Pulmatrix Inc (NASDAQ:PULM) Still Has Plenty Of Run Room

At the end of last month, we highlighted Pulmatrix Inc (NASDAQ:PULM) as being a company to watch during the remainder of the first quarter of 2017. Our thesis was simple – the company had taken a considerable hit heading into the latter half of 2016 and during early 2017, but as far as we could tell, there was no real justification for the action we were seeing. At the time of our initial coverage, Pulmatrix was trading for a little over $2.2 a share. At its most recent close, the company went for $5.10 a share – a more than 130% gain in around seven days. That's a nice quick turnaround profit, but we think this one is far from done. There is plenty more from a catalyst perspective set to hit press over the coming six months, and each of these catalysts could inject some upside momentum into the company's market capitalization. Here is what we are watching.For those that missed our previous highlighting of Pulmatrix, the company is focused on the development of treatments for lung diseases (primarily) with its pipeline rooted in a technology it calls iSPERSE. The idea behind the technology is pretty simple. Current treatments for a whole host of lung conditions rely on systemically administered active compounds. In other words, a patient takes a pill and waits for the active ingredient of this pill to pass through their bloodstream and reach the lungs. The process is similar for an intravenous or subcutaneous administration. It goes without saying that this sort of systemic method is relatively inefficient in its delivery.Pulmatrix is attempting to rectify this inefficiency by delivering active compounds directly to the lungs, and it is doing so using the above-mentioned iSPERSE technology (basically, an inhaler). Its lead application is called PUR0200, and is targeting a condition called chronic obstructive pulmonary disease (COPD). As we noted previously, COPD is a blockbuster indication, and is relatively underserved by the current standard of care treatment, which involves the same active ingredient as PUR0200, but systemic administration of said ingredient.Pulmatrix has teamed up with MYLAN (TLV:MYL) to bring this one to market, and only has to prove it is bioequivalent to current SOC (in other the words, show that the same amount of active ingredient will reach the lungs on administration as does current SOC) for the drug to be approved.In this approval alone, there is a very large and immediate upside potential for Pulmatrix. High double-digit percentage points are conservative, and triple digit percentage points are not unrealistic.And that is just for one drug. The company is developing a second drug called PUR1900 in a cystic fibrosis infection indication, and again, this one is a potential billion-dollar market if it can get the treatment approved. An approval for PUR0200 would serve as strong proof of concept for the technology, and we will likely see some collateral benefit on the back of the latter's approval, rooted in said approval's implications for the chances of PUR1900 getting an FDA green light.The company just announced a $5 million RDO, which is likely to weigh on sentiment a little bit near term. It’s an institutionally driven offering, however, and this sort of smart money interest only serves to reinforce our suggestion that this one remains undervalued at its current price. Cash on hand at September 30 was $7 million, and with the $5 million raise, we're probably looking at somewhere in the region of $10 million on hand at the end of February. That’s enough to carry through to the end of 2017 (given the big pharma partnerships).Catalysts we are watching relate to the Mylan partnership, and any potential indication that the company is poised to pick up a similar big name collaboration on the PUR1900 asset.We will be updating our subscribers as soon as we know more. For the latest updates on PULM, sign up below!Disclosure: We have no position in PULM and have not been compensated for this article.