Is Vitro Biopharma Inc. IPO a Good Buy?

At the core of every clinical-stage biotechnology company stands a primary ethos focused on improving the human condition. While a profitability motivation undergirds medical innovations, the holistic benefits that successful biotech firms may evoke typically outweigh potential financial agendas. Fundamentally, this dynamic bolsters the upside ambitions of Vitro Biopharma Inc. and its upcoming initial public offering (IPO).

One of the most groundbreaking public market debuts, Vitro Biopharma represents an early-stage, Phase 1-ready biotech firm developing stem cell therapies for various indications. Specifically, Vitro leverages culture-expanded mesenchymal stem cells (MSCs) to formulate therapeutic candidates for autoimmune diseases and inflammatory disorders. The use of stem cell-based technologies for regenerative medicines presents myriad opportunities to address longstanding diseases and cancers.

At the same time, Vitro Biopharma may attract controversies. Since the MSCs that Vitro leverages in its therapeutic pipeline are sourced from the Wharton’s jelly of umbilical cords donated by healthy volunteers following childbirth, the company risks encountering ethical concerns.

On a broader scale, the economic and market framework doesn’t necessarily support risk-on investments like Vitro. Since the company lacks financial rigor, the upside narrative for the underlying security hails from aspirational milestones. Vitro cannot guarantee meeting these milestones, presenting substantial risks for the prospective investor.

Nevertheless, the appeal of a game-changing therapeutic helps drive a consistent flow of interest toward the early clinical-stage biotech sector. Below are the pros and cons of the Vitro Biopharma IPO.

What Does Vitro Biopharma Do?

Vitro Biopharma specializes in the use of stem cell-based innovations to forward novel therapeutics for autoimmune diseases and inflammatory disorders. Leveraging its proprietary platform called AlloRx Stem Cell therapy, Vitro is “developing novel cellular therapeutic candidates that are derived from culture-expanded mesenchymal stem cells (MSCs) sourced from the Wharton’s jelly of umbilical cords (UCs) donated by healthy volunteers following childbirth,” per its Form S-1 IPO prospectus filed with the U.S. Securities and Exchange Commission (SEC).

In the U.S., Vitro received authorization to conduct two clinical trials under two U.S. Food and Drug Administration (FDA) Investigational New Drug (IND) applications. The first trial involves assessing the safety and efficacy of AlloRx Stem Cell therapy in Pitt Hopkins syndrome (PTHS). The second trial focuses on post-acute sequelae to SARs-CoV-2 (PASC) or colloquially known as long COVID.

“To date, over 300 subjects have received treatment with our AlloRx Stem Cells, primarily in foreign clinical studies conducted by third parties. Our lead clinical program is expected to focus on PTHS, a rare neurogenetic disorder primarily affecting children that is characterized by global developmental delays including autistic features, language delays, intellectual disability, neuro-irritability and significant behavioral concerns,” according to the company’s IPO prospectus.

“We generate revenue from our other technologies through a number of other activities, including providing research services and through the sale of our stem cell products,” Vitro Biopharma adds.

Vitro states on its website that it has “focused on our pre-clinical development programs for multiple sclerosis (MS) and Lupus/systemic lupus erythematosus (SLE).

When is the Vitro Biopharma IPO Date?

On Sept. 9, 2022, Vitro Biopharma filed its intentions to go public with the SEC, per the Form S-1 document. However, the company did not provide a date for entry into the IPO calendar, though market observers anticipate that the debut will materialize soon. Management did not disclose pricing information, so it’s not possible to provide valuation-based statistics.

What investors do know is that Vitro intends to make its public debut on the Nasdaq exchange under the ticker symbol VTRO. In addition, ThinkEquity represents the sole bookrunner for the deal. While Vitro did not provide per-share data, it did mention that overall, it seeks to raise $17 million in its IPO.

Keep in mind that soon-to-be-public companies often adjust the terms of their deals. Therefore, certain details may change, requiring prospective participants to be flexible.

Moving forward, Vitro may enter the public arena at a dynamic and perhaps awkward time. At the beginning of 2022, historically high inflation — arguably stemming from the unprecedented combination of monetary and fiscal stimulus in response to the COVID-19 crisis — weighed heavily on market sentiment. Effectively, the purchasing power of the dollar eroded rapidly, wreaking havoc on the equities market.

In response, the Federal Reserve committed to a hawkish policy to arrest the spiraling trajectory of the greenback. In short, under an inflationary system, an active incentive to invest (or spend) money exists as sitting on cash results in a loss of wealth over time. However, under a deflationary system, a passive incentive to save money exists as holding cash results in — all other things being equal — an increase in wealth through rising purchasing power. Therefore, an investment must be so compelling that cash holders are willing to forego effectively guaranteed returns for exposure to the underlying opportunity.

Unfortunately, few investments offer such extraordinary potential, which helps explain why the benchmark S&P 500 index dropped 25.25% from the start of 2022 through the end of September.

Although VTRO stock features a potentially groundbreaking stem cell-based innovation, market participants must realize the broader context impacting this IPO. Irrespective of the deal’s upside potential, Vitro may still encounter volatility.

What Analysts Are Saying About Vitro Biopharma IPO

Because of the limited size of the offering, analysts at large have not weighed in on Vitro Biopharma. However, the main narrative focuses on the potential and possible pitfalls of MSC-based therapeutics.

According to a research paper published in the medical journal Frontiers entitled, “Therapeutic Potential of Mesenchymal Stem Cells for Cancer Therapy,” the authors note that MSCs “are among the most frequently used cell type for regenerative medicine. A large number of studies have shown the beneficial effects of MSC-based therapies to treat different pathologies, including neurological disorders, cardiac ischemia, diabetes, and bone and cartilage diseases.”

At the same time, “the therapeutic potential of MSCs in cancer is still controversial. While some studies indicate that MSCs may contribute to cancer pathogenesis, emerging data reported the suppressive effects of MSCs on cancer cells. Because of this reality, a sustained effort to understand when MSCs promote or suppress tumor development is needed before planning an MSC-based therapy for cancer.”

The paper concludes that “the use of MSC-derived extracellular vesicles as a cell-free therapy has emerged as a promising option that circumvents the safety concerns associated with the use of live cells.” However, further research will be necessary to see whether cancer patients may benefit from this therapeutic class.

Additionally, VTRO stock will likely encounter issues related to ethical concerns of human MSCs. While the broader field of stem cell research may yield paradigm-shifting innovations, the use of human stem cells “raises sharp ethical and political controversies,” according to researchers Bernard Lo and Lindsay Parham.

In addition, MSCs may not be a pure panacea. Per the research paper, “Ethical and Safety Issues of Stem Cell-Based Therapy,” the primary concern of MSCs-based therapy is “unwanted differentiation of the transplanted MSCs and their potential to suppress anti-tumor immune response and generate new blood vessels that may promote tumor growth and metastasis.”

In other words, “MSCs have a potential to differentiate into undesired tissues, including bone and cartilage.” Therefore, market participants must be aware of the potential for serious setbacks before investing in VTRO stock.

Vitro Biopharma Financial History

While the science undergirding VTRO stock may be impressive, the financials present a challenging picture. In 2020, Vitro Biopharma only generated $650,000 in revenue. To be fair, 2021 delivered substantial growth percentage-wise. However, with sales of only $1.31 million, Vitro remains a very small enterprise.

Also, at the end of 2021, the biotech suffered a net loss of $4.76 million. This tally compared unfavorably to a net loss of $1.64 million in 2020.

Vitro Biopharma Potential

Although an intriguing concept as far as biotech IPOs go, investors will likely want to exercise extreme caution with VTRO stock. Understandably, the underlying stem cell-based therapeutics deliver plenty of upside potential for the business. However, early-stage biotechs represent a dime a dozen.

On the spectrum of realistic thinking, Vitro faces many challenges ahead. As exciting as MSC-based therapies are, they still present clinical obstacles. Therefore, investors would likely be wise to only spare funds they can comfortably lose.

Where to Buy Vitro Biopharma IPO Stock

If you want to participate in Vitro Biopharma’s IPO, you’ll need to know how to buy stocks. But before you take that step, you must sign up for a brokerage account. Below is a list of the best brokers to consider.

Thorough Research Advised

Investors should approach the Vitro Biopharma Inc. IPO with caution and carefully evaluate the company's stem cell-based therapeutics and potential profitability. There are significant risks and ethical concerns associated with the use of human stem cells. Thorough research and a realistic understanding of the obstacles ahead are advised before investing in VTRO stock.

VTRO Restrictions for Retail Investors

Review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons before participating in an IPO. Don’t engage if you have privileged information.

Frequently Asked Questions

VTRO Pre-IPO

At the time of writing, no pre-IPO opportunity has been announced for VTRO stock. However, those interested in early bird prospects should consider opening an account with ClickIPO.com.

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