OncBioMune Pharmaceuticals Inc (OTCMKTS:OBMP), a biopharmaceutical company making strides in the $7.1 billion prostate cancer treatment space, has been one of our clear favorites. We started casing the story back in mid-December, when it was trading around $0.15/share. The message was simple then, and its simple now: The market is still not pricing in any of the company’s probabilistic value as a biotech with advanced progress on the R&D side in a huge end market.
However, that is changing, at least a little. Recent action has seen some solid technical improvement, so we wanted to focus on that aspect of the picture today, given the stock’s recent rip higher out of a symmetric triangle consolidation formed in January and February, to tag relative pattern resistance in the $0.40 area. But first, let’s quickly reintroduce this company.
OncBioMune Pharmaceuticals Inc (OTCMKTS:OBMP) is a clinical stage biopharmaceutical company that develops cancer immunotherapy products. The company has proprietary rights to a breast and prostate patent vaccine; and a process for the growth of cancer cells and targeted chemotherapies. Its lead product is ProscaVax that is in the planning stage of a Phase II clinical trial for the treatment of prostate cancer.
The company also has a portfolio of targeted therapies. OncBioMune Pharmaceuticals, Inc. is headquartered in Baton Rouge, Louisiana.
We continue to believe that it makes sense to view this company as a potential takeover target by one of the larger players in the space who have shown a clear interest in development or acquisition of assets that offer potential for market share in the prostate cancer segment. The short list includes the likes of Seattle Genetics, Inc. (NASDAQ:SGEN), Inovio Pharmaceuticals (NASDAQ:INO), Nymox Pharmaceutical Corporation (NASDAQ:NYMX).
Reading the Tea Leaves
Recent action has seen 69% tacked on to share pricing for the name in the past month of sharp rallies. Moreover, OBMP has witnessed a pop in interest, as transaction volume levels have recently pushed 120% above the average volume levels in play in this stock over the longer term. It pays to take note of this fact given the stock’s very limited trading float of just a paltry 9.8M shares.
As we have discussed previously, whenever you see a very small trading float, it’s important to recognize the special importance of jumps in average trading volume statistics. In this case, the average volume has more than doubled in the stock, but the number of shares out there to trade – which was already too small – hasn’t grown. That creates an extra risk of momentum feeding on itself. For this stock, it’s mean more than a tripling in price in just the past 10 weeks.
The MACD is another strong signal here. The Moving Average Convergence/Divergence (or MACD) indicator measures trend momentum by tracking the relationship among moving averages. In this case, we can plainly see that upward momentum is holding its acceleration, broadly speaking, despite wiggles back and forth on the chart.
All of that comes in the environment of a string of positive catalysts for the company.
For example, the company was recently advised by Glenn J. Bubley, M.D. (Associate Professor, Medicine, Harvard Medical School and Director, Genitourinary Medical Oncology, Beth Israel Deaconess Medical Center) that their upcoming study on their pipeline’s lead prostate cancer therapy is a prime candidate for submission to the Cancer Therapy Evaluation Program (CTEP) at the National Cancer Institute.
CTEP coordinates the clinical therapeutics development program of the Division of Cancer Treatment and Diagnosis (DCTD) by reviewing clinical trials and evaluating their merits for collaboration and funding. OncBioMune is in the process of preparing documentation for submission and consideration by CTEP.
In addition, there are several companies that may consider OBMP’s pipeline as worthy of acquisition, given the still-cheap market cap in play here. Hill-Rom Holdings, Inc. (NYSE:HRC) recently paid $330M for Mortara. We also just saw Celgene Corporation (NASDAQ:CELG) take Anokion off the playing field. In similar fashion, and right up our current alley, Pfizer just scooped up Medivation Inc (NASDAQ:MDVN) primarily for their IP related to the prostate cancer market.
But the space has been more active than that, with additional deals such as Kitov Pharmaceuticals Holdings Ltd (ADR) (NASDAQ:KTOV) moving on TyrNovo, among others.
Eli Lilly and Co (NYSE:LLY), Nymox Pharmaceutical Corporation (NASDAQ:NYMX), or Pfizer Inc. (NYSE:PFE), all of which have been hot on the trail of IP geared toward the prostate cancer market, wouldn’t even know it in the balance sheet department if they took on OBMP in one small bite. Anything under $100M for a viable play into that $7 billion prostate cancer market is a fine starting idea to a conversation among any of these players.
That narrative provides legitimacy for the OBMP rally, and allows that small float and strong momentum to grip the hearts and minds of traders. We will keep it front and center and continue to cover the story as new details emerge.