$ZVSA A Promising Sympathy Play
The biotech sector has been hot this year with multiple stocks making impressive runs. One biotech stock that appears to be poised to have a substantial run soon is ZyVersa Therapeutics, Inc. (NASDAQ: ZVSA) which could be a sympathy play to another biotech stock – First Wave BioPharma, Inc. (NASDAQ: FWBI). While FWBI stock climbed by as much as 157% on news of reaching enrollment for its phase 2 clinical trial, ZVSA stock did not move despite sharing a promising white paper on Inflammasomes. With this in mind, ZVSA stock could soar soon thanks to its groundbreaking discovery that could result in the development of several treatments in the future.
ZVSA Fundamentals
On June 13, FWBI reached enrollment for its Phase 2 SPAN Adrulipase Clinical Trial. An hour later, ZVSA published an intensely researched report (a white paper) on Inflammasomes. Both of these catalysts are significant on their own, but given the timing of these catalysts, it is probable that these two stocks might feed off of each other and reach new heights.
Inflammasomes
Inflammasomes are intracellular multi-protein structures that cause inflammation, which ordinarily assists people by executing many physiological tasks. That said, many people die of inflammation-related ailments. According to the world health organization 33 million people died due to inflammation-related causes. To better understand this figure one must take into account that inflammation-related diseases include heart disease, cancer, chronic respiratory disease, and autoimmune and neurodegenerative conditions.
ZVSA’s white paper led to the realization that an adaptor protein called (ASC) played a pivotal role in undesirable inflammatory responses. That discovery led to the development of a monoclonal antibody, known as Inflammasome ASC Inhibitor (IC 100).
So far, ZVSA has conducted a litany of tests on animal models using IC 100 to treat a large variety of ailments such as Alzheimer’s, traumatic brain injuries, and acute respiratory distress. All these tests resulted in the subject inhibiting an inflammasome response that led to improved functional outcomes which is a promising first step toward human trials. With that in mind, ZVSA has a low float of 13.1 million which could see the stock soar on any news regarding human trials.
Risks
Although ZVSA’s discoveries are extremely promising, the company does not have enough to continue operations with the company operating as a going concern according to its Q1 earnings report. Based on this, ZVSA might resort to dilution to raise the required capital to fund its endeavors. In this way, ZVSA’s shareholders could witness significant dilution which would affect their value substantially.
ZVSA Financials
According to its Q1 2023 report, ZVSA’s assets decreased QoQ from $118.5 million to $114.9 million – mainly driven by the sharp decline in its cash balance from $5.9 million to $1.2 million. That said, its liabilities decreased from $18.5 million to $17.8 million, however, its current liabilities increased from $6 million to $6.3 million Given ZVSA’s current ratio, the company could dilute its shareholders soon to pay its liabilities.
In terms of cash burn, ZVSA’s operating expenses increased YoY from $3.3 million to $4.5 million. However, its net loss decreased from $3.7 million to $3.5 million. Given its cash on hand, current liabilities, and burn rate dilution seems inevitable in the near future.
Technical Analysis
ZVSA stock is in a neutral trend and is trading in a sideways channel between its support at $0.3584 and its resistance at $0.4216. Looking at the indicators, the stock is testing its 50 MA support and is below its 200 and 21 MAs. The RSI is neutral at 48 and the MACD is neutral as well.
As for the fundamentals, ZVSA just published its white paper which reveals groundbreaking discoveries regarding the nature of inflammation. Given ZVSA’s potential as a sympathy play to FWBI, the stock could be poised to soar in the near term once more investors take notice of the company’s recent discovery.
ZVSA Forecast
The significance of ZVSA’s white paper cannot be understated as its thorough analysis of Inflammasomes could bring about new and exciting ways to treat autoimmune and neurodegenerative diseases which currently are extremely difficult to treat. Additionally, ZVSA stock could benefit from additional attention as a result of FWBI’s major catalyst. All in all, from a fundamental standpoint, ZVSA is exhibiting many bullish signs that could elevate the stock to new heights, however, investors should note that dilution risk is real.
ZVSA Fundamentals
On June 13, FWBI reached enrollment for its Phase 2 SPAN Adrulipase Clinical Trial. An hour later, ZVSA published an intensely researched report (a white paper) on Inflammasomes. Both of these catalysts are significant on their own, but given the timing of these catalysts, it is probable that these two stocks might feed off of each other and reach new heights.
Inflammasomes
Inflammasomes are intracellular multi-protein structures that cause inflammation, which ordinarily assists people by executing many physiological tasks. That said, many people die of inflammation-related ailments. According to the world health organization 33 million people died due to inflammation-related causes. To better understand this figure one must take into account that inflammation-related diseases include heart disease, cancer, chronic respiratory disease, and autoimmune and neurodegenerative conditions.
ZVSA’s white paper led to the realization that an adaptor protein called (ASC) played a pivotal role in undesirable inflammatory responses. That discovery led to the development of a monoclonal antibody, known as Inflammasome ASC Inhibitor (IC 100).
So far, ZVSA has conducted a litany of tests on animal models using IC 100 to treat a large variety of ailments such as Alzheimer’s, traumatic brain injuries, and acute respiratory distress. All these tests resulted in the subject inhibiting an inflammasome response that led to improved functional outcomes which is a promising first step toward human trials. With that in mind, ZVSA has a low float of 13.1 million which could see the stock soar on any news regarding human trials.
Risks
Although ZVSA’s discoveries are extremely promising, the company does not have enough to continue operations with the company operating as a going concern according to its Q1 earnings report. Based on this, ZVSA might resort to dilution to raise the required capital to fund its endeavors. In this way, ZVSA’s shareholders could witness significant dilution which would affect their value substantially.
ZVSA Financials
According to its Q1 2023 report, ZVSA’s assets decreased QoQ from $118.5 million to $114.9 million – mainly driven by the sharp decline in its cash balance from $5.9 million to $1.2 million. That said, its liabilities decreased from $18.5 million to $17.8 million, however, its current liabilities increased from $6 million to $6.3 million Given ZVSA’s current ratio, the company could dilute its shareholders soon to pay its liabilities.
In terms of cash burn, ZVSA’s operating expenses increased YoY from $3.3 million to $4.5 million. However, its net loss decreased from $3.7 million to $3.5 million. Given its cash on hand, current liabilities, and burn rate dilution seems inevitable in the near future.
Technical Analysis
ZVSA stock is in a neutral trend and is trading in a sideways channel between its support at $0.3584 and its resistance at $0.4216. Looking at the indicators, the stock is testing its 50 MA support and is below its 200 and 21 MAs. The RSI is neutral at 48 and the MACD is neutral as well.
As for the fundamentals, ZVSA just published its white paper which reveals groundbreaking discoveries regarding the nature of inflammation. Given ZVSA’s potential as a sympathy play to FWBI, the stock could be poised to soar in the near term once more investors take notice of the company’s recent discovery.
ZVSA Forecast
The significance of ZVSA’s white paper cannot be understated as its thorough analysis of Inflammasomes could bring about new and exciting ways to treat autoimmune and neurodegenerative diseases which currently are extremely difficult to treat. Additionally, ZVSA stock could benefit from additional attention as a result of FWBI’s major catalyst. All in all, from a fundamental standpoint, ZVSA is exhibiting many bullish signs that could elevate the stock to new heights, however, investors should note that dilution risk is real.