Amarantus Bioscience, Inc. (OTC:AMBS) Reports Positive Trial Results
We have been waiting for a couple of weeks for Amarantus Bioscience, Inc. (OTC:AMBS) to choose a direction, and while the ticker has been stagnant for a while, the company is pointing to developments that may stir interest and create a more active trend.
What may intrigue investors are the positive, statistically significant results in a trial with lab rats, showing the company’s drug in development, a specially formulated protein, may be effective for regenerating lost nerve tissue. On the negative side, rat trials mean a viable human treatment is still a long shot. 
The revolutionary therapy does not come without a pile of debt and losses in the development stage:
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$580 cash
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$4.6 million in current liabilities
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$564 thousand in quarterly net loss
To continue the preliminary operations, Amarantus attracted new funding via a convertible note with a recently increased price of $2 million. The note may be paid in stock at the discretion of the company, which is a probable scenario given the low cash holdings. The possible dilution may depress the stock price further and slow down the trend that has carried the AMBS ticker upward in the past five months. The note, issued to Dominion Capital, is not convertible before May 14th.
On Wednesday, AMBS added more than 13% on a modest buying volume. Currently the stock is not seeing any directed efforts at PR boosting or promotion, but it follows the lead of others in the industry, as pharmaceutical tickers revive interest with a fresh outlook for the new year. A mix of trial results, upcoming approvals and licenses is lifting up the sector. Other researchers such as Titan Pharmaceiticals, Inc. (OTC:TTNP) are experiencing a similar climb even without promotional mailing.
Amarantus itself is leveraging its drug business with newly developed tests for Parkinson’s disease, thus allowing for revenues sooner than the waiting period for a new treatment. But still, there is the aspect of a penny stock play that may mean profit taking and corrections. Added to this is the warning of experts that the biotech sector may be becoming a bubble and that the true value of a drug company may not be known for a few years.
A close competitor of Amarantus is small cap Brainstorm Cell Therapeutics, Inc. (OTC:BCLI). The company is one step ahead, planning to start human trials soon for its stem cell treatment for neurodegenerative disorders. Even this ticker is vulnerable to sharp daily corrections, so it is best to choose the most suitable time horizon for the bio-pharmaceutical sector.
