Shares of brain cancer therapy developer surge by 22%

Shares of CNS Pharmaceuticals, a developer of treatments for brain cancer, surged more than 22% at the opening of trading on Monday. This follows a roughly 23% drop on Friday, June 14, when the company announced an agreement with private investors to sell $1.37 million worth of shares.

Details

On Friday, June 14, CNS Pharmaceuticals’ shares fell nearly 23% on Nasdaq, closing at $2.79 per share. After the market closed, the shares rose 6% in after-hours trading to $2.96 and continued their upward trend on Monday, at times climbing more than 22%.

On Monday, June 10, CNS filed a registration statement with the U.S. Securities and Exchange Commission (SEC) to issue $9.2 million worth of shares. On June 14, the company announced it would sell 366,000 shares at $3.75 each, along with an equal number of five-year warrants priced at $3.62. The buyers are institutional investors specializing in healthcare. The company expects to raise $1.37 million from the transaction (excluding placement costs), which is scheduled to close on June 17. The proceeds will be used to replenish working capital and for general corporate expenses.

CNS Pharmaceuticals’ mission

CNS Pharmaceuticals develops drugs aimed at treating brain cancer and central nervous system lymphoma. Its main drug candidate is Berubicin, a type of anthracycline that is already used to treat certain cancers. Unlike its predecessors, Berubicin is expected to cross the blood-brain barrier—a filter that prevents various microorganisms and toxins from entering nerve tissue but also hinders the treatment of certain diseases by perceiving drugs as threats.

CNS Pharmaceuticals hopes its drug will aid in treating glioblastoma multiforme, a rare and highly malignant type of brain cancer. According to the company, the median survival time from diagnosis is 15-16 months, with only about 25% of patients surviving more than two years. The company expects significant clinical data for this drug by 2025. For now, however, it is only incurring expenses, as indicated by its financial results for the first quarter of 2024.

Analyst insights

Over the past year, CNS Pharmaceuticals’ shares have lost nearly 98% of their value. According to MarketWatch, the company is monitored by one analyst who recommends holding its shares (Hold rating).