Sevion Therapeutics Inc (OTCBB:SVON) Wakes Up
Sevion Therapeutics Inc (OTCBB:SVON) hasn’t been among the most active OTC tickers for quite a while, so, chances are, the more inexperienced among you have probably never heard of it. Once you take a closer look, however, you’ll see that the company has been around for some time. It was previously called Senesco Technologies and several years ago, plenty of people were putting their money on the line in the hope of something better to come.
Some even wrote articles saying that the stock, which was then traded at $5 per share, could some day reach $26. At the moment, however, this lofty price target seems somewhat elusive. Especially when you have in mind that the business has not been going quite according to plan.
In Q4 of last year, SVON realized that they don’t really have the capital resources to support the development of their Factor 5A technology and they decided to suspend it for an indefinite period of time. Then, they saw the data from the Phase 1b/2a clinical trials and they figured out that continuing working on the aforementioned technology simply isn’t worth the money and effort. Several contracts were terminated during Q1 and as a result, SVON‘s balance sheet at the end of March looked like this:
- cash: $470 thousand
- current assets: $598 thousand
- current liabilities: $1.6 million
- Q1 licensing revenues: $37 thousand
- Q1 net loss: $1.2 million
Not really the figures you’d expect to see from a company that is about to come up with a treatment for cancer and in light of this, the lack of interest in the stock displayed over the last few months is hardly surprising. Yet, the Factor 5A wasn’t the only piece of technology SVON is trying to develop. They also have some research and development work in the field of antibodies and when they ditched the Factor 5A, they focused on it.
They raised some money as well. A subscription agreement means that they recently sold around $4 million worth of units (comprising of common shares (or convertible preferred shares) and warrants) at a price of $0.75 per unit. In addition to the fresh cash injection, SVON also presented their technology at a couple of biotech conventions and the outcome of all this is that investors are now paying attention again.
The volumes are still far from consistent and the same can also be said about the stock performance. Nevertheless, yesterday, investors traded nearly 300 thousand shares which resulted in a dollar volume of about $305 thousand. The ticker was pushed up by about 15% and it reached a close of $1.07 per share.
Needless to say, however, if SVON is to sustain its current valuation, it will soon need to come up with a little bit more than a couple of Power Point presentations uploaded on their website. The recent funding means that people are still ready to trust them, but, as we’ve established so far, this hasn’t really paid off in the past which, in turn, goes to show that being cautious might not be such a bad call.
