Over the last 12 months, the Tiziana Life Sciences (LSE:TILS) share price soared from 31p to around 98p today. That’s an impressive 200% increase in a relatively short space of time. But it’s hardly been a steady climb. Tiziana Life Sciences has experienced some significant volatility and even reached a high of 236p in July last year.
What caused this enormous growth? Why is the stock’s price moving like a rollercoaster? And should I be adding it to my portfolio? Let’s take a look.
What’s going on with the Tiziana Life Sciences (TILS) share price?
Tiziana Life Sciences is a small biotech company that is developing targeted drugs for various afflictions, including cancer, inflammatory diseases and, more recently, Covid-19. The latter appears to be the primary driving force behind the recent share price boost.
There are plenty of other biotech companies attempting to create an effective anti-body treatment for the virus. And therefore the competition is fierce. However, what makes this company stand out is the method of administration. Instead of the classical intravenous approach, Tiziana Life Sciences delivers its monoclonal anti-bodies via inhalation. As a result, the treatment is absorbed directly within the patient’s lungs, where Covid-19 does the most damage.
Throughout 2020, a continual stream of positive preliminary results was published for this treatment, along with its other projects surrounding Crohn’s disease and progressive multiple sclerosis. And so I’m not surprised that the share price has been rising.
Taking a step back
While positive results are undoubtedly fantastic news, the TILS share price volatility shows that there is still a high level of uncertainty. While the company holds several patents over its drug delivery methods, none of its medicines are close to finishing their development cycle. And its Covid-19 anti-body treatment has yet to enter phase I trials.
I’ve explored some of the risks of drug development before. But as a reminder, it’s a very challenging feat. The typical drug development cycle takes around 10 years, and 90% of treatments are rejected in phase I.
Tiziana Life Sciences does have five different drugs currently undergoing their phase II trials. And if the results remain positive, these treatments will move into the final stage. However, phase III trials are a multi-year process. So, it could be some time before Tiziana Life Sciences brings any products to market. And that’s assuming regulators and health insurance companies actually approve and agree to cover these treatments, respectively.
The bottom line
Tiziana Life Sciences’ patented drug administration methods do sound very promising to me, especially nasal. Why? Well, without going too deep into the science, a nasal spray triggers an immune response that activates regulatory t-cells. These immune modulators have the unique property of being able to cross the blood-brain barrier, making them perfect for the treatment of neurodegenerative diseases like progressive multiple sclerosis. This isn’t possible with traditional intravenous administrative methods.
As a result, I believe that the TILS share price can continue to climb over the long term assuming it succeeds in getting its treatments on the market. However, with no existing commercial products in its portfolio, the company relies entirely on outside funding. Should any of its advanced treatments fail in their phase III trials, this external capital may become quite limited. Needless to say, it creates a significant level of risk. Personally, I think there are too many unknowns at this time. And therefore, I won’t be adding the stock to my portfolio today.
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Zaven Boyrazian does not own shares in Tiziana Life Sciences. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.