Easton Pharmaceuticals Inc (OTCMKTS:EAPH) is a micro-cap stock that has started to generate some undeniable momentum in recent trade. We would argue that the upward trending move really has its roots in the EAPH’s hold of key support around the $0.02/share zone back in late June. Likely not coincidentally, that inflection was accompanied by the announcement that it had received an approximate total of $400K in purchase orders for the quarter from its sub-distributors for the Mexican market.
According to that release, the purchase orders include a new order received just last week, including an upfront cash deposit which has brought the total for all Easton / BMV’s woman’s diagnostic and treatment products to approximately $400,000 USD in purchases for the quarter since its first “Gynofit” launch in April of this year.
Easton Pharmaceuticals Inc (OTCMKTS:EAPH) bills itself as a specialty pharmaceutical company that designs, develops, and markets various topically-delivered drugs and therapeutic health care products.
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According to company materials, “EAPH is a diversified specialty pharmaceutical company involved in various pharmaceutical sectors and other growing industries. The Company previously developed and owned an FDA-approved wound-healing medical device and currently owns topically delivered drugs to treat cancer and other therapeutic products to treat various conditions that are all in various stages of development and approval. Easton has partnered with BMV Medica and together, own the exclusive distribution rights in Mexico and Latin America for patented women’s diagnostic and preventative care products, along with two generic cancer drugs Paclitaxel and Docetaxel.”
Moreover, products include Nauseasol, a motion sickness gel; Skin Renou HA, an anti-aging wrinkle cream using hyaluronic acid, which keeps the skin smooth; Kenestrin Gel used for arthritis, knees, elbows, shoulders, wrist, and back pain; Viorra, a hormone free, non-toxic, and topical gel that improves sexual functioning of women; and female sexual arousal disorder drug.
EAPH is apparently also developing XILIVE, an early stage cancer drug. In addition, it is involved in the medical marijuana business. It was formerly known as LAM Industries, Inc. and changed its name in March 2010.
As noted above, EAPH shares have been red hot over the past few weeks, with a clear inflection in late June corresponding to the company’s announcement that it had received an approximate total of $400K in purchase orders for the quarter from its sub-distributors for the Mexican market. That announcement was able to provide a ground for estimates of future topline impact for the company’s operational dealings south of the border.
According to the release, “the PO’s include a new product where a new sub-distribution agreement has recently been executed. Complete details to follow on a subsequent press release once legally approved by all parties. A third product launch agreement is nearing completion with a major international pharmaceutical company as a JV partner which includes royalty and upfront payments on closing. Complete details are forthcoming.”
Management actually provided quite a bit of insight in that release, which may be one of the reasons the stock has performed so well ever since: “The $400,000 USD in purchase orders for the quarter represents a good start on product launches. New products launches in the pharmaceutical industry typically start slow and take several years for marketing efforts to gain awareness and traction. Sales of its woman’s diagnostics and treatment products will continue to grow which will soon include a third product in its portfolio for Mexico and Latin America. These revenues coincide with sales of its recent acquisition of iBliss Vapor where minor changes to its agreement were recently executed. Updated news on iBliss and the expected closing of Alliance soon to follow.”
Recent action has seen 55% tacked on to share pricing for the name in the past month. Market participants may want to pay attention to this stock. EAPH is a stock who’s past is littered with sudden rips. Furthermore, the company has registered increased average transaction volume recently, with the past month seeing 24% over the long run average.
Currently trading at a market capitalization of $32.24M, EAPH has virtually no reported cash on the books, which must be weighed relative to about $155K in total current liabilities. One should also note that debt has been growing over recent quarters. The company is pre-revenue at this point. This is an exciting story, and we look forward to a follow-up chapter as events transpire. For continuing coverage on shares of $EAPH stock, as well as our other breakout picks, sign up for our free newsletter today and get our next hot stock pick!
Disclosure: we hold no position in $EAPH, either long or short, and we have not been compensated for this article.