Figured OA mass accumulation names probably deserve their own thread as a way of consolidating information and updates about the aforementioned. I am going to drop a few key pieces of information below, state sources, and hopefully folks will build on it and the board can find it useful. If not, we can keep posting updates on the main thread if this is redundant.
The beginning excerpt below is actually from reddit (here's the full link https://www.reddit.com/r/pennystocks/comments/ok8idv/eloxx_pharmaceuticals_nasdaqelox_dd/). Before you dismiss it, below the excerpt are the Form 4/13D/13G filings from the company's website that validate the reddit post. To me, unless I read it in a filing or confirm it in a filing, it's not real.
Here's the Pontifax May 17th Form 4 straight from the ELOX website (you can find this on sec.gov/edgar as well…). Seems like most of these guys purchased at $1.35.
https://investors.eloxxpharma.com/static-files/8499716f-859f-4b7b-9182-6d9b7897ff64
https://investors.eloxxpharma.com/static-files/97537033-f0bc-469f-b1f3-b1dfe9157df1 (Tomer Kariv, Pontifax CEO)
https://investors.eloxxpharma.com/static-files/81720933-58cc-4542-b17a-9c4ee6571e74 (Ran Nussbaum, Pontifax managing partner and co-founder)
Here's another list of filings from May 17th and May 20th of ELOX company officials and BoDs increasing their stake in the company:
https://investors.eloxxpharma.com/static-files/1774d4f6-e576-4944-84a3-d5726cc6db43 (Sumit Aggarwal, ELOX CEO)
https://investors.eloxxpharma.com/static-files/34fbff24-37ee-4041-b4a7-a713b6cf4638 (Parekh Rajesh, ELOX Board of Directors)
https://investors.eloxxpharma.com/static-files/9874c445-7dfe-4951-b39e-1fa2698d5f38 (Vijay Modur, ELOX head of R&D)
https://investors.eloxxpharma.com/static-files/1ddb84c7-8fbc-42f8-96ae-93ba8d5f466d (Avnur Zafrira, ELOX Board of Directors)
On May 20th, pretty much all the members of the board filed an increase in ownership with the SEC. You can find all of these on the ELOX website (won't post them all here, you get the point).
Then the Roche Finance 13G:
https://investors.eloxxpharma.com/static-files/6912f5e4-9afe-41ad-8433-99945cfeb7d1
Then the Waypoint 13G
https://investors.eloxxpharma.com/static-files/4e0cf553-eaea-4954-893d-4dc567dc4404
As a further note, here are the following Institutional/Insider Ownership numbers from a few different sources:
Finviz: Insider Own is 9.37% and Inst Own is 34.40% …..so 43.77% of the float is owned by the big money
Yahoo Finance: Insider Own is 9.37% and Inst Own is 34.35% …..so 43.72% of the float is owned by the big money. Same numbers.
I like to short stocks while day trading (rarely go long unless swing/long term buys), especially small cap stocks that run on big news and have big dilution events on their hands. As a general rule, I stay away from names that have >40% insider buying because the remaining float just isn't big enough for retail to panic sell after buying the top and have a big enough move downwards. A smaller "retail" float also increases risk of getting taken for a ride upwards while short. Looking at it from that perspective, this is obviously bullish for me on this particular name.
Drug Candidate Validation
ELX-02 has received Orphan Drug Designation on April 30, 2018 and was recently granted Fast Track Designation from FDA on September 9, 2021. The latter has also coincided with big volume on the chart and a nice positive uptrend ever since.
The company has also received funding from the Cystic Fibrosis Foundation to the tune of 2.5 million dollars for novel treatments of CF. Recognition from the CF Foundation is indicative that this company is for real and validates its efforts in my eyes.
Risks and Dilution
At the end of the day, the value here rests with the ELX-02 drug and positive phase 2 results. In addition, the company has a $200 million shelf from August 2021 where they can dilute more shares to raise money, as obviously they do not have a drug that currently produces them revenue to keep the lights on.
https://investors.eloxxpharma.com/static-files/2d116b1b-1f98-4ae1-adb4-6b33fcb64ca8
Summary
If the company can deliver on ELX-02, there is massive value to be gained here, as the drug is targeting a population of patients with no current treatment (different addressable market than Vertex). But to me, the insider buying at $1.35 and the chart supporting in and around that level, plus the validation from the FDA and CF Foundation, makes me like the risk/reward proposition.
The beginning excerpt below is actually from reddit (here's the full link https://www.reddit.com/r/pennystocks/comments/ok8idv/eloxx_pharmaceuticals_nasdaqelox_dd/). Before you dismiss it, below the excerpt are the Form 4/13D/13G filings from the company's website that validate the reddit post. To me, unless I read it in a filing or confirm it in a filing, it's not real.
Quote:
Insider/Institutional Buying:
The money pipeline drug, ELX-02, is currently in Stage 2, and the results were scheduled to be released in H1 2021. But, due to COVID-19, allegedly, management announced that the results would be heading towards H2 2021. If this reading goes well, the valuation will increase exponentially. So, obviously, most of the public is waiting on the results of this reading in order to decide whether to invest. However, what gets really interesting is that there has been quite a bit of signaling as to these results might be positive.
1. After announcing the delay of the Stage 2 reading, on May 18th, Eloxx completed a secondary private offering to avoid the public markets. On the surface, this may seem like a non-material point. However, is it likely that insiders would want the shares to get out to the public if they knew they had potentially strong phase 2 results incoming? The answer is unlikely. During this offering, institutions purchased 30% of the company. If you trace back who were the major purchasers of the aforementioned offering were, you find that it was Pontifax. Pontifax is an Israeli biopharma venture capital fund who have a strong history of great performance and exits. Additionally, Pontifax isn't just casting a wide spread with a lot of investments Pontifax put $0 into other public holdings in the past year; Elox was the exception not just a drop in the bucket.
However, if you dive further into this Pontifax purchase, Pontifax's CEO, Tomer Kariv, used to be the CEO and Founder of Eloxx. Kariv also currently still serves as the chairman of the board at Elox itself. So, Kariv, the former founder of Elox, who arguably knows more than anyone about the company, just purchased a large ownership in the company prior to the biggest reading in the company's history.
So, putting the above in simple terms, Elox delayed their Stage 2 reading. Elox insiders, who realistically have some idea how the Stage 2 is going, prevented Elox from going to the public markets and instead purchased 30% of the company for themselves.
2) Enter Roche Finance. Roche Finance is a unit of the Swiss pharma giant Roche Holdings ($330bn market cap). On June 14th, Roche Finance disclosed that they have purchased an ownership stake of 5.3% of Eloxx Pharmaceutical. If you want to look up Roche further, they have incredibly strong performance and a history of investing in winners.
So take another step back, following that 30% purchase from insiders, another major pharma player purchased an additional 5.3% of Elox.
3) Now, if that wasn't enough institutional and insider buying, I still have more for you. Enter Ernesto Bertarelli and Waypoint Holdings/Gurnet Point. I am sure hardly anybody has heard of Bertarelli, but Bertarelli is a billionaire with a strong biopharma background. Bertarelli was the CEO of Serono, which was a major producer of MS drug Rebif. The details of his specific background is not incredibly important. However, Bertarelli and his funds Waypoint/Gurnet purchased 5.7% of Eloxx Pharma announced on June 29th.
Here's the Pontifax May 17th Form 4 straight from the ELOX website (you can find this on sec.gov/edgar as well…). Seems like most of these guys purchased at $1.35.
https://investors.eloxxpharma.com/static-files/8499716f-859f-4b7b-9182-6d9b7897ff64
https://investors.eloxxpharma.com/static-files/97537033-f0bc-469f-b1f3-b1dfe9157df1 (Tomer Kariv, Pontifax CEO)
https://investors.eloxxpharma.com/static-files/81720933-58cc-4542-b17a-9c4ee6571e74 (Ran Nussbaum, Pontifax managing partner and co-founder)
Here's another list of filings from May 17th and May 20th of ELOX company officials and BoDs increasing their stake in the company:
https://investors.eloxxpharma.com/static-files/1774d4f6-e576-4944-84a3-d5726cc6db43 (Sumit Aggarwal, ELOX CEO)
https://investors.eloxxpharma.com/static-files/34fbff24-37ee-4041-b4a7-a713b6cf4638 (Parekh Rajesh, ELOX Board of Directors)
https://investors.eloxxpharma.com/static-files/9874c445-7dfe-4951-b39e-1fa2698d5f38 (Vijay Modur, ELOX head of R&D)
https://investors.eloxxpharma.com/static-files/1ddb84c7-8fbc-42f8-96ae-93ba8d5f466d (Avnur Zafrira, ELOX Board of Directors)
On May 20th, pretty much all the members of the board filed an increase in ownership with the SEC. You can find all of these on the ELOX website (won't post them all here, you get the point).
Then the Roche Finance 13G:
https://investors.eloxxpharma.com/static-files/6912f5e4-9afe-41ad-8433-99945cfeb7d1
Then the Waypoint 13G
https://investors.eloxxpharma.com/static-files/4e0cf553-eaea-4954-893d-4dc567dc4404
As a further note, here are the following Institutional/Insider Ownership numbers from a few different sources:
Finviz: Insider Own is 9.37% and Inst Own is 34.40% …..so 43.77% of the float is owned by the big money
Yahoo Finance: Insider Own is 9.37% and Inst Own is 34.35% …..so 43.72% of the float is owned by the big money. Same numbers.
I like to short stocks while day trading (rarely go long unless swing/long term buys), especially small cap stocks that run on big news and have big dilution events on their hands. As a general rule, I stay away from names that have >40% insider buying because the remaining float just isn't big enough for retail to panic sell after buying the top and have a big enough move downwards. A smaller "retail" float also increases risk of getting taken for a ride upwards while short. Looking at it from that perspective, this is obviously bullish for me on this particular name.
Drug Candidate Validation
ELX-02 has received Orphan Drug Designation on April 30, 2018 and was recently granted Fast Track Designation from FDA on September 9, 2021. The latter has also coincided with big volume on the chart and a nice positive uptrend ever since.
The company has also received funding from the Cystic Fibrosis Foundation to the tune of 2.5 million dollars for novel treatments of CF. Recognition from the CF Foundation is indicative that this company is for real and validates its efforts in my eyes.
Quote:
Mr. Aggarwal continued, "In addition, the development of a Ribosome Modulating Agent for the treatment of CF with support from the Cystic Fibrosis Foundation complements our ongoing ELX-02 program, currently in Phase 2 clinical trials. Data from these Phase 2 trials is expected in the second half of this year."
Risks and Dilution
At the end of the day, the value here rests with the ELX-02 drug and positive phase 2 results. In addition, the company has a $200 million shelf from August 2021 where they can dilute more shares to raise money, as obviously they do not have a drug that currently produces them revenue to keep the lights on.
https://investors.eloxxpharma.com/static-files/2d116b1b-1f98-4ae1-adb4-6b33fcb64ca8
Summary
If the company can deliver on ELX-02, there is massive value to be gained here, as the drug is targeting a population of patients with no current treatment (different addressable market than Vertex). But to me, the insider buying at $1.35 and the chart supporting in and around that level, plus the validation from the FDA and CF Foundation, makes me like the risk/reward proposition.
