Chen Lin excerpt from The Life Sciences Report
TLSR: So you have another one you want to talk about?
CL: The last is a company called Apricus Biosciences Inc.(TBIO:OTCBB). The company makes an erectile dysfunction (ED) drug, like a Viagra (sildenafil citrate; Pfizer Inc. [PFE:NYSE]). Viagra is orally administered and can only help 50–55% of the population because people cannot take Viagra if they have a heart condition or diabetes, etc. Apricus' drug, Vitaros, can cover the rest because it is a cream that is applied locally. Major pharmaceutical companies like Abbott Laboratories (ABT:NYSE) and Novartis AG (NVS:NYSE) have already licensed this product, signing for milestone payments of almost $100M plus additional double-digit royalties, in most cases.
"I believe biotech is in the first leg of what could be a multiyear bull market."
But the company's market cap is still tiny. It's still around $85M. One day, one of the big pharmas will say, "Why do I need to pay hundreds of millions in royalties when I can buy the company for the same price?"
I like the company's new management, because it just got rid of the poison pill (shareholders' rights agreement) that opened it to a bidding war. Recent stock weakness was due to the company doing a secondary offering. I believe once the shares go to stronger hands, the stock can make a major move. It just got European Union (EU) approval for Vitaros. It will find new partners and get new milestone payments. For the next 6–12 months, we could have a dozens of positive catalysts. I believe the stock will move much higher. This is the only biotech stock that didn't go parabolic for me this year, but I think it could be the next to move.
TLSR: Where is it trading now?
CL: Around $2.50. With an $85M market cap and an ED drug that has billion-dollar per year potential, Apricus can be worth billions. And the company has already received EU approval. So Vitaros can be on the market in 6–12 months.
