RedHill Biopharma Ltd (NASDAQ: RDHL) just received an exclusive licence for the commercialisation of Talicia. The drug is used to treat Helicobacter Pylori infections, commonly known as H- Pylori. Talicia is a first-line therapy with commendable efficacy, tolerability, and drug resistance profile. It has the potential to replace other interventions against H. Pylori, making the biotech stock attractive.
The newly granted market exclusivity licence for Talicia comes with intellectual property protections. The IP protections will be in place until 2034. After the first three years, RedHill Biopharma may elect to allow other companies to market the product. The approvals and protections give RedHill Biopharma the first-mover advantage and other rights. Both will result in higher revenues.
RedHill Biopharma is expected to rapidly commercialise the product. If that happens, the company will record rapid growth in revenues and profits. RedHill Biopharma now has the chance to emerge from the loss region. Buying the stock now would enable investors to benefit from the projected growth.
There is another factor that is important to consider when investing in RedHill BioPharma. NASDAQ recognizes the company as being in the market to raise more capital. The FDA approvals will make it easier for RedHill Biopharma to raise further capital. Expectations are that the company could still consider the equity markets for additional capital. Depending on the avenue taken to raise capital, buying the stock now could unlock further opportunities.
RedHill Biopharma has the potential to hit a $2 valuation
RedHill Biopharma is a penny stock with high upside potential. For a start, the stock could rise to stabilise at a $2 valuation. The stock is also likely to record high momentum due to its low price per share. The valuation and performance of the stock make it an important addition to small trading accounts.
We think buying RedHill Biopharma carries great potential for growth. The low price per share means that investors can purchase a significant stake in future performance. The probability that the stock rises to a $2 valuation is high. Investors have the opportunity to lock in value before the mass market gets to understand the penny stock.
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