Arca Biopharma Inc (NASDAQ:ABIO)

CAPS Rating: 1 out of 5

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Member Avatar jed71 (98.66) Submitted: 12/11/2014 12:08:48 PM : Underperform Start Price: $1.14 ABIO Score: +1.27

Boy, do I hate low priced bio-pharmas. They can burn you with any small piece of news and can quickly send your Caps score into the toilet. I just can’t resist down thumbing this one after the unwarranted pop earlier today. Charts and momentum can be hard to read on these low priced beasts, but I’ll take a shot here and see what happens.

The company was formed in 2004 and hasn’t produced a lick of revenue in that time. A little about the firm:

“ARCA biopharma, Inc., or the Company or ARCA, a Delaware corporation, is headquartered in Westminster, Colorado and is a biopharmaceutical company principally focused on developing genetically-targeted therapies for cardiovascular diseases. The Company’s lead product candidate, Gencaro™ (bucindolol hydrochloride), is a pharmacologically unique beta-blocker and mild vasodilator that ARCA plans to evaluate in a clinical trial for the treatment of atrial fibrillation, or AF, in patients with heart failure and/or left ventricular dysfunction, or HFREF. The Company has identified common genetic variations in receptors in the cardiovascular system that it believes interact with Gencaro’s pharmacology and may predict patient response to the drug.”

And there’s this from the most recent 10-Q (Sep 30, 2014):

“The Company is testing this hypothesis in a Phase 2B/3 clinical trial of Gencaro, known as GENETIC-AF. The AF indication for Gencaro was chosen based on prior clinical data from the previously conducted Phase 3 heart failure (HF) trial of Gencaro in 2,708 HF patients, or the BEST trial, which suggested that Gencaro may be successful in reducing or preventing AF.”

From 2012 filing:

“The Company is planning to initiate a Phase 3 clinical study of Gencaro in AF patients with HF and/or left ventricular dysfunction. The Company believes AF is an attractive indication for Gencaro because data from the previously conducted Phase 3 HF trial of Gencaro in 2,708 HF patients, or the BEST HF trial, suggest that Gencaro may have a potentially significant effect in reducing or preventing AF.”

So they were attempting to put the same Phase 3 trial into place in 2012? Talk about delays!! Yowsers. I find it hard to believe they will ever make anything of this drug candidate given their unsuccessful first attempt at a phase 3 but maybe I am a skeptic.

The financials further support a red thumb on this stub. As I mentioned before they have no revenues. They also are burning cash at a rate of approx. $10-11MM per year. They have $17MM in cash and $18MM in total assets. I estimate the additional need for cash well in advance of any drug approvals they might receive. The accumulated deficit has reached an enormous $82MM and they are diluting like drunken sailors. The share count in 2009 was approx. 1.3MM whereas the share count today is closer to 15.7MM. There is also at least one very large reverse split in their past.

Have I mentioned they are being actively promoted? One of the penny sites has this mentioned in bold. I’ll end with the going concern statement, which in my view, couldn’t be much stronger of a warning:

“The Company devotes substantially all of its efforts towards obtaining regulatory approval and raising capital necessary to fund its operations and it is subject to a number of risks associated with clinical research and development, including dependence on key individuals, the development of and regulatory approval of commercially viable products, the need to raise adequate additional financing necessary to fund the development and commercialization of its products, and competition from larger companies. The Company has not generated revenue to date and has incurred substantial losses and negative cash flows from operations since its inception. The Company has historically funded its operations through issuances of common and preferred stock.”

I really dislike this company, but must admit that bio-pharmas do tend to burn me.


Member Avatar porschetech (< 20) Submitted: 10/14/2010 3:54:26 PM : Outperform Start Price: $19.32 ABIO Score: -187.37

GO BIG OR GO HOME. You need a few stocks like this just like you need a 3 point shooter in the NBA.

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