Advanced Cell Technology, Inc. (OTC:ACTC) Pulls Ahead on Charts
In Friday trading Advanced Cell Technology, Inc. (OTC:ACTC) made a big move up the charts, reaching its previous 3-month high of $0.079 per share. The move was significant but was it also warranted?
ACTC works in the field of regenerative cell research, with a current focus on curing the major cause for blindness. According to its website, the company has several programs in its pipeline, but only the program focused on curing macular dystrophy has reached the clinical trials stage.
The company’s financials, as with many biotech startups, are not a pretty sight. The most current information available to investors is dated September 2012 and contains the following:
- $8.2 million in cash
- $19.5 million in current liabilities
- $68 thousand quarterly revenue
- $8.5 million quarterly net loss
Those are precarious financials to hang on to, to say the least. Given the speed at which ACTC chews through money and their negligible revenue, the $8 million cash reserves don’t look impressive at all. At the same time, with those numbers in their books, ACTC currently has a market cap of over $175 million – a price many may consider horrendously inflated. The company has 2.75 billion of shares issued and outstanding.
The management of ACTC has received some pretty hefty compensations for their work so far. The base salary of CEO and Chairman Gary Rabin for 2011 was $500 thousand, with a cash bonus exceeding that amount. Adding the stock options and awards, the total compensation of the CEO peaks at over $3.5 million. CSO Robert Lanza also received summary compensation of $3.4 million in 2011. This again may seem a bit overgenerous to investors hoping for hard results and positive cash flow.
The company was rumored to have reached a new stepping stone with its trial patient cohorts. ACTC is now allegedly allowed to treat patients with 20/80 vision. However, this has not yet been announced in an official press release and is not mirrored in either of the company’s study pages at clinicaltrials.gov.
Investors are advised to be careful around biotech penny stocks, especially ones that are shaky on their feet and resort to dilutive financing.
