In January of this year, I wrote a piece on PharmaCyte Biotech (NASDAQ:PMCB) calling it a very curious case. Indeed it is a strange company with a strange past. In the comments there, someone wanted to know how I thought to write about them. I actually began following the company (formally Nuvilex) in March of 2013 after first learning of the company through this article. The company seemed to have promise and the idea of treating diseases utilizing injected cells honestly sounds like a great concept. I rarely touch penny stocks, but at the time I decided to purchase some shares to initiate a small position. The company sat in my portfolio for almost a year with relatively little change in the share price. When 2014 began though not only did the company get some sort of funding, but also it received treatment as if it were a marijuana stock in what had become a huge marijuana stock bubble. The shares soared and not wanting to be greedy (as well as still being skeptical), I exited my position. I was also tired of the routine press releases that touted that preparation for trials were going well. After a year I need more substance than repeatedly "it's on the way".
The company recently put out another release to once again say the trials are on the way. This time I'll hand it to them though, the release is much more detailed. This news is the best I've seen this far with regards to the company appearing to actually be finally close. Here's the rundown of what's happening and what's supposed to be happening.
- Translational Drug Development (TD2) is conducting an expanded preclinical study for the company on 12 mice using the Cell-in-a-Box plus low-doses of ifosfamide combination to slow down the accumulation of malignant ascites fluid. This study is expected to last about 2 months. Phase 1 trials in the US are expected to begin in Q3 of this year being conducted by TD2.
- Phase 2b clinical trials in patients with advanced, inoperable pancreatic cancer are due to begin in Australia in Q3 being done by Clinical Network Services (CNS).
You can learn about TD2 here and CNS here.
The new developments point to one thing. Quarter three will be make or break. If the trials actually start it could mean a huge up boost for the shares. However, if once again the company needs more time, it will leave me thinking that the trials may never start.
In that same release, CEO Kenneth L. Waggoner addressed some shareholder concerns as well:
Before doing so, however, we would like to address two issues that reportedly are of significant concern to a number of our shareholders. The first has to do with whether a reverse stock split is imminent. The second is whether we have access to capital to move forward with our clinical trials. PharmaCyte Biotech has no current plans to effectuate a reverse stock split. In addition, our cash position remains strong and our ability to raise capital continues to be very favorable.
In my previous piece, dilution was a very large concern of mine. The number of shares seems to increase dramatically with every filing. As stated above, the company has no plans to do any stock split and it believes it has the ability to raise capital along with its cash position to initiate trials. I still believe that should trials get initiated and the shares see a nice boost, the company will more than likely heavily dilute. Dilution continues to be one of the largest red flags and it will be very interesting to see what the number of shares are when the company releases its next filing.
In conclusion, quarter three is setting up to be very big for the company. If the trials actually begin I will become less skeptical. However, should they be delayed longer, I will become much more adamant on the idea that they may never happen. Either way, I continue to sit on the sidelines and keep an eye on a company that is quite interesting. Only time will tell what Q3 will bring.
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