AP Pharma, Inc. (OTC:APPA) Jumps on NYC Marketing, Inc. Pump

A blunt advice for hard decisions is that if you need more than one reason to choose something, you must not choose it. If you picked AP Pharma, Inc. (OTC:APPA) for the one good reason of exposure to an up and coming pharmaceutical company, it may be a good bet. But add to this the reason that APPA is hot right now and your investment may turn sour. The second reason for APPA‘s latest spike is a paid promotional email. DMHI0313.png

As with many pharmaceutical companies, development may be slow and costly and cause great fluctuations in stock price depending on how close the company is to marketing a new and potentially profitable drug. The company’s anti-nausea drugs have been under FDA scrutiny for a few months now, and though the procedure is lengthy, this may give some hope for the future. But APPA looks pressed in its financial reports, showing: DMHI10313.png

  • $53,506,000 cash
  • $55,172,000 total assets
  • $4.1 million liabilities
  • Zero revenues
  • $23 million net annual loss for 2012

While APPA manages to keep debt from shooting through the roof, it is accumulating losses. There is a marked increase in cash reserves in 2012, coinciding with an issue of more than 100 million additional shares. The company is currently capped at around $187 million, with more than 305 million shares outstanding.

One of the causes that stopped the slide in the APPA stock is a promotional email from NYC Marketing, Inc. Our database show no compensation for the message, and it may be an attempt to improve records with a relatively solid stock from a business that inspires confidence. This pumper has a past history with pharmaceutical companies, and it promises to keep us on APPA for the next few weeks. But let’s see what happened to the other pharma selection, DMH International, Inc. (OTC:DMHI). The mention at the start of March caused a brief spike of the 4-cent stock, but it slid to 2 cents as the promoted selected another ticker.

Pharmaceutical companies have been on the rise among small caps in 2013, but with different rationale behind the rise. Some grow out of obscurity when they finally achieve a market share, while others are padding selected by pumpers. If you want to gain from the general industry trend, it is best to do your own due diligence of each separate company before committing to an overhyped ticker.

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