We need to talk again about Akari Therapeutics PLC (ADR) (NASDAQ:AKTX), the drug developer, as everybody in the market seems to be assessing the company at the moment. Zacks Equity Research, ledgergazette.com, Bezinga, and Post Analyst were among the equity research firms that noted the recent share price increase and most of them increased their price targets.That is very fine, but what happened? That's the interesting fact. The company did not release new information and we could not find answers on Yahoo Finance and Seeking Alpha. Everybody is astonished and cannot explain the move.It is true that we noted that the company was quite interesting in our last piece "Akari Therapeutics PLC (ADR)(NASDAQ: AKTX) Is A Smart Money Play", but we could not expect such a share price move in a short period of time. In a three-days-period, the share price almost doubled. Have a look at it: 1 year chart for AKTX 1 month chart for AKTXRecent DevelopmentsAkari Therapeutics, which has been operating since 2004, is focused on inhibitors of early mediators of acute and chronic inflammation, specifically the complement system, the eicosanoid system, and the bioamine system. These systems have proven causative roles in several diseases and the company believes that blocking early mediators of inflammation will prevent initiation of the processes that cause them.On August 21, 2017, a new CEO, David Horn Solomon, was appointed. He commenced working on August 28, 2017 and has an interesting profile; 20 years of leadership experience in the biotechnology industry, and good track record of leading Phase 2-stage companies like Akari. The most outstanding part is that he has led the development of lixisenatide, which is now commercialized by Sanofi. The new executive was quoted:
“I am excited by Akari’s growing and diversified discovery platform and its clinical programs in the complement mediated diseases, PNH (paroxysmal nocturnal hemoglobinuria) and aHUS (atypical hemolytic uremic syndrome). I believe Akari’s lead compound, Coversin, with its dual binding sites also has potential in a wide range of other diseases where both the complement and leukotriene pathways are implicated including atopic keratoconjunctivitis in the eye and bullous pemphigoid in the skin”. Source
We believe that the announcement should have been beneficial for the share price, but it did not move up. Additionally, having a look at when the announcement was made we concluded that the share price reaction, which commenced on September 8, 2017, was not created by the new CEO.Furthermore, on August 10, 2017, the most recent 10-Q was released, wherein we found the company's financial statements. Like we said in our previous piece, the financial situation of the company is good, but that was known. Thus, the share price did not jump in September. The company continues to report a large amount of cash, approximately $30 million, which we appreciate, as it shows that AKTX will be able to run its operations for a long period of time.Current Assets: June 30,2017December 312016Cash and cash equivalents $30,118,882 $34,098,812 Short-term investments-10,021,963Prepaid expenses and other current assets1,686,2171,513,006Total Current Assets31,805,09945,633,781Restricted cash142,200142,168Property and equipment, net74,20558,364Patent acquisition costs, net31,83739,365Total Assets $32,053,341 $45,873,678SourceOn top of it, as we noted some months ago, no long term debt is shown in the balance sheet.Current Liabilities:Accounts payable$2,842,497$2,214,313Accrued expenses1,305,8241,837,647 Liabilities related to options and warrants4,995,0207,662,808Total Current Liabilities9,143,341 11,714,768Other long-term liability58,03656,360Total liabilities 9,201,377 11,771,128 SourceAdditionally, a lot of market participants noted stakes in the company.HolderSharesDate Reported% OutValueDeerfield Management818,158Jun 29, 20176.95%4,098,971Vivo Capital, LLC527,842Jun 29, 20174.48%2,644,488Baker Brothers Advisors, LLC496,901Jun 29, 20174.22%2,489,474NEA Management Company, LLC452,167Jun 29, 20173.84%2,265,356VHCP Management II, LLC426,297Jun 29, 20173.62%2,135,748Millennium Management LLC214,126Jun 29, 20171.82%1,072,771SourceThe insiders are still keeping the shares that they acquired two years ago:InsiderTransactionTypeValueDateShares
Purchase at $0.19 - $0.19 per share.Direct201,000Sep 17, 20151,055,600
Statement of OwnershipIndirectSep 17, 2015722,345,600
Statement of OwnershipDirectSep 17, 2015722,345,600SourceFurthermore, on September 1, 2017, the company gave stock options to purchase ordinary shares to the CEO and other officers, however for the moment they all decided not to exercise them:
- David Horn Solomon; 26,000,000 Ordinary Shares
- Clive Richardson; 4,500,000 Ordinary Shares
- Robert M. Shaw; 1,800,000 Ordinary Shares
- Dov Elefant; 500,000 Ordinary Shares
ConclusionAKTX has been an exciting story this month after the share price almost doubled. We, like other people in the market, could not understand the move. However, we found many facts that we appreciate in this name that make us believe that something good may be announced soon. The fact that the CEO was recently changed is certainly positive. He has experience of leading Phase 2-stage companies and may be helping the company speed up the FDA approval process. Additionally, insiders and other market participants hold large stakes in the company and they don't seem to be willing to sell. To sum up, be alert on this company, it may announce something soon.Be sure to check out our coverage on AKTX!We will be updating our subscribers as soon as we know more. For the latest updates on AKTX, sign up below!Image courtesy of citation750xl via FlickrDisclosure: We have no position in AKTX and have not been compensated for this article.
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