ContraFect Corporation (CFRX) Stock Could See Substantial Growth with Impressive Capital Generation

ContraFect Corporation (CFRX) hit USD$4.11 at market close on April 14th, 2021, having seen an upswing of 4.05%. Investors hope this is a continuation of growth in stock prices that will continue its upward trend.

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BARDA Contract

CFRX stock prices saw a sharp spike following the announcement of a USD$86.8 million contract with the Biomedical Advanced Research and Development Authority (BARDA). This contract intends to provide ongoing support for the third phase of the ongoing DISRUPT trial. The first installment will see CFRX receive USD$9.8 million, with the rest being provided on an ongoing basis depending on clinical progress and success.

High Hopes for Success

Should the trial be completed successfully, the capital provided by BARDA will be used towards supporting additional developmental work necessitated by the FDA for its approval. The funds are also eligible to cover post-approval costs, including but not limited to pediatric study completion.

CARB-X Award

CFRX announced an award from CARB-X, totaling up to USD$18.9 million, in mid-2020. The initial tranche amounts to USD$4.9 million, with the rest being released dependent on the achievement of project milestones for IND-enabling activities for CF-370. IND-enabling activities are anticipated to go into the first phase of the trial in the first half of 2022, with studies currently being conducted to facilitate that goal.

What this Mean for Investors

These contracts serve to instill investor confidence in the highly competitive work CFRX is conducting, with a probabilistic, evidence-based outlook of a positive outcome by the parties awarding the contracts. The acquisition of capital through non-dilutive financing has also been highly appealing for investors both current and prospective.

Why did Stock Price Plummet?

CFRX stock prices, however, plummeted following the news of a public offering of 11.5 million shares of its stock, priced at USD$5 per share, to net the company USD$53.7 million. Despite the dilution that investors thought they had avoided, stock prices are on the cusp of further growth in light of their strong financial position in Q1 of 2020.

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