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Why James 'Rev Shark' Deporre Likes Beyond Air

Clinical-stage biotech awaiting FDA approval of tankless system for nitric oxide treatments of pulmonary conditions in newborns.

James “Rev Shark” Deporre is keeping his eyes on a biotech stock waiting for a catalyst from the U.S. Food & Drug Administration.

The stock, Beyond Air XAIR, has had a banner year with shares up 96.58% YTD. Rev Shark said he’s been following XAIR for a few months and is leveraging September’s weakness (the stock was down 1.89% for the month) to rebuild a position.

Beyond Air is a clinical-stage biotechnology company that uses medical-grade nitric oxide (NO) to treat lung conditions, potentially including COVID-19. The LungFit system uses proprietary technology to generate nitric oxide from ambient air, eliminating the need for heavy and cumbersome gas storage cylinders. 

Right now, XAIR is waiting for the FDA to grant premarket approval (PMA) of its application for LungFit PH to treat persistent pulmonary hypertension in newborn infants (PPHN). The company expects a decision in the fourth quarter.

“The decision was expected in the third quarter but has been pushed back,” Deporre said recently on Real Money. “The company has completed the necessary Stage 1 Assessment and now the FDA is undergoing inspection of the manufacturing process.”

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XAIR also expects two other milestones before the end of the year.

“Preliminary results from the LungFit GO Nontuberculous Mycobacteria (NTM) lung infection at-home pilot study are expected, and the company's solid tumor program should receive regulatory clearance for human trials by year's end,” Rev Shark said.

Deporre notes there was over $2 million in insider buying earlier in the year so management appears to be optimistic.

“In addition, XAIR has coverage from four analysts in the last three months and all four have 'buy' recommendations,” he noted. “Matthew Kaplan of Ladenburg has a $17 target and recently stated: "We remain confident that Beyond Air has set itself up to execute its timeline for commercial launch and label expansion. We believe the upcoming milestones could serve as significant potential catalysts for the stock."

FDA approval could come at any time and management has made it clear that it expects it to hit this quarter. “Consequently, I've added to my position ... and will be looking for further entry points,” Deporre said.

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