//If this stock drops below $2 again, I should be certified incapable of making any financial decisions on my own. //
I pay no attention to technical indicators whatsoever. Instead trying
to value the company entirely based on fundamentals. So, in terms of
technical analysis I am of absolutely no value.
From a fundamental standpoint, IMO, this company has it's entire future based on the Memantine trials. They will be out of money, or nearly out, by the time the current Phase II trials are finished. If the trials are both failures, then the company will be in a bind. They will only have the prospect of developing Dynorphin A and CRF for the future, as well as some potential follow up work with Memantine.
The investment community isn't likely to place much value on CRF (for cerebral edema) considering it's past failures. Some may disagree with this view. Also, there doesn't seem to be much value placed on Dynorphin A. NTII has placed Memantine higher on the development priority list (rightfully so IMO). Also, speculating, if Dynorphin A was a hot ticket, then NTII would have partnered already for parallel development with Memantine. This is speculation, others may hold significantly different views here.
Summing that up, NTII won't have much to offer the investment community if Memantine fails. The stock could IMO fall to .25 to .30 if these trials fail to show efficacy/safety. Certainly different opinions are welcome--in fact I hope I am wrong.
Future prospects--
They haven't announced any further relationships with university researchers beyond Stuart Lipton at Harvard. This may be something you could ask about Monday! The fact that none of their prior drug developments have gotten past Phase II trials may be hurting their credibility with researchers. It would be interesting to know if they are pursuing any further development relationships.
Having painted such a gloomy picture, it is easy to wonder why anyone would consider such a stock. Well, memantine hasn't failed yet. In fact I am placing a large bet (in terms of stock ownership) that it won't.
Buying this stock is a bet on the results Lipton is showing at Childrens Hospital. A couple of the more respected posters to this board (John de Castro and Rick Harmon) have been touting Memantine specifically for a couple years. They have been doing so based on their research into the results of Memantine vs other drugs. Neither of these guys has wavered at all (for at least two years) in their support.
Another point to consider--Paul Freiman took over as CEO after the stock was trading below $2.00/share. This company was valued by the market for less than $15MM. Freiman was former Chairman for Syntex and was instrumental in selling Syntex to Roche for over $5 billion. He is also a former Chairman of the Pharmaceutical Manufacturer's Association of America. Why would such a person take over as CEO of an apparently failing, nearly worthless (in terms he is used to) biotech? Certainly he would at least look at what the company has going for it. And what is that?
Also, Abe Cohen, NTII Chairman of the Board, is a former senior vice president of Merck. Merck currently has a market cap of ~125 Billion. Why would he assume Chairmanship of an apparently failing miniscule biotech? Granted, he is the only compensated member of the board, but that can't be much compared to what he is worth.
These guys have to see something in NTII, the only thing I see is Memantine.
What happens if Memantine is successful? That depends on how successful. With good enough efficacy the FDA may grant approval for AIDS dementia immediately. Memantine has a track record for safety- it has been used in Germany for years. If the trial for neuropathic pain is successful that should open several options for partnering, as well as give the stock price a good enough rise for another stock offering.
So, where will the stock go if both trials are successful? You can pick a number, the price will certainly be influenced by the general market. My guess, somewhere between 8 & 16 depending upon immediate approval for AIDS dementia, general market mania, and a potential stock offering (in addition to a Memantine partnering).
As always, comments welcome. And, as always, sorry for rambling. |
