Manhattan Pharmaceuticals is a penny play that has returned some solid gains this year already, on more than one occasion, but like most penny plays, the quick gains were followed by even quicker declines in share prices.

That's why, when playing the pennies, you always need to be on your game and have a quick trigger finger.

Since the last spike, earlier this year, MHAN dropped to below a penny before announcing and then quickly effecting a reverse stock split. The old adage goes that reverse stock splits are rarely good for a company, and that most are always followed by an immediate drop in share price on the back end of the split.

The same might be said for MHAN - which is now trading with a "D" on the end of its ticker symbol to signify the reverse split.

That said, the extremely-speculative penny play is still working to bring a couple of products through the pipeline and to market in the United States - at least that's what they tell us. For quite a while now, it was Hedrin that was supposed to be the near-term catalyst that drove the MHAN share price. Already approved in Europe as a non-toxic treatment for head lice, Manhattan was involved in a joint venture with Nordic to bring Hedrin to market in the US, but a share dispute killed the joint venture deal just as talk of a US Hedrin looked to be materializing.

For all intents and purposes, any hope of Manhattan bringing Hedrin to market in the US is dead in the water, given that it is highlighting another two of its products, AST-726, a nasally delivered vitamin B12 remediation treatment, and AST-915, an orally delivered product candidate for the treatment of essential tremor.

Manhattan just announced this week that it has agreed with the FDA on a special protocol assessment (SPA) for the design of a Phase III trial of AST-726 in patients with a confirmed medical history of vitamin B12 deficiency.

That announcement drove shares of MHAN higher by 200%.

The volume behind that move, while a seemingly unsubstantial 6,000 shares, should actually be considered decent, given the 1-50 reverse split.

Will the move hold? Probably not, but it's enough to take notice that the company may be able to provide yet another run in 2011.

As always, these penny plays are highly risky, but MHAN looks to have enough going on to play the volatility; but you have to have a strong stomach for risk to get involved with these penny plays.

Let's see how the reverse split plays out for Manhattan.

Disclosure: Long MHAN.


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