An Insider Buy That Could Make You Sweat It Out

Did you know that more than 10 million people have been diagnosed with Axillary Hyperhidrosis? (1)

What is Hyperhidrosis?

It is a chronic condition defined by excessive sweating in the hands, feet, and armpits that is mostly unrelated to exercise or heat. It can be so bad that sufferers are literally dripping with sweat. It’s already a big market you may have never heard of and it’s growing.

An estimated 5% of the population is affected by this problem. (2) (3) That’s approximately 15 million Americans that suffer from Axillary Hyperhidrosis and too many to count globally. According to Reports and Data, “The Hyperhidrosis Treatment Market is projected to grow at a rate of 5.7% in terms of value, from USD 1.27 Billion in 2019 to reach USD 2.10 Billion by 2027.”

You might be wondering, why is any of this important?

Because, in our weekly insider review, we noticed that Brickell Biotech, Inc. (BBI), Chief Executive Officer (CEO) Robert Busard Brown bought 100,000 shares at a cost average of $1.1778 for a total investment of $117,780. (4)

Many investors and friends/family frequently ask about and have a high interest in low-priced stocks.  With that in mind, we started our research after seeing the $100k insider buy. We looked at the upstart biotech’s stock price and insider trading histories.

Brickell Biotech’s shares closed at $4.69 on September 3, 2019 when BB merged with Vical Incorporated. If shares can return to the merger price, BII has the potential to reward Brown and shareholders handsomely.

About a year later, a couple of insiders started nibbling at BII shares around 80 cents. Then the CEO steps in with a sizable buy following the company’s latest quarterly earnings report. In the news release Brown told shareholders, “Over the last several months, we achieved a number of important milestones – including the initiation of the U.S. pivotal Phase 3 clinical program – that have enabled us to continue developing sofpironium bromide as a potential best-in-class treatment option for the more than 10 million people in the U.S. suffering with primary axillary hyperhidrosis.”

Later in the press release, the CEO added the following, “In addition to the great progress we’ve made in the last quarter at Brickell, our Japanese development partner, Kaken, was successful in executing its clinical development program for ECCLOCK®. This progress is highlighted by the approval, placement on Japan’s National Health Insurance reimbursement price list, and recent commercial launch of ECCLOCK® in Japan. Of note, Japan is the first country to approve sofpironium bromide, which also represents the first topical prescription product to be marketed for the treatment of primary axillary hyperhidrosis in the country. Kaken has proven to be a valuable partner, and we look forward to seeing the ramp up of their commercialization program for ECCLOCK®, which will provide Brickell with royalties and potential sales-based milestone payments per our sublicense agreement.”

Based on the $100k insider buy, BII’s not too distant price history, and possible good things to come for the biotech, we did market research on Hyperhidrosis to get a sense of the opportunity, which we outlined at the top.

Outlook: We can’t even begin to pretend what percent of the US or world market share of Hyperhidrosis might go to Brickell Biotech, Inc. (BBI) if/when they receive approval. What we do know is that Wall Street valued BII at more than $4 less than two-years ago on the potential of their treatment for Hyperhidrosis. We know that they are much closer to applying for FDA approval than they were in September 2019. We do know the estimated market size and that it offers decent year-over-year growth for the next half-decade. And we do know that insiders have slowly started to buy the stock with the CEO making a significant purchase last week.

We also know that Brickell Biotech is a $1 stock for a reason, it’s super risky. Shares are only appropriate for those who are willing to lose all of their investment. If that’s you, then you might treat BII as an option without an expiration date.

The sum of our analysis leads us to believe BII offers more upside potential than if the stock fell to zero. However, it might take a few years of sweating it out along the way.


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