Not Too Agile (AGRX)
“If you’re not confused by the stock market, you haven’t been paying attention."
The Portfolio Performance
The portfolio is UP +10.20% YTD
The S&P 500 is UP +8.32% YTD
Agile Therapeutics (AGRX)
Agile Therapeutics is a women's healthcare company that developed a novel, weekly hormonal birth control patch. The novel patch design keeps active ingredients in place. The innermost layer—the active adhesive matrix—consists of hormones and adhesives, as well as a humectant (designed to limit skin irritation) and permeation enhancers that enable the hormones to pass through the skin and into the bloodstream. The internal membrane separates the active adhesive matrix from the peripheral adhesive layers. The two peripheral adhesive layers are designed to help keep the patch in place and confine the active adhesive matrix. The woven outer layer is made of a flexible fabric that’s designed to contour with a woman’s body.
Agile decided to take Twirla to market on its own while still developing a pipeline of other drugs that can utilize its novel patch design. The patch was the primary thesis for my investment in Agile. Their go-it-alone strategy has not worked, the investment thesis is now broken, and I've closed out my position in Agile. Unfortunately I've broken my own first rule (see below).
Agile's stock initially showed some promise in data and the commercialization of Twirla, but that soon faded. To be fair, Agile was obliterated, like many other small growth companies, by the Federal Reserve rate increases. On January 3, Agile closed at $10.85; by January 16th, the stock was at $16 before it slid back to $10.50 on April 10th.
On April 11, 2023, Agile executed a 1 for 50 stock split, effectively wiping out most investors. The stock split reduced our 5,000 shares to 100 and boosted the cost basis to an eye-popping $525/share. I've been studying their pipeline and th eperformance of their sales team. My own conclusion is that Agile is not likely to succeed on their own, mergers and acquisitions are very difficult as the FTC is blocking most M&A. The most likely outcome is a sale of the assets in bankrupcy at some point in the future. While the company is still unprofitable, and revenue is almost non-existent, I do hope that Agile succeeds because the science is excellent, the product delivers and is safe, and with this financial engineering, the company may live long enough to fight another day. As far as the Stay Invested portfolio is concerned, I've closed the position and have taken the loss as the stock split made it impossible to recover the position.
SOLD AGRX 100 @ $4.39
Keep Me Honest 2023
"Markets don't go to zero, Portfolio's do.
Buy quality, be patient...and look twice for motorcycles."
- Clay Baker
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Rule #1: Don't lose money
Rule #2: See Rule #1
Rule #3: Portfolios go to zero, markets don't, Stay Invested
Rule #4: When good stocks you own drop 10% below your cost basis, add shares
Rule #5: Bull markets aren't sustained without the Transports
Rule #6: When Forward P/E is lower than TTM P/E, expect earnings to increase
Rule #7: When an investment bank sells below book value, buy it
Rule #8: Tips are for waiters. Do your own homework.
Rule #9: Don't sell a stock because you're bored with it. Do your own homework.
RULE #10: Being early and being late is the same as being wrong...move on.
Rule #11: Investing is easy. Waiting is hard; waiting is the hardest part.
Disclosure: I am personally invested long in some or all of these stocks or funds that appear in the Stay Invested portfolio and may purchase or sell shares within the next 72 hours. I am also invested in other stocks and funds that do not appear in the Stay Invested portfolio but may be mentioned or related to this article. It is not my intention to advise or encourage the purchase or sale of any security. I am invested long in these securities mentioned in this post:
AMD, AMRN, AMZN, AAPL, ARKK, ARKG, CNRG, ENPH, FB, GNRC, GBTC, GLD, HRTX, HD, IPOD, MSFT, NVDA, PSTH, TWLO, VBIV
I am invested short in these securities mentioned in this post:
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. This article is not intended to offer investing advice, guarantee 100% accurate predictions, or to be interpreted as providing a personal recommendation.