all: MCHM is an interesting short at $6. It looks a lot like COPY,
with its septagenarian bosses, tiny payroll, eternal development-
stage status, tiny instittutional ownership, etc.
I first learned about MCHM when Asensio listed it among the stocks
that were held by the Dreyfus manager who got fired after terrible
results. He was involved in trading in CCSI, MCHM, and a bunch of
other development stage stocks. Other than MCHM, the others are now
below $5.
MCHM has a market cap of $155 M and only 20 employees, half of them
involved in research. I wasn't able to easily tell which stage of
clinical trials they are in. The filings don't say plainly. Maybe
only pre-clinical trials.
They are developing methods of applying drugs to the skin using a
different kind of solvent (dioxolanes, for example). One of many
purported applications is none other than 'erectile
dysfunction.' Like COPY, they do have several patents. One is
entitled 'method of treating hair loss.'
Here's the oldest patent, from 1989:
patents.ibm.com
The stock is at $6. The co. has $1 per share cash, thanks to a
private placement a year ago, so liquidity isn't an issue.
The co. has been around for decades. The chairman is 77, the CEO is 66,
and one of the two outside directors is 84. (The other outside
director was installed by a financier, and he probably won't last.)
The co. pays Janssen-Meyers Associates to promote the stock. JM is a NYC
firm that also promotes Asensio favorites CCSI and TRBD.
Short interest has been growing rapidly since May. This timing
seems unrelated to the stock price movement, but it does correspond
roughly to when Asensio discovered the stock.
Below is a MarketGuide report:
Corporation
Market Guide Quick Facts Report
MacroChem Corporation SYMBOL: MCHM EXCHANGE: NASD
PRICING DATA (AS OF) 07/31/98 RATIOS & STATISTICS
Price 7.00 Price/Revenue (TTM) 1,851.96
52 Week High 14.75 P/E (TTM) NM
52 Week Low 4.75 Price/Book (MRQ) 6.34
Beta 2.41 Price/Cash Flow (TTM) -35.18
Avg Daily Vol (10 Day) 0.14 Mil ROA (TTM) -25.67%
Avg Daily Vol (3 Month) 0.38 Mil ROE (TTM) -26.44%
Current Ratio (MRQ) 38.01
DIVIDEND INFORMATION Total Debt/Equity (MRQ) 0.00
Indicated Annual ($) 0.00
Yield 0.00% NOTE: TTM = trailing twelve months
MRQ = most recent quarter
SHARE RELATED INFORMATION SHORT INTEREST INFORMATION
Market Cap. ($) 155.421 Mil Current Month 2.849 Mil
Shares Out. 22.203 Mil Previous Month 2.599 Mil
Float 15.500 Mil Short Interest Ratio 7.3 Day
INSTITUTIONAL & INSIDER OWNERSHIP
PURCHASES SALES NET PURCH %OWNED
Institutions (3 Months) 1.195 Mil 0.056 Mil 1.139 Mil 13.8%
Insiders (6 Months) 0.000 Mil 0.022 Mil -0.022 Mil 30.2%
BUSINESS SUMMARY MacroChem Corp. engages in the development and
commercialization of transdermal drug delivery compounds and
systems designed to promote the delivery of drugs from the
surface of the skin into the skin and bloodstream. For the
3 months ended 3/98, the company reported no revenues. Net
loss rose 28% to $911K. Revenues reflect the absence of one
completed research contract in 1997. Higher loss reflects
expenses for listing on the NASDAQ and hiring of employees.
REVENUES (Thousands of U.S. Dollars)
QUARTERS 1995 1996 1997 1998
MAR 15 0 51 0
JUN 0 83 0
SEP 0 3 0
DEC 2 44 69
TOTAL 17 130 120
EARNINGS PER SHARE
MAR -0.040 -0.050 -0.050 -0.040
JUN -0.050 -0.070 -0.070
SEP -0.050 -0.040 -0.060
DEC -0.060 -0.045 -0.040
TOTAL -0.200 -0.205 -0.220
Short interest has been growing rapidly since about May.
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