Arch Therapeutics Inc (OTCMKTS: ARTH)
If I didn’t know better, I would think that Arch Therapeutics was producing a magnet that sticks to numbers, instead of a highly successful medical device that can stop human bleeding very quickly.
At least if ARTH were producing magnets, I would understand why the ARTH share price has been sticking to the number 60 like a Disney World magnet on a Main Street refrigerator. Oh, that number 60 refers to 60¢, the level that ARTH has been clinging to for the past month. And, NOT for good reason.
ARTH Needs To Broadcast
Without a doubt, ARTH is well on the road to bringing a working medical device to market, one that can potentially transform the way wounds are treated in both trauma and surgical situations.
ARTH has developed the AC5, a medical device that utilizes self assembling peptides to produce a response in naturally occurring amino acids. The AC5 is designed to stop bleeding quickly, and human trials have shown a vast decrease in the time required to achieve hemostasis, the stopping of bleeding.
This is what gets me, though. Here you have a company like ARTH, one that is on the cusp of getting FDA approval as well as receiving the important Ce mark from Europe, and very few investors know about the story. ARTH is trading at less value than some bogus penny stock concoctions that regularly promise investors a product by next quarter, only to let them down with excuses for delay or postponement.
It’s the perpetual game of shareholder rotation, one retail investor goes in and one goes out. A transfer of wealth, if you please. Only that in most cases it becomes the transfer of a big bag of worthless shares.
It can be different for ARTH though, and until management realizes that it has to actually market its company AND its products rather than to simply invent one, the stock will languish.
What Should ARTH Do?
First, ARTH needs to hire a professional Investor Relations company, one that can be a one-stop shop for drafting press releases, scheduling road shows, and more importantly, introducing the company to institutional-based investors that would quickly embrace the ARTH story and understand their potential.
I’m not talking about engaging with a pump and dump firm, I am talking about letting ARTH grow up and begin to play with the bigger kids in the money pit. It’s perfectly acceptable to hire a professional team to do what they do best – promote companies and make prime introductions to interested institutional parties. It allows ARTH to do what they do best, concentrate on refining the AC5 to ensure that it is the best and most viable coagulation option available to treating physicians.
The AC5 is demonstrating exceptional efficacy with regards to treating open wounds. The device has been used to stop the bleeding in intentionally made wounds as well as shown tremendous success when used during surgical procedures.
The time to hemostasis has demonstrated a 40% decrease over traditional cessation methods, clearly demonstrating the superiority of the AC5 against traditional treatment.
ARTH needs to tell the story. While coverage on financial sites may help expose the company to new investors, the type of investment partners that ARTH can attract is much grander. ARTH has results in hand and a multi-billion dollar addressable market that can employ the AC5, which offers a far better method of stopping bleeding than is currently available. But, if investors don’t know about the product, the market value of the stock will continue to suffer.
Future Of ARTH
I am a believer that ARTH will eventually get its post pubescent growth spurt, however, the more time that ARTH management allows to slip by, the less value the shareholders may receive in a post-approval partnership.
Yes, trading on these podunk OTCBB markets don’t help the cause, but ARTH can address that as well, as long as they put the right people in place to do the talking for them.
ARTH shouldn’t be trading at 60¢, they should be well north of a dollar at this point in the evolutionary life cycle. Not only have they demonstrated superior results, they cleared the largest hurdle last month when they announced that the AC5 is just as effective in stopping bleeding for patients that are taking anti-coagulant medications. This was the one potential item that rightfully gave investors pause. But, now that that is cleared, the obstacles are about cash and exposure.
As far as the cash goes, ARTH is fine where they are. They don’t need too much additional funding, as the company has never stated that they intended to market the AC5 on their own. A partnership should be in the cards, and ARTH can wait out the New Year until they sign one. Johnson and Johnson would fit the bill quite well, by the way.
The next obstacle, also easily cleared, is for management to take a very small chunk of cash and apply it toward building a professional reputation based on a credible product and enormous market potential. No pump and dump, simply the truth about what the AC5 has demonstrated in human trials and the addressable market potential for the device.
ARTH…State Your Name
ARTH, its time to state your name out loud, because at this point, very few investors know it. You have a great device with broad applications. The AC5 is highly praised by both surgeons and medical professionals as a revolutionary method to stop bleeding in patients.
ARTH, you have the medical endorsements and you have the management team in place. All you need now is a microphone. Although this article will reach many in the know, its time that you moved away from the retail play pit and hire a team that can develop the company on a socially acceptable, professional level. It’s called company-based marketing.
Trust me, there are people who wish that they knew your name, or they will in a few months once you successfully bring the device to market. It’s okay to give them a chance now, though.
Walking softly while carrying a big stick may have worked for Buford Pusser in “Walking Tall”, but, in the real world of stock investing, ARTH needs to yell loudly and carry around a full briefcase of updated clinical results, the reports that you will hand out to potential investors during the road shows that you should be attending.
Once people know you, they will love you. C’mon, ARTH, don’t be shy. You have one of the most revolutionary products on the verge of coming to market. It’s time to tell the world.
[Image Courtesy of Flickr]