Small-Cap Strategies: Discovering Future Potential (CRKN, GUTS, CARM, NUWE, TRAW)

8/4/20246 min read

Unlocking hidden potential in small-cap stocks can lead to significant profits in the investing world. These underestimated enterprises thrive on a mix of catalysts that drive their success. Today, we spotlight five small-cap stocks, exploring the factors fueling their growth and igniting investor enthusiasm.

Crown Electrokinetics Corp. (NASDAQ: CRKN) - Crown Electrokinetics Corp. shares concluded last week's trading session down 7% at $2.15. In May, the company announced its Q1 2024 Earnings Conference Call, highlighting their Gen 1 Alpha smart window insert, which is expected to hit the market in small quantities between August and September. Their goal is to deploy four to ten inserts per building in approximately 10 to 20 buildings across major U.S. cities. In July, Crown Electrokinetics announced its expansion in Arizona and Oregon, partnering with two of the country's largest telecommunication and cable operators. The company also revised its third-quarter revenue guidance from the original $7 million to $8 million range to a revised $8 million to $9 million. This month, the company announced it would hold its second-quarter 2024 conference call on August 14, 2024, at 12:00 PM Eastern Time, featuring remarks from Crown's management team. As we await further updates, we will be monitoring for a potential resistance break between $2.30 and $2.36.

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Fractyl Health Inc. (NASDAQ: GUTS) - Fractyl Health Inc. shares ended last week's trading session down 8% at $2.51. At the end of July, the company announced that the U.S. Food and Drug Administration (FDA) granted Breakthrough Device Designation for its Revita System for maintaining weight loss after discontinuation of GLP-1 drugs. This designation allows for priority regulatory review with the FDA upon the successful completion of the REMAIN-1 study, as well as the potential for early or accelerated reimbursement decisions by the Centers for Medicare & Medicaid Services (CMS). The pivotal study of Revita in patients with type 2 diabetes (T2D) who are inadequately controlled on any glucose-lowering agent, called REVITALIZE-1, is currently enrolling participants in the United States and Europe. Additionally, the pivotal study of Revita in patients with obesity after discontinuation of GLP-1-based drugs, called REMAIN-1, is underway, with anticipated data readouts from the open-label study in weight maintenance expected in the fourth quarter of 2024. Also in July, the company announced the launch of its REMAIN-1 trial, a randomized, double-blind trial of Revita. This trial will compare patients who have lost at least 15% of their total body weight on tirzepatide therapy against a sham therapy and is expected to begin treating its first cohort of patients in the third quarter of 2024. Wewill be monitoring for some consolidation and a potential bounce, with a possible resistance break between $2.60 and $2.65.

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Carisma Therapeutics, Inc. (NASDAQ: CARM) - Carisma Therapeutics, Inc. shares ended last week's trading session down 5% at $0.97. In June, the company announced the nomination of its first development candidate under its collaboration with Moderna, Inc. This candidate, an in vivo CAR-M targeting Glypican-3 (GPC3), is designed to treat solid tumors, including hepatocellular carcinoma (HCC), the most prevalent type of liver cancer and the fastest-rising cause of cancer-related deaths in the U.S. This nomination triggers a $2 million milestone payment to Carisma. "The nomination of the first development candidate underscores our productive collaboration with Moderna to develop mRNA-based in vivo CAR-M cell therapies," said Michael Klichinsky, PharmD, PhD, Co-Founder and Chief Scientific Officer at Carisma. "The development candidate targets GPC3, a tumor antigen highly expressed in HCC. This milestone represents a significant step forward in developing immunotherapies for solid tumors and an advance for the in vivo cell therapy field." In a July filing, the company stated that enrollment of new patients in the Phase 1 clinical trial of CT-0508 and its sub-study using CT-0508 in combination with pembrolizumab was halted in April 2024 due to the implementation of the company’s revised operating plan. As of July 2024, all activities related to the patients enrolled in the Phase 1 clinical trial and sub-study have been completed. The company only has preliminary results from the Phase 1 clinical trial and expects clinical data updates in the third quarter of 2024. Wewill be monitoring a possible resistance break at $1.05 and for $0.95 to continue as support as we await additional updates from the company.

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Nuwellis, Inc. (NASDAQ: NUWE) - Nuwellis, Inc. shares ended last week's trading session down slightly over 1% at $2.73. In July, the company announced that the first patient was treated with the newly launched QUELIMMUNE™ therapy in a commercial setting at Cincinnati Children's. QUELIMMUNE, manufactured for SeaStar Medical (NASDAQ ) and exclusively licensed and distributed in U.S. pediatric hospitals by Nuwellis, is a novel therapy designed to treat pediatric patients (weighing 10 kg or more) suffering from acute kidney injury (AKI) with sepsis or a septic condition and requiring kidney replacement therapy (KRT). The company also announced that it will release financial results for the second quarter of 2024 on Tuesday, August 13, 2024. Nuwellis will host a conference call and webcast at 9:00 AM ET to discuss its financial results and provide a general business update. In a July filing, the company stated that, as it expands its commercialization efforts in the pediatric market, it is developing a Continuous Renal Replacement Therapy (CRRT) device, branded Vivian. This device is designed to address the unmet and specific needs of pediatric patients weighing 2.5 kg and above who do not have functioning kidneys and need kidney replacement therapy for survival. It is estimated that approximately 11,000 newborns require neonatal kidney replacement therapy each year in the United States. Funded in part by a $1.7 million grant from the National Institute of Health, the company completed preliminary engineering and testing for its dedicated pediatric system in the fourth quarter of 2023 and finalized its IDE protocol with the FDA. The company intends to submit an IDE with the FDA in the third quarter of 2024. Wewill be watching for a resistance break at $2.90 and continued support at $2.60 as we await additional updates from the company.

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Traws Pharma, Inc. (NASDAQ: TRAW) - Traws Pharma, Inc. shares ended last week's trading session down just under 5% at $0.36. In a filing from late July, the company announced further advancement of the development of TRX100 with a Traws Pharma-sponsored Phase 1 randomized, blinded, and placebo-controlled study in Australia, approved by the Human Research Ethics Committee. This study will enroll three cohorts of 8 participants each, with 6 participants receiving the study drug and 2 receiving a placebo in each cohort. Participants will be healthy males or females aged 18-45 years and will take either one dose of the study drug or one dose of the placebo. The dose levels to be investigated are 80, 120, and 240 mg, administered via oral capsules. The primary endpoint is the measurement of safety and tolerability, while the secondary and other endpoints include determining the drug's pharmacokinetic profile. Traws Pharma expects the first cohort to begin dosing in mid-August 2024. As we await further updates from the company, it is worth noting that a special meeting of stockholders will be held virtually via live webcast, though no date has been set yet. The company has until September 23, 2024, to regain compliance with Nasdaq's continued listing requirements related to the minimum bid price. We will be monitoring for a resistance break at $0.38-$0.39.

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