Some speculative sharemarket traders will be thumping the air this morning after clinical-trial-stage immuno-oncology drug development company Noxofarm Ltd (ASX: NOX) announced some positive results for its Veyonda drug for the treatment of cancer.
The Noxofarm share price is up 35% to 50 cents as a result of the news and if it ever gets its drug commercialised it is likely to soar many multiples more over the next few years.
However, it's still a very long way off commercialisation stage and the vast majority of speculative biotech companies at this end of the market with no revenue and huge cash burns never produce positive long term returns for investors.
Rather they swallow capital via cash raisings as the share price gradually shrinks due to the ballooning number of shares on issue.
For the six months ending December 31 2019 Noxofarm lost $4.45 million and generated zero sales revenue, which isn't a surprise seeing it has no products other than costly trial stage drugs.
It did have $9.6 million cash on hand though and will likely need all of that to fund further trials in its quest to become a blockbuster success.
