Viralytics Ltd [ASX:VLA] climbed 5.5% this morning to a high of $1.14 per share.
What happened to Viralytics?
VLA released their Appendix 4C — the quarterly activity report — to the market. For the March quarter, VLA received $545,000 from operating activities, largely made up of government grants and tax incentives. The company spent $2.7 million on research and development.
At the end of the quarter, VLA had $38.7 million in cash.
What now for VLA shares?
VLA, as a business, is still in the early stages. For the March quarter, they received no revenues from customers and manufactured no products. That’s because they are in the process of developing a cancer-curing immunotherapy.
VLA is a biotech company that develops oncolytic immunotherapies using the oncolytic virus to infect and kill cancer cells. If they are successful in creating a cancer-killing immunotherapy, the stock could explode.
But there are obvious risks in investing in a company like VLA. What if they can’t get their product, CAVATAK, off the ground? What if it takes more money to produce than originally anticipated? What if trials take longer than the company originally thought?
These are the risks you have to weigh up to potentially make huge returns. But if you don’t have the stomach for uncertainty, I suggest you only look at businesses that operate in industries you know and understand.
Junior Analyst, Money Morning
PS: It’s not always easy to find growth among billion-dollar stocks. Unless they can significantly increase earnings, you’d be lucky to get double-digit returns. That’s why some investors prefer the smaller end of the market.
Small-cap stocks are a riskier investment. There is no running away from it. But they can potentially grow earnings 10-fold in a short space of time.
Small-cap specialist Sam Volkering has been on the other end of small-caps running up 1,000% or more.
So far in 2017, Sam hasn’t recommended a losing stock yet. In his advisory service, Australian Small-Cap Investigator, his top three active investments are up 283.4% 314.3% and 1,736.7%.
To find out more, click here.