a man and a woman holding a test tube

Context Therapeutics stock (NASDAQ:CNTX) is a recent IPO. The CNTX price rose by 86% from an opening price of $4.45 to $8.29 in the first four days. This initial rally didn’t hold up. The price fell back down to IPO levels throughout November. However, the stock price held $4.80 well throughout a choppy market last week. For me, this feels like the stock has found its bottom and looks set to test initial highs soon.

Context Therapeutics

Context Therapeutics is a women’s oncology company developing advanced small molecule and immunotherapy treatments to transform care for hormone-driven breast and gynaecological cancers. The company’s robust clinical program for lead candidate onapristone extended release (ONA-XR) comprises three phase 2 clinical trials and one phase 1b/2 clinical trial in hormone-driven breast, ovarian and endometrial cancer, as well as two phase 0 biomarker pharmacodynamic trials in breast cancer. ONA-XR is a novel, first-in-class small molecule under development as a complete antagonist of the progesterone receptor, a key unchecked mechanism in hormone-driven women’s cancers.

IPO

The initial public offering was for 5.75 million shares of its common stock at a public offering price of $5.00 per share. This gives the company a very small market cap of $55M as well as a very small float. Some of this float will be held by investors meaning less shares available to trade hands each day. So what? Well, this means that any releases of positive PRs will help drive the price without much effort. If there are less shares available (less supply) but more buying interest into the stock either for short term or long term (more demand), the price can move up rapidly.

On November 19th, CNTX reported that they will be presenting clinical data on ONA-XR on December 8th. This saw some demand for the stock as the price gained 18% after open that day. This is a big move from a relatively small PR.

Catalysts

The above mentioned catalyst is one to look forward to. The price may not have held gains on the day of that announcement, but keep your eyes on December 8th for more substantial news regarding the progress of this drug.

There are three phase 2 clinical trials, one phase 1b/2 and two phase 0 trials to look forward to.

Technicals

The stock dropped to IPO levels on November 18th, but was helped up the following day after the announcement mentioned previously. The price has traded sideways since then and has closed above $4.80 each of those days. That is something impressive to note as the market underperformed and the IWM, a small caps ETF, had its worst week of the year, losing 4.8%.

Overview

The stock hit a high in pre market today of $5.55 after closing Friday at $5.10. Initial highs are a short term target for the Context Therapeutics stock price as momentum looks set to build. $8.29 (ATH price) is a gain of 62% from Fridays close. Announcements of more good news relating to trial progress will also help the price gain momentum. The downside risk for CNTX is minimal. We would keep an eye on $4.80 if it does retrace further.

As this is a small float and market cap, a smaller position in your portfolio would do better than most as the returns will be much greater than bigger companies. Take a look at another recent small cap IPO, Stran & Company, here.

AlphaPicks does not own a position in Context Therapeutics either through stock ownership, options, or other derivatives.

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