Here is a buy recommendation on one of Rubberman's picks......NRT
Calls for a 12 month price of $4 per share.
Nortran Pharmaceuticals (V-NRT)
Price:
$1.15
Range:
$0.81 - $3.15
Shares Outstanding:
25.4 million
Market Cap:
$29.2 million
Sales per share:
$0.00
Price/Sales:
NM
Earnings per share:
($0.15)
Price/Earnings:
NM
Fundamental Rating:
36.5
Valuation Rating:
1.7
Overall Rating:
62
12 Month Target:
$4.00
Nortran Pharmaceuticals is a Vancouver-based drug discovery company, focusing on pathology targeted ion channels. The company's research is centred on two primary areas: antiarrhythmics used to prevent sudden cardiac death in heart attack patients, and a new generation of pain killers called Nociblockers. Pathology targeting looks at the problem in relation to the entire disease process rather than identifying a particular molecule and developing a treatment based on that molecule. This helps researchers better understand the mechanism by which their compound affects the body, and how the body might respond to it. The market for antiarrhythmics is substantial, as roughly 1.5 million people in the US alone suffer from heart attacks each year. The problem with many antiarrhythmics on the market is their high toxicity: as dosage increases, the probability of interfering with the heart's electrical signals also increases, and in some cases can actually trigger a subsequent heart attack. Nortran's antiarrhythmics are designed to target only damaged heart tissue, leaving healthy heart cells alone. The company's first generation antiarrhythmic, RSD921, has already been licensed to the Chemical Company of Malaysia (which now holds a 19.9% interest in the company) for the Asian market, and the two companies are expected to jointly undertake a Phase II trial some time this year. In early May, the company entered into an option agreement with Hoffmann-La Roche whereby the latter purchased an exclusive option to license a group of Nortran's antiarrhythmic compounds in exchange for a license fee, up to US$86.5 million in milestone payments to fund clinical development, and a royalty on sales. The companies are currently undertaking studies to further evaluate the safety and efficacy of these compounds.
Nortran's scientific team comprises some 20 PhDs and MDs, and the company's new president, Bob Rieder, brings with him more than two decades of medical venture capital experience. The research program is well-financed, with approximately $8 million in the bank. The company's biggest liabilities, however, are its large public float and its unusual propensity to attract short-term investors. Since its days as a VSE shell, the stock has been heavily promoted by individuals with various vested interests, and as a result, the company has had a very difficult time establishing credibility with the investment community. The fact that the stock has fallen by approximately 60% since it announced its agreement with Hoffmann-La Roche - an agreement which not only could prove lucrative but which more importantly provides third party validation to Nortran's science - suggests that the company is trading on the basis of something other than its fundamentals. As long-term investors, we view Nortran as a promising young company that it currently trading well below its fair market value. |
