Fusion Antibodies (FAB) shares surged but gains could be brief

Fusion Antibodies (LON: FAB) share price has been in the spotlight this week after the company made major developments. The highly embattled stock surged by more than 50% on Tuesday and reached its highest point since July. It was trading at 7.95p on Wednesday, much lower than its all-time high of almost 200p.

Fusion Antibodies is an Irish company that provides Collaborative Research solutions to other companies. It works with companies and guides them through their pre-clinical stages. Over the years, it has worked with companies like Amgen, Pfizer, Moderna, Bayer, and Harvard University.

Fusion Antibodies is one of the top companies that produces antibodies, reformatting them, and maturing them. It has developed over 10 antibodies over the years.

FAB share price surged on Wednesday after the company announced a new collaboration with the US National Cancer Insitute. The goal of this partnership is to create therapeutic antibodies. It will provide the institute with its OptiMAL technology for up to two years.

While this is an important development, I have doubts that it will have a positive impact on Fusion Antibodies stock. For one, the company is still going through major headwinds, as it pointed out in September. 

At the time, the management said that the company was experiencing a “commercially challenging period due to weak market conditions for investment in new drug discovery and development programs.”

Most importantly, the company is still having financial challenges. After raising funds in March, the company expected the cash to last until November 2024. That estimate was based on market conditions improving. Analysts now believe that the company could be forced to dilute its shareholders again.

Turning to the daily chart, we see that the Fusion Antibodies share price has gone sideways in the past few months. It has moved in a horizontal manner after tumbling hard after peaking at near 190p in 2021.

While FAB’s volume jumped on Tuesday, it remains quite small. Therefore, I suspect that the company will continue struggling in the coming months. It will likely remain below 10p in the foreseeable future.

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