Biotech Values

[stuck_holder]

Re: Resverlogix Jul 31/07 CC - a couple of interesting notes on this (especially after having gone thru DNDN Reg SHO & Joe Edelman)

CEO McCaffrey began the call by commenting on their recent $25M convertible debenture notes financing & its structure - namely the part about if any of the debenture notes were converted at a time when the stock traded below the $17.50 Cdn threshold (approximately the price at the time the Jun financing was announced) then resverlogix would pay interest on the notes thru to maturity.

the stock had hit a high of $29.50 in February after a similar $15M debenture financing in January and then dropped precipitously to a low of $10.50 in early April before recovering. It hit $22 in early June just before the latest financing announcement.

the price subsequently dropped below the $17.50 threshold shortly afterwards and continued dropping to a recent low of $7.01, which prompted today's <a href="http://www.resverlogix.com/upload/latest_news/45/01/2007-08-13_interest_rate-conversion_press_releas.... news release</a> announcing that the interest rates on the notes have increased to 12 & 13% (from 8%) due to the stock trading below the Jan & Jun conversion prices and that certain debenture holders had converted some debentures while the stock traded below the conversion prices.

mccaffrey stated he fully believes that someone is perpetrating illegal stock trading and putting downward pressure on the stock but refrained from accusing any of the partakers of the recent financing.

interestingly, that prompted the first cc question from perceptive advisors' joe edelman about what mcaffrey's comment about "illegal manipulation" was about. mcaffrey's response was to reiterate that the company has contacted Cdn regulatory authorities (who are largely ineffectual when it comes to enforcement when compared to the SEC, imo) and let them handle it. earlier, McCaffrey suggested investors contact their relevant regulators, and even suggested to US listeners to avoid buying stock on the "pink sheets" & purchase them on the TSE as they aren't listed in the US & accordingly aren't subject to any regulatory controls in his opinion. he also indicated he would pursue this illegal shorting issue even if & when the company was sold successfully.

another note of interest - rvx appears on Reg SHO (having apparently first appeared there on Jan 16, 2007, 11 days after closing their original $15M debenture financing)

ftp://ftp.nasdaqtrader.com/symboldirectory/regsho/nasdaqth20070116.txt

as for the rest of the cc, it certainly appears mccaffrey is strongly suggesting that the company (i.e. technology platform) is for sale to big pharma and they are actively in negotiations with interested parties (hinting large pharma) - and if the phase I trials suggest any hint of efficacy the asking price will go up much higher...how much of that is hype and how much is based on a sincere belief & confidence in what they have and more importantly on their ability to execute & deliver is open to debate.

as for the current share price technicals, (closed at $8.28 Cdn today, down $.62), recent RSI levels (below 30 since late July) suggest the stock may be bottoming, fwiw.