Onconova Therapeutics Inc [NASDAQ:ONTX] took a beating in August following a cancer study that failed to meet its primary endpoints. At the time, the stock opened with a gap down that is yet to be close. Despite the drop and the continued low prices, this stocks holds lots of opportunities for growth in the near-term. There are several factors that play in this stock’s potential value growth. Some of the key value drivers for this stock are as below:
The fundamentals are strong
Despite the price drop after the failed cancer study, the company continued to invest in research and development. As such, it stands to gain in value once those investments start to bear fruit. Like all other biotech stocks, The Company engages in scientific research and development and there are times when research does not bear fruit and there are times when it things go right. In the context of Onconova, a breakthrough in its next research could see the stock rocket in the near-term. The company already stated that it is working on a project for lung adenocarcinoma. When announcing the failed cancer study, it stated that it would be focusing its energies on an investigator initiated study program for oral rigosertib beyond its current phase I/IIa in KRAS and lung adenocarcinoma, in solid tumors. If the company records a breakthrough on this front, it could see its value touch new highs and recover all the losses from the past two months.
The stock is trading at a key support level
After the company announced that its trial for cancer had failed, the stock value dropped to a key support level around the $0.32 range. Essentially this means that it is trading at a point of maximum pain and has little room to drop any further. This means that any good news are likely to put upside pressure on the stock. This is evident in its recent price action when the company announced that its CEO was presenting at several key investor conferences. So far there are a number of positive factors that could help push this stock up in the near-term. One of them is a COVID-19 vaccine that would uplift the stock markets as a whole. In such a scenario, stocks that offer maximum gains such as ONTX could rally more than the rest of the market.
About Onconova Therapeutics Inc
Onconova Therapeutics Inc is a biopharma company that develops cancer treatments. It is based in Newton, Pennsylvania.