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peculator's Radar: Small-cap biopharma challenging highs ahead of move up to NYSE-Amex from bulletin board (3.78 +0.05)
Prolor Biotech (PBTH.ob) is a niche-focused, development-stage biopharma that will be moving up to the NYSE-Amex next week. The stock is currently challenging all-time highs, and could generate additional interest as it moves to up to a major exchange.
Prolor announced yesterday that it will begin trading on the NYSE-Amex on Monday (3/29), a move up from the bulletin board where the stock has been trading (stock will keep the PBTH ticker). As we often note, the move to a major exchange from the bulletin board represents a key catalyst, as it provides greater exposure and validates early-stage companies, while opening the door up to a wider base of potential institutional investors. While the move is positive, and analysts are bullish on the company, it still carries significant risk as it is a development-stage (Phase I) biopharma company with no revenues.
For some background, Prolor is a small, Israel-based biopharma company developing proprietary, longer-acting versions of therapeutic proteins that require frequent injections. The company is focused on approved protein drugs with established safety and efficacy. PBTH's core technology, discovered by researchers at Washington University, is based on a naturally occurring short amino acid sequence, the Carboxyl Terminal Peptide (CTP). When attached to a therapeutic protein, CTP significantly extends the length of time the protein remains active in the body. The company is currently developing biobetter, CTP-modified versions of human growth hormone, interferon beta, EPO, factor VII and GLP-1. Clinical trials of hGH-CTP are ongoing.
Merck (MRK), which has rights to apply the CTP technology to four endocrine proteins, announced on January 28, 2010 that it has received marketing authorization in Europe for its CTP-modified follicle-stimulating hormone (FSH-CTP, named ELONVA) product -- showing that a single injection of FSH-CTP provided the same clinical effect as 7 daily injections of standard FSH. This approval helped to validate the CTP technology, which improves PBTH's profile. While MRK has a license from Washington University for the use of CTP technology on four proteins, PBTH has licensed all other uses of the CTP technology. Last week, PBTH announced that it had closed a $24.4 million private placement of its common stock, sold at $2.35 per share.
Despite being a bulletin board stock, PBTH is covered by two analysts - Roth and Ladenburg Thalman -- and both have "Buys" on the stock. What's notable is Ladenburg's $9 tgt. The firm raised their tgt to $9 from $5 on Feb. 3 following the company's Phase I hGH trial results. The firm said the drug candidate demonstrated an excellent safety profile (all safety/tolerability endpoints were met) at the doses tested (4/7/21 mg), and the results suggest that the product's pharmacokinetic profile could be better than they anticipated with patients requiring only two injections per month.
Lastly, we'd note that Dr. Phillip Frost is the Chairman and major investor in the company (Frost holds 18% of the outstanding shares). Frost is a well known biopharma entrepreneur, who previously built and sold Key Pharmaceuticals and IVAX Corporation. Given recent M&A in the space, along with PBTH's niche focus and MRK's presence in the CTP space, we wouldn't be surprised to see speculation about potential M&A and/or partnership deals on PBTH... We'd caution that the stock remains thinly traded, with only 28K shares trading so far today. Mkt cap $134 mln, float 21.6 mln, avg vol 98k (IDEAS)
Prolor Biotech (PBTH.ob) is a niche-focused, development-stage biopharma that will be moving up to the NYSE-Amex next week. The stock is currently challenging all-time highs, and could generate additional interest as it moves to up to a major exchange.
Prolor announced yesterday that it will begin trading on the NYSE-Amex on Monday (3/29), a move up from the bulletin board where the stock has been trading (stock will keep the PBTH ticker). As we often note, the move to a major exchange from the bulletin board represents a key catalyst, as it provides greater exposure and validates early-stage companies, while opening the door up to a wider base of potential institutional investors. While the move is positive, and analysts are bullish on the company, it still carries significant risk as it is a development-stage (Phase I) biopharma company with no revenues.
For some background, Prolor is a small, Israel-based biopharma company developing proprietary, longer-acting versions of therapeutic proteins that require frequent injections. The company is focused on approved protein drugs with established safety and efficacy. PBTH's core technology, discovered by researchers at Washington University, is based on a naturally occurring short amino acid sequence, the Carboxyl Terminal Peptide (CTP). When attached to a therapeutic protein, CTP significantly extends the length of time the protein remains active in the body. The company is currently developing biobetter, CTP-modified versions of human growth hormone, interferon beta, EPO, factor VII and GLP-1. Clinical trials of hGH-CTP are ongoing.
Merck (MRK), which has rights to apply the CTP technology to four endocrine proteins, announced on January 28, 2010 that it has received marketing authorization in Europe for its CTP-modified follicle-stimulating hormone (FSH-CTP, named ELONVA) product -- showing that a single injection of FSH-CTP provided the same clinical effect as 7 daily injections of standard FSH. This approval helped to validate the CTP technology, which improves PBTH's profile. While MRK has a license from Washington University for the use of CTP technology on four proteins, PBTH has licensed all other uses of the CTP technology. Last week, PBTH announced that it had closed a $24.4 million private placement of its common stock, sold at $2.35 per share.
Despite being a bulletin board stock, PBTH is covered by two analysts - Roth and Ladenburg Thalman -- and both have "Buys" on the stock. What's notable is Ladenburg's $9 tgt. The firm raised their tgt to $9 from $5 on Feb. 3 following the company's Phase I hGH trial results. The firm said the drug candidate demonstrated an excellent safety profile (all safety/tolerability endpoints were met) at the doses tested (4/7/21 mg), and the results suggest that the product's pharmacokinetic profile could be better than they anticipated with patients requiring only two injections per month.
Lastly, we'd note that Dr. Phillip Frost is the Chairman and major investor in the company (Frost holds 18% of the outstanding shares). Frost is a well known biopharma entrepreneur, who previously built and sold Key Pharmaceuticals and IVAX Corporation. Given recent M&A in the space, along with PBTH's niche focus and MRK's presence in the CTP space, we wouldn't be surprised to see speculation about potential M&A and/or partnership deals on PBTH... We'd caution that the stock remains thinly traded, with only 28K shares trading so far today. Mkt cap $134 mln, float 21.6 mln, avg vol 98k (IDEAS)
