Microcap Biotech Rings In The New Year With HUGE Gains, The Seeds Of Despair Have Planted A New Bull Market

ENVB +73%

Enveric Biosciences (NASDAQ: ENVB) is a biotechnology company dedicated to the development of novel small-molecule therapeutics for the treatment of anxiety, depression and addiction disorders. Enveric is committed to developing novel treatments to transform the lives of patients living with mental illness. We are pursuing new pathways and targeting impaired neural circuitry with the goal of improving brain health. Our mission is to pioneer new and innovative solutions with the potential to have profound effects on patients and their families, and to deliver life-changing medicines for diseases affecting the brain. Enveric is headquartered in Naples, FL with offices in Cambridge, MA and Calgary, AB Canada.

At the end of December, Enveric reached a level of oversold capitulation tax-loss harvesting that we have rarely seen before. Since reaching a low of $1.62 on December 28th, ENVB shares have rebounded nearly 80% back to an area of previous support near $3.00.

MDNA +60%

Medicenna (NASDAQ:MDNA) is a clinical stage immunotherapy company focused on the development of novel, highly selective versions of IL-2, IL-4 and IL-13 Superkines and first in class Empowered Superkines. Medicenna’s long-acting IL-2 Superkine, MDNA11, is a next-generation IL-2 with superior CD122 (IL-2 receptor beta) binding without CD25 (IL-2 receptor alpha) affinity thereby preferentially stimulating cancer killing effector T cells and NK cells. Medicenna’s early-stage BiSKITs™ program, (Bifunctional SuperKine ImmunoTherapies) is designed to enhance the ability of Superkines to treat immunologically “cold” tumors. Medicenna’s IL-4 Empowered Superkine, MDNA55, has been studied in 5 clinical trials including a Phase 2b trial for recurrent GBM, the most common and uniformly fatal form of brain cancer. MDNA55 has obtained Fast-Track and Orphan Drug status from the FDA and FDA/EMA, respectively.

Medicenna briefly traded down to BELOW its cash value on December 28th when it traded at $.40 per share on the Nasdaq. The retest of the $.40 support level put in place a DOUBLE-BOTTOM. Since then, MDNA shares have rallied more than 60%.

It is difficult to justify MDNA's deflated ~$42M USD market cap based on the quality of the company's advanced drug development programs. Their Phase 1/2 clinical trial (“ABILITY”) for MDNA11, a variant of the immunomodulating IL-2 cytokine, as a treatment for solid tumors (e.g. metastatic melanoma, renal cell carcinoma, sarcoma, etc.) is in the final dose escalation stage and we should expect new data in this first quarter (1Q23). MDNA11 has been engineered to solve many of the dosing and toxicity problems for proleukin, an FDA approved IL-2 therapy that has been used to treat melanoma and renal cell carcinoma since the 1990s. Preclinical analysis has shown favorable dosing characteristics with limited toxicities, allowing MDNA11 to be dosed less frequently and in much lower concentrations (thereby limiting toxicities), while producing a dramatically higher therapeutic effect (e.g., activation of CD8+ T cells to kill the cancer cells). Interim data from the ABILITY trial shows tumor “control” in five of the 14 currently enrolled patients, and a confirmed partial response in a single patient suffering from pancreatic ductal adenocarcinoma (one of six different solid tumors being treated in the study). In collaboration with Merck, the ABILITY trial will be extended to examine the efficacy of MDNA11 in combination with KEYTRUDA® (pembrolizumab), the pharmaceutical giant's anti-PD-1 therapy.

Medicenna's most advanced drug asset is MDNA55, another immuno-oncology biologic that activates the immune system to hunt and kill tumors, for the treatment of glioblastoma multiforme (GBM). Results from the company's Phase 2b trial were promising with an overall survival (OS) of 11.8 months, considerably longer OS of the approved drugs carmustine (OS of 5.1 – 7.5 months), lomustine (OS of 7.1 – 9.8 months), and temozolomide (OS of 5.4 – 9.9 months). Medicenna is currently pursuing a partnership strategy to facilitate MDNA55’s further development through the planned Phase 3 clinical trial. Following an End of Phase 2 meeting with the United States Food and Drug Administration (FDA), the agency agreed that Medicenna could conduct an open label hybrid Phase 3 trial that allows use of a substantial number of subjects (two-thirds) from a matched external control arm to support regulatory approval of MDNA55 for rGBM. The FDA also expressed their willingness to consider an interim analysis of the trial if certain criteria are met. Unlike conventional randomized control trials, the hybrid trial design will reduce the overall number of subjects needed in the study to achieve the primary endpoint as well as reduce the cost and timelines associated with completing the trial.

On January 5th, Medicenna announced that it strengthened its intellectual property protection with the issuance of a U.S. Patent covering methods of treating solid cancers with an IL-2 “Superkine” and PD1/PDL1 or CTLA-4 checkpoint inhibitor, administered in combination or as a single agent via their BiSKIT™ platform. This newly issued patent adds to Medicenna’s portfolio of patents and applications providing protection for MDNA’s innovative IL‐2 Superkines, including MDNA11, in the U.S., Europe, Japan, China, Canada, India, and Australia.

We expect Nasdaq-listed MDNA shares to find some chart based resistance near the $.80 level over the next couple weeks. Traders can de-risk their positions after a sizable rally in MDNA’s share price to begin 2023.

NUMI.TO +40%

Numinus Wellness (TSX: NUMI) helps people to heal and be well through the development and delivery of innovative mental health care and access to safe, evidence-based psychedelic-assisted therapies. The Numinus model - including psychedelic production, research and clinic care - is at the forefront of a transformation aimed at healing rather than managing symptoms for depression, anxiety, trauma, pain and substance use. At Numinus, we are leading the integration of psychedelic-assisted therapies into mainstream clinical practice and building the foundation for a healthier society.

Numinus shares made a triple-bottom at C$.165 in the final week of December, and Numinus CEO Payton Nyquvest decided to use the opportunity to add to his stack of shares with an open market purchase of 100,000 shares.

Numinus is leading the charge in the medical psychedelics sector through the development and delivery of innovative mental health care and access to safe, evidence-based psychedelic-assisted therapies. The company released Q1 earnings and hosted an investor conference call yesterday. After listening to the conference call, MedicalGold noted that:

• Numinus has gained tremendous momentum with 35.7% revenue growth compared to the last quarter. Impressively, they achieved a 41.9% gross margin and could likely be the first medical psychedelic company to achieve net profitability within 24 months.
• The strong revenue growth was a result of increased demand for psychedelic-assisted therapy provided by their network of 12 clinics in the USA and Canada (generated 88% of revenue). Numinus' clinics offer a much wider range of services than their competitors, who are limited to ketamine-assisted therapy. This explains the nearly 19,800 appointments completed during the quarter a 13.7% increase over the prior quarter.
• This rapid growth is due in large to Numinus' acquisition of Novamind in June 2022, which expanded Numinus' network of wellness clinics and provided Numinus with new CRO capabilities and 2 new research sites in which to conduct clinical trials.
• Central to Numinus' brick-and-mortar growth strategy is the acquisition of trained psychotherapists. The company added 37 new psychedelic-assisted therapists to their growing network of 155 clinicians distributed across 14 wellness clinics. Given the newness of the field, acquiring trained psychedelic-assisted therapists, or training traditional therapists on how to use psychedelics to assist their therapy, appears to be the rate limiting component of generating a profitable psychedelic wellness clinic. Numinus' CEO believes they can achieve full profitability with the existing clinic infrastructure if they achieve a full roster of practitioners to reach clients.
• Numinus is expanding multiple business units, and it positioned to be the first vertically-integrated psychedelic company and service provider to the entire industry.
• ‍Numinus' Clinical Research Organization called Cedar Clinical Research ("CCR") generated $680,000 revenue in 1Q23, a 38.8% increase compared to the prior quarter. CCR managed 14 independent clinical trials (for other biotech companies) and achieved a gross margin of 70.9% (the greatest of all Numinus' business units). Numinus also owns a total of 4 clinical research sites in which to conduct the clinical trials managed by CCR.
• On October 5, 2022, the company announced that Numinus Bioscience has developed a psilocybin-containing tea bag for use in clinical research and, if appropriate regulatory approvals are granted, eventual treatment of clients in psychedelic-assisted therapy. Numinus has submitted a CTA to Health Canada for this psilocybin clinical trial.

MedicalGold will be publishing a featured article focusing on Numinus in the next week, stay tuned for our update.

For those who positioned themselves correctly in the final weeks of 2022, the hardest part will be exercising the will to “be right and sit tight” - for those who are feeling some FOMO in the first couple weeks of 2023 we recommend the following process:

• Do your due diligence and select high quality opportunities to add to a watchlist.
• Determine your personal investment objectives and timeframe.
• Follow company news releases and select a handful of commentators to follow on a regular basis.
• WAIT for an opportune entry point.
• Don’t be afraid to execute on your analysis, size your position properly relative to your bankroll, and be sure to have a well-defined risk level (stop loss).
• If the market confirms your analysis by moving in your favor, you must learn to be right and sit tight. Instead of cutting your profits short.

Giving into FOMO is the fastest way to part with your hard earned money in financial markets. It is better to miss a trade completely than to chase it due to the Fear Of Missing Out. In markets, money is made by waiting; waiting for the right entry point, and then waiting for the bull market to generate gains over the long term.

We nailed the sector low in December 2022 and you can count on MedicalGold to continue to diligently cover the fundamental as well as technical developments across the Canadian microcap biotech space in 2023.