Hoth Therapeutics’ search for salvation in the stars appears to have been rewarded by investors, as the company’s stock doubled after a pivot to powering AI in space.
As Hoth, the biotech had been soldiering on with a neurokinin 1 receptor agonist for EGFR inhibitor-induced skin toxicities. But despite kicking off the year with phase 2 data that showed a reduction of acneiform rash, investors left Hoth’s stock bobbing around the $1 waterline this year.
With a merger with Algorithm Sciences falling through back in 2023 and even a potential play for the red-hot obesity space via a clinical-stage parenteral glial cell-derived neurotrophic factor program leaving investors cold in recent weeks, it looked like Hoth was running out of options.
So Hoth took drastic action, announcing last week that it would shed its biotech persona and rebrand as Rocket One. As part of this move, the company has bagged exclusive rights to nanomagnetic AI chip technology that uses electron spin and magnetic states rather than conventional electrical charges.
Rocket One is pitching this tech as having applications everywhere from defense and aerospace to the kind of orbiting AI data centers dreamed up by Elon Musk for his potentially record-breaking SpaceX IPO.
Meanwhile, the EGFR inhibitor gel and other drugs that were being developed by Hoth will be moved to a separate, wholly-owned subsidiary.
The surprise strategic pivot appears to have won around investors, who sent Rocket One's stock up to over $2 when the markets opened Thursday. As of this morning, the company has discarded its “HOTH” ticker and is now listed on the Nasdaq as “RKTO.”
“Space is moving from a launch story to a compute story,” Robb Knie, the CEO of Hoth, who has stayed on to lead the rebranded company, said in yesterday’s release.
“We believe that the platforms that will define the next decade in orbit will be the ones that can think for themselves under power and radiation constraints that ground-based hardware was never designed to handle,” Knie continued.
“Our exclusive licenses give us a credible technical foundation, and the RKTO ticker is a signal to investors, partners and customers that our focus is now on the orbital economy,” the CEO added.
Hoth is not the only drug developer to have made an unusual business pivot. In January, Italy’s Genenta Science disclosed it was moving from cell-based gene therapies to funding a tactical rifle manufacturer, while there has been a trend of beleaguered biotechs to rebranding as crypto companies.