Hoth Therapeutics Inc. (NASDAQ: HOTH) has been phenomenal in just the last two days, taking off abruptly from $3 to almost $11. A rise of such mighty proportions warrants a thorough look into this promising biotech stock.
FDA Approves Hoth Therapeutics’ IND Application
Cutting straight to the chase, the reason behind HOTH’s incredible takeoff links to a recent announcement that the company’s management came forward with. The FDA has approved the company’s Investigational New Drug application for its HT-001 candidate. This news comes as a major win for the shareholders, and significantly improves Hoth Therapeutics’ future, especially with its advances in epidermal growth factor receptors and related therapies. One reason why bulls are rushing HOTH with this news also links to the candidate’s potentially significant role in cancer treatment. Additionally, HT-001 is also a highly effective treatment against skin toxicities, which result in rashes.
Private Placement for HOTH Financing
Another reason behind HOTH stock price’s takeoff relates to a private placement to sell 2 million shares to the market, in order to raise $10 million in gross proceeds. The arrangement of this financing facility is essential that 2.5 million warrants would face issuance, which will allow the holder to buy at the exercise price of $5 per share, being valid for the next 5½ years. This $10 million cash injection is a significant milestone for the company, considering that its market capitalization was less than this amount, until as recently as yesterday.
HOTH stock is presently in the process of a rapid upward takeoff, due to which shareholders have been having a field day. The recent announcement of the FDA approval for HT-001, as well as the $10 million financing, have both spurred market bulls into action. In light of this new information, it is the market clearly found HOTH price to be severely undervalued.