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Though it’s not a comfortable discussion under any context, cancer is no longer the automatic death sentence it once was. Certainly, it’s a disease to be avoided. And some cancers feature a higher fatality rate than others, especially those not caught early.
Nevertheless, advancing biotechnologies and pharmaceutical therapies — particularly in the last several years — have delivered encouraging results for patients and their families. In January 2020, the “American Cancer Society reported that the rate of cancer deaths in the United States had fallen 2.2% from 2016 to 2017. This was the largest single-year decline in cancer mortality ever reported.”
Of course, this data came out just before the COVID-19 pandemic rendered unprecedented turmoil in American society. For the first time in the modern era, everybody in the nation experienced some impact directly associated with the health threat, a circumstance that contrasts with localized disasters (whether natural or artificial).
Unfortunately, the side effect of the arguably necessary pivoting of health infrastructures to address the SARS-CoV-2 virus is a disruption in care for patients suffering from chronic conditions, including cancer. It’s then more than possible that COVID-19 could adversely shift the trajectory of positive cancer-treatment-related health outcomes, thus providing a driving force for Hillstream Biopharma Inc.
When Is the Hillstream Biopharma IPO Date?
Unlike other widely traded securities, Hillstream Biopharma has, at time of original publication, yet to launch an initial public offering (IPO), the first time a private enterprise distributes its equity shares to retail investors of the general public. Prior to an IPO, non-public enterprises will often accrue capital through private-equity funding rounds, which are usually limited to institutional or accredited investors.
For most organizations, the desire to enter the public arena stems from expansionary goals. Having outgrown the upside potential of private capital, an IPO opens the next stage in the company’s long-term strategy. In exchange for an ownership stake in the business, the soon-to-be-public enterprise leverages the raised funds in an IPO to hopefully spark substantive growth, thus handsomely benefitting early investors.
In this case, Hillstream Biopharma will enter the IPO calendar on Jan. 12. The company intends to distribute 3 million shares at a projected per-share price range between $5 and $6. At the midpoint of the estimated pricing spectrum, Hillstream will raise approximately $17 million, drawing a fully diluted market value of $58 million.
Shares will trade on the Nasdaq exchange under the ticker symbol HILS. ThinkEquity represents the sole book runner for the IPO.
One of the philosophies regarding participation in new listings is the possibility of tremendous upside in a short time frame. Even companies that eventually underperform may enjoy an outsized period of market success. As with anything in life, people are excited about the new car smell. Then acclimatization kicks in, and the savory fragrance rolls away with the wind.
However, market sentiment being directly linked to mass human emotions, no one knows the day or the hour when that acclimatization period kicks in — if there’s even an opportunity for such adjustments to materialize. Sadly, many IPOs have been found not airworthy only after they’ve been ill-advisedly launched off the carrier deck.
Moreover, Hillstream has another dilemma that many other new listings don’t face: HILS is a nano-capitalization play, which is a step below the ultra-risky micro-cap stock. As Benzinga contributor Sarah Horvath stated, the latter category typically represents businesses with a market cap between $300 million to $2 billion.
At $58 million, HILS stock is nearly 81% below the minimum threshold of micro-cap status. To be fair, the law of small numbers could dramatically enrich early takers if the business succeeds. But failure in early clinical stage biotechnology firms is the norm, not the exception. Therefore, if you decide to acquire HILS, only consider money you can afford to lose.
Hillstream Biopharma Financial History
Similar to multiple competing biotech outfits, Hillstream Biopharma combines the potential power of its underlying business with a marketing narrative that appeals to the audience’s deep-seated fears and inherent sense of justice. That is, no one wants to hear the dreaded six-letter word, but if they do, they want reassurances of a viable therapy.
Naturally, Hillstream presents just such a compelling storyline. Underlining this nano-cap investment is an organization dedicated to researching and developing ferroptosis as a novel anti-cancer therapy. According to medical journal Frontiers, ferroptosis is “an iron-dependent programmed cell death pathway mainly caused by an increased redox imbalance but with distinct biological and morphology characteristics when compared to other known cell death patterns.”
On the surface, ferroptosis “is associated with various diseases including acute kidney injury, cancer, and cardiovascular, neurodegenerative, and hepatic diseases,” which does not sound like a desirable dynamic. However, as another Frontiers report mentioned, targeted “cell death induction is becoming increasingly popular for developing novel cancer treatment.”
While the details about leveraging ferroptosis to address cancer cells goes beyond the scope of a finance-focused article, the main idea is that “cancer cells process a higher level of ROS [reactive oxygen species] than do healthy cells.” As such, a higher level of ROS “can lead to two opposite outcomes: the promotion of cancer and its suppression.”
Relating to Hillstream’s ferroptosis-based initiative, cancer suppression “occurs because an elevated ROS level promotes various cell death processes.” Focusing on the company’s drug pipeline, its key product (HSB-1216) “causes cell death by de-linking cancer’s addiction to iron.” In other words, Hillstream fights fire with fire.
On paper, the proposed ability to corral destructive biological processes against injurious disease mechanisms is both fascinating and morally satisfying. It’s the biotech equivalent of feeding a miscreant element its own medicine. However, that HSB-1216 arouses such fascination is ironically the catalyst for skepticism-driven due diligence.
As an origination point for investigation into this or any IPO, prospective investors should consult the target company’s Form S-1 — colloquially known as the IPO prospectus — filed with the U.S. Securities and Exchange Commission (SEC).
Under risk factors, Hillstream’s management declares that it has a “limited operating history.” In addition, the document warns that drug development “is a highly uncertain undertaking and involves a substantial degree of risk,” and that, significantly, it has “not generated any revenue.”
Thus, to keep this story going requires alternative financing, including research grants and — if you decide to invest — money from your pocketbook.
Hillstream Biopharma Potential
Despite the mountainous risk factors surrounding HILS stock, the underlying investment commands incredibly robust potential upside because it ties to a possible paradigm shift in oncology. It’s not just about a novel approach to cancer therapeutics but extending a lifeline to patients for whom traditional therapies have failed.
As well, “widely applied chemoradiotherapy is showing its drawbacks, such as frequent resistance and toxic side effects,” per the Frontiers report. Indeed, toxicities associated with cancer treatment impose an economic burden. Therefore, lessening this load promotes a shotgun effect of myriad positive outcomes from one medical therapy.
On the other hand, HSB-1216 is still in the pre-clinical phase in the U.S. and is actively seeking an investigational new drug (IND) application. Therefore, the three clinical rounds necessary before achieving a chance at commercial licensing remain waiting, like menacing middle linebackers who know a run play is imminent.
Translation: HILS stock could be profitable, but investors should gird themselves for a bruising.
How to Buy Hillstream Biopharma IPO (HILS) Stock
If you want to acquire HILS in the open market, you need to know how to buy stocks. Below is a quick refresher.
Step 1: Pick a brokerage.
These days, the best brokers compete on similar financial incentives. Therefore, choose a platform that suits your needs.
Step 2: Decide how many shares you want.
Early-stage biotech IPOs are incredibly risky because of the existence of multiple variables. Therefore, choose a balanced share count.
Step 3: Choose your order type.
Before trading, learn these market concepts.
- Bid: The buyer’s best offer for a stock.
- Ask: The seller’s lowest acceptable price.
- Spread: The difference between the bid-ask price, the spread indicates market risk as this is also the profit margin for market makers.
- Limit order: Buy or sell requests at a predetermined price, limit orders provide transparency but no execution guarantees.
- Market order: Market orders guarantee fulfillment but only at the current rate.
- Stop-loss order: Stop-loss orders automatically exit your position at either a predetermined price or anything lower.
- Stop-limit order: Stop-limit orders only leave positions at a specified price, but they also carry non-fulfillment risks.
Step 4: Execute your trade.
Follow these steps to execute a market order:
- Select your action type (buy or sell).
- Enter the shares you want to acquire (or sell).
- Hit the Buy (or Sell) button.
Follow the same sequence for limit orders (but include your execution price).
HILS Restrictions for Retail Investors
Review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons before participating in an IPO. Don’t engage if you have privileged information.
For those interested in acquiring HILS stock on a pre-IPO basis (shares at their initial offering price), open an account with ClickIPO.
Leveraged Opportunity, Leveraged Risk
Hillstream Biopharma may be the biotech industry’s equivalent of judo, or the art of leveraging an opponent’s size against him. However, the concept of transitioning destructive processes against harmful cells is an unproven one, presenting huge risks for HILS stock.