Northern,WI 12/11/2012 (BasicsMedia) — Investing in SmallCap is tricky, and anything smaller than $200 Million with a tightly held float can prove too rich for many to stomach, take Acura Pharma (NASDAQ:ACUR) currently valued at $3.50 ($160MarketCap), in July 2012 they were valued near the current valuation – and over the next few days they were sliced in half – only to rally back to the $160M level in 1 fiscal quarter. It’s tough to sit through that, but trading in this subsector of SmallCap Pharma is not for everyone. Take solace in the fact that common shares cannot go below zero…because this stock tested the $1 level a few times during 2012.
What they do is design drugs that outsmart addicts so they cannot abuse them by changing the compounds (I am no scientist) so they can’t be cooked, smoked or shot by the growing addict numbers in American cities – which is a huge problem – and as a market observer it’s great to see this from a public company. This is a very interesting sub-sector of Pharma, and along with the volatility comes some great opportunity at revenue for a small cap company…and it’s good to know there are – do good – stocks like (ACUR) !!
Back in July what sent the stock lower was this PR regarding the Oxycodone substitiute, ” Acura Pharmaceuticals, Inc. (ACUR), a specialty pharmaceutical company announced that Pfizer (NYSE:PFE) provided notice on July 26, 2012 that it is exercising its right to terminate the license……“…..Bob Jones, President and Chief Executive Officer of Acura Pharmaceuticals. “We will evaluate our strategy for these products over the coming months, including possible partnering with alternative strategic partners, and will work with Pfizer to exercise our rights under the Pfizer Agreement for the transition of these products back to us.” shares took a huge swipe and spent 90 days rallying back to current levels.
What created the initiative for the rally in the stock in November and December revolved around releasing press on a product Pseudoephedrine, a decongestant used in some cold and allergy medicines, is the primary ingredient converted during illegal methamphetamine production. Unlike other cold and allergy pseudoephedrine products, Nexafed® is the only medicine that utilizes Acura’s Impede™ technology, a unique polymer matrix that disrupts the extraction and conversion of pseudoephedrine to methamphetamine. If abusers try to extract the pseudoephedrine out of Nexafed® to make methamphetamine, the inactive ingredients in the polymer matrix will form a thick gel to block that extraction and disrupt conversion of pseudoephedrine to methamphetamine.
What all this means is that Technically shares filled the gap from July breaking down from $3 and change to today closing near $3.50 making this SmallCap a wild ride…in a really cutting edge sector. I can tell you the ride is not over. I guess success in trading many times is not looking at the screen for awhile and believing that the company has the R&D product line fully loaded…and this management team has weather the storm in 2012….would you expect anything less from a guy named Bobby Jones.
Disclaimer: We have no position in any stock mentioned here.