Elite Pharmaceuticals, Inc. (OTCBB:ELTP): Will It Change its Range?
At 11 cents, Elite Pharmaceuticals, Inc. (OTCBB:ELTP) certainly looks like a return story. But the new week will show if the two amazing days of buying will help hold up the ticker. ELTP grew by 9.8% on Friday, on dollar volumes above $511,000. 
The latest news from ELTP are an 8-K filing stating that Epic Investments converted its preferred stock to 65.8 million common shares. The company has just above 403 million shares outstanding, so the amount is significant, and with daily trading around 5-10 million shares, could certainly affect the markets, should the holders decide to sell. On the plus side, there is no new concerted effort to pump ELTP since its last small campaign of a couple of emails in April.
ELTP is one of the better-quality pharmaceutical companies, but at 11 cents the recovery is still shaky. And despite all the bright prospects and drugs, it seems there is not enough enthusiasm that would take out ELTP out of the 7-13 cents range it’s been hanging in in the past years. At most, ELTP has spiked to 17 cents in 2012. The company is offering delayed-release technologies, and its latest upcoming bid is to pass a delayed-release opioid drug. This may be considered a culturally significant drug, with a potential to decrease addiction.
All of this has equipped ELTP with:
- $369 thousand cash
- $2.5 million total current assets
- $5.3 million total current liabilities
- $3.4 million revenues
- $1.4 million net income
However, not even a dazzling new tech is enough for some companies to keep the stock level. The social problem of addiction helped boost the stock of Titan Pharmaceuticals, Inc. (OTCBB:TTNP), but a negative comment from the FDA brought the stock down. For ELTP, no amount of success in the drug market would guarantee the sustained climb in stock levels. And the ticker has shown that is it often correcting by 30 or even 50% in a short time.
As for bright promises, Advanced Cell Technology, Inc. (OTCBB:ACTC) is relying on a global breakthrough in stem cell research and regulation. Still, the stock has been caught in a narrow range, unable to make a true recovery up from the 6-cent levels. ACTC seemingly has everything on its side, including a genius founder, but so far the market performance is its own vexing story.
If you still believe ELTP has a long-term upward potential, and may break out of the usual constraints, by all means follow the news in the next months as they may reveal how new trials are organized. Also, ELTP may attract the attention of a bigger partner. But until that happens, do not rely too much on a fast breakthrough. ELTP is still not in uncharted territory, and it’s a wait and see if the stock truly takes off.
