Stock market

This 13p penny stock is on fire! Should I buy it?

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Earlier this week, I screened the UK stock market for penny stocks (those with share prices below £1 and market caps below £100m) with share price momentum at the moment. is strong It’s fair to say that some interesting companies emerged.

Here, I am going to look at one of them – Pool Bag Pharma (LSE: POLB). Is this AIM-listed stock, currently trading at just 13.45p, worth buying as a high-risk, high-reward investment for my portfolio?

An innovative biopharmaceutical business

Polbeg Pharma is an under-the-radar biopharmaceutical company developing drugs to meet unmet medical needs.

Areas of focus include cancer immunotherapy-induced cytokine release syndrome (CRS), infectious disease, and metabolic conditions such as obesity (it is currently developing an oral weight loss drug).

On its website, Polbeg notes that it leverages advanced technologies such as artificial intelligence (AI) to accelerate drug discovery.

It all sounds interesting to me, especially the AI ​​side of things.

I’m also really interested in the obesity medicine angle. Recently, I bought some weight loss drug stocks for my portfolio because I believe it will be a huge investment theme over the next decade.

A sharp rise in share prices

Now this stock has caught fire recently. Over the past six months, it has grown by nearly 50 percent.

Most of these gains are related to news about the company’s POLB 001 drug, which has been shown to reduce CRS induced by cancer immunotherapy in an in vivo model.

Earlier this month, the company announced that it had received approval from the US Patent Office for its product. This should strengthen the company’s intellectual property, increasing the value and attractiveness of POLB 001 to potential pharma partners.

We believe that POLB 001 holds great promise in addressing unmet medical needs in cancer immunotherapy-induced cytokine release syndrome and severe influenza, positively impacting patients and healthcare systems alike. . Its impressive data package and strong patent portfolio, combined with a $10bn+ market opportunity in cancer immunotherapy-affected CRS, have the potential to positively impact global health and create value for our shareholders. Strengthens our confidence.

Poolbag Pharma CEO Jeremy Skellington

Another factor that has helped the share price is the appointment of co-founder and major shareholder Cathal Friel as executive chairman. Farrell has an excellent track record in capital markets, having previously co-founded it. hVIVO (which is enjoying considerable success today) and Amryt Pharma, which was acquired in 2023 for $1.5bn.

Should I buy?

Given the recent developments here, I think this is an interesting company. I think it has a lot of potential.

Having said that, it is really risky from an investment point of view. Today, the company has no revenue or profit. And there’s no guarantee it will ever happen. This is about drug development. It is notoriously unpredictable.

For me personally, penny stocks are a little too risky right now. So I won’t buy it.

But I will keep it on my watchlist. When there is a little more clarity about the viability of its drug, and the revenue and earnings it generates, I might be interested in investing here.

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