Cocrystal Pharma Inc (OTCBB:COCP) Storms Ahead
Cocrystal Pharma Inc (OTCBB:COCP) ended the second quarter of 2014 with around $4 million in the bank, about $10.1 million in current assets, and $6.9 million in current liabilities. Without a doubt, the balance sheet is a lot more solid than what we’re used to seeing from development stage OTC companies and it could act as an incentive for some investors to jump in.
In addition to this, Dr. Phillip Frost owns a rather large stake in the company. Dr. Frost, in case you haven’t heard of him, is the founder of several successful pharmaceutical ventures. According to Forbes, his net worth hovers around $3.8 billion and he doesn’t look like the sort of person who is willing to throw his money into some company just for the fun of it. His involvement could be interpreted by some investors as another plus point for COCP.
If you throw in Ebola into the equation, you’ll end up with a recipe for quite a run. Surprisingly or not, that’s exactly what COCP did on Thursday.
It was the company’s first press release since August and it said that they are using their core platform for the development of what they believe to be the first high-throughput screening technology for the deadly virus.
Ebola has been all over the news over the last couple of weeks and the need to defeat it has sparked quite a stir among investors. Needless to say, they jumped right in after COCP‘s press release. Thursday’s session ended with around 9% in gains and a dollar volume of over $600 thousand and on Friday, the ticker added another 10% while investors traded more than $1 million worth of shares. COCP is currently sitting at $0.53 per share which means that the market cap is hovering just below the $65 million mark.
The hype and excitement around the Ebola virus had quite an effect on the stock performance and we’re pretty sure that plenty of people made some quick trades and pocketed the profits. Others, however, reckon that this is not the smartest of moves. They seem convinced that COCP can run much higher. But is this really the case?
We’re about to find out. The truth is, you can never know how high a penny stock can go based on excitement alone and we won’t be shocked if COCP end up logging some more gains. That, however, doesn’t mean that you can skip on your due diligence before jumping in and we’re starting to think that some people might be forgetting one or two things.
For one, the press release from Thursday does indeed sound optimistic and it does imply that COCP‘s technology can help us fight Ebola. What it doesn’t do, however, is tell us how much time the company needs to get a product ready. No deadlines were given and the management team failed to mention any phone calls they might’ve received from the organizations who are in charge of dealing with the problem. If COCP manage to roll out the product on time, and if somebody’s interested in it, things could in turn become really interesting. Until we receive confirmation of this, however, investors can do little else but keep their fingers crossed.
And while they’re at it, they might consider the fact that, according to the latest 10-Q, COCP expects to continue losing money “over the next several years during its clinical development phase”.
They might also bear in mind that before the name and ticker symbol change, COCP (then known as Biozone Pharmaceuticals Inc (BZNE)) had some problems with convertible debt. A certain 8-K Form from ten months ago, for example, tells us that on December 19, 2013, the company was forced to issue nearly 13 million shares at prices ranging from $0.10 to $0.20 a piece. We probably don’t need to tell you that if these shares hit the open market, the consequences for the stock could be quite devastating.
