Summary
- Recent results pleased analysts.
- The company's relationship with various Big Pharma companies will be key to future revenues and to the stock price.
- The market in general sees great potential for pharma companies working on cancer developments.
- Further key product test details due to be released by Infinity in December.
- Investors should be aware of risks involved in trading in a small drug development company.
Infinity Pharmaceutical (NASDAQ:INFI) has seen its stock price double recently on some positive sentiment.
There have been several promising developments. These include better than expected financial results, promising testing updates, and further investment from the fund which is its main investor.
Sentiment in general is positive towards cancer plays. Medical advances in oncology have been apparent recently. The field is seen as a strong potential revenue growth area for Big Pharma. Infinity has a single pathway drug but has testing under way for a range of cancers in combination deals with large companies.
It should be noted that Infinity is a small scale development company with one main product. This risk though is partly lessened by the testing for different applications. Only a small minority of such companies at Phase 1 or II actually get drugs through Phase III and onto the market. In addition, such small companies can have their stock prices manipulated by speculators who may not have the long-term good of the company in their sights.
Stock Price & Earnings
I last wrote about Infinity in 2017. The stock price now is just about where it was then, as the chart below illustrates:
Charles Schwab
For a company of its type, the price has been less volatile long-term than one might have expected, but it is still volatile short-term. The one month chart as provided by Charles Schwab illustrates this:
Charles Schwab
As can often be the case with such smaller traded companies, Infinity can fall prey to short trading manipulators. The current short interest is however only 0.3%.
