RedHill Biopharma Ltd (RDHL)

[midastouch017]

Verdict:

RedHill appears to be a stretched rubber band, ready to take a big step forward on its top line with Talicia sales and opaganib trial results the wildcards. There is robust upside and plenty of shots on goal in the pipeline and with its stock being added to the NASDAQ Biotechnology Index effective December 21, 2020, it should garner more attention and support.

However, until the company demonstrates in its quarterly sales reports that it is growing fast enough to avoid a significant dilutive event (hopefully which eased with the recent $25M capital raise) – more dilutive than its current ATM facility – there will likely be a lid on RedHill’s upside at least in the short term. As such, it is a solid covered call candidate and that is how I added exposure to this name in my portfolio at the close of 2020.