Can Zosano Pharma Corp (NASDAQ:ZSAN) Stock Turn Around?

Zosano stock

Zosano Pharma Corp (NASDAQ:ZSAN)

Zosano Pharma Corp (NASDAQ:ZSAN) stock lost almost 10% Friday after their Q2 financial results were released, continuing a downtrend that has persisted ever since the stock broke through support at $1.20 on August 3. Share volume was more than double the 30-day, daily average. Friday marked the ninth day in a row ZSAN stock dropped in value, but Zosano shares are still well above their 52-week low of $0.45.

Zosano stock price chart:

Zosano Pharma Corp (NASDAQ:ZSAN)
One month ZSAN stock price chart

About Zosano

Zosano Pharma Corp (NASDAQ:ZSAN) is a clinical stage biopharmaceutical company focused on providing novel delivery methods of therapeutics using their proprietary Adhesive Dermally-Applied Microarray, or ADAM technology.  Zosano recently announced positive results from their ZOTRIP study that assessed M207, the company’s proprietary formulation of zolmitriptan. M207 is being assessed as an acute migraine treatment. It was delivered through the company’s proprietary ADAM technology.

Zosano’s ADAM technology consists of titanium micro-projections coated with drug, and the company’s formulation of zolmitriptan.  The ADAM technology delivers the drug by allowing the drug to be absorbed into the microcapillary system of the skin.  In February 2017, Zosano announced statistically significant results from the ZOTRIP trial, which demonstrated that the 3.8mg dose of M207 met both co-primary endpoints, achieving pain freedom at 2 hours.

Zosano Pharma Corp (NASDAQ:ZSAN) reported a Q2 2017 (-$6.7) million net loss, or (-$0.17) per share on a basic and diluted basis, compared with a Q2 2016 (-$6.6) million net loss, or (-$0.54) per share on a basic and diluted basis. R&D expenses increased to $4.4 million from $4.3 million in Q2 2016. General and administrative expenses were $2.2 million – up from $2.0 million in Q2 2016.

Zosano Stock

At the end of February 2017, ZSAN stock was trading near $3.50 but has been in a strong downtrend since. Back in February, ZSAN stock benefitted from positive clinical trial results. However, the stock has spent a lot of time trading below the $2.00 level over the past two years despite being given a $4.00 consensus price target. Two analysts cover the company. One assigns ZSAN stock as a “Strong Buy” while the other rates the shares as a “Hold”. YTD, ZSAN shares have performed moderately well – up almost 9%. However for the year the stock is down over 42%.

A change in earnings or sales may likely lift the stock. In 2014 the per share loss was (-$2.78). That per share loss was smaller in each of the next two reporting years but was still at (-$2.17) for 2016. Sales have also been a major factor. No sales were reported for 2016 but, back in 2012, a sales number of over $11.6 million was reported.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Author: Steve Clark

Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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