Managements inability to meet their performance targets has hurt IZP's share price. But we must remember IZP's past success in licensing out their TB antigen, cancer drugs as well as receiving financing from Rothschild and Goldman Sachs. The Rothschild / Goldman Sachs financing came after a 6 months review of IZP's technology.
The licensing of the TB antigen to Cortecs came after two previous failures. IZP initially (1995 ) tried to license its TB antigen with BioChem Therapeutic and later with Abbott Labs before securing a deal with Cortecs. The stock price dropped after the letter of intent with BioChem failed. In November of 1995 the stock hit its all time low of $0.20 Canadian.
It shouldn't be a secret that IZP was close to closing a licensing deal for Apanol last December / January. Had the deal been satisfactory to IZP management and been finalized the share price would be significantly higher than it is today. We should credit IZP's management for getting the company and its shareholders the best deal possible even when it causes us short term pain.
What is significant is, as of January IZP had C$8. million in the bank with a monthly burn rate of C$420,000. The company had 19 months of operating cash on hand. Rothschild and Goldman Sachs, with members on the Board of Directors, have outstanding warrants for another C$6. million. We should hear some positive news over the next 19 months. Let's hope it starts with the hiring of a new CEO.
Set aside what is happening with IZP's core business and look at the TB test kit. The licensing deal with Cortecs struck back in November 1996 was a two year agreement. We should expect Cortecs to develop a TB test kit by November of 1998, any sooner is a bonus. Harold Lehman has been kind enough to contact Phil Goodwin, at Cortecs, and share his findings with us. At this time, we know the test kit is being developed.
It is my belief that the TB test kit could single-handedly drive IZP over C$20.00 within the next 5 years. Remember, IZP's TB antigen came in #1 when tested by the World Health Organization. That is a nice return on a C$0.73 investment.
All that said, you must protect yourself against all possibilities. Keep a diversified portfolio. The anti-inflammatory industry is said to be a US$50 billion dollar / year industry. You might look at diversifying within that industry. Look at companies like ARRS, ISIP, and ICOS. ICOS moved from US$6 to US$16 in the last 6 months with some healthy insider buying. I believe the stock moved 100% before any news hit the street. It doesn't hurt that Bill Gates owns 15% of the stock.
Although I operate a MAC, I must agree with Bill Gates that the Pharmaceutical Industry will perform in the future as the High Tech sector has in the past. You should maintain a diversified portfolio because any one company can fail.
So, while I cannot give you a specific answer on where IZP's share price will bottom, I do see brighter days in the future. IZP has had set backs in the past and they will have them in the future. The same can be said for their successes.
Best of luck,
Sean |
