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small-cap

One NASDAQ- Listed Biotechnology Stock at Support Levels – Reneo Pharmaceuticals Inc

Aug 16, 2023 | Team Kalkine
One NASDAQ- Listed Biotechnology Stock at Support Levels – Reneo Pharmaceuticals Inc

Reneo Pharmaceuticals Inc

Reneo Pharmaceuticals, Inc. (NASDAQ: RPHM) is a clinical-stage pharmaceutical company. The Company is focused on the development and commercialization of therapies for patients with rare genetic mitochondrial diseases, which are often associated with the inability of mitochondria to produce adenosine triphosphate (ATP). The Company's product candidate, mavodelpar, is a potent and selective agonist of the peroxisome proliferator-activated receptor delta (PPARd).

Business and Financial Updates:

  • Q2 Highlights and Recent Developments:
    • Enrolled more than 130 adult patients with primary mitochondrial myopathy (PMM) caused by mtDNA defects in the mavodelpar open-label extension study (STRIDE AHEAD).
    • Expanded the inclusion criteria of the STRIDE AHEAD study to allow enrollment of adult patients with PMM caused by nuclear DNA (nDNA) defects.
    • Presented at significant mitochondrial scientific conferences: EUROMIT 2023 Conference (Bologna, Italy) and United Mitochondrial Disease Foundation’s Mitochondrial Medicine Symposium (Charlotte, NC).
    • Included in the Russell 2000® and 3000® Indexes, broadening market visibility.
    • Secured USD 68.3 million in gross proceeds through a public offering and concurrent private placement of common stock.
  • Financial Performance for Q2 Ended June 30, 2023:
    • In the second quarter of 2023, RPHM reported a net loss of USD 19.5 million, equivalent to USD 0.65 per share, compared to a net loss of USD 12.3 million or USD 0.50 per share during the same period in 2022. The company's cash, cash equivalents, and short-term investments totaled USD 142.7 million as of June 30, 2023.
    • Research and development (R&D) expenses for Q2 2023 were USD 14.4 million, an increase from USD 8.1 million in the same period of 2022. This rise in R&D costs was primarily driven by a USD 4.7 million increase in clinical and contract manufacturing expenses for mavodelpar's marketing registration, a USD 1.0 million hike in personnel-related costs due to headcount growth, and a USD 0.6 million increase in medical affairs costs.
    • General and administrative (G&A) expenses for Q2 2023 were USD 6.6 million, compared to USD 4.3 million in Q2 2022. This G&A expenses increase was mainly attributed to a USD 1.2 million rise in commercial development activities and a USD 1.0 million surge in facility and personnel-related costs due to additional headcount.
    • In May 2023, RPHM successfully completed a public offering and concurrent private placement, issuing a total of 8,531,250 common stock shares at a price of USD 8.00 per share, amounting to around USD 68.3 million in gross proceeds. After accounting for underwriting discounts, commissions, and offering expenses, the company received net proceeds of approximately USD 63.5 million.

Technical Observation (on the daily chart)

Currently, the stock is currently near an important resistance level of USD 5.00-USD 5.50, from where price has taken supports in the past. A support from the current level is expected with a trend reversal towards upside. The RSI (14 period) momentum indicator is at a value of 35.02, with expectations of further consolidation or a short-term correction. Moreover, the price is currently positioned below both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term resistance levels.

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As per the above-mentioned price action, key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Speculative Buy’ rating has been given on Reneo Pharmaceuticals, Inc. (NASDAQ: RPHM) at the closing market price of USD 5.64 as of August 15, 2023.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The yellow colour line reflects the 21-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The orange colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The red and green colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is August 15, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.


Disclaimer-

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Kalkine Media LLC, an affiliate of Kalkine Equities LLC, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.