Biozone Pharamceuticals, Inc. (OTCBB:BZNE) Holds Fast, Awaits Effect of PR

Biozone Pharamceuticals, Inc. (OTCBB:BZNE) gave some signs of settling, with a small gain on Monday. The suddenly active pharmaceutical ticker added a bit more than 5%, to stand at 84 cents on dollar volumes of $480,000. BZNE opened the week with a new 8-K announcing another settlement of patent disputes, with the obligation to pay out a further 700K. With this, BZNE has taken up payments of $1.3 million, along with a stock option.

All those infringement settlements could clear the future of the company, but they are certainly a financial burden, one that Opko Health and investor Dr. Phillip Frost would have to shoulder. Still, the stock movement of BZNE may hold surprises, just as it went up from almost no trading activity.

Tuesday opened with a new Seeking Alpha profile, categorizing BZNE as a company that has a well-developed consumer business and does not rely on new developments like pharmaceutical companies that rely on pure R&D results.

A company from the same category is Elite Pharmaceuticals, Inc. (OTCBB:ELTP), with a well-developed product network. Still, this stock has also come stagnant, peaking at 16 cents only to slide back and drift around 12 or 13 cents.

But International Stem Cell Corp. (OTCMKTS:ISCO) is a true cautionary tale, a pharmaceutical stock that rose on exuberant buying, only to crash by more than 40% in a few days. ISCO, as well as ELTP, are cheap enough for a new run, but nothing about their business or price levels has protected them from selling, investor fatigue and locking in profits.

In the case of BZNE, the company is active and promising, with basic sales and a new technology promising to be licensed to other players in the industry. It is clear that with all the settlements and warrants, BZNE is being prepared for a more active future.

But not even the most active companies in the sector are immune to disproportionate price rises. Biotech tickers are in great demand these days, among the leaders in the most-traded penny stocks. But this also means that many of those stocks rise and crash unexpectedly. In the case of BZNE, forums hold great concerns that BZNE is also being presented in a too-positive light, and has yet to show real development.

If you still believe in the potential of this ticker, it is best to choose your time frame carefully and stay away unless you can afford the losses of as much as 30% in a couple of days that BZNE made a while back.