ZLCS is a Developmental Stage Biotech Company. COMPARE IT!
Below is a small grab bag of currently popular small cap biotech companies that are still in the "developmental stage" of their business life. All have "promising" drugs or diagnostic products, all have seen a significant amount of attention in the financial press. Some have no earnings yet enjoy market caps 10x that of Zalicus or more (mnkd). ALL have market caps that are based upon what they INTEND to earn if their products ever make it to market but none have the expected reach of just one of ZLCS pipeline drugs; Z160. What most of them do have is CASH. Lots of it. But if successful,
Z160 will dwarve the return of any product from anyone of the stocks listed below. Furthermore, the ONLY reason some of these companies enjoy such large market caps is because they have prematurely diluted shareholder equity using one PIPE deal after the next. By stuffing their coffers prematurely, they rob future shareholders value. (don't you find it odd that the shares in these companies actually went UP after these dilutions (EXAS). If ZLCS dilutes upon news of positive test results (actually I believe they'll be much better than EXAS poor results) , they'd have to issue around 20 million shares at 10 to have the same amount of cash and market cap. Any way you look at it, ZLCS is UNDER valued right now w/ 1/2 as many shares!
1. ZLCS Market CAP = 124 Million / Net Cash on Hand 7 Mil / Last Q. Revs 14.7 Mil
2. ACAD Market CAP= 4.5 BILLION / Net Cash on Hand 205 Million / Last Q Revs 4.73 Mil
3. MNKD Market CAP= 1.57 BILLION / Net Cash on Hand -304 Million / Last Q Revs 35k
4. KERX Market CAP= 845 Million / Net Cash on Hand 80 Million / Last Q Revs 7 Mil
5. EXAS Market CAP= 834 Million / Net Cash on Hand156 Million / Last Q Revs 4.4 Mil
6. NKTR Market CAP= 1.24 BILLION/ Net Cash on Hand 67 Million / Last Q Revs 96 Mil
I'm not familiar with all of these, but the ones I am are far more advanced than ZLCS.
ACAD is an FDA darling and the build up to their NDA next year will be one of the biggest events in biotech.
MNKD is on the verge of approval in a few months (some doubt it, but that's not the point).
KERX have probably just had their NDA accepted (I haven't kept track for a couple weeks but they're just about there).
You get my point. I holding ZLCS through the trial results - I'll think results will be good, and I still like the risk/reward even after the split.
But these aren't valid comparisons.
ACAD is close to completing phase 3, while Z is only trying to start Phase 2. ACAD is going to be the one and only drug that can significantly treat Parkinson's. I can name several bios treating pain, so Z doesn't quite capture all the marketshare.
Lastly, ACAD has sponsors...lots of them and partnerships with big pharmas...so they are in no need for cash. Z on the other hand, has no capital sponsors. They are bleeding cash. That is why they have to continually sell stocks to fund the company, and because no institutionals are willing to buy their shares, they are slouching under $1. The R/S was don't in desperation to save itself from being de-listed. So tell me, how brilliant the mgmt. Z is?