Three Small Cap Biotech Stocks
That Could Break Out in the Near Term

1. Nemaura Medical (NASDAQ: NMRD): BEATing Diabetes

Nemaura Medical logo

Nemaura Medical (NASDAQ: NMRD) is a medical technology company developing sugarBEAT® as a non-invasive, affordable, and flexible Continuous Glucose Monitor (CGM) designed to provide persons with diabetes and pre-diabetics with an Ambulatory Glucose Profile (AGP) as a superior metric to better manage their glucose levels as compared to an HbA1c reading. SugarBEAT® consists of a daily disposable adhesive skin-patch connected to a rechargeable transmitter, with an app displaying glucose readings at five-minute intervals for periods of up to 24 hours. SugarBEAT® should significantly expand the use of adjunctive CGM among people with diabetes, given it is more non-invasive (not requiring the insertion of a sensor into skin), affordable, and flexible than competitor CGMs.

sugerBeat Device

It is worth nothing that over the two-day period 12-13 Sept. 2018, after NMRD reported positive interim data from the clinic portion of its sugarBEAT® FDA clinical trial, the stock price jumped 63%, reaching a high of $3.50 a share, with volume for the two days almost reaching 5.5 million shares. Again, a CE Mark approval could precipitate an upward move in the stock, because the approval will validate the Company’s technology and open up commercialization opportunities in Europe. The Company announced recently that they expect CE Mark approval in 2018. The European market for diabetes care devices is estimated at $5.16 billion for 2018 (MarketDataForecast.com) and by 2023 is expected to reach $6.7 billion.

Here are some investment highlights from Nemaura’s busy 2018:

  • In September 2018, Nemaura reported positive zero finger-stick calibration data for its sugarBEAT® continuous glucose monitor. Nemaura is currently undertaking additional data analysis that could allow sugarBEAT® to be used with zero or reduced-frequency finger-stick calibration. If Nemaura can offer a patch that requires few or no finger-stick calibrations, then the non-invasiveness of its product will be strengthened, and the diabetics and pre-diabetics using the patch will be even better able to integrate the patch seamlessly into their daily life. NMRD will win these users’ loyalty and have a big advantage over its competitors.
  • SugarBEAT® commercial launch expected 4Q2018 in UK, Europe in 1H2019, with CE Mark approval anticipated this quarter.
  • FDA clinical program was launched in 2Q2018. Submission expected in 1Q2019.
  • NMRD uplisted to the NASDAQ in 1Q2018, improving the company’s access to capital markets while expanding its pool of potential investors.

Given the large market size ($82 billion) NMRD is targeting, the stock should trade at much higher multiples as they near CE Mark approval and began commercializing sugarBEAT® in Europe. An industry comp is Sensomedics (NYSE American: SENS), whose market cap is $630 million, compared to Nemaura’s market cap of $440 million.

2. Marker Therapeutics, Inc. (NASDAQ: MRKR): Key Merger, Positive Safety Results


Marker logo

Marker Therapeutics, Inc. (NASDAQ: MRKR) is a leader in the development of novel immunotherapies for cancer, with multiple Phase 2 and Phase 1b/2 clinical studies currently ongoing for the treatment of ovarian and breast cancer. Its stock is surging in response to a steady stream of good news:

  • In March 2018, Marker Therapeutics, Inc. published positive safety results in a Phase 1 trial for ovarian and breast cancer for its lead vaccine candidate TPIV200. This vaccine has been fast-tracked by the FDA with an orphan drug designation. This will allow more frequent interaction with the FDA and the possibility of accelerated review.
  • In May 2018, the Company, then known as TapImmune (TPIV), announced a merger agreement with Marker Therapeutics, creating a transformational Immuno-Oncology Platform. This merger adds a Multi-Antigen Targeted Cell Therapy Platform to MRKR’s Peptide Vaccine Portfolio, and it has the potential to disrupt the CAR-T and TCR filed therapies. MRKR’s acquired therapies are significantly less toxic than CAR-T, require no gene modification, and are highly efficacious and extremely durable, without the need for lympho-depletion.
researchers

Marker Therapeutics, Inc. is in four active Phase 2 clinical trials (six clinical trials in total) in the $100+ billion market for immunotherapy cancer drugs. The global market for cancer drugs is projected to top $150 billion by 2020 (IMS Health), and much of the growth is being driven by constant innovations in cancer immunotherapy. Currently, Marker Therapeutics, Inc. is advancing its robust mid-stage clinical pipeline focused on breast and ovarian cancer.

Similar companies in Phase 2 clinical trials in immuno-oncology have attained much higher valuations, as for example Aduro BioTech (NASDAQ: ADRO) at $520 million. Marker Therapeutics, Inc. is valued at only $120 million. With its next-generation T-cell vaccine technology, the Company is well-positioned to capture part of the rapidly growing cancer immunotherapy market.

3. Immuron (NASDAQ: IMRN): Moving up the Development Pipeline

Immuron Limited logo

Immuron Limited (NASDAQ: IMRN) is an Australian microbiome biopharmaceutical company focused on developing and commercializing orally delivered targeted polyclonal antibodies for the treatment of inflammatory mediated and infectious diseases.
Here are some reasons 2018 has been so good for IMRN:

Immuron Product Traveler American Package
  • In March 2018, Immuron reported positive top line Phase 2 results in a NASH clinical study. This was an extremely welcome development, as NASH therapies are estimated to become a $40 billion global market by 2025. The company also received a European patent grant for NASH treatment.
  • In IMRN’s FY18, which ended June 30, 2018, the company’s revenue increased 29% to AUD2 million, up from AUD1.4 million in FY16.
  • One reason for the revenue increase is Travelan, Immuron’s all-natural OTC product for the prevention of traveler’s diarrhea. Traveler’s diarrhea is a persistent global problem, with a market estimated to be worth between $600 million and $1.2 billion. Travelan is poised to carve an even bigger stake in this lucrative business, as it is currently licensed in the U.S., Australia, Canada, South Africa, Latin America, and several countries in Southeast Asia, and because the U.S. Department of Defense recently reported that Travelan protects against Shigella in primates.

The company is in three Phase 2 clinical trials for NASH, ASH, and pediatric NAFLD. Another clinical stage asset, IMM-529, is targeting Clostridium difficile infections (CDI). These products, together with the Company’s other preclinical immunotherapy pipeline products targeting immune-related diseases currently under development, will meet a large unmet need in the global immunotherapy market.

Other companies in Phase 2 trials for NASH have achieved significant valuations.Intercept Pharmaceuticals had positive Phase 2 results for NASH, leading to an increase in market cap from $1.5 billion to $6.6 billion. Additionally, companies such as Galectin Therapeutics (NASDAQ: GALT; market cap: $200 million), Galmed Pharmaceuticals (NASDAQ: GLMD; $250 million), Conatus Pharmaceuticals (NASDAQ: CNAT; $150 million), and Genfit SA (OTCQB: GNFTF; $660 million), are in Phase 2 clinical trials for NASH and have valuations much higher than Immuron’s ($30 million).

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Nemaura Medical is a client of RedChip Companies. Nemaura Medical pays RedChip a monthly cash fee for investor awareness services.

Marker Therapeutics, Inc. (MRKR) is a client of RedChip Companies, Inc. MRKR agreed to pay RedChip Companies, Inc., a monthly cash fee for (4) months of RedChip investor awareness services.

Immuron Ltd. (IMRN) is a client of RedChip Companies, Inc. IMRN agreed to pay RedChip Companies, Inc. a monthly cash fee for 12 months of investor awareness services.

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