DelMar Pharmaceuticals Inc (OTCBB:DMPI) Slides on Record-Breaking Volume
Back in July, Zacks Small-Cap Research initiated a coverage on DelMar Pharmaceuticals Inc (OTCBB:DMPI) and put a price target for the next twelve months of $4.50. Now, less than six months later, this seems a bit far-fetched. Yesterday DMPI dropped by nearly 16% and closed the day at $1.01 while recording an all-time volume record of 447 thousand shares.
On the whole, it’s clear that the stock performance is not brilliant. Generally speaking, the volumes are quite low, and the price seems a bit reluctant to register any significant moves in the right direction. This is somewhat strange considering the good news that’s been coming out of the company HQ.
On November 22, for example, DMPI announced that they have presented the interim results of the 1/2 clinical trials for their flagship product – the VAL-083. Jeffrey Bacha, the company CEO said that things are looking “very promising”, but despite this, investors seemed uninterested. The press release went out about an hour and a half before the opening bell and during the session, the ticker managed to gain around 7%. The volume, however, was dismal and the ascend was retraced over the next two days.
That’s even more surprising considering the fact that DMPI is one of the few pharmaceutical penny stocks with a relatively solid balance sheet. The latest 10-Q covers the third quarter of 2013 and it contains the following financials:
- cash: $5.1 million
- current assets: $5.3 million
- current liabilities: $427 thousand
- no revenue since inception
- net loss: $6.7 million
It’s clear that the company still has a long way to go and they are honest enough to admit in the report that they don’t expect the revenue generation to start in the near future. On the bright side, they do have some money to get by in the coming months and if everything goes according to plan with the clinical trials, things could become interesting.
That said, their credibility might be damaged by the fact that their principal office is offered as a virtual solution, but at least they have managed to stay away from the paid promoters. But if it isn’t the pumpers, then what is causing the strange and unpredictable stock performance?
It would appear that there’s quite a lot of activity on Seeking Alpha. Every once in a while, an article appears and it’s, more often than not, linked on the company profile at Yahoo! Finance. The coverages paint a bright picture of DMPI and its future and you can read through them yourself and decide whether you should trust your money with the optimism found in them.
As a side effect, however, these articles might present some people with an opportunity for a profit. Shortly after Berry Only, Inc completed the acquisition of DelMar Pharmaceuticals, the company sold some shares at $0.80 as well as warrants exercisable at the same price. The latest 10-Q also informs us that there are some outstanding warrants that can be turned into common stock at CDN $0.50 per share. The extra exposure given by the Seeking Alpha articles will inevitably result in increased interest and some of the investors who got the discounted equities could decide to take advantage of the opportunity.
In any case, even if you believe that drops such as the one seen yesterday are just obstacles that can be dealt with, you should be sure to do a lot of due diligence before putting any money on the line.
OncoSec Medical Inc (OTCMKTS:ONCS) is another pharmaceutical penny stock on the OTC Markets and it too had a rather interesting session yesterday. $1.3 million worth of shares changed hands in just six and a half hours and the price went up by around 4%. Growlife Inc (OTCBB:PHOT), on the other hand, dropped by around 8.5% registering a dollar volume of $755 thousand.
