Is Pharmacyte Biotech a Boiler Room Stock?

When investing in disruptive technologies, it is important to be able to identify investments you should not invest in along with those that may show promise. In the disruptive technology space, you will come across three types of companies; startups or private companies which often show the most promise but hold their cards close to their chests, publicly traded companies with lots of regulatory requirements, and over-the-counter companies which you should typically avoid like the plague. We have seen countless examples in the past of over-the-counter (OTC) companies that follow the same steps through a sometimes lengthy lifecycle that will end up with “investors” losing money 99% of the time. One (OTC) Company that we came across recently which seems to quite heavy on promises and press releases is PharmaCyte Biotech (OTCMKTS:PMCB).

There’s a classic film that came out in 2000 called Boiler Room in which a naive young man finds himself working for a corrupt stock promotion firm called “JT Marlin”, the name clearly a play on “JP Morgan”. The below firm seems to be capable of causing similar confusion:

Goldman_Report

With no affiliation to investment bank Goldman Sachs, this firm called Goldman Small Cap Research was compensated for the above report in the amount of $4000 for a research subscription service and $2500 for a series of articles and updates. In the past month, a total of 7 compensated “reports” were published including one titled “PMCB is a 4 Bagger“. I always appreciate it when my investment adviser describes upside for a potential investment to me in the form of “baggers”. Nevertheless, let’s take a closer look at what all the hype is about.

As stated on the Company website:

PharmaCyte Biotech is a clinical stage biotechnology company focused on developing and preparing to commercialize treatments for cancer and diabetes based upon a proprietary cellulose-based live cell encapsulation technology known as Cell-in-a-Box®.

We can look at the latest 10-Q filing to get an understanding of how this Company came about. Note that this company was originally called Nuvilex but changed their name in January of this year.

In June of 2013, the Company acquired a biotechnology called “Bio Blue Bird”. Biotech investors would automatically raise an eyebrow here. If you googled “Bio Blue Bird”, you’d be taken to the website of a very successful cancer immunotherapy company called “Blue Bird Bio”. You’d have to look very closely to see the difference in names. In fact, there is no website for “Bio Blue Bird”, so we don’t know much about what was actually acquired here. PharmaCyte tells us that they acquired exclusive, worldwide licenses to use a proprietary cellulose-based live cell encapsulation technology for the development of treatments for all forms of cancer.

In July of 2013, the Company paid $2 million to Austrianova Singapore for an exclusive, worldwide license to use their cellulose-based live-cell encapsulation technology called Cell-in-a-Box for a diabetes treatment. According to the Austrianova website, “The Cell-in-a-Box® technology, developed by Austrianova, is a means to protect, isolate, store and transport living cells”. Austrianova was an Austrian biotechnology company that had set out to develop a cell product targeting pancreas carcinoma. The company had planned the launch of their cell product in 2008 but then went bankrupt instead. Later in December 2014, Pharmacyte paid another $2 million for rights to use cell-in-the-box with cannabis. Yes, cannabis stocks have been all the rage in 2014 among the penny stock world so no surprises there that PharmaCyte would want to ride the coattails of this trend.

The Company promises various clinical trials to begin this year. As they should, investors are questioning just how any clinical trials can be funded. As we discussed before, the drug approval process is expensive with the average cost for the full life-cycle of a drug approval having reached a staggering $1.3 billion by 2005 alone. Pharmacyte has just under $1 million in cash on their books. For the 9 months ending January 2015, they had burnt through $7 million in cash, a less than a tenth of that amount being actually spent on R&D. The Company is very audible about an orphan drug designation they received in December 2014. The truth is, such a designation is not that hard to get. According to the FDA, 60-70% of applications result in granting orphan drug designation status. There are so many legitimate non-OTC companies with exciting value propositions that exist out there today, not to mention biotech ETFs that allow you cheap diversification. Why would you want to take a punt on a promoted stock and most likely lose all your money?

It’s important to remember, that management of OTC companies may not necessarily be acting in a malicious way. Through no fault of their own, their stock could be promoted and the result could be a bunch of “investors” who were hoping for a “4 bagger” but are now caught holding the bag. PharmaCyte Biotech (OTCMKTS:PMCB) will be added to our growing list of “disruptive” OTC companies, all of which we would warn investors to avoid like the plague.

Of course, as is typical with many OTC companies we warn investors about, we expect to hear the same retorts in the comments section. “Clearly you’re short”. “You wish you would have loaded up”. “You have ulterior motives”. Etc. As we have stated many times before, we will never short any stock discussed on this site. We simply believe that it is as equally important to talk about what one should not invest in as it is to talk about what one should not invest in.

Here at Nanalyze, we write about tech stocks a lot, but most of our money goes into a dividend growth strategy. Our 30 dividend stocks provide an income which increases every year. Find out how to build your own growing income streams with dividend growth stocks - Quantigence - A Dividend Growth Investing Strategy - freely available to Nanalyze Premium subscribers.

57 thoughts on “Is Pharmacyte Biotech a Boiler Room Stock?

  1. PharmaCyte is actually going to be The Biggest Success Story in BioTech in 2015. Dr. Daniel Von Hoff will Report his Pain/Ascites Follow-Up Study Results soon. If The Mice are Still Alive as assumed: Today would be 66 Days. That would be a Medical Miracle Breakthrough. And a Buyout/Merger/Partnership would be the result. Just my opinion after having done complete due diligence for going on two years.

  2. No real writer would mention the potential comments to their article. I’d say this is more of a hit at Rob Goldman’s reputation rather than how much PMCB will be pro-longing the life of cancer patients and curing the need for daily Insulin injections for Diabetes patients. Poor due diligence on another phantom writer. Bashers are getting nervous. Mice results soon. Guess they will do anything. At least Goldman notes what he is compensated by a third party in his articles. No mention of that here. Poorly written attempt again. Love the copy and paste though.

    1. No compensation was received from any party to write this article, nor any of the other +300 articles on this site. Thank you for helping to prove the point Ken.

  3. the drug approval process is expensive —- This is true,,,,PharmaCyte Biotech not a drug but a delivery platform,,,,The writer doesn’t even know what he’s talking about.

      1. No compensation was received from any party to write this article, nor any of the other +300 articles on this site.

  4. In reading this a second time, I believe the author and Nanalyze have a Libel suit on their hands. PMCB is far from a fictitious company. I have forwarded a copy of this link to PMCB recommending that they consider filing the Libel suit immediately. I can’t imagine that anyone at Nanalyze or this author have the money to afford a lawyer let alone pay damages associated with a libel suit. Not sure how the phantom author convinced this website to allow this falsehood to be placed on their site especially now with a libel/slander suit pending. Nanalyze needs to consider if this garbage is worth their reputation.

    1. Agreed. I will forward one to PMCB and SEC as well. Let them arrest this person. I will report to FBI as well since they are trying to steal money from people

      1. I wouldn’t say that PMCB is stealing money from people. They may have no knowledge that their stock is being promoted.

    2. Thank you for the comment. We’d all be interested to hear what facts presented here that are taken directly from the Company’s latest 10-Q filing you disagree with.

      1. The JT Marlin comparison is a complete falsehood. PMCB is not a fake company. Did you talk to one board member before you wrote this??? Everyone is calling this a bash piece because it IS a bash piece.

        1. Hi Ken. The comparison between “JT Marlin / JP Morgan” and “Goldman Sachs / Goldman Small Cap Research” is very appropriate given both are named so similarly to well known investment banks. What facts presented here do you disagree with specifically?

          1. That’s his real name that his mother gave him. Also, if you want to just bash Goldman than go do that in a separate article. Stay away from the company that is extending the life of Pancreatic Cancer patients and curing the need for Insulin injections for Diabetes patients.

        2. What facts presented here about PMCB do you disagree with Ken? You have now commented on this article 6 times but have not raised any points of contention about any of the facts the article presents.

  5. You copied and pasted off of a year old 10Q and fact checked with no members of PMCB. Gee, the title might be misleading. Good luck Phantom.

  6. I do not yet have an opinion on Pharacyte, nor on the arguments presented in this forum. I am looking at the company myself and trying to do due diligence. I like the possibilities that are represented with what they are trying to accomplish. However, how are they going to fund the second stage of trial? Can anyone currently un-biased answer that question? If they complete the trial and it is a success…BOOM! Huge gains. However, they are new to this space and only have a small number of employees and not much cash. Can they pull it off?

  7. This article is completely preposterous. PMCB is loaded with star studded names. I promise you that this site is getting some type of financial benefit from this article. Btw, I have seen this same analysis on the yahoo board.

    1. You may have seen someone post a link to this article on the Yahoo board but you wouldn’t have seen anyone from Nanalyze commenting or posting content on Yahoo boards. We have received no financial benefit in any form from this article. Were there any particular facts presents in the article taken from the Company’s very own filings that you disagree with?

  8. This writer worked for a hedge fund some where in Asia…all of their name is identical with couple folks in LieHub. What a bunch of liar that stealing money from PMCB investors.

    1. Nobody writing for Nanalyze works for a hedge fund. Aside from making accusations and uninformed “shoot from the hip” remarks, were there any particular facts presents in the article taken from the Company’s very own filings that you disagree with?

  9. All the negative comments here sound a lot like “sour grapes”. From people the article describes as …a bunch of “investors” who were hoping for a “4bagger”but are now caught holding the bag.
    Having a different opinion/presenting the other side, should be very much welcomed and I commend Nanalyze for doing so in a thorough and responsible manner. And within this space Nanalyze is far from unique. Just take a look at another online service like Citron Research (and, for example, their most recent comments on AXDX…).
    Interestingly, articles that are positive, or where it is so blindingly obvious that something is wrong with the company, generate few, or no comments…
    If someone raises a red flag you can either heed the call, or ignore it. If you think you are/were wrong, accept it, correct it, and move on.
    I live outside the U.S. and have no connection whatsoever with Nanalyze.

    1. Thank you for your positive feedback Michael.

      Disruptive technologies are exciting and many OTC companies attach themselves to various labels such as “3D Printing”, “Graphene”, “Nano”, Etc. to take advantage of that all that excitement among eager investors.

      We write about disruptive technologies from an investor’s perspective. Less than 10% of the articles published on this site are about OTC companies. We only write about certain OTC companies because they claim to be involved in some disruptive technology. It’s always an interesting exercise. Most of the reality behind these companies can be found in their regulatory filings, not in their press releases.

  10. Although much of what you stated may ring true in general terms, here I believe, you are way off the mark. In truth, some in depth due diligence would have showed you why I think you are wrong. What your article shows me is that you haven’t done all the proper and necessary due diligence on this company by leaving out the positive reasons for investing. Some of these reasons can clearly show that this stock is not in the category of which you have written. Was it intentional? I don’t know, but some rather large short positions have a lot to lose if the stock is a success. Regardless, the proof is in the pudding and the science will make or break this stock. So far, from only part of the due diligence I just mentioned, things may look good. It is still a long way from any of its goals’ fruition. It is a high-risk stock for sure, and under some selling pressure. However, in the end, the FDA and product sales will take this company to another pricing level or bankrupt it. A slight fact you forgot to state. Insofar as money to complete the task is concerned, there is further dilution which the market can bare for this product if it works. Pi/ii funds are not a problem. If phase i/ii is (or even is coming along nicely during the approval process) a success, the remainder of the stages such as phase 2b for pancreatic cancer should not be a problem. Much of the phases (testing) was already completed successfully and is behind them. Money may come in droves with every successful step towards completion of one of its medical uses. Many small bios and pharma’s that are large companies today started in the very same way. This is a delivery system and not a drug.

    1. Thank you for your detailed comment.

      It is a myth often touted by stock promoters that OTC stocks are being heavily shorted. The truth of the matter is that they are very difficult to short:

      https://www.nanalyze.com/2013/08/the-dangers-of-over-the-counter-otc-stocks/

      As we stated before, we don’t short any stock discussed on this site. You will never find us investing long or speculating in OTC companies either. 99% are scams. Why take that risk? In regard to your statement about continued dilution, you’re right. There is no doubts that the company will continue to dilute shareholders.

  11. What the hell is going on? Is this company legit or not? Where are they even getting any funds to do anything? What do they have to gain by trying to pump a otc stock? What could they possibly gain out of pumping this stock up? I’m lost. I also don’t understand why all these big names would jump on board with this company? Even if this stock went up to a $1 what the hell would be gained by it?

    1. brendah
      Do you mean BIOGEN- IDEC which is now just “BIOGEN”?
      They were Biogen then they merged with Idec and became Biogen-Idec. Then as is often the case,
      about 8-10 yrs later, they dropped the acquired company’s name and went back to “Biogen”.

      They began as a small bio-tech. I spotted a little 1-2 inch article on the bottom of a page of the WSJ that tweaked my curiosity in 1993. I believe they came public in Sept. 1991 at $18.00/sh. They weren’t a penny stock but they were inexpensive, between $5 & $10/sh. in 1993 when I first bought some. By 1995 they’d dropped all the way down to $2 sh. They didn’t have anything on the market yet, if I remember correctly. It was all losses due to R&D expenses and no income, but that’s the way it is for most small, bio-techs. I bought it a few times, adding to my position.Then as it grew, I also took my money out, letting the rest ride. I’ve held that stock all these yrs. It’s one of my core holdings. It’s one of the best managed bio-techs, is a world leader in MS drugs and has a great pipeline.
      Right now, the ambulance chasing atty’s are going after it in a class action suit because last Jan. one of the Exec’s or member of the BOD said their new oral MS drug, Tecfidera, then out about a yr., “might be their best drug ever”. When they came out with this new MS drug, all the MD’s began moving their patients onto it. Once you get that initial transfer rate, you won’t ever again have that many new patients on a drug. You’ll have new patients as new people become inflicted with the disease and those who didn’t transfer right away, but not numbers like the initial transfer rates. A little common sense would tell you that high accelerated rate couldn’t continue. But, apparently, by the end of Q2 ’95, sales had slowed and they’d had to renegotiate the price in Europe as their economy was slowing. OOPS! Sales didn’t meet analysts expectations nor guidance given at the beginning of the yr. There was also one confirmed death of someone taking this drug, but whether it was from Tecfidera or not was not yet determined. There has now been a second death of someone, in the US this time, who was on this drug, but it still hasn’t been determined to be the cause. However, that may be causing a slowdown in transfer rates. Of course, they knew this would happen 6 months before, in Jan (Ha Ha), so let’s sue them for leading us astray! Perhaps those investor’s and the atty’s, should have read the Safe Harbor statements and applied a little common sense. Biogen, caught up in a bubble, had jumped up to over $480/sh. Then it crashed on it’s Q-2 earnings and has continued down, as all bio-techs have since July, to about $273/sh. My opinion, I never thought it should be as high as it was and I said so at the time. I couldn’t understand why it was approaching $500/sh. I looked, I scratched my head, but I didn’t sell.
      It doesn’t bother me in the least that it’s pulled back to a more realistic level. Yahoo Finance is showing a 1 yr target of $100 above it’s current price. I’d have to spend some time checking out what new drugs may be coming on line, etc., to determine if I think that’s a fair estimate or just another analyst over estimating earnings again.
      If you’re interested in Biogen, I’d suggest you buy it now, since it’s a lot closer to it’s 52 wk low
      than it’s 52 wk high. I believe it reports earning on Wed. 10.21.15.

  12. I know shit about their encapsulation but..If these guys at pharmacyte are serious about their business they must have understood what this means for cannabis.
    Google “tissue culture” and cannabis and you may have a chance to understand.

  13. Clearly this article has been proven at the very least to be short on intuition and honestly it reads as something wholly biased and negative. Given the current circumstances of Pharmacyte its easy to question the motives.

    I am glad I did my own due diligence as my investment from last year is up nearly 400%. Pharmacyte is heading to trials now with some very well respected people. They have also secured funding to complete the trials. While some of their fundamentals were a bit underwhelming and this path took far too long, sometimes its the people that matter.

    I am just glad I didn’t run into this article when I was planning to invest. Mind you I did not bet the farm, but I thought it warranted a position which has now paid off well.

    1. Hi Del,

      Thank you for the comment! We’ll continue to say this over and over. Do not invest in OTC stocks.

      Looks like there was a recent sharp run up (what some might think looks like a pump). Here’s what looks to be the latest news:

      Pharmacyte Biotech Inc (OTCMKTS:PMCB) has presented its pre-Investigational New Drug conference bundle to the U.S. FDA for its therapy in LAPC that is inoperable. This step comes next to its recent update that the U.S. FDA has given firm a pre-IND conference for its pancreatic cancer treatment.

      Here’s an article we did on the FDA approval process:

      https://www.nanalyze.com/2014/09/the-fda-drug-approval-process-simply-explained/

      So they gave the FDA a pre-IND package of information? Please tell us there’s something more here than just that.

      You are best off staying away from OTC stocks all together as 99% will turn out to be either scams or failed businesses driven into the ground by incompetent management. Here’s a list of red flags to watch out for:

      https://www.nanalyze.com/2013/08/the-dangers-of-over-the-counter-otc-stocks/

      Here’s some examples of how easy it is to lose money in OTC stocks:

      https://www.nanalyze.com/2015/07/how-to-lose-money-investing-in-stocks/

      1. Now that pmcb is meeting with fda in a pre IND meeting….do you think nanalyze should do a follow up piece? Does the fact that Dr von hoff is associated with pmcb change your view? How about the University of North Colorado having a partnership to study MJ? Does that deserve a mention? How about University of technology in Sydney having a partnership to study diabetes using melligen cells and cell in box? A lot has happened since you first wrote that initial piece on pmcb…your readers deserve an update…no?

        1. Hi Fred,

          We use social media shares to dictate reader interest in future topics. Nobody seems to be that concerned about PMCB and as we mentioned in the above comment, we feel their recent news does not merit another article.

          1. Well…thanks for the reply…forget social media…I ask you…the author of this writeup to take another look at pmcb and where they are headed…fda pre ind meeting just took place…ceo is having a CC on Feb 7 to share info…I think you should listen…maybe you could get the jump on other stock analyzing websites who may soon cover pmcb….

          2. Hi Fred,

            We’ll always reply as we love hearing from readers!

            The sort of language you use is exactly the type of language that assures us that nothing has changed with PMCB since our last article.

            Here are is an article which talks about the red flags that can be found in OTC stocks:

            https://www.nanalyze.com/2013/08/the-dangers-of-over-the-counter-otc-stocks/

            Can any of these be found in in PMCB?

            Here’s an article which shows what happens when you invest in OTC stocks.

            https://www.nanalyze.com/2016/04/18-reasons-not-to-invest-in-penny-stocks/

            We have already warned investors about PMCB. We don’t need to do it again.

            Thank you for the heads up!

  14. Lol….nice quick response…listen I understand you want to defend your article and quickly dismiss any post that might cause you to rethink your opinion on a startup bio which at this stage of its life has a low pps and so on…but facts are facts…von hoff will be involved in the upcoming clinical…do you know who he is? He recently brought abraxane to market for celgene….do some dd on this….do you know that some NDAs have been signed with pmcb…..this will be my last post until I come back to just say heeheehee…oh….and although you won’t admit it….I am sure you will be listening to the CC on Feb 7th….

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