GH Resources: Focus On Treatment-Resistant Depression Paying Off

This article looks at what neurological diseases GH Research (GHRS) is focused on, its clinical trial progress to date, its latest quarterly financials, the history of its stock price performance, and the price forecasts for the stock over the next 12 months.

About GH Research PLC 

GH Research PLC, a clinical-stage biopharmaceutical company with a market capitalization of $547M and a stock price of $10.51. as of March 3rd, 2023, is focused on developing mebufotenin (the new International Nonproprietary Name for 5-MeO-DMT 5-Methoxy-N,N-Dimethyltryptamine, or 5-MeO-DMT) therapies for the treatment of patients with treatment-resistant depression (TRD).

Research and Development Pipeline

  • Its lead program GH001, an inhalable 5-MeO-DMT product candidate, recently initiated a Phase 2b trial in patients with Treatment-Resistant Depression (TRD) to determine the efficacy of its single-day individualized dosing regimen and found that 87.5% of patients were brought into an ultra-rapid remission was well tolerated with no serious adverse events reported. As such, the Company strongly believes that the results suggests that GH001 has the potential to change the way TRD is treated today.
  • GH002, an injectable mebufotenin product candidate, is currently in Phase 1 clinical development in a dose-ranging clinical pharmacology Phase 1 trial which the Company expects to complete in Q4 of 2023., and
  • GH003, an intranasal mebufotenin product candidate, is also in phase 1 preclinical development.

Q4 Financial Highlights

The Company is still in the product research and development of novel compounds and, as such, has no products and has no revenue, and requires a great deal of money to fund its R&D expenses. Cash, cash equivalents and marketable securities were $251.7 million as of December 31, 2022, which the Company believes will be sufficient to fund their operating expenses and capital expenditure requirements into 2026. For a detailed look at all the financial metrics related to GHRS in the last quarter, and for every year going back to 2018, go here.

Stock Price Performance

GHRS's IPO back on June 25th, 2021 was at $19.25 and by the end of 2021 its stock was at $21.70 but by the end of 2022 it had declined 56.0% to $9.53 before increasing slightly to its current price of $10.51 YTD. As bad as that was, the 2022 decline was much "better" than the 74.6% decline experienced by the other 5 major clinical-stage psychedelic stocks in the munKNEE Psychedelic Drug Stocks Index (see details here).

Analyst Forecasts

Based on 3 Wall Street analysts (see here) offering 12-month price targets for GH Resources in the last 3 months the average price target is $34.67 with a high forecast of $46.00 and a low forecast of $25.00. As such, the average price target represents a 228.9% change from the last price of $10.51 at the close of business on Friday, March 3rd, 2023.

Risks and Offsets

The company reports that its cash position at the end of Q4, 2022, of US$271.7M is anticipated to provide a cash runway into 2026. That being said, however,

  • were GHRS to experience a major setback in its research programs,
    • that might cause investors to lose confidence in the eventual success of the company and such negative sentiment could negatively impact its stock price;
  • were another company to develop a treatment for Treatment-Resistant Depression before GHRS,
    • that would most likely negatively impact the stock price, as well and, even more so, if such a competitor were to take the treatment for one of those diseases to market; and
  • were one or more of senior management to depart,
    • that might cause the company to lose focus which would slow down the progress of its research and development.

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Disclosure: None

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