TapImmune Inc. (OTCMKTS:TPIV) Falls Down Despite Positive Announcements
At the end of Wednesday’s trading TapImmune Inc. (OTCMKTS:TPIV) issued a PR announcing that their cancer vaccine TPIV 200 in the treatment of ovarian cancer has received Orphan Drug Designation from the FDA. As if that wasn’t enough at the start of yesterday’s session the company also revealed encouraging data from the Phase I clinical trial of their TPIV 100 vaccine. According to the CEO of TPIV the data should provide “the rationale and catalyst” for the start of a Phase II trial.
After such impressive announcements one would expect TPIV‘s stock to have moved nowhere but further up the chart during yesterday’s session. Instead the exact opposite happened – TPIV opened at close to $0.95 but crashed down almost immediately and finished the session at $0.81 for a loss of over 10%. What could explain the negative performance?
Well, TPIV may have far superior financials than those of the majority of pennystocks but there still are some rather alarming red flags. Since the start of the year the outstanding shares of the company have nearly tripled – from 20.3 million shares at the end of 2014 to more than 60 million as of November 16. The majority of the newly issued shares saw the light of day through the exercise of warrants at prices far lower than the market price.
Approximately 6.7 million series C warrants have been exercised at $0.50 while the staggering amount of 24.6 million series B warrants were exercised at just $0.20 each. TPIV has also sold over 12 million shares at $0.20 each as part of two private placements. The effects of the issuance of so many cheap shares and the resulting dilution should definitely be taken into consideration.
On the other hand with TPIV planning to launch its Phase II trials and the $13.3 million grant from the U.S. Department of Defense that their collaborators at the Mayo Clinic were awarded for a 280 patient Phase II clinical trial there are several catalysts that could get investors excited.
Dealing with pharmaceutical pennystocks always carries a lot of risks and putting any money on the line should be preceded by sufficient due diligence and careful planning.
