Big technical breakouts are important to investigate. One such breakout this week has taken hold in shares of Nascent Biotech Inc. (OTCMKTS:NBIO). This is an early-stage biotech with a top asset targeting the multi-billion-dollar cancer treatment space. The asset is called Pritumumab (PTB), and it works through a completely new treatment channel, as we will cover below.
First off, PTB is being tested now for brain cancer. NBIO made it through phase 1 trials with flying colors. Now PTB is clear to confront phase 2 clinical research—where the rubber really meets the road.
While PTB is just being studied for brain cancer at the moment, it will potentially have multiple applications because it binds to cell surface Vimentin (also referred to as ectodomain vimentin), which is a protein expressed on the surface of epithelial cancers, or carcinomas, which are the most common forms of cancer. If it turns out that PTB is a winner in glioblastomas, it may well turn out to be a winner against breast, lung, prostate, colon, and skin cancers as well.
In other words, pricing in even just a small percentage of future cash flows from the probabilistic universe that contains PTB’s eventual commercial success is a big, big thing. Certainly, quite a lot more than $0.15/share on a $17 million market cap.
This week’s huge bullish breakout in the stock could be the technical spark finally bursting into flames. Let’s take a deeper look.
Nascent Development
NBIO shares have been on fire, up now over 200% in the past 60 days. So, what’s changed? Why now? Why is this story finally catching fire?
We would submit that it comes down to the stage this company is at. This is an early-stage biotech with a promising R&D platform and a potential blockbuster primary asset with PTB. And, more to the point, PTB is just powered through phase 1 research with honors.
Once you get well into phase 2 clinical research with your first and leading asset, you graduate into a much more immediate relationship with the concept of commercialization. This is especially true if phase 1 research proceeded particularly well.
PTB’s Phase I research process went smoothly: 15 patients received PTB and were evaluated for safety and efficacy analyses. 12/15 patients had a diagnosis of glioblastoma and one patient each had anaplastic astrocytoma, oligodendroglioma, and non-small lung cancer with brain metastases.
There were no dose-limiting toxicities to this natural human IgG mAb. Overall, the study reportedly found that single agent Pritumumab is safe up to a dose of 16.2 mg/kg every 7 days in brain tumor patients. One partial response showed nearly a 98.0% and 40.8% reduction in 2 tumor lesions for 17 months on study.
“The presentation displayed our Phase I data, which included our safety data at various dose cohorts and early outcomes data, was well received and viewed by interested parties at the conference. In summary, it showed the drug to be very safe at 5 ascending dose cohorts and definitive bioactivity in several patients,” stated Dr. Mini Gill who presented for the Company at a recent conference.
And yet, as we pointed out in our prior piece on NBIO, shares of the stock have priced in about 1% of the upside potential in terms of future cash flows from commercialization if the compound successfully moved forward from here and is eventually approved.
In other words, even with the recent 200% 2-month rally, NBIO shares remain dirt cheap based on what we often see following Phase 2 clinical research approval from the FDA.
The Technical Picture for NBIO
NBIO is a biotechnology name, which means it is firmly in the segment of the market that is perhaps the most fundamentally driven of all because how the research works out will determine how the stock trades over time. It’s not debatable.
That said, technical behavior encapsulates the market discounting future expectations about fundamental information. Hence, wise market participants pay attention when we see outsized breakouts in cheap stocks with big market potential.
Right now, NBIO shares are breaking out in dramatic fashion. The stock is running about 180% ahead of the S&P 500 since early September. And there’s a reason for that: The company is moving head-long toward commercializing a truly unique cancer treatment. And, so far, no barriers to the upside of this program have appeared.
The latest technical breakout is an ascending triangle bullish breakout built on multiple touches of the stock’s 50-day moving average as key support. All the key signals are lining up. And buyers are finally competing for access.
