Monopar Therapeutics (NASDAQ: MNPR) saw its stock skyrocket over 400% on Thursday after announcing a licensing deal with AstraZeneca. By 2 PM, the stock had traded over 10 million shares, far above its usual daily volume of 800,000. 

This sudden surge in price and volume has caught the attention of many, driven by the news that Monopar will take over the global development and commercialization of a once-terminated Phase 3 drug candidate from AstraZeneca’s Alexion unit. With such extreme price action, many might wonder whether the recent rally is the start of a longer-term opportunity or just a short-term pop.

What is Monopar Therapeutics?

Monopar is a clinical-stage biopharmaceutical company focused on developing cancer therapeutics. Its lead product candidate, Validive, is in late-stage trials to prevent severe oral mucositis in cancer patients undergoing chemoradiotherapy. In addition, the company is advancing several other pipeline drugs, including Camsirubicin, which targets advanced soft tissue sarcoma, and MNPR-101, an antibody-based therapy designed for multiple cancers and severe COVID-19. Monopar’s research portfolio is ambitious, but the company has yet to report consistent revenue, making it a high-risk bet in the biotech space.

Monopar Secures Exclusive License

The stock’s dramatic move on Thursday came after Monopar announced it had secured an exclusive worldwide license to develop and commercialize ALXN-1840, a drug designed to treat Wilson’s disease, a rare genetic disorder that leads to toxic copper buildup in the liver, brain, and other organs. AstraZeneca had previously terminated the program after clinical trials failed to meet regulatory endpoints despite showing promise in earlier studies. Under the new agreement, Monopar will make upfront cash and equity payments to AstraZeneca, with additional costs tied to future regulatory milestones and sales performance.

Key Considerations Before Taking Action in MNPR

The recent rally has drawn interest from traders, but the extreme volatility also comes with risks. With a small float and typically low trading volume, Monopar’s shares are prone to sharp price swings. While Thursday’s surge is exciting, it could just as quickly reverse if momentum fades or profit-taking sets in.

Long-term investors may need to be cautious, especially given that the company has reported no revenue for the second quarter of 2024 and a net loss of $0.10 per share. The stock has a consensus Buy rating based on three analyst ratings, but the consensus price target of $22 suggests potential downside after the recent spike. It’s also worth noting that the consensus price target is primarily influenced by one outlier price target of $50 set by Rodman & Renshaw, with the other two price targets at $6 and $10, respectively.

Monopar’s ability to sustain this momentum will largely depend on how well it executes the development of ALXN-1840 and advances its other drug candidates. The company has regained Nasdaq compliance through a 5-for-1 reverse stock split and expanded its partnership with NorthStar Medical Radioisotopes, which will supply critical components for cancer treatment. These developments are encouraging, but the road ahead remains challenging, especially without steady revenue streams.

Should You Invest?

For now, Monopar offers an exciting, high-risk, high-reward opportunity for speculative traders who thrive on volatility. However, the recent rally may not be enough for long-term investors to offset the risks tied to the company’s financials and uncertain clinical timelines. Whether the partnership with AstraZeneca can unlock new value or if this surge is just a temporary spike will become more apparent as the company moves forward. Investors must stay alert to any new developments to determine if Monopar can capitalize on this fresh catalyst or if it remains a speculative trade best suited for short-term gains.