Bellerophon Therapeutics, Symbol BLPH,Is Aclinical-Stage Biotherapeutics Company Focused

Bellerophon Therapeutics, Symbol BLPH,Is Aclinical-Stage Biotherapeutics Company Focused

Bellerophon Therapeutics, symbol BLPH,is aclinical-stage biotherapeutics company focused on developing innovative products at the intersection of drugs and devices that address significant unmet medical needs in the treatment of cardiopulmonary diseases.

Pipeline:

The Company is currently developing three product candidates under its INOpulse platform, a proprietary pulsatile nitric oxide delivery system.

  • The first is for the treatment of pulmonary arterial hypertension (PAH), for which the Company recently commenced Phase 3 clinical trials.
  • The second is for the treatment of pulmonary hypertension associated with chronic obstructive pulmonary disease (PH-COPD), which is in Phase 2 development
  • The third candidate is for the treatment of pulmonary hypertension associated with Idiopathic Pulmonary Fibrosis (PH-IPF).

The Company’s plans also call for the completion of further work on the use of INOpulse to treat PH-COPD and PH-IPF during 2016.

Capitalization and Financials:

The Company's current capital structure consists of 125 million authorized shares of common stock of which 13.5 million were outstanding as of March 31, 2016 (as per the Company's March 31, 2016 Quarterly Report) and a float of 4.19 million shares. Included within the March 31, 2016 Quarterly Report, the Company's cash balance was $17.3 million or $1.28/share."In addition, as of March31, 2016, the Company had$10.5 millionprepayments of R&D expenses related to its amended drug supply agreement with Ikaria and with Worldwide Clinical Trials (WCT), the clinical research organization it has partnered with for the first of the two Phase 3 clinical trials for INOpulse for PAH."

Recent Stock Performance:

On June 9, 2016, the Company's stock ran from $2.00 to a high of $4.62 only to close at $3.03. Volume for the day exceeded 2.8 million with over 1.2 million being sold short.

Since that date, the stock has slowly drifted back to trade within a range of $1.60-$2.00. The chart is building a nice cup and handle formation, which we believe is setting up for higher prices in the near future.

One of our favorite trades is what we call a "bounce" trade after a recent run higher. As you can see on the chart above, what is typical in microcap companies is to get a pullback,over an extended period, from the recent high. Once the bottom is reached, the stock will trade sideways for several sessions before slowly building for the next move higher. This is in essence the building of a cup and handle formation. It is our opinion that the handle is being formed now with a break higher to be tested soon. The break can be news driven or simply on technical merits.

Risk Factors:

As with anymicrocapcompany whose revenue is dependent on one or a few products, caution needs to be exercised. We never designate more than 10% of our fund's capital tomicrocapcompanies.

As with any microcap company, we suggest caution in opening new positions. DO NOT chase price movements. Pick entry and exit price targets and stick with these as a steadfast rule. Stocks of microcap companies can be difficult to obtain a fill when volume dries up.

Risk factors specific to BLPH are twofold mainly. First and foremost is the approval of the use of the Company's INOPulse platform in the United States or Europe. Secondly, the Company may need to raise capital in the future to complete its current studies or any additional studies required by the FDA. In the event this were to occur, current shareholders could be diluted.

Conclusion:

We like BLPH here for three main reasons:

  1. The Company is not simply a one company product. BLPH's INOPulse platform is currently in a Phase 3 study for the treatment of PAH simultaneously with two Phase 2 studies targeting pulmonary hypertension related conditions;and
  2. The Company's balance sheet is strong with over $17 million in cash and $10 million in prepaid expenses; and
  3. The Company's stock chart is building a cup and handle formation which we believe foretells of higher prices coming in the near future.
Top View