Novelos Therapeutics (OTC: NVLT) experienced a shocking fall yesterday, dropping a startling 32.0%.
The drop comes after a 5.4 million public offering by the company. The offering included 5,420,800 unites at $1.00 each, with each unit consisting of one share of the common stock; additionally, the offering included a Class A Warrant with a five-year term to purchase one-half of shares at $1.25 and a Class B Warrant with a 90-day term to exercise the stocks at, or around $1.00. Reuters covered this transaction, but no one expected them to falter as much as they have.
Ironically, the day began on a hopeful note for Novelos Therapeutics.
Prior to the announcement of the public shares, the company had established itself as a growing stock. It reached a high of $2.00 on April 26th, 2012 and then another peak of $1.70 on June 5th, 2012. Experts were looking to see the company’s stock continually increase as more news was unveiled of successful drug trials. This drop isn’t completely surprising – not like the recent avalanche of AGR Tools (AGRT). On May 22nd, 2012 Novelos fell to a two month low of $1.20, suggesting that, with all things taken into consideration, the drug stock market wasn’t completely stable.
Novelos Therapeutics is a pharmaceutical company that focuses on the development of new drugs for treating and diagnosing cancer. They are known for their three cancer-targeted compounds, which directly attack cancer cells, while leaving normal cells virtually unharmed. The pursuit of such highly-efficient cancer drugs is the holy grail of cancer research, making the company’s penny stock very interesting to watch.
On May 15th, 2012, the company announced that it had successfully completed the first stage of its multiphase drug dosing trial of its new cancer-targeted radio therapeutic compound. For the less scientifically inclined among us, what this drug essentially does is attack cancer cells in patients with advanced solid tumours. The company’s lead compound, NOV-002, has already been administered in over 1,000 cancer patients in clinical trials across the United States.
Currently, the company is in phase 2 of its trial.
The most recent public offering isn’t any new territory for the cancer drug company. Back in December 2011, Novelos had a comparable public offering of $5.9 million. After that offering, the company stayed at a plateau of around $0.50, indicating that the public wasn’t very responsive to the company’s benevolent motives. As reported by www.stockreads.com, Novelos still remains positive in the overall view of the public, but until absolute success is reached, the company won’t have achieved anything spectacular in the market.
New and untested drugs directed at cancer is risky business. The inevitable truth is that, one day, a cure for cancer will be found. So, moving forward into uncharted waters – like all such things – requires a certain degree of faith – it’s just a matter in believing that Novelos is the one.