By Shares of Traws Pharma Inc (NASDAQ: TRAW) more than tripled today after reporting encouraging early-stage data for its tivoxavir marboxil as a treatment of H5N1 bird flu.
The investigational drug demonstrated safety and tolerability, and maintained blood levels above the EC90 for more than 23 days in a Phase I clinical trial.
“Topline data for a higher dose is still to come,” the biopharmaceutical firm confirmed in its press release on Monday.
Despite today’s surge, Traws Pharma stock is down more than 50% versus its year-to-date high at writing.
Why does it matter for Traws Pharma stock?
The aforementioned experimental drug of Traws Pharma Inc was shown to have potential as a treatment for H5N1 in an animal model.
“This result is highly encouraging for future clinical development of tivoxavir marboxil for treating human H5N1 influenza,” C. David Pauza – the biotech’s chief science officer said today.
Traws Pharma stock is rallying this morning as the company’s update arrives at a time when bird flu has resurfaced as a significant concern.
In fact, the state of California dubbed it an emergency last week after discovering an increase in H5N1 infections in dairy cows.
TRAW is now trading some 300% above its year-to-date low in late November.
Traws Pharma’s board member resigns
Traws Pharma has been in news in recent days also because Luba Greenwood resigned as a member of its board on December 16th.
Her decision was voluntary and not related to a disagreement with the biopharmaceutical firm’s operations, policies, or practices – according to the company’s filing with the Securities & Exchange Commission.
Traws did not disclose any immediate plans of searching for Luba’s replacement at the time, which suggests her departure is unlikely to meaningfully affect its governance or strategic direction.
Despite the rally this morning, Traws Pharma stock remains unattractive for income investors as it doesn’t pay a dividend at writing.
Traws Pharma is burning cash
In November, Traws Pharma reported $8.5 million of net loss for its third quarter that translates to $8.81 per share.
The number was up significantly from $4.7 million or $5.64 a share last year.
The biotech firm had cash, cash equivalents, and short-term investments worth $5.4 million at the end of September – also down from $20.8 million at the start of 2024.
Traws Pharma shares are not particularly popular among Wall Street analysts.
The only one – Robert LeBoyer of Noble Financial, who covers them currently finds them fairly valued at about $6.0.
His price target warns of a potential downside of well over 50% from current levels.
Before today’s price action, TRAW was essentially a penny stock, which means traders may be manipulating its price on Monday.
So, the question of whether it will succeed in sustaining the recent gains remains on the table.
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