Interest in Arno Therapeutics Inc (OTCMKTS:ARNI) Wanes
Since the start of May interest in the stock of Arno Therapeutics Inc (OTCMKTS:ARNI) has reached record levels. On April 30 they announced that the European Commission had designated the company’s AR-12 drug as orphan medicinal product for the treatment of two separate infectious diseases. Initially the news had minimal impact on the performance of the stock but three days later ARNI spiked up the chart by 50% climbing up to $0.83 on nearly a million traded shares. Although the next session saw the ticker suffer a minor correction it took place on the all-time record number of 1.8 million traded shares.
On May 7 the U.S. Patent and Trademark Office (USPTO) granted Notice of Allowance for two patent applications related to the lead drug of the company , onapristone. Once again on the day of the PR the market reacted far from the expected – ARNI closed the day with a 1.25% correction. On the very next day however investors’ sentiment suffered a drastic change and the ticker soared upwards by nearly 19% closing at $0.94. The daily volume once more reached massive numbers with 1.4 million traded shares. Is ARNI, a company that in April registered 5 sessions with ZERO trades while the biggest daily volume for the month was 33 thousand shares, capable of keeping investors excited?
Well, if the last two sessions are any indication the answer seems to be far from reassuring – on Monday a little over 400 thousand shares changed hands while yesterday the volume barely surpassed 250 thousand. At this rate ARNI could return to its previous illiquid state in a matter of days.
The company’s inability to attract the attention of the market is rather puzzling. For a pharmaceutical company ARNI’s financials are definitely encouraging. The annual report for 2014 showed that they finished last year with:
• $8 million cash
• $8.2 million total current assets
• $2.1 million total current liabilities
• $21.4 million loss from operations
The losses are significant but at least ARNI have not resorted to raising capital through toxic funders. In fact, for the entire 2014 less than 40 thousand shares were issued. If their cash needs remain the same the company projects that it will have enough capital to fund its operations through the third quarter of the year.
In October 2013 Arno entered into an agreement with Opko Health Inc (NYSE:OPK) and Frost Groups LLC. Through Quantum Parners LP for whom Soros Fund Management LLC (“SFM”) serves as principal investment manager George Soros also has a connection to ARNI.
Despite its positive aspects ARNI’s stock remains a risky choice for investment. For now the ticker is keeping its price gains but the deteriorating traded volumes should be taken into account before any trades are attempted. The company is going to have three posters presenting at the 2015 American Society of Clinical Oncology (ASCO) Annual Meeting, being held May 29-June 2 in Chicago, so we will see if the information they disclose will be enough to keep investors interested.
