Athersys, The Next Wannabe 10-Bagger in Biotech (ATHX, PFE)
Athersys, Inc. (NASDAQ: ATHX) is soaring on the announcement by the company that it entered into a development and commercialization pact with Pfizer Inc. (NYSE: PFE). The pact is for MultiStem(R) for the treatment of Inflammatory Bowel Disease. As traders and investors look (and hope) for potential 10-baggers in small-cap and low-priced biotech shares, this one is seeing very exacerbated trading activity.
Athersys will receive a $6 million cash payment up front from Pfizer to fund the research during the first and initial part of this pact. The standout note from Pfizer is that it noted how Athersys represents a cornerstone of Pfizer’s stem cell and regenerative medicine plans. Athersys is eligible to receive milestone payments of UP TO $105 million upon the successful achievement of certain milestones in development, regulatory approvals and commercial limits.
Athersys shares are up a whopping 192% at $2.92 today after closing at 1.00 on Friday. Trading volume is almost 6.8 million shares as of 12:15 PM EST, and the average trading volume is only 30,000 shares per day… Sorry, it was only that amount. Even after the huge gain, the market cap is listed as a mere $54 million.
To show how much traders are willing to chase the companies on any such news, this stock has an intra-day high listed as $3.95. Athersys was very briefly an $8.00 stock back in 2007 when it came public. In 2008 it slid from over $4 down to under $1.00 throughout the year. Shares had recovered off of lows, but nothing at all like what we are seeing today.
As of September 30, 2009, the company had $18.8 million in cash and short-term investments, and listed another $3.94 million in long-term investments. Its total liabilities are listed as only $1.665 million.
JON C. OGG
DECEMBER 21, 2009
