Investors Are Waiting for an Arch Therapeutics Inc (OTCBB:ARTH) Update
About two years ago, Arch Therapeutics Inc (OTCBB:ARTH) was playing with the $1.30 per share mark. Right now, it’s sitting at just $0.25.
If you’ve been following the company, you know what the problem is – ARTH was pumped in the summer of 2013. The promotion was quite massive. $2.9 million was set aside and touting was done through landing pages, paper mailers, and emails. The initial excitement pushed the ticker to over $1 per share, but although the campaign lasted for a while, at one point, the promoters had to move on and, left to its own devices, the stock crashed hard.
Investors lost interest, but a few weeks ago, ARTH popped back on the radar when the company announced that, according to an independent third party, the AC5 hemostatic device is performing beautifully. On Friday, the ticker entered the spotlight once again. It didn’t really move very much – 9% in gains isn’t that impressive when it comes to penny stocks, but at one point during the session, ARTH hit a peak of $0.27 which is just inches away from the 52-week high logged eleven months ago. What’s more, the dollar volume of about $230 thousand goes to show that people are still interested.
They are most likely waiting anxiously for the LD Micro conference which should take place at the beginning of next week. ARTH announced on May 18 that they will be attending and they said that during the conference, Dr. Terrence Norchi, the company CEO, will provide corporate updates and talk about upcoming milestones.
Hopefully, he has something really good to say because ARTH‘s balance sheet is not exactly confidence-inspiring. Here’s a summary of the figures recorded on March 31:
- cash: $573 thousand
- current assets: $606 thousand
- current liabilities: $1.4 million
- NO revenue since inception
- quarterly net loss: $834 thousand
Some of you will probably say that, in light of the company’s development stage status, the financials aren’t too horrifying. Sure, the debt is quite significant and the lack of revenues is certainly putting pressure on the balance sheet, but these are all things we’re used to seeing from small cap biotech enterprises. And some of them manage to pull through despite all the problems.
That’s true, but you should bear in mind that not quite everything is going according to plan. If you read through the latest 10-Q closely, you’ll see that ARTH initially expected to start the clinical trials during the first half of 2015. They are now saying that they won’t be able to do it before Q3.
The more experienced among you know that when you’re investing in an early stage biotech company, you have to be armed with a lot of patience. They also know that delays could potentially be quite disastrous for the share price. Make sure you bear this in mind while making your investment decision.
