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November 8, 2013

Thanks to Diabetes Treatment Deal, Big Increase in Valuation Ahead for Nuvilex

Yesterday’s landmark announcement by Nuvilex Inc. (OTCQB – NVLX) likely assures that the company will receive a future boost in its overall valuation. Nuvilex has acquired the exclusive worldwide rights to use the cellulose-based live-cell encapsulation technology for the development of treatments for diabetes from SG Austria Pte. Ltd. This new treatment category represents an even larger opportunity for the company than its current cancer treatment initiatives. According to a report by Transparency Market Research, entitled ‘Global Diabetes Devices Market and Diabetes Drugs Market – Industry Scenario, Trends, Analysis, Size, Share and Forecast, 2011 - 2018,’ the global diabetes market for therapeutic devices and drugs is expected to reach US $114.3 billion by 2018. 

A proof of principle animal study demonstrated that when cells that produce insulin were transplanted into diabetic animals, the animals’ elevated blood sugar levels became normalized and remained stable for the duration of one six-month study. This event indicates that the encapsulated cells produced insulin in response to the higher than normal blood glucose levels in the animals. Therefore, the encapsulated cells appear to have acted as an artificial or replacement pancreas which has tremendous value in treatment of diabetes.

Armed with these valuable study results, management will likely take steps that will ultimately lead to the initiation of human clinical trials which, in turn, will serve to substantially raise the company’s value and its profile.  Nuvilex is clearly not a one-trick pony and now has multiple shots on goal with the rights to use the cellulose-based live-cell encapsulation technology in developing treatments for both diabetes and cancer.

Moreover, this is now the second time in less than a year that the Company has been able to raise funds at a premium to the company’s common stock price. The first tranche was $1.5 million at $0.125 per share and the most recent tranche was $1.5 million at $0.15. The stock’s most recent closing price was $0.135.  Under typical circumstances, the ability to raise funds as a microcap stock for two technology rights acquisitions with virtually no material dilution is a testament to the prospects inherent in the business model. However, to do so at a premium—twice---is unheard of and illustrates that management has the capability to raise funds to fund its development objectives.

Coupling the cancer and diabetes markets with its solid R&D results and the proven capability to raise funds indicates that Nuvilex is on the cusp of emerging as a major player on the biotechnology stage. Moreover, an expected 50% or more rise in the share price and overall company valuation as a result of this deal would confirm this sentiment. 

For more information, refer to our previous sponsored NVLX Reports, Updates and Hot Topics by visiting www.GoldmanResearch.com

Senior Analyst: Robert Goldman
Rob Goldman has over 20 years of investment and company research experience as a senior research analyst and as a portfolio and mutual fund manager. During his tenure as a sell side analyst, Rob was a senior member of Piper Jaffray's Technology and Communications teams. Prior to joining Piper, Rob led Josephthal & Co.'s Washington-based Emerging Growth Research Group. In addition to his sell-side experience Rob served as Chief Investment Officer of a boutique investment management firm and Blue and White Investment Management, where he managed Small Cap Growth portfolios and The Blue and White Fund.

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I, Robert Goldman, hereby certify that the view expressed in this research report accurately reflect my personal views about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the recommendations or views expressed in this research report.

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