When we last checked on Nuvilex, Inc. (OTCMKTS:NVLX, NVLX message board) the company seemed to be doing quite alright. It was rising on the news of hiring renowned oncologist Dr. Daniel Von Hoff for one of its flagship projects, a pancreatic treatment program.
Since then, things have gone awry for them. NVLX has been falling on the stock charts with a startling speed, dropping from an April 3 close of $0.449 to $0.275 on April 16. A collateral factor for the drop may have been the suspension of Growlife Inc. (OTCMKTS:PHOT), one of the supposed leaders among pot stock companies on the OTC. One of NVLX’s subsidiaries is Medical Marijuana Sciences, Inc. (MMS), which, as the name suggests, has a stake in the cannabis industry.
Still, after the crash commenced, companies that have worrisome financials seem to have fallen even deeper in the red than the others. NVLX’s last quarterly report (for the period ended January 31, 2014) highlights that for all the press releases it produces, the company’s balance sheet leaves something to be desired:
- cash: $864 thousand
- current assets: $1.5 million
- current liabilities: $479 thousand
- revenue: $0
- net loss: $458 thousand
The company has remained active in its PR attempts but they’ve been mostly ineffective in holding the line for long. An announcement came on April 8 that NVLX’s Dr. Mark L. Rabe (chairman of MMS’ Scientific Advisory Board) presented at the National Medical Cannabis Unity Conference but that seemed little more than headline fluff. Two more releases followed and were far more consequential to the company.
They both concerned NVLX’s Phase 2b clinical trials for their Cell-in-a-Box pancreatic cancer cure. Apparently NVLX signed a “Master Services Agreement” with ViruSure GmbH, an Austria-based company with ties to Austrianova, NVLX’s partners for the treatment. ViruSure would provide the cell banks needed for the trials. The second one said that NVLX had contracted Clinical Network Services Pty Ltd to handle aspects of the trials as their Contract Research Organization – the same company that they had contracted in previous trials.
Still, while those two announcements conjure a positive image, NVLX continued falling down the stock charts, which led to a slightly different approach from them. Two new “analysis” reports from Stock Market Media Group (SMMG) on April 17 and 22 respectively, helped the company push up the stock charts. The first moved share price with almost 27% up, registering $0.349 at the session’s closing bell, with 4.2 million in dollar volume. The second did far more modestly, bringing them 6% in the green to close at $0.369, and with a slimmer dollar volume of 1.94 million.
The first analysis claimed that NVLX could obtain FDA Accelerated Approval after the clinical trials, and the second claimed that NVLX’s application for “Orphan Drug” status would lead to the company selling its treatment without competition for up to 10 years. Whether these claims are grounded in reality or not, investors should be aware that SMMG have done compensated promotions for NVLX as far back as February 19, 2013. The total current compensation for all those reports is cited by SMMG as $78,105. The previous report came on April 3, when NVLX rose, just to plunge on the following day.
The company seems to be moving upwards only when SMMG posts a report, and those shift momentum only for a day or two. If the past is any indication, then potential NVLX investors may be in for a rough ride. As always, due diligence is mandatory and traders should take care to avoid being caught in the red.
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