After taking an absolute drubbing as one of the worst performing stocks on either the TSX or the Nasdaq lately, shares of ESSA Pharma Inc. (TSX: EPI)(NASDAQ: EPIX) are among the best on Monday. Toronto-listed shares are up 28.2% to 50 cents as of about 2:15 PM EDT, adding to a 23.8% gain notched on Friday.
Those sharp gains are relative, though, considering shares of EPI were beaten down from $2.89 per share on June 3 to a low of 31 cents on July 21.
With headquarters in Houston and Vancouver, ESSA is developing novel therapies for prostate cancer. The company’s flagship drug is EPI-506 (ralaniten acetate), a small molecule androgen receptor inhibitor, which is in the front end of a phase 1/2 clinical trial evaluating the treatment for men with metastatic castration-resistant prostate cancer not responding to the commonly used prostate cancer treatments enzalutamide and/or abiraterone.
Data from the dose-escalation trial has shown EPI-506 to be well tolerated with an acceptable safety profile. At higher doses, ESSA has noted signs of clinical activity. As with other phase 1/2 studies, the main goal is safety and tolerability, while investigators dial in the optimal dose for mid-stage research.
The markets have taken a negative bias towards ESSA, perhaps due to 17 of 21 patients in the trial discontinuing treatment, primary because of disease progression. The company also needs to come up with cash and is facing a possible de-listing from the NASDAQ because it’s in violation of the minimum bid price requirement by trading under $1.00 per share for 30 straight days and for its market cap falling under $35.0 million for 30 straight days.
ESSA has been aiming to do an equity offering this month, but has not done so successfully for different reasons, although none were for a lack of interest, according to management. Today, the company said that while it still has identified “alternative transaction structures” it is holding off on an offering as data is being collected and reviewed from higher dose cohorts in the trial of EPI-506. Once the data is disclosed, ESSA intends to revisit the offering.
The bounce in the stock seems to suggest that the markets are interpreting the delay as ESSA hoping the data will impress the investment community, allowing them to raise money at a higher valuation.
Related Stories
