Today I found myself going down an investment rabbit hole, chasing information about a company that, to be honest, is wallowing, and has for a while.
Unmarketed. Unexplained. Unsimple. Unloved.
The company is Zentek (ZEN.V).
Back in the day, it was an exploration play known as Zen Graphene Solutions that was more focused on developing a graphene mine than end uses for graphene as a product, but a recent pivot seems to have landed the company in an interesting space more aligned with biotech than mining.
The Albany graphene project that used to be the company’s raison detre is now in the hands of a subsidiary, while the main focus of the parent is technology they’ve developed that will use their graphene medically rather than selling it on as ore.
This, to me, was a mind fuck because I remember graphene as being the wonder metal that everyone claimed would change the world a decade back, before loudly hitting a wall and taking the graphite market with it.
THE RISE AND FALL OF GRAPHENE
Graphene made a lot of noise back when graphite projects were popular resource deals for a minute, because graphene (a purer, stronger, lighter, rarer version of graphite) was so light and strong you could make allegedly tanks out of the stuff – tanks that would never blow up.
But the graphene business fell out of favour when it came to one realization – that said indestructable tank would, instead of blowing up upon being hit with a missile, rather bounce and roll down the street, effectively shaking its inhabitants to death in an unstoppable Yahtzee roll.
- Also it was expensive.
- Also it wasn’t so easy to find.
- Or work with.
So we all moved on.
That sucked for Zen Graphene Solutions, which needed dough to progress its mine and struggled to get folks back on that horse for a bit.
In 2013, during that small initial rush of blood to graphene’s head, Zen ran to $4.50 in today’s money.
Then it slowed and sunk to $0.40 over the ensuing years, until 2020 when COVID-19 landed, and suddenly things got very real.
Why?
BECAUSE GRAPHENE IS A BIOTECH WONDER
No, really.
Graphene’s remarkable properties make it highly effective in filtration applications, particularly in improving the performance of air and liquid filters.
Here’s why, in layman’s terms:
1. High Surface Area
Graphene’s structure—consisting of a single layer of carbon atoms arranged in a hexagonal lattice—provides an exceptionally high surface area. This allows for greater interaction with particles or molecules passing through the filter. The high surface area is particularly useful for trapping tiny contaminants, ranging from pollutants to bacteria and viruses.
2. Physical Filtration
Graphene sheets can be stacked or incorporated into composite materials to form ultra-thin, yet strong, barriers that physically block contaminants. The size and spacing of graphene layers can be engineered to trap specific particles based on their size, enhancing the selectivity and efficiency of filtration.
3. Chemical and Electrostatic Interactions
Graphene exhibits unique chemical properties that can interact with various substances. These interactions can be tailored through chemical modification of the graphene surface to attract and hold specific types of particles. Additionally, graphene can be engineered to carry a charge, which enables it to attract oppositely charged particles through electrostatic forces, further improving its filtration capability.
4. Antimicrobial Properties
Graphene has demonstrated antimicrobial effects, which are highly beneficial in air and water filtration systems. The material can inhibit the growth of bacteria and other pathogens upon contact, thus not only filtering but also sanitizing the air or fluid passing through it. This is particularly useful in healthcare settings or in systems where hygiene is paramount.
5. Durability and Efficiency
Graphene’s inherent strength and chemical stability make it a durable option for filtration systems. It can withstand high pressures, temperatures, and corrosive environments, which are common challenges in industrial filtration applications. Moreover, graphene’s thinness allows for the creation of filters that require less energy to push air or liquids through, increasing overall efficiency.
AMAZING!
So, when COVID landed and the world nearly ended, and we all needed PPE and filters and masks, Zen was right where it needed to be to be in the mix in the anti-COVID business.
And the stock, she ran, back up to $7.50 a share by the end of 2021, after a boardroom takeover shifted old management along and focused the story.
Old holders were elated. It was a rare case of a company pivoting from its formerly important core, ditching the board, and riding to victory with an evolved version of itself.
Until it wasn’t.
Not for lack of trying, but the mask and filter game didn’t pan out like folks hoped. There’s been sales, sure, but not massive sales, and not matching the early investment needing to be put into manufacturing and sales development.
So Zen fell once more, now to around $1.50, as we all moved on from COVID.
BUT ALL WAS NOT LOST
See, the thing with a brand new metal that folks are still trying to figure out the uses for is, sometimes you have to travel down a windy road to see the obvious. First thoughts aren’t always the best thoughts.
Graphene for tanks? Not a winner because of Tank Commander Yahtzee.
Graphene for cars? Cool, useful in terms of strength and lightness, but expensive.
Graphene for filters? Great, but a crowded market that has fallen away.
So what’s next?
GRAPHENE IN YOUR MEDS
Okay, so we’re going to get into the biotech world a little here and I’m going to try to keep it all in layman’s terms for you because you and I both know the biotech world is cryptic and weird and full of pointy headed gatekeepers that say “actually” a lot..
Zentek’s subsidiary, Triera Biosciences, has developed what it calls the the C19HBA aptamer, a synthetic molecule designed to specifically bind to and inhibit SARS-CoV-2, the virus responsible for COVID-19.
Stay with me. I swear I’ll keep you interested.
Before we get to C19HBA, we’re going to explore monoclonal antibodies.
Trust me, you’ll be smarter by the end. People will love you at parties. Girls will say, “he’s weird looking but he knows his biotech and I find that very arousing.”
Monoclonal antibodies are laboratory-made proteins that mimic the immune system’s ability to fight off harmful pathogens such as viruses by being formed to copy the pathogen in question.
For example, let’s say “Slartibartfast-12” is a killer virus that looks like a stressball under a microscope.
Here’s one now:
The monoclonal antibody is designed to attach itself to the stressball’s spikes, basically preventing it from using those spikes to attach itself to your cells.
Monoclonal Antibodies are amazing and are used in infections, cancers, and autoimmune disorders. They’re a modern wonder.
Here’s the detail – and if you’re worried squeezing this into your brain might make you forget how to drive, skip ahead;
- Target Identification: Each monoclonal antibody is designed to target a specific molecule (antigen) on the surface of cells. For instance, in cancer treatment, the antigens might be proteins that are abundant on cancer cells but not on healthy cells.
- Binding: Once administered, the monoclonal antibodies circulate in the bloodstream until they find and bind to the specific antigens. This binding is highly specific, akin to a lock and key mechanism, where the antibody (key) is designed to fit perfectly with the antigen (lock).
- Blocking Function: By binding to the antigen, monoclonal antibodies can block the antigen’s normal function. For example, if the target is a growth receptor on a cancer cell, the antibody can prevent it from receiving signals to grow and divide.
- Flagging Cells: In addition to blocking antigens, the bound antibody makes the diseased cells more visible to the immune system. This “flagging” helps the immune system recognize and destroy these cells.
- Triggering Direct Effects: Some monoclonal antibodies can directly trigger cell death or influence the cell’s environment to limit growth and survival.
These antibodies can be used not only for treatment but also for prevention in some cases, providing a tailored approach to combat specific diseases.
Amazing, right?
The thing is, monoclonal antibodies can be complex to build, needing to be consistently cloned in a lab. It’s not easy, nor cheap, and expensive drugs, while better than nothing, aren’t the perfect solution for patients.
THIS IS WHERE GRAPHENE COMES IN
This is what COVID-19 looks like under a microscope.
Those floral shoots sticking out all over? That’s what attaches to your cells. The monoclonal antibodies attach to those so COVID doesn’t get a purchase on you, and then makes the bacteria large enough that your immune system says, “WTF is this big blue blob with bits hanging off it?” and sends soldiers out to destroy it.
Recent tests have shown that Zen’s C19HBA not only competes with, but also outperforms existing monoclonal antibody treatments in both therapeutic efficacy and as a prophylactic, when it comes to COVID-19.
That means – those viruses with their weird molecules and hooks and arms and floral bouquets – C19HBA jams right into them and outdoes the existing treatments, at least in mice.
This innovation is built on Zentek’s expertise in graphene, that they’ve developed by not giving up on the stuff when everyone else did.
REMEMBER: Zentek’s ZenGuard technology, the masks and filters mentioned earlier that incorporate graphene, improves antimicrobial activity and filtration efficiency at the nano level, but that same technology, shrunk even further and specifically designed with a particular virus in mind, also applies here.
REMEMEBER: We were all so busy playing military tech with early graphene, we missed the obvious nanotech medical uses altogether, until Zen came along and took things to their next use case.
Path to FDA Approval and What It Means for Investors
The journey to FDA approval is meticulous and multifaceted, starting with preclinical trials to establish safety and efficacy, followed by a series of phased clinical trials. Given the promising results of the C19HBA aptamer, Zentek is poised to enter Phase 1 clinical trials.
Here’s the thing – it can take a few hundo million doughbucks to get through the clinical trial process, traditionally, for medications that are new and have to be tested against all potential side effects and problems, if they ever work as theorized.
But the streamlined nature of aptamer development, demonstrated by rapid and cost-effective trial phases, underscores a potentially expedited path to market compared to traditional drug development processes for Zen.
In short, what’s being tested here isn’t the treatment so much, as it is the platform to deliver the treatment.
And the FDA is far less prickly on that.
For investors, the implications are profound. The successful progression of Zentek’s aptamer technology could not only promise substantial returns from the therapeutic segment but also positions the company as a pioneer in aptamer application, with possible expansions into treatments for other infectious diseases and beyond.
The company is – right now – patenting the tech, and assuming that patent is granted, getting the platform approved could launch the company into a rights licensing tsunami where any treatment currently using monoclonals could instead use the graphene option to be a better, faster, cheaper option.
Looking Ahead: Expectations for the Coming Year
The coming year is pivotal for Zentek as it advances C19HBA through the clinical trial phases. Investors should watch for updates on trial progress, partnerships, and regulatory milestones, which will be key drivers of the company’s stock performance – assuming they get the story out there.
That may be a big assumption – they’re not paying me to write this, I just think there’s a lot here for those who care to digest the information and establish a position while the thing is in this market flux.
The broad application potential of graphene in sectors such as air filtration, energy storage, and even consumer goods is right there for ZEN and suggests continued growth and diversification of Zentek’s business down the road, and given the global emphasis on health security and pandemic preparedness, as highlighted by recent public health challenges, Zentek’s innovations meet both current and future market needs.
The company’s ability to address these needs effectively through its graphene-based technologies not only enhances public health response capabilities but also offers significant economic benefits by reducing healthcare costs and improving the efficiency of medical treatments.
Conclusion
This company has been through some shit. Propelled and punished, dragged out and forgotten, this is a deal that, if it had set out to be a biotech play from the start, might not have been much further ahead than it is by now. It NEEDED to bounce around, figure out what graphene was capable of, and that digging it out of the ground is only half the battle – what it can do after the fact is far more interesting, and potentially profitable.
I have no dog in this fight. My finger is hovering over the buy button because I believe there’s something good there, but am not sure if there’s a rush to jump in or not.
The thing with biotech is, you can wait a long time for news but when it lands, things go haywire quickly, up or down, depending on that news.
A lot of people don’t understand the FDA process, and a lot don’t understand the jargon, and a lot aren’t built for the wait, or the drama of the morning that randomly sees news of a trial’s success or failure drop, launching the stock into crazy town.
What I am doing is watching this thing, because when it goes, it’s going to go like that graphene tank, bouncing unstoppably til it finds it natural restpoint.
And hey, at least it’s different.
— Chris Parry
FULL DISCLOSURE: No commercial arrangement. I think it’s cool. And you’re cool in that shirt.