NanoViricides Inc (OTCBB:NNVC) Moving Up
Starting a pharmaceutical company is by no means easy and the people who run NanoViricides Inc (OTCBB:NNVC) can confirm that. You first have to come up with the illness you want to treat and the technology you will use in your drugs. Then you have to go through the lengthy process of developing and testing. Next come the required approvals from the institutions and finally you have to think about manufacturing, marketing and selling the treatments at a profit. Having gone through quite a lot of development stage pharmaceutical small cap ventures, we can see that most of them are struggling, but is that the case with NNVC?
Well, they started their medical business back in 2005 and they have targeted a few illnesses that they plan to treat with state-of-the-art polimer-based products called nanoviricides. A total of six commercially significant drug programs are currently in motion and they are in various stages of development.
On June 10 they announced that one of them (DengueCide) is being filed for approval with the FDA which is definitely a sign that NNVC are moving in the right direction. If the treatment gets okay’d, it will receive the “orphan drug” designation. Dengue Fever is a less common disease and in order for the treatment to be considered “orphan” the ailment should be experienced by less than 200,000 people in the US. On the one hand this means that the customer base is somewhat limited, but on the plus side, the orphan program provides some tasty tax incentives, which is always good for a start-up company.
This will definitely help NNVC make progress and another thing suggesting that eventual success is not impossible is the relatively strong financial statement. When we go through reports of other small cap pharmaceutical ventures, we’re more often than not faced with huge working capital deficits, a lot of debt and horrendous losses. NNVC seems to be a little bit different. Here are the figures as found in the 10-Q covering the period before March 31:
- cash: $15 million
- current assets: $17 million
- current liabilities: $4 million
- no revenue since inception
- quarterly net loss: $3.6 million
The large amount of cash and the working capital of around $13 million do provide some financial comfort and they say in the report that at the moment, they feel no need for raising more money through the sale of stock or through convertible notes and debentures which is more than can be said about other OTC ventures like Creative Edge Nutrition Inc (OTCMKTS:FITX) (who lost 43% yesterday despite some optimistic news) and Fuse Science, Inc. (OTCMKTS:DROP) (who wiped out a further 15%).
Another thing that NNVC seem to be enjoying at the moment is confidence from investors and yesterday’s press release about their participation in the 2013 edition of OneMedForum-NY was apparently enough to get investors all excited. By the end of the day, the ticker had gained nearly 10%.
Still, we all know about the volatility of penny stocks and the possibilities of sharp corrections are always strong. Furthermore, it seems to be taking NNVC quite a lot of time to get the whole business rolling and the shareholders might start to get impatient at one point in the future. Not to mention the fact that there are absolutely no guarantees that the regulatory organs will even let the DengueCide medicine hit the shelves.
All in all, despite the strong financials and the progress made in terms of operations, a potential investment in NNVC still has its risks and it’s vital that you consider them carefully before jumping in.
