Accurexa Inc (OTCBB:ACXA) Blasts Off
About a year ago, the people behind Accurexa Inc (OTCBB:ACXA) were trying to develop a medical device called the iV3. The plan sounded clever enough. The gizmo was supposed to help with the early detection of cancer, but unfortunately, ACXA were struggling to get it off the ground.
In August 2014, they decided to give up and look for a new product candidate. The current name and ticker symbol were put in place and about a month later, a licensing agreement was signed which gave ACXA the right to develop what we now know as BranchPoint – a medical device that delivers different therapeutics to the brain. It should be much safer and more efficient than the methods used at the moment, and, by the looks of things, it’s getting closer and closer to becoming a reality.
Yesterday, ACXA proudly announced that they have submitted all the documents for BranchPoint’s 510(k) clearance from the FDA. The management team reckon that this is an “important milestone”, and investors tend to agree.
In a matter of just six and a half hours, they traded about 320 thousand shares and racked up a dollar volume of over $1 million. The enormous buying pressure pushed the ticker up by a whopping 75% which led ACXA to its closing price of $3.60 per share.
By the looks of things, someone read the news in advance, because if you check out Friday’s performance, you’ll see that three days before the actual press release, ACXA surged by an even more impressive 177%.
Information is leaking as if it’s been stored in a net which is hardly confidence-inspiring, but there is a more pressing matter at the moment and you have to think about it carefully. You have to decide whether ACXA really deserves its current valuation.
Coming up with an answer won’t be easy. On the one hand, the BranchPoint device appears to be clever and, as Stem Cell Stock Review (who received 2 thousand common shares and $5 thousand) recently said, it could be used for saving lives. Then again, you mustn’t forget that there is a difference between “applying for a 510(k) clearance” and “getting a 510(k) clearance”.
The latest financial statement isn’t particularly encouraging, either. Here’s a summary of the figures recorded at the end of Q1:
- current assets: $482 thousand in cash
- current liabilities: $312 thousand
- NO revenue since inception
- quarterly net loss: $363 thousand
ACXA‘s financials aren’t as bad as what we’ve seen from other OTC enterprises, but they might not be good enough to give the company a competitive edge in the crowded biotech sector.
You should also think about the convertible notes. There’s only three of them which, by OTC standards, is not that bad, but they all give the note holders an instant opportunity for a profit. The first note can be turned into stock at a fixed rate of $2 per share, the second one provides a 50% discount to the market price, and the third one converts at $0.20.
Of course, the debt holders might be willing to wait and see what will happen with the FDA submission. Then again, they might be eager to cash in. Make sure you bear this in mind while deciding on your next move.