Spotlight Innovation Inc (OTCMKTS:STLT) is a stock that just launched higher on news that the United States Patent and Trademark Office issued to the Company’s subsidiary Celtic Biotech Iowa a patent for Cancer Treatment. The patented invention relates to compositions isolated from rattlesnake venom (“Crotoxin”) and methods for intravenous administration of Crotoxin to cancer patients.
The stock reacted to the news with a monstrous 60% rip to close the week. Volume on the move came in about 10 times the 60-day average. Traders should note this as important due to the tight float size in the stock (under 11M shares). As savvy traders are well aware, with such a tight trading float, this kind of ramping interest can force a supply-shock squeeze.
Spotlight Innovation Inc (OTCMKTS:STLT) trumpets itself as a company that identifies and acquires rights to innovative and proprietary platform technology candidates for the treatment of cancers and infectious diseases.
It provides solutions for healthcare-focused companies commercializing healthcare intellectual property. The company develops Crotoxin for the treatment of solid cancers and pain; and Cardiotoxin for the treatment of cancers and chronic kidney disease.
It also develops Cobramine for the treatment of chronic kidney disease in felines. In addition, the company develops Immunoplex, a vaccine platform technology, which is designed to use the body’s own naturally occurring targeting system to deliver vaccine components to immune cells.
Spotlight Innovation Inc was founded in 2012 and is based in West Des Moines, Iowa.
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According to company materials, “Spotlight Innovation Inc identifies and acquires rights to innovative, proprietary technologies designed to address unmet medical needs, with an emphasis on rare, emerging and neglected diseases. To find and evaluate unique opportunities, we leverage our extensive relationships with leading scientists, academic institutions and other sources. We provide value-added development capability to accelerate development progress. When scientifically significant benchmarks have been achieved, we will endeavor to partner with proven market leaders via sale, out-license or strategic alliance.”
Commenting on the significance of this patent issuance, Cristopher Grunewald, Spotlight Innovation’s President and Chief Executive Officer, said, “A key component of Spotlight Innovation’s product development strategy is to establish a strong intellectual property portfolio to support our pipeline of therapeutic product candidates.”
The company also recently put out a clear statement about a new direction for some of their resources on the R&D side: “Spotlight’s newest development program, announced just last week, targets Spinal Muscular Atrophy (SMA), a rare, highly debilitating and often fatal neuromuscular condition. SMA is a genetic disease, characterized by the loss of nerve cells in the spinal column and progressive muscle weakness and atrophy.”
According to materials released by the company, while SMA is largely unfamiliar to the general public, the disease gained national attention earlier this year when a 14-year-old girl afflicted with the condition announced that she would host a dance to celebrate her life.
“The girl, Jerika Bowlen, was wheelchair bound and only able to move her hands and parts of her face. Due to the extreme pain caused by the disease, she decided that after the dance she would voluntarily remove herself from the ventilator that was sustaining her life. She died in September.”
While Spotlight has publicly revealed only limited information about their SMA-related development program, they have noted that they obtained an exclusive, worldwide license from Indiana University Research and Technology Corp to commercialize “an orally-available small molecule that may have therapeutic potential for treating Spinal Muscular Atrophy”.
Now commanding a market cap of $29.8M, STLT has almost no cash on the books, with total assets approaching $7.1M, which stands against an appreciable load ($3.92M) of total accumulated debt. This is a terrible balance sheet situation, especially for a biotechnology company. Funding is a constant issue, and will have to be solved by a combination of partnerships that assign future revenues or through dilution of the cap table. That said, this is extremely common in the space and the company appears to have recently successfully renegotiated the terms of its debt financing and further beefed up the Scientific Advisory Board, which mitigates the hurdle a bit. We will be on the lookout for telltale signs of which way this story will tip, and we will strive to update the narrative from our perspective as soon as it makes sense. For continuing coverage on shares of $STLT stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!