NASTECH PHARMACEUTICAL – GROWTH STOCK UNDER YOUR NOSE?

Mad Money’s Jim Cramer has been talking about Nastech Pharmaceutical Co (NSTK) for a long time now.  He picks it as his speculative pick which means don’t bet your kid’s life savings on it!  But here is the review on it:

Here is the description from Reuters:

“Nastech Pharmaceutical Company Inc. is a pharmaceutical company focusing on the development and commercialization of therapeutic products based on both its molecular biology-based drug delivery technology. The Company’s RNA interference (RNAi) therapeutic programs are targeted at both developing and delivering therapeutics using siRNA to down-regulate the expression of certain disease causing proteins that are over-expressed in inflammation, viral respiratory infections and other diseases. The Company’s products under clinical stage include Parathyroid Hormone PTH(1 -34) (Peptide), Calcitonin-salmon (Peptide), PeptideYY(3-36), Insulin, Exenatide and Carbetocin. The products under pre-clinical stage include RNAi directed against influenza virus, RNAi directed against TNF-alpha and undisclosed compounds.”

NASTECH DRUG PIPELINE

Well in english, Nastech has three drugs that it’s working on that all target huge markets.  They are Nastech’s parathyroid hormone PTH(1-34) for osteoporosis, its insulin nasal spray (RNAi compounds)  for diabetes and its PYY treatment for obesity.  Let’s take a look at each.

Osteoporosis is a huge problem that will deabilitate a large baby boomer population of women and we all know women live longer because the wives torture their husbands (just kidding women).  But this compound will target a huge population when approved in a great nasal spray.  Next is diabetes which is one of the fastest growing problems in America and soon the world.  With the insulin nasal spray, people won’t need to go to those dreaded shots.  Next is the PYY treatment for obesity which is also a nasal spray.  Do I sense a trend.  Nastech…nasal.  Yes they specialize in nasal delivery of tons of drugs.  From trials the drug reduced caloric intake by 30%.

Up next seems to be a nasal delivery of an Autism drug and possibly more.  The company claims that the nasal delivery of drugs make it more effective compared to shots so technically many drugs can be delivered better though their technology.  Interesting wouldn’t we say.  This sounds awfully like a sales pitch.  But here is the bad:

In their last earnings report on Wednesday August 8th, Nastech’s second quarter loss widened because of LOWER revenue and increased expenses because of clinical trails and development cost because of their large pipeline.  The company reported a net loss of $12.4 million, or 50 cents per share, compared with $560,000, or 3 cents per share, a year earlier. Revenue fell 57 percent to $4.9 million from $11.4 million.  Analyst were expecting 42 cent loss and $6.1 million.  So they missed pretty badly.

Overall it can be a growth stock if the market finds that nasal delivery is unquestionably better but the stock seems to be falling with the market after a strong rise but support seems at $14 where is now but next support is $13.50 50 day moving average then $12.25 200 day moving average.  Under $13 looks like a good bet for a speculative stock.