Elite Pharmaceuticals, Inc. (OTCBB:ELTP) Jumps Up By a Quarter
After fluctuating on both sides of $0.12 for around two and a half months the stock of Elite Pharmaceuticals, Inc. (OTCBB:ELTP) made a rather significant surge during yesterday’s session. The ticker shot straight to the sky adding nearly 25% to its value and ending the day at $0.15. We have been following the company quite closely and with a good reason – ELTP is certainly not just another pharmaceutical pennystock.
While the typical company is desperately trying to develop just one product ELTP have been able to successfully sell eight. Even though 3 of them were launched during the last two quarters which means that their market share has not fully developed revenues for ELTP have increased dramatically. At the end of September they had:
• $766 thousand cash
• $3.2 million total current assets
• $11 million total current liabilities
• $1.2 million revenues
• $9.6 million net loss
Although the amount of the net loss certainly looks scary it must be noted that almost all of it is due to a change in the fair value of the ELTP‘s preferred shares and outstanding warrants.
The report also revealed that the costs for research and development have increased by nearly four times signaling that the company is having even more plans for the future. On December 5 they began the pilot bioequivalence study for their abuse resistant twice a day oxycodone/naltrexone product. The trial finished on December 22 but on January 10 a larger bioequivalence study will start for another product. The next set of trials is planned for March with one of them being for a once per day drug.
Investors should keep in mind that the earliest any of these new products is going to hit the shelves is at the end of 2015 according to the CEO and that is if everything goes along perfectly. For now ELTP have access to enough sources of funds to execute all of their operations. Back in April they entered into a $10 million common stock purchase agreement with Lincoln Park Capital Fund, LLC. As of November 4 they have sold them around 38 million shares for proceeds of $2,960,000. ELTP also has a credit line of no more than $1 million with both the current CEO and the previous one.
On November 15 ELTP received their first milestone payment from Epic Pharma, LLC. This payment was a part of their license agreement according to which Epic has the right to manufacture and sell twelve generic products owned by ELTP. This payment might have had something to do with all the shares sold by Epic on the market in the past two months.
The potential of the company is undeniable but investors should attempt any trades only after doing extensive research. The stock has been quite volatile and has proved to be able of both sharp climbs and steep drops.
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