Provectus Pharmaceuticals, Inc. (OTCMKTS:PVCT) Drops Below $1 Again

1PVCT.pngIt’s been an exciting few weeks for Provectus Pharmaceuticals, Inc. (OTCMKTS:PVCT). Up until the middle of last month, the ticker was happily occupying the $0.63 – $0.65 range. Trading volumes were negligible and the possibility of sudden surges in the right direction or violent corrections seemed slim. Then, interest increased and the price started to go up.

It was a slow and steady ascend and by the beginning of September, the ticker was hovering around the $0.75 per share mark. On September 4 OTCBB Journal started covering the stock and a Seeking Alpha article written by a trader who has a long position in the ticker appeared on PVCT‘s Yahooo! Finance profile. A week later, the company announced that it has been granted its 26th patent and although the market’s reaction was not immediate, the price really started gaining momentum. On September 20, PVCT reached its 52-week high of $1.14 and the questions of whether it has what it takes to continue the upward trend were getting bigger and bigger.

Sure enough, a reversal has been observed during the last couple of sessions and yesterday’s trading was particularly painful for the stockholders when 844 thousand shares changed hands and a total of 16% of the value was lost. PVCT opened the day at $1 and started sliding down almost immediately. Six and a half hours later, it was at $0.84 which equates to a market cap of around $108 million.

That’s quite a lot for a development stage company that has:

  • $4.6 million in cash
  • $2.3 million in quarterly net loss
  • no revenue
  • an accumulated deficit of approximately $125 million

The market valuation is indeed a bit on the overestimated side, but we shouldn’t ignore the fact that PVCT have a much more solid balance sheet compared to the majority of development stage pharmaceutical small cap ventures. In addition to this, according to their website, they are currently preparing themselves to start the Phase 3 trials for their flagship PV-10 melanoma treatment, which should suggest that commercialization is getting closer and closer.

The really big problem is, it has taken them an awful lot of time to get to where they are today. The company entered the pharmaceutical business about nine years ago and that’s quite a lot of time, especially in Pennyland, which could suggest that some of the people who invested a while ago are getting impatient.

As you can see from the chart at the beginning of the article, such traders certainly had the chance to release their holdings on the open market when the interest was at its peak and, while we can’t be 100% sure that this is exactly what happened, it might serve as an explanation for the slide over the last couple of days.

Of course, if PVCT manage to succeed with their efforts of putting PV-10 and the rest of the products in their pipeline on the market, they will probably experience some more consistent growth, but unfortunately, they are reluctant to put up a deadline for the commercialization process which means that all shareholders can do, is keep their fingers crossed and hope for fair wind.

While they’re doing that, the implications of yesterday’s fall could be felt by the regular trader. Quite a lot of investors will probably be put off by the big red candle and, despite PVCT‘s relatively strong fundamentals, might decide to walk away. This, as well as the rest of the risks related to all development stage pharma penny stocks are definitely worth considering before putting your money on the line.

3TDEY.pngOther tickers that retraced their gains yesterday include 3D Eye Solutions, Inc. (OTCMKTS:TDEY) who wiped out nearly half of their value after the pressure got too much and North American Oil & Gas Corp (OTCBB:NAMG), whose performance over the coming sessions is becoming increasingly unpredictable due to the million-dollar hard mailer pump being carried out for them at the moment.

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