|Is Radient Pharmaceuticals now the real deal?|
|Thursday, 13 January 2011 08:22|
Even those who may have doubted Radient Pharmaceuticals' (AMEX:RPC) recent run up the charts have taken notice of the volume and interest that the company has generated. The Early cancer detection diagnostics company has now reportedly been approached by potential partners/suitors
Two weeks ago we saw a great “short squeeze” trade involving a company being strangled by liabilities and obligations from years of technology development costs. Bad previous management decisions and very few sales marked Radient Pharmaceuticals. Thanks to new management and the vision of shareholders, the company has just gone $31 million in debt to $41 million in equity.
We’ve heard news and confirmation from management directly that the company is starting to see the fruits of the commercialization efforts that began two years ago. An announced $10 million order for their early-cancer detection kits is, reportedly, the first of many to come and revenue/sales projections are poised to multiply exponentially in both the short and long term.
During the last two weeks we’ve seen volume in the stock rise to record levels. Price action and trading activity have been volatile, yet seem to indicate that the stock has started to consolidate at and trade at new levels. After seeing the stock get hammered recently by both naked shorts and heavily profit taking, the bulls have refused to let prices go below the 200 day moving average.
We, for one, take very little credit for creating that type of volume and activity. The type of buying and selling we are seeing can’t possibly be retail investors. While someone seems recklessly determined to keep the price down, the ticker tape shows huge buy blocks taking positions in the stock.
We were lucky enough to alert our readers when we spotted a breakout and saw shares rise from $.30 to over $1.60 before the most recent correction. At the end of the day, the short squeeze play that featured a very sick, big board listed company with a strong will to survive has transformed into a momentum trade play spotlighting a new buy-out/partnership candidate with an FDA approved early-detection technology that now appears to be drawing interest from suitors and wall street bankers alike.
Those are the facts and it is our job is to make sure we report the truth as we are accountable to not only our readers and subscribers, but to the authorities who monitor the markets and news outlets.
To the best of our ability as connected industry observers who often run around behind the scenes trying to fact check here are a few of the developments at play:
According to several sources, Radient Pharmaceuticals has been in contact and talks with one or more larger, publicly trading companies about deal which includes partnering or licensing one or more of their early detection diagnostic platforms. The implications of these discussions from a financial standpoint are unclear at this moment but everyone we have spoken to tells us as that at least one deal which could “bring tremendous value and benefit Radient and their shareholders” is being considered.
A privately held company- Provista Diagnostics - which Radient announced plans to merge with or acquire last summer plays into the equation of the proposed deal. Provista is a healthcare and biotech development company located in Phoenix, Arizona, whose product portfolio includes innovative tests for the detection and diagnosis of Alzheimer’s disease as well as breast, ovarian, uterine, and cervical cancer.
Two months ago, both companies entered into an exclusive 5-year Laboratory Services Agreement that requires minimum quarterly antibody purchases from RPC and for RPC to share in the net proceeds from the sale of any tests that are developed by Provista from RPC's proprietary FDP antibodies.
In an interview in late December, Douglas MacLellan, CEO of Radient Pharmaceuticals wnet on the record: “ RPC and ProVista Life Sciences announced on October 13, 2010 some important validation study results of a blood test for early detection of lung cancer. Provista is planning to broadly introduce this new test to market and we see that as a game changer on many levels. The study which was completed focused on the requisite analyses and data evaluation which was needed to validate Provista’s test- which is based on Radient’s antigens for fibrinogen degradation products. It successfully detects lung cancer with a high degree of accuracy. The study itself included men and women between 20¬-76 years of age and the data generated in this study proved consistent with previous findings and produced positive clinical performance marks of 87% sensitivity; 95% specificity; and an ROC Accuracy of 0.97... By industry standards, the study proved very successful and will serve as one of the cornerstones to Provista’s efforts to introduce that new lung cancer detection assay- which they have branded “LC Sentinel”- to the market. Provista intends to introduce LC Sentinel as a CLIA Laboratory Developed Test (LDT) for use in high¬ risk lung cancer patient populations in the U.S. through its standard clinical channels which include physicians, medical clinics and hospitals.
It has been published and noted that Radient expects to seek FDA registration for LC Sentinel in 2011. Currently, several publicly traded and private companies are seeking to develop and market similar tests that can detect lung cancer with a high degree of accuracy. Clearly, Radient appears closest to marketing such a test, pending that FDA registration.
We are told by multiple sources that at one point recently, Provista was close to becoming a publicly traded company themselves but that street bankers and advisors proposed the marriage of the two companies instead. Said William Gartner, President and CEO of Provista in a previously issued statement: "We believe our combined knowledge, experience and product portfolio will offer significant market value."
Something has occurred which has influenced Radient’s decision to release preliminary data from their pending validation study being conducted in collaboration with Mayo Clinic's Validation Services division. We are told that the company is expected to announce more details about that critical study, the timeline for releasing data and the implications of those study results within the day or two. That pending announcement now becomes a forward looking news event.
We also understand that the company turned down several investors and bankers who took notice of the interest in the stock and approached the company with various finance deals. One major investment banking firm which deals heavily in the biotech sector reportedly began to heavily short the stock in anticipation of landing a deal (which would eventually drive the stock price down when announced). In this way- as most, but not all financeers do, the firm could make money on the way down and on the way back up. That firm was told that company was not interested in making a deal with them yesterday afternoon. Now, we are told that they must start to cover their short position.
Certainly, we advise that you look at the trading activity in the stock carefully, but given the news and developments here, as well as the positive trading action late in the day yesterday- the stock may be setting up for another short term run. As always, please do your own diligence and become fully aware of market conditions and risks before making a trade.