Arca Biopharma Inc (NASDAQ:ABIO)

CAPS Rating: 1 out of 5

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Member Avatar pchop12316 (60.95) Submitted: 4/21/2015 12:01:21 PM : Underperform Start Price: $0.89 ABIO Score: +1.92

more downside near term


Member Avatar zzlangerhans (99.81) Submitted: 4/13/2015 11:01:54 AM : Underperform Start Price: $1.04 ABIO Score: +15.98

I've hammered Arca countless times over the many years that they've been floundering in progressing their zombie drug candidate Gencaro, initially for CHF and now purpotedly for prevention of atrial fibrillation. With a new shortposition of 10000 shares cost basis 1.02 this is the first time I've put my money where my mouth is. The stimulus for my quick short this morning was a gap up on news that Gencaro has been awarded Fast Track designation for a-fib. Fast Track designation is virtually meaningless, especially given Arca's absurdly slow pipeline progress over the past few years. It's kind of like putting Air Jordans on a Galapagos tortoise and expecting it to start sprinting.

Arca has two big problems. One is that the GENETIC-AF trial of Gencaro for a-fib is highly likely to fail, since the premise of the trial was retrospectively data mined from a previously failed trial, which was in turn a redo of another failed phase III trial. The second problem is that even if the trial were to be successful, we're years away from even a hint of that fact. Despite enrollment having been open for a year, Arca recently reported having enrolled only 12 patients out of 200 necessary to complete the phase IIb portion of the trial. That's completely pathetic, especially given the fact that a-fib is as common in medicine as sand is in the Sahara. What that enrollment rate tells us is that cardiologists have zero interest in enrolling their patients in this trial. Arca would have us believe that it is because their enrollment criteria were too strict, and they have now submitted protocol changes to the FDA that remove certain exclusions. If these changes are approved, Arca believes they "may" complete enrollent of the phase IIb portion by the end of 2016 with an analysis of that data in H1 2017. That analysis will determine if the trial proceeds to the phase III portion which requires enrollment of another 420 patients. Does everyone see where this is going? Into the 2020's.

I say that these are Arca's problems but I doubt anyone at Arca is losing much sleep over them. After all, as long as the lights are on management is getting paid and living large on fat expense accounts. These are really problems for Arca longs, whose numbers have now been swelled by those regretfully piling on to the false catalyst this morning. What's the risk here? Well, as my recent journey into the red on a Nymox short proves, no stock is too pathetic to be manipulated into multibagger gains in the short term. In addition, Arca is a favorite for the Seeking Alpha Pro scam, in which one-sided pumps are frontrun to paying customers at SA and then released to the general readership a day or two later to engender a sharp price spike for quick profits for Pro customers. However, in the past all these games have resulted in only short-term gains and Arca stock quickly receded back into the depths. If not, Arca has only 15M in cash as of the end of 2014 which is probably a tenth of what they need to see them through to completion of GENETIC-AF. Any sustained rise in share price will be quickly followed by a dilutive financing on unfavorable terms.


Member Avatar jed71 (73.67) Submitted: 12/11/2014 12:08:48 PM : Underperform Start Price: $1.14 ABIO Score: +25.58

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: -193.25

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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