Elite Pharmaceuticals, Inc. (OTCBB:ELTP) Bucked Good Run, Slides Toward 12 cents

Elite Pharmaceuticals, Inc. (OTCBB:ELTP) had a good run, but now it is up to the market to decide if the new week opening means just a breather and a minor setback, or a deeper correction. ELTP lost more than 12% on Monday, and slid down on Tuesday down through 13 and toward 12 cents or less. ELTP0924.png

While ELTP indeed holds a lot of potential, a lot of it is contingent on FDA approval, which may be slow. And drugs in the pipeline may test the patience of investors. So despite the fact that ELTP is at a three-years’ peak, there is no guarantee for any higher level. TTNP0924.png

For now, the correction is not unusual, as it has happened in past months, only to lead to a further climb. But still, the cuts may be painful and costly for some.

On Monday, the selling may have been attributed to selling by Epic Investments, a fund that recently converted its preferred stock to common stock and soon after that shed the holdings. With events like that, it is easily seen that ELTP is more complex than merely a good pharmaceutical story.

And the good story ELTP tries to offer is that of abuse-resistant opioid pills, using a technology to create non-crushable, non-injectable medication. In the past, the FDA has been speaking positively of drug companies trying to fight addiction to prescription drugs. But this did not help too much for Titan Pharmaceuticals, Inc. (OTCBB:TTNP) which crashed after negative comments from the FDA.

The other worrying thing for ELTP are the relatively low volumes, only in the last few days rising up to around 5 million shares per day. Monday’s total trading reached $1.7 million dollars. And at a relatively low price, ELTP is vulnerable to wiping out a large percentage.

All of this may happen despite the company’s genuine change in the past days, and despite the promise of new CEO Mr. TTNP0924.pngNasrat Hakim. We have to wait and see if ELTP indeed benefits from the opioid markets.

Another pharmaceutical company with a relatively accessible price is Advanced Cell Technology, Inc. (OTCBB:ACTC), headed by controversial scientist Raymond Lanza. Currently, ACTC is on a minor winning streak, but again fighting an epic battle for positions between 6 and 7 cents.

If you are looking for a bargain, ELTP may easily drop to a more appealing price in the next hours. But this does not automatically mean a rebounce, not without further mention in a press release, at the least. So while ELTP looks like an exception, it is better to be as skeptical as for all penny stocks.

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