Shares of OncoVista Innovative Therapies (OVIT.OB) had dipped into the mid twenty cent range during the early goings of 2012, but a nice spurt of volume over the past week had shares trading for as high as forty cents. In fact, more shares have traded hands over the past seven trading sessions than all previous sessions this year combined, capped by Tuesday's volume of 215,000 shares traded and Wednesdays showing of over 160,000 shares.
For a stock that has been dormant, it could be that some life is being realized.
OncoVista is a clinical-stage company developing less toxic and more efficacious targeted cancer therapies. Limited resources essentially put development on hold during the depths of the economic crisis when funding was tough to come by, but the pipeline looks to be revitalized following some updates and buzz that materialized in 2011.
Judging by the recent volume, it looks like there may be another round of updates pending.
The most advanced product in this company's pipeline is OVI-123, known also as Cordycepin, and it was revealed late last year that OncoVista had entered into an agreement with Oncology Therapeutic Development (OTD), a consulting and early Clinical Development focused CRO, to initiate a Phase Ib clinical trial of Cordycepin associated to Pentostatin for the treatment of patients with terminal deoxynucleotidyl transferase (TdT)-positive refractory leukemia.
The estimated market potential for Cordycepin is greater than $350 million annually, according to statistics posted in the company's website, and the FDA has already granted the product an Orphan Drug Designation.
OncoVista is also developing OVI-117 as a targeted treatment for multiple cancer indications. This product is in the latter stages of pre-clinical development, but may hold greater market potential than Cordycepin, should it make it that far through development to commercialization.
Encouraging updates on either of these pipeline fronts could spark an even further price move as volume and interest in earlier-stage biotech and pharmaceutical companies picks up. It has previously been unusual for big pharma to jump into technologies at such early stages in development, but Lpath, Inc. (LPTN.OB) is a prime example of how that tide may be changing.
The recent Dendreon (DNDN) rebound has brought renewed interest to the cancer treatment sector, and speculative companies such as OncoVista stand benefit as a result. Immunocellular Therapeutics (IMUC.OB) has stormed past two dollars, for example, amid speculation of a move to the AMEX.
While such events might still be further off for OVIT, the eight million dollar market cap may be tough to justify for a technology that could potentially be a game changer for cancer treatment; and for relatively nothing, a larger company could pick up that technology right now, on the cheap.
Keep an eye on the trading volume. For those that believe that volume precedes price, OVIT is one to watch.
Disclosure: Long OVIT.