Arch Therapeutics Inc (OTCMKTS:ARTH)
Ironically, Arch Therapeutics Inc (OTCMKTS:ARTH) was trading below $0.50 a year ago before the biotech stock went north and hit a 52-week high of $0.78. Still, the medical device company is trading around double what it was trading at in early 2016. The company’s success in the market tracked the success of its AC5 surgical hemostatic device. Hemostasis is a process that causes bleeding to stop.
Arch Therapeutics Inc (OTCMKTS:ARTH) is based out of Wellesley, MA and develops surgical care products designed to stop bleeding and control leaking – amongst other benefits. AC5 is their lead product candidate and is applied directly into wounds through a spray or liquid squirt. AC5 is designed to invade the nooks and crannies of the connective tissue and build into a physical structure that ceases bleeding or the leakage of other bodily fluids. Needless to say, the market is enormous for a liquid medical product that can stop bleeding effectively.
Earlier this year, Arch Therapeutics Inc (OTCMKTS:ARTH) had a registered direct offering for over 10.1 million units. Each unit consisted of one shares of ARTH and a 0.55 of a Series F Warrant that is exercisable at $0.75 per ARTH share and have a term of five years. Each unit was sold at $0.60 and total gross proceeds are expected to be in the range around $6.1 million and around $825,000 of that total will be used to retire some debt. The company expects the raised cash to be able to fulfill operational expense demands into the 3rd quarter of 2018.
More recently, Arch Therapeutics Inc (OTCMKTS:ARTH) announced their intention to file for a 510(k) allowance with the U.S. Food and Drug Administration (FDA). Terrence Norchi, CEO of Arch Therapeutics Inc (OTCMKTS:ARTH), stated in the press release that significant benefits will come to the firm in the form of business opportunities and technological validation if the 501(k) is approved. Approval would also mean a shorter time to market for AC5. As of now, Arch Therapeutics Inc (OTCMKTS:ARTH) expects AC5 to be commercialized sometime in 2018.
YTD, Arch Therapeutics Inc (OTCMKTS:ARTH) has lost over 20% while the S&P 500 has gained around 8%.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.