NuPathe (NASDAQ:PATH)

upside unlikely

I'm a little nonplussed that NuPathe has been able to retain so much of their valuation despite management's admission in the last earnings call that they don't even have enough cash to take them through the beginning of the Zecuity launch in Q4. The 14M shares of preferred stock from the last dilutive financing have been converted to common which leaves the 14M outstanding in-the-money warrants in hidden cap. This brings the "real" cap to about 135M.

There's obviously a hardcore crew of believer's in Zecuity's commercial prospects, but I'm not one of them. Most migraineurs who fail sumatriptan, or triptans in general, do so because the drug is physiologically ineffective and not because of the delivery route. I'd be surprised to see a partnership here after the incredibly destructive prior financing, and I see a management with absolutely no loyalty to current shareholders.

I think fair value of NuPathe is closer to 1 than 3 so if there's a manipulated spike ahead of the next financing and shares are available I may short this in real life.

I have been on the wrong side of every significant move that this stock has made, so if you're a betting man, it's time to buy.

Upcoming January catalyst

Hoping the FDA approves their migraine patch, Zelrix.

Get out before the dilution...

expect FDA approval of their product