+ Watch ABIO
on My Watchlist
I was so preoccupied with Oculus on Wednesday that I was too busy to explore another shorting opportunity where I actually may have been able to get some shares. Arca is a completely pathetic zombie biopharma that should have gracefully shut its doors in 2009 after the FDA appropriately issued a CRL for Gencaro, a beta blocker that failed to show stat sig benefit in CHF in phase III trials. Instead, Arca spent the last four and a half years raising money through dilution, spending it on salaries for themselves, reverse splitting, and raising more money. During that time they conducted no clinical studies that I am aware of, but they did switch the target of Gencaro from CHF to A-fib, despite having an SPA in place for a phase III trial in CHF since 2010.Over the last few weeks, a concerted effort has been taking place on Seeking Alpha and elsewhere to try and make FDA acceptance of the IND for Gencaro in A-fib and approval of the phase III trial protocol into a catalyst. Most legitimate biopharmas don't even bother to PR IND acceptances, since it's mostly a formality before the real work of conducting clinical trials begins. Nevertheless, the touts primed the pumps and Arca was only too happy to oblige with a pompous pre-market declaration of the FDA's acceptance of the IND, accompanied by a saintly picture of their CEO. Indeed, the float was tiny and enough gullible traders were moved by the word "acceptance" to start a fire under the stock, taking it from 1.4 to a high of 2.1. I dropped my red thumb at 1.9, but CAPS gave me the share price of 1.68 from an hour earlier as my start position. No worries. Arca will go to zero someday so the worst that happens is I wait a little longer to close the pick.The rapid decay after the pump means that Arca may not be able to dilute at the higher price they wanted. They have about 18M as of the last 10Q, thanks to a slimy financing with convertible preferred stock that is not reflected in the market cap on the financial portals. That won't be anywhere near enough to see GENETIC-AF through to completion, so expect to see much more coordinated work between Arca management and "analysts" to prop up the share price ahead of extensive further dilution.
sell out time
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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