Aerpio Pharmaceuticals, Inc. (ARPO) stock prices skyrocketed by 69.0059% some time after market trading commenced on July 8th, 2021, bringing the price per share up to USD$2.89 earlier in the trading day.
Upgrading of ARPO Stock
Analyst Robert Burns of H.C Wainwright upgraded ARPO from a Neutral rating to a Buy, with the company’s stock being given a USD$22 price target. Burns cited the transformative nature of the merger as being the driving force behind the upgrading of the company. Furthermore, the merger is expected to facilitate the transition to a self-sustaining, commercial-stage enterprise, with a distinguished flagship product that boasts applicability across a myriad of oncology indications.
Merger with Aadi Bioscience
May 16th, 2021 saw the company announce its strategic merger with Aadi Bioscience, Inc. and Aspen Merger Subsidiary, Inc. The agreement will see Aadi surviving the merger as a wholly-owned subsidiary of ARPO, with both companies’ Board of Directors having given their approval. Following the merger, ARPO will continue as Aadi Bioscience and will focus on the development of FYARRO.
PIPE Financing
In connection to the merger, ARPO entered into subscription agreements to raise up to USD$155 million in Private Investment in Public Equity (PIPE) financing. The PIPE will see shares of the company’s common stock and pre-funded warrants being used to purchase Aerpio’s common stock. This move is expected to be executed at the same time as the closing of the merger, as per customary closing conditions and the closing of the merger itself.
Solid Liquidity Position
March 31st, 2021 saw the company report USD$39 million in cash and cash equivalents, down from the USD$42.6 million reported as of December 31st, 2020. ARPO reported a total of almost 47.4 million common shares outstanding as of March 31st, 2021, with weighted average common shares, both basic and diluted, outstanding totaling 47.3 million as of the end of the quarter.
R&D Expenses
The first quarter of fiscal 2021, ended March 31st, 2021, saw ARPO report USD$2.2 million in research and development costs, up 21.8% from the USD$1.8 million reported for the three-month period ended March 31st, 2020. This year-over-year difference was largely driven by increased expenses associated with the company’s clinical programs.
Net Loss Reports
Net loss attributable to common stockholders was USD$4.4 million for the quarter ended March 31st 2021, representing a net loss of USD$0.09 per common share. This is comparable to the USD$3.9 million in net loss reported for Q1 2020, which came out to a net loss of USD$0.10 per common share.
Future Outlook for ARPO
Armed with the massive scope in light of its recent merger, ARPO is poised to capitalize on the expanded opportunities afforded to it. The company is keen to leverage its combined resources to usher in sustained and organic growth over the long term. With a target price of USD$22.00, investors are snowballing the growth as it climbs higher and higher towards that goal.
