BioAtla, Inc. (BCAB) is a global clinical-stage biotechnology company, which focuses on developing Conditionally Active Biologic (CAB) antibody therapeutics. It has three product candidates in its pipeline.
Clinical-stage companies generally generate little to no revenue and have to devote substantial resources to product development. Additionally, reaching product commercialization takes long and any setback in clinical development means an added strain on limited resources. This heightens investment risks for stockholders.
In such a scenario, let us take a look at BioAtla’s product candidates, its Q2 numbers and understand what has changed in its key risk factors.
BioAtla currently has two first-in-class CAB programs, BA3011 and BA3021, in Phase 2. BA3011 is a potential therapeutic for multiple solid tumor types, non-small cell lung cancer (NSCLC) and ovarian cancer. BA3021 is being developed for treating different solid tumors, including NSCLC, melanoma, squamous cell cancer of the head and neck and ovarian cancer.
Its third candidate, BA3071, is designed to reduce systemic toxicity and potentially provide safer combination therapies with checkpoint inhibitors. BioAtla has a global collaboration with BeiGene and is developing BA3071 for multiple solid tumor indications. The company aims to start a Phase ½ study of the drug in 2021.
The Chairman, CEO and Co-Founder of BioAtla, Jay M. Short (Ph.D.), said, “BioAtla is advancing potentially registration-enabling Phase 2 clinical trials for our two lead CAB product candidates. With strong financial resources, we are also broadening our development pipeline to include several additional ADC and bispecific CAB candidates.”
BioAtla generated collaboration revenue of $250 thousand in the second quarter of fiscal 2021, as compared to $190 thousand a year ago.
Its R&D expenses jumped to $14.9 million from $2.9 million a year ago. It expects R&D expenses to increase significantly in future periods as it continues to advance product candidates and clinical programs and expand its product pipeline.
BioAtla’s G&A expenses also jumped to $15.9 million from $1.8 million a year ago. The company expects a further increase in these expenses as it expands its intellectual property portfolio.
Consequently, BioAtla’s net loss widened to $30.4 million from $6.2 million a year ago. At the end of Q2, the company had cash and equivalents of $207.6 million, which it estimates will be sufficient to fund operations into 2023. (See BioAtla stock chart on TipRanks)
On August 16, Jefferies analyst Kelly Shi assigned the stock a Buy rating with a price target of $75. Shi commented, “BA3011 could have a fast-to-market strategy by developing in STS/bone sarcoma which represents areas of high unmet need. BCAB plans to enroll an ongoing Ph2 trial for registration purposes. Data may be available in ’23 w/ approval in ‘24.”
The stock has a Strong Buy consensus rating based on 4 unanimous Buys. The average BioAtla price target of $75.25 implies 96% potential upside for the stock. Shares are up 24% over the past year.
Now, let’s look at what’s changed in the company’s key risk factors.
According to the new Tipranks’ Risk Factors tool, BioAtla’s main risk category is Tech & Innovation, which accounts for 40% of the total 78 risks identified. Since June, the company has changed one key risk factor.
Under Tech & Innovation category, BioAtla acknowledges that it is developing certain product candidates in combination with other therapies and consequently issues related to regulatory approval, safety, or supply chain may delay or prevent the product development process.
Tech & Innovation risk factor’s sector average is at 25%, compared to BioAtla’s 40%.
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