Micro-cap Tonix Pharmaceuticals massively undervalued amid monkeypox outbreak — Zacks

Zacks Small-Cap Research has released a report on Tonix Pharmaceuticals, which is developing a monkeypox vaccine, valuing the stock at $4 per share, nearly 26 times the last closing price. The company’s current market capitalization is around $3.3 million.

Details

The fair value of a Tonix share is $4, estimates Zacks Small-Cap Research (Zacks SCR). That is almost 26 times the share price at the close of trading on Tuesday, September 10. The Zacks SCR valuation takes into account the company’s potential future revenue from its CNS (central nervous system), immunology, and biodefense programs.

Tonix is also developing a monkeypox vaccine. On Monday, September 9, it announced that a live-virus vaccine based on synthesized horsepox had proven effective in preclinical studies (on animals). The immune response after a single dose was 100% in all primates involved.

“Now that the World Health Organization (WHO) has declared the spread of monkeypox a public health emergency, we look forward to Tonix’s progress in developing its candidate vaccine for this disease. And if the outbreak continues to spread, we potentially see an opportunity for government funding,” Zacks SCR wrote.

Upcoming milestones for Tonix include the expected filing for approval of a fibromyalgia drug later in the year. Nevertheless, the Zacks SCR numbers are not the most optimistic in the market: according to MarketWatch, the two analysts tracking Tonix have an average target price of $21 per share, 135 times the current market price.

Context

The monkeypox virus has been known for decades and is endemic to Central and West Africa. Case numbers, however, have been on the rise recently. In the first half of 2024, more people died from monkeypox than in the entire previous year, according to WHO statistics.

In mid-August, Sweden reported the first case of monkeypox outside of Africa. In response, the WHO declared a public health emergency and announced that it is urgently ramping up support to affected countries to contain the spread of the virus.

Against this backdrop, shares of several small diagnostic companies that offer tests for the virus soared. Virax Biolabs, with a market capitalization of $7.14 million, jumped almost 142% on August 19, while Applied DNA Sciences, with a market capitalization of $17.5 million, climbed about 129%. A week later, shares of the Danish biotechnology company Bavarian Nordic also shot up after a European country ordered a record 440,000 doses of its monkeypox vaccine.

The WHO, for its part, stated in late August that the current outbreak “can be controlled and can be stopped,” and plans to spend $135 million over the next six months to implement an action plan.