NanoViricides Inc (OTCBB:NNVC) Follows The Upward Trend
NanoViricides Inc (OTCBB:NNVC) finished yesterday’s session another 5% up with a trading volume of 677 thousand shares which is three times higher than the average one from the past three months. The last red session was about a week ago and this goes to show that investors are still pretty excited about the the developments around the company. That said, there are a few reasons that could suggest an even brighter future for NNVC.
As we mentioned in our previous article, they recently filed an application for the FDA approval of one of their drugs – DengueCide. If the experts decide that it’s safe, it will hit the shelves as an “orphan” drug which means that the disease it treats is relatively rare. This might limit the customer base somewhat, but the orphan program is designed to give manufacturers some tax incentives which will definitely help NNVC along the way.
While FDA are doing the testing and checking out of everything is safe for use by the public, NNVC are not just sitting there as well. On July 1 they issued a press release in which they say that they are planning to give DengueCide for testing by the European Union authorities. This means that if the wind is fair, the medicine can be sold in all 28 member states and, as you have probably guessed, that is a huge market. The only problem is, approval by the European authorities will take even longer since all the documentation should be translated into every single one of the languages spoken there which is a lengthy process.
Financially speaking, things are looking good. As we wrote previously, NNVC are a lot better than most of the penny stocks out there, especially the ones that are in the development stage. Cash amounting to $15 million and total assets of around $17 million are not to be sniffed at, but having said that, we should also point out that the market valuation of around $120 million is still a bit of a stretch.
The thing that does worries us a little bit is the fact that they do appear to be taking way too long. NNVC started their medical business way back in 2005 and while developing a medicine as revolutionary as the one they want to market is by no means easy, eight years is still an awful lot of time. Judging by the comments under one of our articles from January 2012, shareholders were already getting a bit impatient even back then and right now, more than seventeen months later, the revenue section of their financial statement is still empty.
Hopes now lie with the DengueCide and its potential approval. Traders and investors want to see the medicine on the market as soon as possible and they are also keeping their fingers crossed that NNVC will manage to keep the costs at bay and sell it at a profit. But what if something goes wrong?
We’ve seen it happen before. A.P. Pharma, Inc. (OTCBB:APPA) is another small cap pharmaceutical venture that wanted to develop and sell a new kind of anti-nausea medicine. They presented it to the FDA last year and everyone was mightily optimistic about the whole thing. Unfortunately, the regulatory organs weren’t too happy with APPA‘s creation and they refused to give them their sign of approval. The results are pretty clear from the chart on the right.
Another, even more tragic example is the one of Affymax, Inc. (OTCMKTS:AFFY). Their efforts were aimed at treating anemia patients and unlike APPA they received their FDA approval back in February 2012. A year later, however, reports of nasty side effects emerged and AFFY were forced to recall the drug from the stores. Shortly after, they laid-off all their workforce and were delisted from NASDAQ.
These are indeed grim scenarios, and we do hope that NNVC have better luck, but we reckon that you should be aware of all the possibilities before making any investment decisions.