» Will Access Pharmaceuticals (Nasdaq ACCP.OB) jump again on Monday?

Will Access Pharmaceuticals (Nasdaq ACCP.OB) jump again on Monday?

February 2, 2007 on 1:29 pm | In Short Term Picks |

BUY ACCP.OB near $4.10

SELL ACCP.OB at or near the market open on Monday

Access Pharmaceuticals is a tiny drug development company with one cancer treatment that has already been approved and one that is in multiple Phase II trials. Access Pharmaceuticals has only 10 employees, a $14 million market cap, $17 million in debt and only about 800K in cash.

MuGard is a treatment for oral mucositis which received FDA marketing approval in December of 2006. Oral mucositis is a side-effect which afflicts about 40% of patients undergoing radiation and chemotherapy. Access Pharmaceuticals claims that there is no currently well accepted treatment for oral mucositis and that the market for this indication could be over $1 billion.

ProLindac is an oncology drug that is currently in Phase II clinical trials for ovarian and head and neck cancers. ProLindac uses a nanopartical formulation designed to deliver more drug to the tumor while reducing delivery to non-cancer tissues. Access Pharmaceuticals projects that, if approved, ProLindac would have sales of approximately $2 billion. However, ProLindac is only in Phase II trials, it is probably at least five years away from a potential approval, and the vast majority of cancer treatments do not even make it to Phase III trials.

This week’s Inside Wall Street column in Business Week has a highly positive piece on Access Pharmaceuticals. At Wall Street Mayhem, we typically like to trade the Inside Wall Street picks that have a pop on Friday morning, then settle back down to near Thursday’s close. This has been the strategy we followed on Thermage, American Oil & Gas, and Shanda.

Access Pharmaceuticals does not follow the same pattern as these previous trades. Access is up over 30% today after the online publication of Inside Wall Street. Usually Wall Street Mayhem would stay away from such a trade because the risk of a pull back is high when the stock has already gained so much from the Business Week effect. However, for Access Pharmaceuticals the market cap is low for a company that has one FDA approved cancer treatment and another in Phase II trials. The majority of Business Week readers have not yet read the piece on Access Pharmaceuticals. Therefore, Access Pharmaceuticals still has a good chance of moving higher on Monday morning.

This is a very high risk trade and we recommend entering a smaller than normal position in Access Pharmaceuticals. It is entirely possibly that the very people who were responsible for getting the article into Business Week will be selling on Monday.

Wall Street Mayhem does not usually trade OTC BB stocks because the risk for fraud and manipulation is much higher for these stocks than for stocks listed on the Nasdaq national market and on the NYSE. This morning we have been watching ACCP and waiting for it to pull back from the open, but instead it has continued running. The Business Week effect has been strong recently with companies like Intelli-check and Thermage receiving bounces after the on-line article on Friday and then again after the print version on Monday. Therefore, we think Access Pharmaceuticals has a reasonable risk/reward ratio at this point due to the recent effect Inside Wall Street articles have generated for small cap companies.

Wall Street Mayhem does not have enough information about Access Pharmaceuticals to recommend an investment. We really have no idea what the true market potential of MuGard is, and we have no idea if ProLindac will be approved. We are entering this trade based on our analysis of the Business Week effect, not based on the actual prospects of Access Pharmaceuticals. Wall Street Mayhem believes that the big numbers (billions) thrown out by the Business Week article will entice investors into a stock with a sub $15 million market cap.

26 Comments »

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Too risky for me, but it will be interesting to see how this turns out. If it wasn’t a buliten board stock I’d be in, but the BB status makes it too risky for me.

Comment by traderjoe — February 2, 2007 #
Looks like I’m too late, I would have bought in at the recommended $4.10, but now it has run to $4.35. I’ll buy if there is some late day selling, but otherwise I’ll leave this trade the rest alone.

Comment by Gbop — February 2, 2007 #
Sorry guys, but I may have just cursed this trade. I have a terrible track record of chasing stocks that are on fire and I just bought at $4.35. I’ve been following the rest of the Business Week trades, but this is first one I’ve pulled the trigger on.

Comment by Pligg — February 2, 2007 #
It’s going nuts now. May want to take some early profits with at least a portion of the position.

Comment by Prince Andrei Bolkonsky — February 2, 2007 #
Pligg, you are officially no longer a jinx. This thing is incredible, I’m irritatd that I had the chance to buy at $4.25 and passed it up.

Comment by Gbop — February 2, 2007 #
No kidding, I thought I might be getting in at the top, but now this thing is looking outstanding for Monday. I’m already up about 25% and I think Monday still might hold and additional pop.

Comment by Pligg — February 2, 2007 #
Does anyone know who the European marketing partner is for MuGard?

Comment by Cancan — February 2, 2007 #
I think this stock still has a long way to go on Monday. This run can’t last forever, but considering the tiny market cap and small float Monday is still going to see another big jump. Wait and see, my money is on a $6+ open.

Comment by TomG — February 3, 2007 #
This stock is still running. I can’t believe it never corrected after the Business Week article. It is now up over 200% since before the article came out. Too bad I can’t short BB stocks.

Comment by Cancan — February 13, 2007 #
[…] Recently, some of the small companies that have been featured in Business Week’s Inside Wall Street column have received significant positive moves as a result of these articles. Access Pharmaceuticals was a big beneficiary of the Inside Wall Street column as it soared over 200% after being mentioned in Inside Wall Street. […]

Pingback by Wall Street Mayhem » Will Microvision Inc. (Nasdaq: MVIS) experience the Business Week Effect? — February 16, 2007 #
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