Please ensure Javascript is enabled for purposes of website accessibility

Why Brooklyn ImmunoTherapeutics Stock Crushed It in April

By George Budwell – Updated May 11, 2021 at 7:04AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This clinical-stage biotech was one of April's brightest stars.

What happened

Brooklyn ImmunoTherapeutics (BTX 1.02%), a relative newcomer to the world of publicly traded biotech stocks, saw its shares rip higher in April by a stunning 1,230%, according to data provided by S&P Global Market Intelligence. The stock took flight last month for two related reasons:

  1. In late April, Brooklyn secured an exclusive license for mRNA gene-editing and cell-therapies technology from Factor Bioscience and Novellus Therapeutics. This novel therapeutic platform has attracted significant interest from investors since the rapid development of mRNA-based COVID-19 vaccines from both Moderna and Pfizer/BioNTech
  2. Ahead of this landmark business development deal, Brooklyn's stock was singled out as a "top idea" on multiple social media platforms. 
A rocket taking off.

Image source: Getty Images.

So what

Perhaps the most compelling aspect of this story is the fact that Brooklyn may not have a product approved by the Food and Drug Administration on the market until 2026. The company's lead product candidate is the immunotherapy IRX-2, which won't wrap up late-stage testing for head and neck cancer until 2025.

What's more, this mRNA license isn't slated to yield an all-important human clinical trial until 2024, according to the biotech's latest investor presentation. Long story short, Brooklyn's nearly $1.6 billion valuation might not be warranted at this early juncture in its life cycle. 

Now what

Not surprisingly, Brooklyn's shares have fallen by a noteworthy 51% from their recent highs since the start of May. So the reality of the company's long road ahead appears to be settling in among retail investors. That's not to say that this small-cap biotech stock won't turn out to be a winner over the long term, but investors may want to wait for a more attractive entry point before buying shares. 

George Budwell does not own any stocks mentioned in this article. The Motley Fool recommends Moderna Inc. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Brooklyn ImmunoTherapeutics, Inc. Stock Quote
Brooklyn ImmunoTherapeutics, Inc.
BTX
$0.25 (1.02%) $0.00
Pfizer Inc. Stock Quote
Pfizer Inc.
PFE
$43.76 (-0.91%) $0.40
Moderna, Inc. Stock Quote
Moderna, Inc.
MRNA
$118.25 (0.15%) $0.18
BioNTech SE Stock Quote
BioNTech SE
BNTX
$134.88 (0.96%) $1.28

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
326%
 
S&P 500 Returns
102%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.