3 Disruptive Biotech Companies Moving On To Higher Exchanges

Includes: IPIX, NVIV, ONVO
by: Arthur Goldgaber

Companies that trade on the financial marketplaces and electronic trading system operated by the OTC Markets Group (OTCQX, OTCQB, OTC Pink), or the Over the Counter Bulletin Board (OTCBB), are typically looking for greater exposure and attention, along with investments, in order to eventually uplist to a national security exchange. These exchanges, such as the NYSE-MKT or the NASDAQ-CM, open opportunities for the company to benefit from even larger investments from retail brokers and institutional investors.

The uplisting process is not automatic and requires meeting specific requirements. Companies that are uplisted to the NYSE-MKT gain from issuer-selected Designated Market Makers (DMM) that utilize world-class NYSE trading systems to reduce volatility, improve prices, add liquidity, and increase value.

Additionally, NYSE-MKT-listed companies can have greater brand exposure, attract more institutional investors and are eligible for issuer services afforded by the NYSE Euronext community. These advantages not only benefit the companies that are uplisting, but also the investors who purchased shares early. Three recent companies in the medical and pharmaceutical arena have taken the steps necessary to get uplisted, (with one recent success), and all three are worthy of investors' attention.

Organovo Holdings, Inc.

Though not an easy process, uplisting for a company can be extremely profitable for all involved. For example, Organovo Holdings, Inc. (NASDAQ:ONVO) is currently reaping the benefits since it was approved for uplisting to the New York Stock Exchange (NYSE-MKT) on July 9. Before uplisting, it traded on OTCQX, OTC Markets Group’s highest financial marketplace. Keith Murphy, Organovo’s president and CEO, stated in a press release that trading on OTCQX, helped the company expand its investor base and increase its average daily trading volume, which was “instrumental” in enabling it to qualify for an NYSE MKT listing.

In a recent statement after the ringing of the opening bell at the NYSE, President and CEO of Organovo stated, "Organovo is proud to ring the opening bell on behalf of our employees, investors and all of our supporters, in recognition of our recent uplisting. This milestone is another important step forward for the company in our mission to advance the impact of 3D bioprinting in changing the shape of medical research and practice. We found NYSE to have made an unparalleled commitment to providing a fertile platform for growth to early stage biotechnology companies, and we look forward to a great future on the exchange."

Organovo has its own niche designing and creating functional, three-dimensional human tissues for medical research and therapeutic applications. The company collaborates with pharmaceutical and academic partners to develop human biological disease models in three dimensions.

These 3D human tissues, known as the NovoGen MMX Bioprinter which was developed to meet challenges in biologic research, could potentially accelerate the drug discovery process, and, that in turn, will enable treatments to be developed faster and at lower cost. This platform shapes human cells into 3D tissue, creating a superior analysis alternative to animal testing models.

As of this writing, the Organovo's shares climbed $.80 to $6.81, or 13% on 7.9 million shares. With a market cap of just $439 million, the company is in its infancy as it creates a viable product that many in the medical field are counting on for research. However, the recent uplisting enables Organovo's investors to utilize all of the trading technologies, including connectivity and routing of the NYSE platform that offers superior price discovery and liquidity, and reduced trading volatility. The investing frenzy into 3-D printing, combined with the application to medical research, continues to make this stock attractive one.

Cellceutix Corporation

If you missed the boat on Organovo, let's look at Cellceutix Corp. (CTIX.OB). The company trades on OTCQB, OTC Markets Group’s middle marketplace which identifies companies that are current in their reporting to the SEC or a bank or insurance regulator but either cannot or choose not to qualify for OTCQX. The company is a unique business in that it is a clinical stage biotechnology company focused on discovering small molecule drugs for difficult- to-treat diseases. The company has developed an extraordinary drug, Kevetrin, that has been found in the research to fight many forms of cancer. Kevetrin induces the activation of p53, often referred to as the "Guardian Angel Gene" because of its role in controlling cell mutations. This p53 is a tumor suppressor protein and has been widely regarded as possibly holding a key to the future of cancer therapies.

Cellceutix is on the path to uplisting as well. In December 2012, the company signed an agreement with Aspire Capital for $10 million in financing, and Kevetrin is currently undergoing human clinical trials at Harvard Cancer Center (Dana Farber). This year, the company received approval for a 505(b)(2) designation by the FDA for Prurisol, their Anti-Psoriasis compound. This accelerated path for testing and approval is boosting the company's chances for uplisting.

As Cellceutix CEO Leo Ehrlich stated during a recent interview, "We are very focused on what we are working to accomplish in the near term with the development of Kevetrin and Prurisol, but moving to a senior exchange is definitely part of our overall plan to maximize exposure and shareholder value. Making some preliminary plans, I had a meeting with the NYSE earlier this month to discuss the process and was pleasantly surprised that they knew who we were already. As I'm sure you can tell, we don't let the moss grow under our feet at Cellceutix." Ehrlich added that "We are always planning for the future, but we still recognize that there is work to be done in the here and now. As we meet our milestones, we will move forward. I am confident of that."

Cellceutix is worth examining because of the critical news that is due in the coming months. News should emerge about P21 data from their Dana Farber trial of Kevetrin, their human trials for Prurisol set to begin in Europe next month and also their sponsored studies at the University of Bologna and MD Anderson for blood cancers. The company is probably waiting for the trials to advance further before uplisting. This affords and appealing situation and an opportunity to pick up shares now while it's trading at less than $2.00.

InVivo Therapeutics Holdings Corp.

InVivo Therapeutics Holdings Corporation (NASDAQ:NVIV) is a developer of specialized technologies for the treatment of spinal cord injuries (SCI) and other neurotrauma conditions. InVivo is strong financially and should be a strong candidate for uplisting.

Last month the company announced that it raised $16 million from investor warrants. InVivo's CEO Frank Reynolds said that, "We are pleased with the addition of $15.6 million of cash from the warrant call which strengthens our balance sheet. With the resultant elimination of the $24.6 million warrant liability from our books, the last major impediment to up-listing to a national securities exchange has been removed." Reynolds also said, "We expect that an uplisting to a national securities exchange will increase liquidity and unlock inherent value in our stock."

InVivo is poised to attract investor attention when it is uplisted. Instead of focusing exclusively on regeneration, the company is in a unique position in that it is the only company that has developed a way to harness the ability to secrete substances to the local area of a spinal injury to help prevent other injuries. In other words, the company concentrates on neuroprotection.

Its products are intended to protect the spinal cord after primary injury by mitigating the bleeding, inflammation, and further cell death that result from the body's immune response to spinal cord injury, according to the company. By minimizing these secondary injury processes, and by supporting subsequent repair and recovery, the body can locally reorganize toward functional recovery through the spared healthy tissue. This process, known as neuroplasticity, may result in partial functional recovery.

The company's technologies encompass multiple strategies involving biomaterials, U.S. Food & Drug Administration (FDA) approved drugs, growth factors and human neural stem cells (hNSCs).

It is just a matter of time, but the uplisting of InVivo will happen which is why I believe now is good time to conduct a thorough analysis of the stock.


Investing in companies that are on the verge of uplisting is one strategy of investing. Noting the trend of the three companies above and including them on a closely reviewed watch list should increase an investor's likelihood of selecting good, long-term companies with possible above-average returns.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.