July 24, 2013
The Stars Align For Nuvilex
Investing in any stock is fraught with risk and there is arguably no riskier proposition than investing in early stage biotechnology stocks. However, over time, risks can be reduced as companies and their respective segments reach pivotal inflection points in their growth. A perfect example of how risk in a biotech stock is dramatically reduced while upside potential moves front and center is Nuvilex, Inc. (OTCQB – NVLX - $0.1435– Spec Buy).
It was not too long ago that Nuvilex had what some might view as crippling real estate-related debt from a bad deal executed by prior management. Plus, despite its affiliation with SG Austria, it did not yet own all of the assets and licenses associated with live-cell encapsulation platform technology for pancreatic cancer and all other forms of cancer for that matter. Plus, the soon-to-be concluded deal at the time included the acquisition of all of the assets of SG Austria which would have resulted in a 22% share dilution and the ownership of non-core businesses that would have bled operating expenses.
Today, the real estate debt looks like it will be settled soon, if it isn’t already, all of the oncology-related assets and licenses for the use of the live-cell encapsulation therapy for oncology have been acquired with essentially no dilutive effect, and going forward, operating expenses are held in check since the ownership in SG Austria is 14.5%, instead of 100% of the SG Austria subsidiary, Austrianova Singapore. This step has ensured access to the live cells Nuvilex requires for its trials without the associated overhead of non-core business lines. Plus, when the $1.5M in funds were raised privately to execute the transaction through restricted stock, they were priced at $0.12 with no warrants, earn-outs, milestone payments, or additional debt. As a result, the risk inherent in the stock is substantially reduced which in turn raises the value of the stock at an even greater level than the current price. Furthermore, as progress is measured and reported on the development front, the stock should only move in one direction: up.
Separately, one of Nuvilex’s peers in the pancreatic cancer treatment arena, Merrimack Pharmaceuticals (NASDAQ – MACK) is slated to complete enrollment for its Phase III pancreatic cancer trial with top-line results expected in the next year or so. Any positive news resulting from the trial will likely result in a boost for any stocks in the pancreatic cancer space, as a rising tide lifts all boats---even in this case where Nuvilex may ultimately likely exceed Merrimack’s results, if the success in the first 2 pancreatic cancer clinical trials recur.
Clearly, all of these events and milestone serve to benefit Nuvilex as the stars align for management and shareholders.
You Might Also Like
Senior Analyst: Robert Goldman
The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research report, update, article, or note is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.
This publication does not take into account the investment objectives, financial situation, or particular needs of any particular person. This report does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA, the U.S. Securities and Exchange Commission or with any state securities regulatory authority.
ALL INFORMATION IN THIS REPORT IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.