Manhattan Pharmaceuticals (TGTX.OB) was making some noise last year at around this time, and it looks like the company is ready to roll again, now armed with a new ticker symbol (previously MHAN.OB) and a fresh licensing agreement.

The company had been dead for the better part of last year, aside from some short term moves, but last week its stock registered a 600% gain one day and also showed some life on Friday with a 15% pop.  Both are indications that there may be some new interest in this volatile and very risky penny play, at least by the swing, momentum and day traders.

Manhattan has become a relative unknown since the failure of its weight-loss drug a few years back, but the company still sports a couple of pipeline products that are in the latter stages of development.  Hedrin, a non-insecticide treatment for head lice that Manhattan was looking to market in the US as part of a joint venture (JV), had been the company's first hope at a consistent revenue stream - aside from dilutive financing deals -  but a fallout with the JV partner over share structure has the product in limbo.

Another product candidate, however, AST-726 for the treatment of vitamin B12 deficiency, may be rolling along towards commercialization.  An agreement with the FDA on the protocol for the expected Phase III trial was reached last year in an announcement that sparked a 200% spike at the time.

Additional products are also in the pipeline, although still at earlier stages in development.

Bear in mind that before last year's reverse stock split, Manhattan traded for quite some time at right around the penny level, making it a pure penny play.  Now, on the other side of the RS, TGTX will need to prove that the short term moves for which MHAN had become known have more meat behind them than just day traders playing their games.

There is some long term potential with TGTX, but history tells us that it's a better idea to sell into these significant spikes than to hold onto everything in order to wait for bigger gains later on down the road.  The company's track record is not solid enough to coax investors into believing that bigger gains will be there to be had.

This is the prototypical 'night on the town' play.  Quite a few shares can be had for the cost of a night on the town; if it pays off, then the Dom and Goose can flow even harder, but if it goes completely bust, all you've really lost is a hangover.  Such is the risk of pure penny plays.

Keep an eye on Manhattan.  The track record that has been proven with this company is that long bouts of silence are followed by quick, but very significant, moves.  If you get in at the right times, that strategy can pay off.

One day a product may make it to market, but beware of the risk involved.

Disclosure:  Long TGTX.

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