Mast Therapeutics, Inc. (MSTX)

[Digger 2-0]

Here's The Silver Lining For MSTX

For many, all hope surrounding Mast Therapeutics was shattered when they released the results to the most recent Vepoloxamer study. Unfortunately, the medication proved to be ineffective in the treatment of sickle cell disease. However, the good news is that Vepoloxamer wasn't the only candidate in the pipeline, and sickle cell wasn't the only indication the treatment was designed for. In fact, there are several areas where MSTX may have a product coming down the line relatively soon.

At the moment, the company has two treatment candidates. One of these candidates is, of course, Vepoloxamer. The other candidate is AIR001. While we don't often hear much about AIR001, it is a candidate that deserves more recognition. This treatment is designed for heart failure patients. So far, it has proven to have a strong safety profile and is in the midst of Phase 2 studies. All in all, if the company can prove efficacy, this could be a big thing for MSTX and its investors.

Another thing that is important to remember here is that Vepoloxamer is a multi-indication treatment. While the treatment didn't do too well in the sickle cell space, Mast Therapeutics is currently in the midst of a Phase 2 clinical trial surrounding chronic heart failure. The treatment is also ready for Phase 2 studies in the indication of ischemic stroke. Of course, if either one of these studies proves to be positive, it could be a major turn around point for MSTX.

The Risks Involved

While there is a silver lining, I don't want to overshadow the fact that, at the moment, the cloud is still dark. At the end of the day, there was a whole lot riding on the sickle cell trials. First and foremost, the company has spent massive amounts of time and money on a treatment that ultimately failed. On top of that, because of the failure, there is very large debt that the company is working to pay off.

Many of those who are bearish on the stock believes that the financial picture at MSTX is a relatively weak one. As a result, the company may not have enough money to get a treatment to the commercialization phase, and may be forced to look at other, less desirable strategic options.


What I'm Expecting To See

While I understand the risks, conditions don't seem quite that dire at the moment. All in all, the failure of the sickle cell study was a horrible thing, and investors have made the company pay dearly for their failure. However, at the end of the day, Vepoloxamer has multiple indications that are looking promising and AIR001 is looking great as a heart treatment. While no one knows what the outcome of future trials will be, I remain cautiously optimistic. All in all, if you have a decent appetite for risk, this may be a strong play.

http://cnafinance.com/mast-therapeutics-mstx-stock-is-there-a-silver-lining-here/11279