Our Stock of the Week is Humacyte (HUMA). I’ve been discussing this stock extensively for a while, but with an FDA decision due in about a month and good support on the chart, it looks like an opportune time to evaluate the name.
HUMA has developed the Acellular Tissue Engineered Vessel (ATEV). This is essentially artificially engineered human tissue that can replace blood vessels. The company has been working for over 20 years to develop this product and has received support from the US Secretary of Defense, who sees the product as important for dealing with battlefield injuries.
HUMA applied in February to the FDA for approval of the ATEV for trauma repair. The FDA decision is scheduled to be released around August 10. ATEV has numerous other applications and recently received the designation of Regenerative Medicine Advanced Therapy (RMAT) for the treatment of Peripheral Artery Disease (PAD).
The company is preparing to start sales in the fourth quarter after the FDA PDUFA date. Cantor Fitzgerald is projecting sales of $6.1 million in the fourth quarter and then $30.2 million in the calendar year 2025.
HUMA stock has had a bumpy ride. It came public in the SPAC frenzy in 2020-2021 with very high expectations. One of its major investors is an investment banker, Brady Dugan, who is married to the CEO, Laura Niklason. He is a former CEO of Credit Suisse. After he left that position, he started his own investment bank, which had severe financial issues that caused him to liquidate a large number of HUMA shares. This drove the stock even lower after the SPAC frenzy blew up.
In addition to insider trading, US Senator Tommy Tuberville traded the stock and generated substantial attention and volatility. It is unusual for politicians to trade a stock as small as Humacyte, and the lag in reporting caused some confusion over his actual trades. The stock moved substantially higher on news of his trades even though he had already liquidated his position at a much lower price.
HUMA is now back near support and is awaiting FDA approval and the start of sales. There are a number of other indications for the ATEV that are progressing quickly. There is a substantial Total Addressable Market here, and the product is truly unique. As Cantor Fitzgerald noted, there haven’t been new developments for a conduit in the trauma market for decades. The analyst foresees over $1 billion in annual revenue for various indications by 2032.
There is risk that the FDA will not approve the product on August 10, but this is a product that the Dept of Defense has been behind and is also receiving rave reviews from physicians at the Mayo Clinic.
Small-cap biotechnology is a very tough sector to trade, but this stock has outstanding catalysts on the horizon. As always, we look to aggressively trade the name for volatility.
This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell, or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength and buy or sell anytime for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees, and affiliates of Shark Investing, Inc. and/or principals, clients, employees, and affiliates of Hammerhead Financial Strategies, LLC, directly or indirectly, controlled investment and/or trading accounts containing positions in HUMA and HUMAW. To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.
