Why QBIO Could Continue to be 2019’s Hottest Small-Cap Biotech Monster

Date : May 14, 2019

New Opportunity:  Q BioMed Inc. (OTCMKTS: QBIO)

 

The biotechnology space has been beaten to a pulp in the bear market movement witnessed during Q4 of 2018. There are a number of high quality names that now represent market opportunities, and QBIO has been identified by the market as something potentially special, according to recent action.

 

The stock has been red hot since fund managers got past the new-year turn, meaning they no longer had to worry about stigma or tax loss advantages, and just started to think about where they could make the most money going forward.

 

This story now revolves around Autism and Non-Verbal Learning Disorder (NVLD). The company has a new drug in the pipeline that attacks this underserved growth market. This is a rare instance where the technicals appear to be signaling an underappreciated growth opportunity, and it deserves some immediate attention ASAP.

 

Symbol:  QBIO

Company:  Q BioMed Inc.

Quote:  http://finance.yahoo.com/q?s=QBIO

Latest News:  http://finance.yahoo.com/q/h?s=QBIO+Headlines

Company Website:  http://www.qbiomed.com

Who is QBIO

Q BioMed Inc. (OTCMKTS: QBIO), is an interesting player in the small float small-cap biotech growth space that has projects in motion to attack a major growth market (non-verbal learning disorder) with little competition and big potential. And the chart is screaming that smart traders and investors should do some due diligence here – which is why we put in front of you today.

 

This is a biomedical acceleration and development company that focuses on licensing, acquiring, and providing resources to life sciences and healthcare companies.

 

The company offers Strontium Chloride SR89, a radiopharmaceutical agent for the treatment of pain associated with metastatic bone cancer. It is also developing Man-01, a pre-clinical lead candidate for the treatment of primary open angle glaucoma. Q BioMed Inc. has a partnership with Sphaera Pharma to develop an analog of QBM-001 for pediatric developmental nonverbal disorder; and a collaborative agreement with SRI International to provide formulation development, preclinical development, and early clinical manufacturing of QBM-001.

 

The company was formerly known as ISMO Tech Solutions, Inc. and changed its name to Q BioMed Inc. in July 2015. Q BioMed Inc. was founded in 2013 and is based in New York, New York.

 

According to company materials, “We are focused on licensing and acquiring undervalued biomedical assets in the healthcare sector. Q is dedicated to providing these target assets; strategic resources, developmental support, and expansion capital to ensure they meet their developmental potential, enabling them to provide products to patients in need.”

Recent Catalysts

As far as recent catalysts, the company just announced a collaborative agreement with SRI International to provide formulation development, preclinical development, and early clinical manufacturing of QBM-001, in support of Q BioMed’s Autistic Spectrum Disorder (ASD) drug development program for non-verbal or minimally verbal autistic children.

 

According to the release, “SRI has broad expertise in solving formulation, drug delivery, and characterization challenges of small molecule drugs and biologics. The formulation team, led by Dr. Gita Shankar, is experienced in the development of novel formulations that have reached clinical trials. They are currently developing a formulation for QBM-001 with relatable chemical properties and formulation requirements.”

 

Just before that, the company announced that it has entered into agreement to acquire the metastatic skeletal cancer palliation drug, Metastron, from GE Healthcare. As noted, the agreement gives Q BioMed ownership of the brand, trademarks and market authorizations in 22 countries. In addition, all historical and current sales and distribution data related to those market authorizations will be assigned or transferred to Q BioMed to allow for as seamless a transition as possible in all markets.

 

That said, we believe the move to address to the ASD/NVLD market is likely the bell-ringer here

“We are pleased to have found both experience with autism models and expertise in formulation of products like QBM-001 in SRI International,” said Denis Corin, CEO of Q BioMed Inc. “This important step will be the catalyst for several milestones for QBM-001 over the next few months as we prepare clinical product for the trials we anticipate starting in 2019.”

It’s important to understand that there are approximately 18,000 new cases of pediatric developmental nonverbal disorder in the US each year and a similar amount in Europe. As the company notes, the majority of the children are diagnosed as young children and fall within the autism and epilepsy spectrum disorders.

“Individually, the economic cost for toddlers that become non- or minimally verbal is $10 million on average per person over a life span. Collectively, an estimated $200 billion is spent yearly on individuals who have become nonverbal in the US. Not all individuals who become nonverbal will benefit from QBM-001. However, with validated biomarkers, testing from trained specialists and genetic testing, children who fall into this targeted population can be identified, and will have a higher likelihood of responding to treatment.”

In other words, this is unfortunately a “growth market”. This is a company predicated at this point on attacking that market.

Technical Analysis

As noted above, the stock has taken off since the turn of the year. It’s common that portfolio managers, when they get into the fourth quarter, have what’s called “perverse incentivization” – ie, they make decisions for reasons other than taking advantage of the value proposition of any particular stock. This comes as a consequence of year-end bonus criteria, tax-loss selling considerations, and perception of listed holdings.

In any case, what we often see is a dynamic where undervalued stocks start to see big inflows at the outset of a new year.

Given that notion, take a look at this chart: QBIO got not attention or support until just after we got to the magic data. Once we were in 2019 territory, QBIO shares lit up like a bottle rocket on the 4th of July. The stock is up about 100% since that moment, and there’s not any other clear reason except for this dynamic as far as we can see.

Now consider that we are talking about a stock with a float of just 9.2 million shares. That’s a rare level of supply-shortage for shares in the biotech space, and it could represent an upside catalyst if investors start to realize a need to scramble for exposure here.

About QBIO

QBIO (Q BioMed Inc.), a biomedical acceleration and development company, focuses on licensing, acquiring, and providing resources to life sciences and healthcare companies.

 

The company offers Strontium Chloride SR89, a radiopharmaceutical agent for the treatment of pain associated with metastatic bone cancer. It is also developing Man-01, a pre-clinical lead candidate for the treatment of primary open angle glaucoma. Q BioMed Inc. has a partnership with Sphaera Pharma to develop an analog of QBM-001 for pediatric developmental nonverbal disorder; and a collaborative agreement with SRI International to provide formulation development, preclinical development, and early clinical manufacturing of QBM-001.

 

The company was formerly known as ISMO Tech Solutions, Inc. and changed its name to Q BioMed Inc. in July 2015. Q BioMed Inc. was founded in 2013 and is based in New York, New York.

 

According to company materials, “We are focused on licensing and acquiring undervalued biomedical assets in the healthcare sector. Q is dedicated to providing these target assets; strategic resources, developmental support, and expansion capital to ensure they meet their developmental potential, enabling them to provide products to patients in need.”

Key Points:

  • QBIO is working to develop a clinical program that can help NVLD and autism spectrum disorder, which are moving quickly up the list of society’s most concerning dilemmas.
  • QBIO has a small trading float of just 9.2M, which suggests the stock could launch higher on any additional influx of interest.
  • QBIO is coming off an RSI trough under 40, pointing to a massively oversold stock now heading back the other way.
  • QBIO just recorded a MACD Bullish reversal, suggesting a technical change in trend.
  • QBIO has been launching ever since we started 2019, suggesting that the stock is being seen as potentially deeply undervalued to big money players in the marketplace.

Conclusion

 

The big picture right now for QBIO is a very indicative chart – the stock has been launching ever since we got past the perverse incentivization of the year-end antics, including tax loss selling. Ever since we got to 2019, money has been flowing into QBIO shares.

 

One reason that might be the case is the company’s move to address the ASD/NVLD growth monster that is impacting society in such an aggressive manner in recent years. One thing is certain: with a market cap of just $27M, this small-cap biotech growth play is worth a look right now, before the train totally leaves the station.

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