Creative Medical Technology Holdings, Inc.(NASDAQ: CELZ) – a commercial stage biotechnology company – is focused on adult stem cell treatments and regenerative medicine. As a company which patents procedures for treating chronic diseases that have no cure, CELZ’s biggest prospect is the versatility of its stem cell procedure which is applicable to every disease it targets. Upon uplisting to the NASDAQ at the start of December, CELZ stock has gained a lot of traction from investors in the biotech industry – reaching an all-time-high of $2.65.
Catalysts
On December 3rd, CELZ listed on the NASDAQ capital market following a $16 million IPO. Under the sole management of Roth Capital Partners – an investment bank providing strategic and financial advisory services – CELZ announced its initial public offering of 3,875,000 common stock shares and accompanying warrants at a PPS of $4.13. Each public warrant was exercisable immediately and set to expire five years from the issuance date.
After its offering closed on December 10th, CELZ stock saw a 44% increase in its PPS overnight. This coincided with a massive trading volume of 17.15 million shares – a 16,793,000 increase from its average trading volume. Since then, the company has emphasized it will not be issuing any offerings for the next 6 months. It also highlighted the company’s lock-up agreement which does not permit certain shareholders to sell common stock or securities convertible to common stock for the 6 months following December 7th.
The company’s CEO – Timothy Warbington – has also assured shareholders that dilution will not take place as a result of CELZ’s 1:500 reverse split which reduced its OS by 99.8% putting its current OS at roughly 2.5 million shares. This reverse split led to its NASDAQ listing and has reduced the company’s need for liquidity according to Warbington because it “will raise the company’s profile to a broader investment community and ultimately create shareholder value”.
All of these factors have significantly decreased the number of shares eligible to trade and reduced CELZ’s already low float from 2.23million to just over 1.4 million – making the stock even more prone to volatility. However, now that the offering has closed, some investors are speculating CELZ stock could be a short squeeze candidate due to a rise short interest. However, short interest has decreased significantly but many believe the stock is still primed for a short squeeze.
In this way, CELZ’s decision to uplist to the NASDAQ could prove to be a major catalyst for the company which has spent years developing an extensive product portfolio utilizing stem cells for applications in Immunology, Urology, Neurology, and Orthopedic treatments. With its robust product portfolio, the company is positioned to capitalize on the regenerative medicine industry, which is expected to reach $39 billion in 2023.
Currently, the company is focused on increasing the commercial sale and use of its CaverStem and FemCelz products throughout the US and Europe. Through its leading in–market treatment – CaverStem – CELZ is offering the only patented procedure utilizing FDA-approved equipment to treat Erectile Dysfunction using the patient’s own stem cells. Offering relief to the nearly 30 million American men suffering from ED annually, CaverStem is a promising product for the company. However, CELZ is also treating female sexual dysfunction through its FemCelz brand which is also on the market. Still in the pilot phase, CELZ has a StemSpine product designed to treat degenerative disc disease and a treatment for premature ovarian failure in the pre-clinical phase.
At the moment, the company plans to continue expanding its stem cell treatment IP portfolio and has recently filed an Investigational New Drug (IND) application to utilize its ImmCelzTM technology for stroke treatments. In order to achieve the capital required to fund the research and development necessary to continue growing its IP portfolio, CELZ made the strategic decision to uplist to the NASDAQ.
Having successfully uplisted, the company is confident that it will be able to form the strategic partnerships necessary to take its IP and products to the next level. CELZ has shown notable growth over the years, reporting $164.5 thousand in sales last year. The company saw a dramatic 2,491.67% increase in revenue growth from 2017 to 2018 but only a 33% increase from 2018 to 2019. Overall, CELZ has seen strong growth with the commercialization of its products over the last four years and uplisting could be a catalyst which further accelerates the commercialization process for the company.
Currently, the company has heavy institutional ownership and investors feel that at these levels there is room for a swing play. The company also has $20 million cash on hand which is significantly higher than its market cap of $13.1 million. Based on this alone the company is currently undervalued at a PPS of $1.99.
In light of this, investors are awaiting updates regarding the company’s pending FDA-approval as well as future growth plans. With that in mind, they are bullish that another catalyst could send CELZ stock to new heights.
Media Sentiment
Investor @otc_chairman is bullish on CELZ stock which is undervalued at its current share price.
Technical Analysis
CELZ is currently trading at $1.99 with a support at 1.80 and a resistance at 2.65 with a second at its high of 2.93. Accumulation has been declining following a major spike on December 10th. The MACD is bearish and RSI appears to be dropping at 43.
These indicators emphasize that the stock is witnessing a downward trend and might fall to its support at 1.82 – which could be a good entry point for a swing trade. However, if investors are looking to hop on the bandwagon now, securing a small position on CELZ stock prior to the potential squeeze could be better. In case a squeeze happens, one can average up to the resistance and in the case it doesn’t, one can average down to the current support.
Should you buy?
With no plans for dilution, a growing IP portfolio and a recent NASDAQ listing, CELZ is well-positioned to start 2022. Although investors are still awaiting news on the company’s future, they remain bullish that its low float of 2.23 million could prompt CELZ to surge easily. With the lock-up agreement in place as well as a promise of no offerings for the next 6 months, investors are holding their positions tight.
As the stock approaches its support at $1.80, investors can secure a small position prior to a potential short squeeze that could push CELZ stock well beyond its resistance of $2.65 or buy shares for a swing trade.
If you have questions about CELZ stock and where it could be heading next feel free to reach out to us in our free alerts room!
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