Richard, a while back you noted that I have been a long-time PRLN investor and asked me about the differences between the last major downturn in stock price and this one. I didn't answer your question because I didn't feel like I had enough information, but now Sun has filled in the missing piece. Paracelsian reached a high of about 7.50 or $8 in September 1995 and fell to $1 by January 1996. There was absolutely no negative news on the fundamentals of the company to merit a decline. If anything, someone reading their press releases and not looking at the market would expect the price of the stock to have risen. On Oct. 20, 1995 PRLN issued a press release stating they had found 32 TCM extracts that could inhibit the sexual transmission of AIDS. On Oct. 27 they announced that they had just filed a patent to protect improvements in the efficiency of their Ah-Immunoassay techniques. On Nov. 7 they announced that they discovered that PN355 worked by being a kinase inhibitor. On Nov. 16 they announced they had hired Art Koch to be the Chief Financial Officer. On Nov 29 they announced that they had a $2.7 million loss for the year. The only possible negative story during this period was their $2.7 million loss, but this is not that big a negative because no one expected much better. All the other stories would seem to boost the stock. The only other news was the large private placement of preferred stock. I am not sure how the "crooks" were able to make risk free money through shorting this stock, but evidently they did, and this is what drove the price of the stock down.
The situation today is much different, as I see it. I can put my finger on several fundamental reasons why the stock price declined. 1)PRLN failed to expand their comapssionate use test to 300 subjects as promised. 2) The results of the compassionate use test were mixed. 3) The way they announced those results were confusing at best, and could easily lead one to believe that they were trying to cover up the death of one of the patients. 4) They have not divulged the results of the Bastyr study. I think the market has been grown impatient waiting for results that should have been in hand months ago.
The market has punished PRLN for these shortcomings. It is now up to PRLN to prove itself. It is do or die time. If it can get AndroVir and AndorCar out on the shelves on time and if they have even modest success in helping people, then this stock will soar. If not, then it will crash, no matter what exciting new things they discover.
Robin. |
