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Not sure why so many chose to sell today. But I do think that a timely resubmission of the 510(K) could help. Even if it is only for "wound dressing" it is likely to be approved from what I have heard and is a step in the right direction. Why it is now over six weeks after Norchi said they needed more than a day to answer a question from the FDA and pulled his 510(k) concerns me. How much time is needed? Is the question not easily answered? Also there is a mention in the yearly report 10K that raising more funds may face some difficulties in that, if I remember correctly, conditions made on the prior financing (was it last April?) said something to the effect that 20% of the outstanding warrants had to be executed before they could raise more money. If Norchi were to call those warrants, how much cash would that take? Fighting the flu here, so not up to running numbers, but one of you might want to comment on this. Also writing from memory so apologize if I have misspoken. Staying on the sidelines until this is cleared up.
I am basing what I said on Dr. KSS' twitter posts and what was stated here yesterday that Norchi and KSS had a "falling out." Just seems to me KSS is being vindictive, as nothing changed that I know of with Arch yesterday.
The unexpected destructive rampage by KSS against Norchi for personal reasons has presented those with cooler temperaments an excellent buying opportunity, imo.
Based on the sustained upward SP action of the past week, I think this is more than an oversold bounce, and believe positive news is coming if not out there somewhere. I am going to override my doubts and join those who feel patience is virtue and that the remarkable AC5 will find its way in spite of what doubts I have had about Dr. Norchi's ability to get it there. Back in as of moments ago.
Several issues are at play in the background: Having read the patent license agreement between M.I.T. and Dr. Norchi, which Arch posted in an 8k SEC filing in 2013, it appears to me that if Arch doesn't get a 510(k) refiled in a timely manner, they could be in violation of the agreement which has milestones as of Jan 1, 2018 and Jan 1, 2019. The agreement was signed in 2011 so Norchi is pushing up against long term deadlines. This I think is likely why he is now saying he wants to get clearance for a wound dressing device and later on apply for hemostatis, taking the path of least resistance. If the 510(K) re-submission fails and Norchi has to file a de Novo or PMA, then I believe he will be unable to meet the licensee agreement milestones, as they are then facing a two year delay at best. This may not be the end of the story for Arch, as it could be possible for M.I.T. and Arch to negotiate an amendment, but as investors we should be aware of the uncertainties looming. Also in the conference Norchi stated he would be raising funds later this year, but was unclear as to how this would be done . Until we have more certainty about all of this, I can see how difficult it is to know how to value the stock. The SP could take a temporary bounce here from being oversold or it could lose more value if.39 is breached, I believe from my reading of the chart and current L2.
Norchi stated at the Biotech Showcase conference that he could not comment on what the questions were that the FDA asked as it would reveal proprietary information. He did say they would not be difficult questions to answer, but not in the time frame allotted.
I thought from reading the 10k that the patents are under MIT's "ownership" due to the license agreement, so I attempted to get a copy of the license agreement between M.I.T. and Arch from M.I.T. and had no luck. I was told that it is not available to the public, to ask the the company. I will ask Arch for a copy of the license agreement. I want to know what the milestones and payments Norchi alludes to are. Will let you know. (BTW my dad was a patent attorney and he was most amused by the volume of patents for "eternal motion machines." Theoretical impossibility, but still people were getting patents for them!) I am more concerned about the license agreement at the moment than the patents.
RE: my previous post, the issue to look at in the 10k involves not yet exercised "warrants", not "options" (my typo) from the previous sale of securities. Thanks
UFO: Please stop the personal attacks. If you want to debate something of substance please don't hesitate. You were out of line to post my comments on Stock-gumshoe previously. You are out of line again in this most recent put-down. Have you read the recent Arch 10(K) yearly report, with care. I'd appreciate your perspective on a couple of issues I noticed since I last posted; The inaccurate description of how 510(K) application is initiated and the difficulty Norchi states he will have in making a (now needed) future stock offer due to restrictions related to the options held in the last one. This would require your time and due diligence, and would be better spent than commenting on me. Simply wishing the current situation isn't so, and being angry at me about it tells me you are not being objective or fair. Also you are violating the rules of iHub with your vindictiveness.My motive from day one of posting here has been to be informative and to warn investors of the trouble I saw brewing. The stock was a about 77 cents when I first posted. If you had looked objectively at what I was presenting to you, you might have saved yourself the grief you are apparently now feeling. My twitter account has had years of positive comments and hopefulness about Arch. Recent events have caused my optimism to change to pessimism. Let's both be in the here and now. I will re-enter the stock if and when it feels safe to me and I will let you know.
I wouldn't read much into the principals at Arch not selling shares. The shares cost them almost nothing and they have very handsome salaries. I believe Norchi earns $500,000/yr plus options, so why not just keep things rolling for years and not worry about selling, like the rest of us are! That is an opinion of an associate of mine. I really have no clue what is going on behind the scene there, only disappointed at where they are now vs where I thought they would be when I first invested with them in 2014.
Amatuer17 Agreed, I think it would be wise for Norchi to pull the irrelevant Class I listing; he claimed "nothing can be done" about it, but the truth is Arch can ask it be taken off the FDA website. (FDA confirmed) before the FDA catches up and pulls it, as I am guessing will be the case. This would show good faith by Norchi and I think be a positive in his negotiating with the FDA. UFO was very critical of me for making my posts without owning any shares. So let me clarify, I have owned Arch, previously, for over two years, as have family members. I have no doubt AC5 is a marvel but as I said to UFO in a private post, it hurts to see Norchi fumble the ball on the goal line. I personally made a suggestion to Dr. Norchi months ago that I believe would have avoided the current situation, to file a de Novo application but he didn't think that was the way to go. His current FDA liaison should be replaced at quarterback, imo. I would not like to be in Norchi's shoes right now. I have always been an advocate of Arch so please don't think I have an ulterior motive when I post. I don't believe there is anything he can add in a new 510(K) that will make a difference to what has already been submitted. Time will tell.
I am wondering why the FDA would continue to allow the Class I-exempt listing for Arch on the FDA website (still there as of today). Dr. Norchi has been circumspect about why they listed as such, and he always says they are applying for Class II clearance. Almost all Class I devices are exempt from FDA clearance or approval. Norchi said at the LD Micro Conference “The Class I listing comes from an FDA database simply related to a company listing to be able to file your products with the FDA. You have to list your company with the FDA.” Actually, the FDA describes Registration and Device Listing as a notice to market a product that has been cleared or does not need clearance (termed PMN-Pre-Market Notification). I would not be surprised to see the FDA pull Arch’s listing, but worse, I am concerned that having made a possibly misguided and/or deceptive listing (my opinion) will harm Norchi’s relationship at the FDA at time when his being trusted is crucial for him to readjust to the current challenge. The loss of the listing could be the next shoe to drop. I am not suggesting you buy or sell shares of ARTH based on this posting. Happy Holidays and New Year!
RE: Regis999 post 8030
Several points of disagreement: 1) I have only posted here--not “all over the internet,” 2) I have spoken with Dr. Norchi. 3) AT FDA, I am in contact with three senior level people, two of whom are in “510(k) submissions” and “Classification” one of whom has been there 22 years. I do not post my opinions without consulting with them. 4) As I previously posted, neither employee discussed the confidential file of Arch, but responded to questions I asked based on documents published by Arch, and how the 510(k) process works normally and specifically 5) No one is going to be fired at the FDA who I spoke with. When you critique me personally without responding specifically to my content with an alternative point of view it tells me you must be heavily invested in Arch and this makes it difficult for you to be either objective or show consideration to someone with a difference of opinion. You are entitled to your points of view, but as the focus here is on Arch’s inability to navigate the FDA for clearance for AC5, please respond to me with courtesy and information rather than insults. As far as Dr. KSS speaking with Dr. Norchi, why would he not present, support and publish the most positive outcome possible and hope to assuage doubts for his readers?
Please see my posts from last month for background on the process for 510(K) clearance. I did express my concerns that there was a problem with Arch’s application. Rather than likely receiving an NSE (rejection) Norchi pulled the application. Did anyone notice that at the LD Micro conference just over two weeks ago, he reset expectations that AC5 would only possibly be cleared as a “wound dressing” by January 17, 2018 and that Arch would then apply again with a new 510(K) to add on hemostasis. You can see the webcast today on their website, although I would not be surprised if they take it down. Check out slide 22. He spent less than 20 seconds to explain what most investors would have thought was a major change in direction. Roth Capital Partners dropped coverage of Arch following that presentation. Now Norchi would like us to believe that whatever problem they are having getting clearance for AC5 will be a setback of no more than 3 to 6 months and that a new 510(k) application will solve the issues. I take that as a best case scenario, but believe it to be unlikely to play out as he says. The 510(k) discussions normally start months before an application is submitted with pre-submission talks, and continues through various timed processes with the FDA. So Arch and the FDA have discussed AC5 for about 9 months already. To claim he has new data to present to the FDA seems unlikely as there is no ongoing study of AC5 to yield that data. Logic tells me that he has been told he will need to file a de Novo application or possibly a PMA so more likely we are looking a delay of approximately one to two years. If he files a 510(K) again it can’t be different enough from what he has already filed to be successful, I would think. One problem I see is that Norchi was looking for approval for both partial and full thickness wounds, but my understanding is that the human studies were only done on partial thickness wounds. What I have just presented is in my opinion of the most likely outcome. I don’t think Norchi is shocked by this as in his yearly report (10k) under “risks” he states the FDA may ask for a PMA because (to paraphrase) AC5 is so novel. My belief is that the advice he was given to file as he did was not good advice and not good planning. Also in the risks section of the 10k Norchi states that he has certain obligations and timeframes he must meet to keep his license with M.I.T. for AC5 (That agreement goes back to around 2006) and Norchi has never specified what the milestones are. So the worst case scenario is that Arch loses the license. I think as reasonable investors we should set our expectations between the best case and the worst. I won’t buy shares until there is a plan that can be understood, points towards success, and is transparent. Right now I think the stock is going to be stuck in a trading range, close to the low .50s but as months pass, I will not be surprised to see the price hit a 52 week low. As far a suitor coming in to the rescue, I see that as unrealistic. Why it hasn’t happened already, is anyone’s guess. This is my opinion and I am not suggesting you buy or sell shares. I currently own none.
Regis999: Sorry my post apparently upset you. I am not about to to give you names when your intention is harmful. You are under no obligation to change your position on Arch based on my post, so calm down please. I agree that AC5 is revolutionary and a game changing medical device. No argument there. This is only about Arch getting to the next step--clearance with the FDA. I just don't get why the company is in my opinion off track with execution. Let's talk about this again in January, as this will be my final post until then, unless something definitive happens before. So Happy Holidays!
Mongoose5: True, Arch "is registered for a Class I device" But, they are not yet "cleared" for anything, internal or external at this point. You are being told they are o.k. Class I by the FDA because Class I means "exempt" which means registration isn't even required. But exempt is not for products like AC5. For approval they have to compare themselves to a substantially equivalent (also called predicate) device and these all are in Class II which Arch pretty much said in the 10K. If they would go out and market now, they would have their Class I registration pulled. Whether the Class I registration was a mistake, or by intention for unclear reasons it has certainly caused shareholders to be confused. Take your time to think this through. Not suggesting anything but caution here.
DtheG I appreciate your concern about the FDA. I was only told something based on what I told them. They did not look at the company specifically, so they were not out of bounds. What I told them came from Arch. I apologize if my information was not factual but for now I believe Arch has said they have heard nothing from the FDA officially and that they did apply for clearance in mid July. If I am incorrect please correct me.
I do have agreement from speaking with the company and the FDA that Arch’s current “registration” doesn’t mean anything. FDA says, generally a company does not register until they have received clearance, which has not happened as of today. If AC5 is cleared as a Class II they will have to register as a Class II at that time. Perhaps Arch was premature to register as Class I when they did, and that it may have been to promote the stock rather than expecting a Class I approval (my opinion). Where it goes from here is anyone’s guess, but I will say, again in my opinion that things don’t add up. The FDA cannot discuss specifics of a company but I was told I have reason to be concerned, from what I told them. 1) The Company saying they have heard nothing official from the FDA to date. 2) If they did apply in mid-July they should have had approval by now. I have no intention to influence anyone’s viewpoint, and am only reporting what I have learned and certainly wish Arch the best. Personally, I consider this a very risky investment at this time.
This link shows that Arch's AC5 is registered as a Class I device with the FDA although they are apparently expecting Class II approval, per the recent 10K. I am posting this because a previous poster said they could not find documentation of Class I registration outside of this forum. Within the 878.4022 Regulation number all approvals have been Class I.
https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfRL/rl.cfm?lid=529643&lpcd=NAE
Deja Vu? Arch’s FDA registration is for a Class I exempt device. Their recent 10(k)states explicitly they "have been determined to be Class II" If they don't change their registration from Class I-exempt, I don't believe they can get approval. Remember the fiasco earlier this year when they said the “wrong paperwork” was submitted to the EU for the CE Mark? Can't figure out what is going on with ARTH. Caution; Today may only be an oversold bounce, imo. The 510(K) is the real story and I don't see it happening anytime soon. Two possible erroneous submissions? How and Why?? My opinion, but I have asked a company that helps with 510(K) submissions and believe they agree.