CPBM: Extremely Small Float Could Mean Big Profits For Investors Print
By Rob Goldman   
Tuesday, 18 May 2010 06:39

Keep an eye on Cyplasin Biomedical (OTC BB: CPBM.OB). the biopharmaceutical company focused on the commercialization of products targeted for sale in the global hepatitis C virus (HCV) treatment market.

Know two things: The company has an extremely low float- one of the lowest we have seen- and the HCV market is a multi-billion dollar opportunity. On any positive news, this stock could move up in price very quickly and the way we hear it there could be some interesting new coming (see below).

Cyplasin is focused on developing nations where infections are the highest in the world. In the past few months, the National Institutes of Health (NIH) has assigned an exclusive license to Cyplasin for a virus like particles, or VLP vaccine and CPBM also has an exclusive immuno-drug platform technology that contains 14 issued patents with over $10M worth of development behind it.

Based on this drug platform technology from NIH, Cyplasin is addressing the HCV market with a unique two-pronged business model. The Company is initially entering the HCV treatment space as an anti-viral generics provider, producing recently off-patent treatment for HCV.

Based on very positive HCV animal tests, it also plans to submit a Phase I protocol for its VLP vaccine under development to prevent HCV infection. There is no preventive vaccine currently on the market and Cyplasin is the only company with a VLP vaccine under development to prevent and eliminate HCV infection.

CEO Garth Likes told BioMedReports.com that by engaging in this strategy, “…it lowers the risk profile for investors as we more quickly generate revenue and still maintain the huge potential of a typical biotech.”

The key here to our alert is that the Company is very close to signing 2 financing deals including one which we believe could occur within a very short period of time. These deals are with domestic and foreign partners which will jump-start the generics operations of and get Cyplasin set to engage in Phase I clinical trials.  One is relatively small, but the second one could be multi-million-dollar in size.

This could be a great entry point for investors not just due to the unknown story and timing but the fact that out of 11 million shares outstanding, there are only 1 million shares in the float. That means the stock could enjoy a dramatic rise as news about financings and milestones hit. Given the value of the intellectual property from the NIH license, the near term revenue opportunity, and its jump from pre-clinical to clinical stage, the stock is way undervalued at current levels. Based on our experience fair value is closer to $20 million, or $2.00, than the $0.40 per share closing price on Monday.

In the Goldman Select Research report on the Company, there were indications of two milestone events that may serve as catalysts for the Company's shares.

"The generics first and clinical trials second model means revenue is in the coming quarters and the huge potential of R&D remains down the road, but with lower risk. Plus, we expect Cyplasin to sign financing agreements in 2Q10 and the commercialization of its generics strategy in 2H10 validate the model and address initial working capital requirements..."

Disclosure: No Positions

Rob Goldman has 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. Goldman produces research via two formats: Goldman Select Research and Goldman Opportunity Research. The Select product represents the Firm’s internally generated stock ideas while the Opportunity product represents sponsored research reports. This coverage tends to be dominated by early-stage health care, technology and energy sectors. Six month or three month subscriptions can be commissioned by publicly traded company management, investor relations or consulting firms, investment banks, or related parties. Full disclosures and report details are available at goldmanresearch.com




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