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Even After a Blistering Rally, Longeveron Is Still Buyable

InvestorPlace logo InvestorPlace 11/30/2021 David Moadel
a close up of a person holding a bottle: A close-up concept image of a tiny glass vial with a strand of DNA in it. © Source: Shutterstock A close-up concept image of a tiny glass vial with a strand of DNA in it.

Looking for a perfect biotech company with no problems whatsoever? Sorry, but

a person in a blue cup: A close-up concept image of a tiny glass vial with a strand of DNA in it. © Provided by InvestorPlace A close-up concept image of a tiny glass vial with a strand of DNA in it.

 (NASDAQ:LGVN) doesn’t fit that description. However, it’s definitely safe to say that LGVN stock is on a powerful upward trajectory that could last for quite a while.

If the trend is your friend, then Longeveron’s among the friendliest names on Wall Street today. Anyone who has held the company’s stock shares since mid-November is enjoying outstanding gains at the moment.

So, what propelled LGVN stock during the past few weeks? As you might have guessed, since Longeverion is a biotechnology company, the rally is related to an important regulatory decision.

Before you join the party and buy some shares, though, you’ll definitely want to check Longeveron’s fiscal stats. If you’re willing to swallow a few bitter pills, then a small investment may be justified.

A Closer Look at LGVN Stock

Prior to mid-November, LGVN stock has been trading near $3 for a while. Moreover, the stock had been on a slow, painful downtrend since August.

Then, Longeveron’s shareholders caught a huge break. Suddenly, the stock popped to $7, which already represented a substantial return on investment.

Yet, that was just the beginning of the ride higher. LGVN stock kept climbing over the ensuing days, even reaching $42.30 on Nov. 24.

By the time you read this, the share price could be much lower or higher than that. Still, it will very likely be far above where it was a month ago.

Was this simply the result of a short squeeze staged by Reddit users?

It’s possible that the short-squeeze mob got involved. Remember, though, that biotech stocks are subject to powerful price moves based on regulatory decisions.


Gallery: 7 A-Rated Healthcare Stocks to Buy for the Long Haul (InvestorPlace)

A Huge Win For LGVN Stock

Just to recap, Longeveron develops cellular therapies for aging-related and life-threatening conditions.

The company’s lead investigational product is a cell-based therapy product known as Lomecel-B.

This is derived from culture-expanded medicinal signaling cells which are sourced from the bone marrow of young, healthy adult donors.

Since Longeveron has a business model that relies heavily on regulatory approvals, a decision from the U.S. Food and Drug Administration (FDA) can be make-or-break for the company.

Fortunately, it was recently disclosed that the FDA has granted Rare Pediatric Disease designation for Lomecel-B for the treatment of hypoplastic left heart syndrome, a congenital heart defect in infants.

Lomecel-B is currently being evaluated in a Phase 2 trial, and of course, the Rare Pediatric Disease designation is a huge win for Longeveron.

It’s also potentially a win for the medical community, as approximately 1,000 babies are born with hypoplastic left heart syndrome each year in the U.S.

A Mixed Fiscal Picture

So, now we know why LGVN stock rocketed from $3 to $42. It wasn’t just a Reddit-fueled rally, clearly.

It’s fine to own a few shares of the stock just to ride the momentum. However, you’ll probably also want to know how Longeveron is doing, financially speaking.

Judging from the company’s third-quarter 2021 fiscal data, there’s a mixed picture here:

  • $0.2 million in revenue, compared to $1.8 million in the year-ago quarter
  • A net earnings loss of $4.9 million, which is substantially worse than the $0.9 million net earnings loss from 2020’s third quarter
  • Cash and short-term investments of $19 million, marking a major improvement over the $1.4 million held at the end of the year-earlier quarter

As you can see, Longeveron needs to show growth in its revenues in the upcoming quarters.

Furthermore, it will be easier to invest in Longeveron with confidence if the company achieves positive net earnings.

The Bottom Line

LGVN stock is far from a perfect investment.

As long as Longeveron posts troubling financial data, some folks will understandably choose to sit on the sidelines.

However, it’s fine to own a small number of shares based on the stock’s powerful momentum.

And hopefully soon, Longeveron’s enduring commitment to treating hypoplastic left heart syndrome will help create a more positive fiscal profile for the company.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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