Brooklyn ImmunoTherapeutics Inc (BTX) is a clinical stage biopharmaceutical company. BTX stock is higher by 28.44% over the past week up 4.69% while the S&P 500 is down -0.09% as of 10:09 AM on Thursday, Aug 26. BTX had its gamestopping moment in April, rising nearly 20x. Within a month after the company arrived in the stock market, the stock went up 1800%, and this fetal stage company suddenly had a market cap of nearly $2bn… but can it make a Gamestop type comeback? Let’s find out.
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If you haven’t figured it out already I have a thing for biotech/biopharma stocks. I[ve said it previously. I work in IT supporting the healthcare field so I have almost an insider view to certain takeaways when it comes to these stocks. Today, I want to talk BTX, or Brooklyn ImmunoTherapeutics Inc. Earlier this year I jumped in on this stock and made $300 in the first 30 minutes and bounced. It pulled back and then went for a bigger run (which I jumped in on as well) before collapsing under the weight of the short squeeze. Since then, I’ve been monitoring and occasionally buying up more shares in anticipation of another rally. But the question is:
Is there another rally in store in the near future for BTX?
Let’s look at how BTX got started.
That first short squeeze started off with a Bloomberg article on April 6, and it happened for a number of reasons:
BTX had a super ultra float, just about 1.12 million shares in March when it launched.
Its precursor company, NTN Buzztime, had a high short interest, and although there was absolutely no relation between the two businesses, the short interest carried through.
r/wallstreetbets and other retail social media hotspots were abuzz with an interest in squeezing the biopharma sector.
On April 5, 2 million shares of BTX were traded. On April 6, that number jumped to 44 million! All these things coalesced together to give BTX that tremendous boost. That rocket launch had absolutely nothing to do with the company's development profile or fundamentals. The fundamentals have been referred to as terrible at best. The company was very low on cash when they launched, and - based on just the science, the management, or the fundamentals - nobody seemed too interested in Brooklyn Therapeutics.
Out of nowhere, and with the help of publicity from the Bloomberg article people started taking notice including retail investors frequenting wallstreetbets’ reddit platform. The smart thing that the company did was to take advantage of the squeeze to issue and sell additional shares of its own. Within 2 weeks of the start of the squeeze, they entered into an agreement with Lincoln Park to sell $20 million worth of freshly issued shares to them. A month later, they amended the agreement to sell $40 million worth of shares. This raised the cash reserves of the company considerably, while adding to the shares outstanding, and eventually to the float. Currently, shares outstanding are 42 million, and the float is 28 million.
The biggest development for the company has been the $125mn deal to acquire Novellus Therapeutics. The deal consists of $17.4M in cash and $107.6M in Brooklyn shares.