Highly Speculative: Manhattan Pharmaceuticals? Print E-mail
By Vinny Cassano   
Monday, 25 October 2010 00:00

A week ago I mentioned that Manhattan Pharmaceuticals (OTC:MHAN) would participate in the Precision IR biotech virtual conference and although nothing significant came from the presentation - aside from the fact that we actually now have confirmation that someone in the company has a heartbeat. 

The proof of a heartbeat came from Dr. Malcolm Morville, President and CEO of Ariston Pharmaceuticals, with whom Manhattan merged earlier this year.

Dr. Morville's presentation, while quite monotone and painful to listen to, gave speculative investors a look at recent developments and future expectations of the company, but did not answer the question as to what is taking so long to advance the pipeline.  It seems like forever that we've been listening to the potential that the insecticide-free head lice treatment Hedrin would have in the US and Canadian markets, but the story has remained the same for the better part of a year - still in discussions with the FDA to commence a Phase III trial. 

According to Morville, the FDA had some non-clinical and manufacturing concerns with the Hedrin plan that needed to be addressed before Manhattan could move forward with the trial.  Those concerns are being addressed, so we could only assume that this trial might take place by early next year - if it ever takes place.  Since Manhattan and joint venture partner Nordic are engaged in a dispute about ownership of the JV and share count, the Hedrin plan could disintegrate before it ever gets off the ground.  Should these entities get their acts together and advance Hedrin to market, then significant revenue could be generated for both the JV and for shareholders. 

On that potential alone, I still think that MHAN is a great risk/reward pick while trading for mere pennies.

The second Manhattan/Ariston product that shouldn't be too far away from market is AST-726, a nasally delivered form of hydroxocobalamin for the treatment of Vitamin B12 deficiency.  I learned way more than I cared to about this product during the webcast - and almost fell asleep a few times - but according to the good Doctor, AST-726 is a superior alternative to the current treatments already on market to treat this condition.  A Phase III trial is planned for early in 2011 and - if successful - the path to commercial launch should be fairly quick.

Also on the cooker is AST-915, a treatment of essential tremor, and a topical GEL product which Manhattan plans to commercialize as an OTC treatment for mild psoriasis.

The webcast was encouraging enough to justify the current two cent buy, in my opinion, with the risk being minimal and the potential rewards being very significant.  It's been a while sitting on this one since the last run to twelve cents, but if any of these trials get off the ground, then we could see another run.

These guys are a little too shady for my liking to not sell into any spikes, but you can't argue with risk/reward.

I even added a couple for two cents.

Keep in mind, penny plays such as this one are always highly risky and highly speculative. 


Disclosure:  Long MHAN.

Vinny also authors the popular stock investing blog VFC's Stock House.

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