The recent outbreak of the mpox virus has thrown companies like Tonix Pharmaceuticals (TNXP) into the limelight as it presses ahead with the preclinical development of its mpox vaccine candidate, TNX-801. This potential intervention is being pursued urgently, given the World Health Organization’s recent declaration regarding the spread of monkeypox as an international public health emergency. Tonix’s clinical portfolio doesn’t stop there, with Phase 3 testing for fibromyalgia treatment and a Phase 2 trial therapy for long Covid-19 symptoms. Despite these potentially promising candidates, Tonix faces financial challenges, with a net loss of $78.8 million in the second quarter.
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The stock is down 98.85% year-to-date, and the company was forced to execute a 1-for-32 reverse stock split earlier this summer to continue trading on the NASDAQ. Yet, it has enjoyed a 10% jump on potential mpox vaccine news. It is a high-risk, high-potential reward situation for only the hardiest of investors.
Tonix Promising Pipeline
Tonix Pharmaceuticals is a clinical-stage biopharmaceutical company centered on producing therapeutics for psychiatric, pain, and addiction conditions. It markets Zembrace SymTouch and Tosymra for treating acute migraine, and its pipeline candidates include TNX-102 SL, TNX-601, and TNX-801.
TNX-102 SL is on track to submit a New Drug Application (NDA) to the FDA in the second half of 2024 for fibromyalgia treatment. This drug has completed two positive Phase 3 studies.
Tonix has recently secured patents for its Zembrace SymTouch and Tosymra formulations, which are expected to provide protection until 2036 and 2030. Furthermore, Tonix received a significant contract from the U.S. Department of Defense, valued at up to $34 million over five years, for developing a broad-spectrum antiviral drug.
Analysis of Tonix’s Recent Financial Results
The company has reported its Q2 2024 results. Revenue was $2.21 million, falling short of analysts’ expectations of $3.35 million. Key operational highlights include reduced research and development expenses from $22.0 million during Q2 2023 to $9.7 million in Q2 2024 due to reduced clinical, non-clinical, and manufacturing expenses. However, selling and administrative expenses saw a slight increase of $0.5 million due to costs related to recently acquired marketed products. The Q2 net loss was $78.8 million (which included a non-cash one-time impairment charge of $59 million) or an EPS of -$19.28, significantly below the expected -$3.27.
At the end of the quarter, the company reported $4.2 million in cash and cash equivalents, a substantial decrease from the $24.9 million held at the end of 2023. The cash used in operations was approximately $30.5 million for the first half of 2024. After Q2, the firm obtained about $34.9 million through the sale of roughly 82 million shares of common stock. Finally, Tonix Pharmaceuticals has filed a prospectus about offering and selling a $300 million mixed securities shelf.
Is TNXP Stock a Buy?
The stock has been on a volatile ride (beta of 2.86) downward, as it has shed over 99% in the past year. It trades at the bottom of its 52-week price range of $0.13 – $26.57 and shows negative price momentum by trading below its 20-day (0.22) and 50-day (0.68) moving averages. The P/B ratio of 0.1x sits significantly below the Biotechnology industry average of 9.9x.
Wall Street follows the company thinly. The most recently published recommendation came from Alliance Global Partners analyst James Molloy, who issued a Buy rating on the shares in July. Molloy noted that the company is on the cusp of filing an FDA application for TNX-102 SL, which could be the safest, best-tolerated alternative for fibromyalgia.
Final Thoughts on Tonix Pharma
Amid an international public health crisis spurred by the mpox virus, Tonix has found itself in the thick of things with a potential mpox vaccine candidate, TNX-801. The company also boasts a portfolio with promising candidates for fibromyalgia treatment and long Covid-19 symptoms therapy. Despite the potential of these candidates, the company has struggled financially, leading to a significant dip in the value of its stock. TNXP represents a high-risk, high-reward situation for courageous investors willing to speculate.
