Daily Stock Watch: MIST Stock Falters Despite Trial Success

By Duncan Ferris


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One stock heading lower at the start of this week is biopharma outfit Milestone Pharmaceuticals (NASDAQ: MIST). But is MIST stock a good investment?

Photo by Robina Weermeijer on Unsplash

Milestone Pharmaceuticals (NASDAQ: MIST) shares have dropped in early trading on Monday despite rising in premarket trading following strong clinical trial results for the company’s etripamil nasal spray.

The Phase 3 RAPID clinical trial met its primary endpoint, with 64.3% of patients who used the spray experienced symptom relief from paroxysmal supraventricular tachycardia (PSVT), compared to 31.2% of patients who had been administered with a placebo. However, it seems that some investors are unimpressed with this result, leading the stock price to fall by more than 15%.

Additionally, the company said it aims to submit a new drug application for etripamil to the FDA in mid-2023.

Joseph Oliveto, President and Chief Executive Officer of Milestone Pharmaceuticals, commented:

"We believe that etripamil, if approved, has the potential to empower patients to take control of their condition as well as provide value to the healthcare system, in part by reducing visits to the Emergency Department. 

“We look forward to working with the FDA to make available what we believe is the first of its kind, self-administered therapy."

What is Milestone Pharmaceuticals?

Milestone Pharmaceuticals is a biopharmaceutical company focused on the development and commercialization of cardiovascular medicines.

The company is developing etripamil, a novel channel blocker, which is in Phase III clinical trial for the treatment of paroxysmal supraventricular tachycardia (PSVT) in the United States and Canada, as well as Phase II clinical trial for the treatment of atrial fibrillation and rapid ventricular rate.

PSVT is a rapid heart rate condition which can give sufferers chest pains, shortness of breath, fatigue, anxiety and more symptoms besides.

Milestone has a license and collaboration agreement with Ji Xing Pharmaceuticals to develop and commercialize etripamil for prophylactic and therapeutic uses in humans.

The company was incorporated in 2003 and is headquartered in Montréal, Canada.

How Does Milestone Pharmaceuticals Make Money?

The company is not yet consistently reporting revenues as its operations are currently not at the commercial stage. However, the company still reported revenue of $15m in 2021, with this relating to its dealings with Ji Xing Pharmaceuticals.

The agreement gave Ji Xing exclusive license to develop and commercialize etripamil for patients with PSVT in China if regulatory approval is obtained. In addition to the upfront payment, Milestone is eligible to receive up to $107.5m in milestone payments and royalties on future sales of etripamil in Greater China.

MIST Stock Financials

The company’s most recent earnings, which covered the three months ended 30 June 2022, saw it report a net loss of $16.6m, down from a profit of $770,000 in the same period a year prior.

This switch was due to the one-off revenue of $15.0m associated with the company’s deal with Ji Xing Pharmaceuticals, as well as the impact of marginally higher R&D, general and administrative, and commercial expenses.

The year to date has seen the MIST share price rise by just over 15%, while it has climbed by almost 45% over the last 12 months. That period has seen MIST stock reach a high of $9.85 and a low of $3.98, compared to a current price of $8.32.

The company does not distribute a dividend to its shareholders.

MIST Growth Potential

The company intends to make its etripamil treatment available to PSVT sufferers in the form of a self-administered nasal spray.

The business hopes this will prove to be a more effective and popular way of treating the condition as opposed to the current alternative, which would involve patients visiting the Emergency Department and potentially being admitted to a hospital.

With this resulting in lower costs and less stress for patients, as well as a reduction in admissions for hospitals, the company believes its PSVT treatment is a significant commercial opportunity. 

Data cited by the company estimates that as many as 2.6 million patients could suffer from PSVT by 2030, with between 40% and 60% of this group anticipated to comprise the company’s addressable market. 

The treatment is also on trial for treatment on patients with atrial fibrillation and rapid ventricular rate, which the company estimates could expand its addressable market by as much as 4 million further patients.

MIST Investment Risks

On 30 June 2022, Milestone Pharmaceuticals had cash and cash equivalents of $62.3m and short-term investments of $23.0m. With a quarterly loss of $16.6m from its most recent three-month period and similar sized losses in other prior quarters, the business looks to be funded for somewhere between 12-18 months, assuming no major changes in costs.

Even so, any pre-commercial stage business carries the risk of running out of funds before bringing its product to market. Indeed, MIST will likely need to raise funds before reaching the commercial stage.

Additionally, pharmaceutical products may not work as intended, could encounter unexpected regulatory difficulties, or may not be as popular as anticipated.

Is MIST Stock a Good Investment?

Milestone Pharmaceuticals looks like a business heading in the right direction, with money in the bank and a drug candidate that appears to be well on the road towards approval.

Additionally, the business appears to have a sizeable addressable market in its native North America, while it also enjoys a potentially lucrative deal in China with Ji Xing Pharmaceuticals.  

However, the business carries the inherent risks evident in all pharmaceutical business’ which have yet to reach commercialization, including regulatory and funding concerns. Additionally, there appears to be real concern among investors that the company's key candidate is not effective enough.

As such, you should consider your own personal appetite for risk before deciding to back Milestone Pharmaceuticals.

The five analysts covering MIST stock for the Wall Street Journal each give it a Buy rating.

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This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Duncan Ferris does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Duncan Ferris has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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