10-Bagger Quest Chases ARCA biopharma (ABIO)
ARCA biopharma, Inc. (NASDAQ: ABIO) was not just the big winner of the trading day. It was an exponential gainer. You rarely see this unless there is a major biotech announcement regarding cancer or other other disease cures. But in the quest for ten-baggers in biohealth, ARCA Bio at least formed a start for a ten-bagger or 1,000% run as shares were up over 200% today.
This morning came the announcement that the U.S. Patent and Trademark Office issued a patent on methods of treating heart failure patients with bucindolol based on genetic testing.
The patent, “Methods for Treatment with Bucindolol Based on Genetic Targeting” was given patent #7,678,824. If all goes as the plans detail, then this would be a new approach to treating heart failure. The company also expects that this will extend its pharmacogenetic intellectual property protection around bucindolol.
As far as if this gets approved for marketing, it would provide Gencaro market exclusivity out all the way until the year 2025.
In today’s BioHealth Business Daily, we noted that this may be an opportunity for the company to raise capital via a secondary offering or even by a private placement. Even with the 200% gain, the market cap here is well under $100 million. The treatment has not even made it to the clinical trial phase, so it is a safe guess without reviewing the history in detail that this is the recipe for a capital raise.
ARCA shares are still well off of 52-week highs, so there was a real let down before in this name. From last May, when the stock hit $13.45 until mid-July, it took a sickening slide to $2.28. Today, as the share moved to $9.00, management got some measure of redemption.
ARCA has also received a notice about NASDAQ listing requirements and it had a dreaded “going concern” letter from its auditors. The company has effectively no revenues and its loss from operations last year was $37 million.
We often cite the quest for ten-baggers. This may be one of those examples, but time will be the judge. Regardless of how it goes you can bet this is going to be on the watch list for traders and investors for some time to come.
JON C. OGG
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