The world has not yet recovered from the Covid-19 pandemic, a new outbreak is causing fears. There are still widespread lockdowns going on in China due to the SARS-CoV-2 virus variants, but what’s now a rising concern is the monkeypox outbreak in non-endemic regions. Monkeypox, a cousin of the smallpox virus, is endemic to regions of Central and West Africa. However, currently, it is spreading throughout the world with cases in Europe, North America, and Australia. This spread to non-endemic regions has the World Health Organization scratching heads while certain cases have been identified with links to travel near the endemic regions.
The Outbreak
According to Our World Data, confirmed cases as of May 30 had reached over 555 in countries outside of Africa. On May 18, the first case of the virus was identified in the U.S. and the number has now crossed 14 in over 7 states. The WHO says it’s too early to deem the outbreak with a possible risk of emerging as a pandemic while the chances seem low. However, the organization’s risk assessment for the outbreak has now reached a moderate from the initial mild.
The smallpox relative, monkeypox is a rare disease with similar symptoms which are clinically less severe. The symptoms include fever, headache, sore throat, body aches, swollen lymph nodes, and painful lesions over the body. Currently, there is no specific treatment for the virus but vaccines for smallpox have shown 85% potency in monkeypox. Hence, the widely used treatment plans for monkeypox thus include approved smallpox vaccines along with other antivirals.
Therefore, the bewildering outbreak of monkeypox has thrust the need for a potential monkeypox vaccine forward. And pharmaceutical companies with smallpox vaccine in their portfolio or pipeline have subsequently been pushed to the spotlight. One such biotechnology company working on preventative smallpox and monkeypox vaccine is Tonix Pharmaceuticals Holdings Corp. (TNXP).
TNXP & its Pipeline
Due to the macroeconomic and geopolitical turmoil, TNXP has shared the fate of the equities downfall this year. Down nearly 79% this year, the stock has been severely battered. However, given the recent events surrounding the new outbreak, the stock has gained some popularity regarding its smallpox/monkeypox vaccine. As of May 31’s after-hours session, the stock had a price of $3.10 per share. TNXP saw an uptick of over 27% in the session due to the announcement of a share buyback plan.
The biotechnology company has a number of vaccines and treatments in its pipeline, out of which the highlight at the moment is TNX-801. TNX-801 is a vaccine candidate of the company under development for smallpox and monkeypox. It is a live form of horsepox virus and demonstrated safety in a preclinical study back in 2020. TNX-801 is deemed to be much closer to the original smallpox virus vaccine developed by Edward Jenner in the 1900s. Comparably, current smallpox/monkeypox vaccines are considered suboptimal and hence warrant the accelerated development of TNX-801.
Other pipeline candidates of the company include those for long covid and fibromyalgia while trials in PTSD, chronic migraine, Major Depressive Disorder, and allograft rejection are set to commence soon.
TNXP’s Troubles
While the company boasts a robust pipeline with both Covid and the new monkeypox as its targets, TNXP does have a fair share of problems.
The company has yet to generate any revenues and being in the pre-revenue stage, its recent financial results were anything but impressive. For the first quarter of 2022, the company posted a net loss of $26.7 million, which expanded from $20.7 million in the comparable period. Contributors to the larger net loss were higher research and development expenses, as well as general and administrative costs. Both of which grew by nearly $3 million in the one-year stretch. The net loss per share was $0.05 in the quarter, which came just in line with the consensus estimate for Q1.
At the end of the quarter, the company had cash and cash equivalents of $140.4 million, which declined from $178.7 million in the prior quarter.
Moreover, the company has also been dealing with Nasdaq’s non-compliance due to its battered share price. In order to regain compliance, TNXP resorted to artificial means and recently affected a 1-for-32 reverse stock split. The company faced severe scrutiny over the reverse split, as it still has to deal with the underlying problems.
Conclusion
With the outbreak of monkeypox, TNXP has gained some relevance due to its smallpox/monkeypox vaccine. However, the company has a lot to prove and too many troubles. Battered share price, no revenue, increasing losses, and a pipeline that is yet to produce a commercial product. Hence, the stock might be enjoying due to the current monkeypox outbreak, but the company has a long bumpy road ahead as the macroeconomic situation deteriorates further.
