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WASHINGTON - 60 Degrees Pharmaceuticals, Inc. (NASDAQ:SXTP), a pharmaceutical company currently trading near its 52-week low of $1.41, announced Thursday it has entered into a sponsored research agreement with Tulane University to evaluate the activity of tafenoquine against Borrelia (Lyme disease) and Bartonella bacteria in cell culture. InvestingPro analysis suggests the stock is currently undervalued, despite facing significant market challenges with shares down over 88% in the past year.
The study aims to investigate tafenoquine’s potential against these vector-borne pathogens, which along with Babesia are known as the "3Bs" in the Lyme disease community. These pathogens are frequently present in individuals with tick-borne illnesses.
"The purpose of this study is to gain a better understanding of these rapidly spreading tick-borne diseases for which there is a growing unmet need for effective, approved treatments," said Geoff Dow, Chief Executive Officer of 60 Degrees Pharma. While the company maintains a healthy balance sheet with more cash than debt and a current ratio of 3.13, InvestingPro data reveals the company is rapidly burning through its cash reserves.
Tafenoquine is currently approved in the United States under the brand name ARAKODA for malaria prophylaxis, but has not been proven effective or received FDA approval for treating or preventing Lyme disease, Bartonella infections, or babesiosis.
The company noted that tafenoquine "continues to perform well in babesiosis trials currently underway in several sites." The new Tulane University study will explore the drug’s potential for treating co-infections in babesiosis patients.
Acute Lyme disease is caused by Borrelia infection and may trigger post-treatment Lyme disease. Some healthcare providers hypothesize that recovery from this condition may be hindered by the presence of low levels of Babesia and Bartonella in the body.
According to the press release, tafenoquine was originally discovered by Walter Reed Army Institute of Research and received FDA approval for malaria prevention in 2018. Looking ahead, analysts project sales growth for SXTP, though profitability remains a challenge. InvestingPro offers additional insights with 15 more exclusive tips about SXTP’s financial health and growth prospects. Subscribers can access detailed analysis including revenue forecasts and profitability metrics.
In other recent news, 60 Degrees Pharmaceuticals announced the closing of a public offering that raised $5 million in gross proceeds, which will be used for working capital and general corporate purposes. The company also highlighted its financial challenges, mentioning substantial doubt about its ability to continue as a going concern despite the new funding. In a strategic move, 60 Degrees Pharmaceuticals is targeting a $245 million market for its drug ARAKODA for the treatment of babesiosis, with plans to submit a New Drug Application to the FDA by 2026. Meanwhile, the company is pursuing a Minor Use Minor Species (MUMS) designation for tafenoquine to treat acute canine babesiosis, following positive outcomes from several clinical studies.
Additionally, 60 Degrees Pharmaceuticals introduced a new 8-count bottle packaging for ARAKODA, aimed at travelers seeking malaria prophylaxis, now available through major retail pharmacies. Ascendiant Capital recently lowered the stock price target for 60 Degrees Pharmaceuticals to $7.00 from $8.50, maintaining a Buy rating, citing a reassessment of the company’s fair value and highlighting a larger opportunity in the babesiosis market. Despite the positive outlook, analysts noted significant risks, including regulatory approval uncertainties and potential dilution from future financing. These developments reflect ongoing evaluations of the company’s market opportunities and challenges.
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