Federal Reserve chair Jerome Powell opened the door for the cessation of monetary stimulus, which essentially translates to higher benchmark interest rates. If so, sentiment for risk-on assets such as NVCT stock will likely decline.
Nuvectis Pharma Financial History
If the timing of the Nuvectis Pharma debut wasn’t already difficult enough to gauge, the financial backdrop adds more reason why you must perform extensive due diligence before proceeding. Oncology is one of the most competitive sectors, leading many hopeful biotech firms down a frustrating and costly rabbit hole. Often, your investments depend almost solely on positive clinical results, which of course are not guaranteed.
As mentioned earlier, Nuvectis is a Phase 1-ready company. Specifically, its flagship therapy NXP800, an oral small molecule HSF1-pathway inhibitor, will soon enter the first round of clinical trials. Nuvectis’ initial indication for this drug is to address “advanced ovarian clear cell carcinoma (OCCC) and relapse/refractory endometrioid ovarian cancer.”
While the science behind NXP800 and Nuvectis’ second therapy NXP900 appears promising, every early stage biotech investor must keep the following statistic in mind. According to the latest edition of Clinical Development Success Rates and Contributing Factors, the “overall likelihood of approval (LOA) from Phase I for all developmental candidates over 2011–2020 was 7.9%.”
Moreover, “Phase II development remains the largest hurdle in drug development, with just 28.9% of candidates achieving this critical phase transition.” Therefore, you are taking shots at the unknown if you decide to buy NVCT stock. This isn’t to criticize the opportunity as the same can be said about any other Phase 1 biotech firm.
Specific to Nuvectis, though, investors must be cautious about its IPO because it’s purely focused on research and development. That’s a nice way of saying that the company doesn’t generate any revenue, only operating expenses. Net loss for the 9 months ending Sept. 30, 2021 is $10.6 million, per the company’s Form S-1.
Again, to clarify, a non-revenue generating biotech firm is not an exclusive concept to NVCT stock. Plenty of promising pharmaceutical innovators start off as research-based institutions. Still, you must be fully aware of what you’re buying into when you consider an early stage company like Nuvectis.
Basically, you’re subsidizing hopes and dreams. They’re science based, but without revenue generation, Nuvectis is a purely aspirational investment. On the flipside, though, aspirational investments make a ton of money on the off-chance they succeed, which is why biotechs continue to attract participants.
Nuvectis Pharma Potential
Unlike playing blackjack or other games of chance where outcomes have a mathematical limitation threshold, biotech firms — especially the early stage variety — are extremely difficult to predict, if not outright impossible.
True, you’re dealing with science, and by nature, insights extracted from this discipline feature the hallmarks of quantification and repeatability. But the process of innovations that stand up to the rigors of clinical trials and peer review is typically messy. While science as a construct progresses, this trajectory does not guarantee that individual components will enjoy the same positive velocity.
Indeed, the dynamism of aspirational biotech firms arguably makes this sector unique. While this statement should not outright discourage participation, exercising careful money management is an absolute given. Primarily, early stage biotechs feature no gradation in their market pricing. Depending on the outcome of a clinical trial, your target stock can either skyrocket or nosedive.
On an encouraging note, McKinsey & Company states that “oncology is the world’s largest pharmaceutical therapeutic area.” Competitive, unmet medical needs — Nuvectis’ specialty — are attractive to participating biotechs because innovative care is typically not available. Thus, “standard” oncology may allow smaller firms like Nuvectis to compete effectively against their larger peers.
How to Buy Nuvectis Pharma IPO (NVCT) Stock
With Nuvectis set to IPO shortly, retail investors must buy shares at the open, advantaging those who already know how to buy stocks. If you don’t, just follow these steps.
Step 1: Pick a brokerage.
Brokerages these days compete on similar financial incentives. Therefore, you can narrow your list of best brokers to platforms that cater to your investing style.
Step 2: Decide how many shares you want.
All IPOs are risky, and biotechs may be the riskiest. Therefore, mitigate downside potential by choosing a balanced share count.
Step 3: Choose your order type.
Before trading, learn these market concepts.
- Bid: The buyer’s best offer for a stock.
- Ask: The seller’s lowest acceptable price.
- Spread: The difference between the bid-ask price, the spread indicates market risk as this is also the profit margin for market makers.
- Limit order: Buy or sell requests at a predetermined price, limit orders provide transparency but no execution guarantees.
- Market order: Market orders guarantee fulfillment but only at the current rate.
- Stop-loss order: Stop-loss orders automatically exit your position at either a predetermined price or anything lower.
- Stop-limit order: Stop-limit orders only leave positions at a specified price, but they also carry non-fulfillment risks.
Step 4: Execute your trade.
Follow these steps to execute a market order:
- Select your action type (buy or sell).
- Enter the shares you want to acquire (or sell).
- Hit the Buy (or Sell) button.
Follow the same sequence for limit orders (but include your execution price).
NVCT Restrictions for Retail Investors
Review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons before participating in an IPO. Don’t engage if you have privileged information.
While pre-IPO (or shares at their initial offering price) access is not available for NVCT stock, you can search for future opportunities through platforms like SoFi Invest.
High Potential for the Prepared Investor
With growing funds pouring into cancer research, the next innovation could be a stone’s throw away, which undergirds the compelling narrative of NVCT stock. At the same time, the probability of success for early stage biotechs is small, meaning investors must exercise vigilance.
About Joshua Enomoto
His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.