ATHX the Next Frontier?
ATHX or Athersys, Inc. is a biopharmaceutial company established in 1995 and publicly traded since 2007 with operations in Cleveland, Ohio and Leuven, Belgium. They develop therapeutic products to extend and enhance human life.
In their lead program, they utilize Multistem®, a proprietary stem cell product that they believe could be beneficial in the treatment for multiple disease indications in the cardiovascular, neurological, and inflammatory and immune disease areas. It is currently in its clinical stages.
One should note that the product addressing Inflammatory Bowel Disease is a partnership with Pfizer.
Just recently, the company agreed to sell an additional 19,802,000 common stock shares at $1.01 per share. In addition, the underwriters were granted an over-allotment option to purchase an additional 2,970,300 shares of common stock. This was also recently exercised. The reason it was exercised was because demand for the shares was high and shares were trading above the offering price. This allowed the company to raise additional capital. As a result the company received about 23M shares. Per ATHX's press release, they "intend to use the net proceeds from the offering for working capital and general corporate purposes, including the funding of its ongoing clinical trials."
If we take a look at the three year chart, it isn't a pretty one. Usually I will stay away from these stocks just because of the downward trend. It went from $5.50 per share to 1.01 per share. We are seeing it close to its 52 week low and just above the support (horizontal blue line) established in December 2010. The next two target points are $1.12 and $1.24. The lowest this stock has ever been at is about $.34 per share in late 2008.
The world may not be ready for stem cell technological advances, but sooner or later it will come. We've seen this stock move from $1 to $5 in a matter of weeks. No reason why it can't move like that again.
The fundamentals are not that great as witnessed by the company's need to raise additional funds just to keep the company afloat. Furthermore, technically speaking, if it busts through that 2010 support, we could be going down for a wild ride. Like with any small biotech company, you are almost gambling. Do your due diligence.
Disclaimer: Article is written for informational purposes. It isn't intended as investment advice.
Disclosure: I have a position in ATHX.
Labels: Featured Stocks, Finances