Mistral Ventures Inc (MILV.PK) is our power play pick for Wednesday, October 26th 2011, and could very well be the next big player in an industry that is estimated to be worth more than $13 BILLION USD by the year 2020!
It's the chronic obstructive pulmonary disease treatments industry... and while it's estimated to exceed $13B in 2020, it's no small market right now, with its current value at around $9 billion this year alone!
The treatments these companies are working on are at all stages of development. The co-development of RELOVAIR, for instance, between GlaxoSmithKline and Theravance is in Phase III testing for COPD as well as asthma. Novartis AG had already submitted its new chronic obstructive pulmonary disease therapy to regulators in the U.S., where it was sent back to the proverbial drawing boards just a few days ago. Though overseas regulators have already approved the drug, the United States ruling could delay a U.S. launch for as much as a couple of years. MediciNova currently has its MN-221 in Phase I testing as a treatment for COPD, though the same drug is in Phase II testing against asthma. Glaxo also has a treatment called Advair that's already on the market, though it's run into patent challenges and FDA restrictions.
In comparison, the Mistral Ventures Inc. entry into the race may seem too far behind to catch up. It's got a twist, however, that could end up making MILV a big winner in the chronic obstructive pulmonary disease without taking on all this competition head-on.
Truth be told, traders may just as well start calling the company Nature's Bioceuticals rather than Mistral Ventures. MILV, which was simply a shell until a couple of days ago, 'acquired' Nature's Bioceuticals via a reverse takeover. The deal essentially made Nature's Bioceuticals a publicly-traded company (where it wasn't before), and breathed new life into a stock that had no reason to live.
As for why investors should care either way, Nature's Bioceuticals has an actual product. It's not sold any of it yet, but it has one - an all-natural remedy for COPD.
Here's the twist.... the company may opt to NOT submit the formula to the FDA, where it could run the risk of being denied or restricted, costing Mistral Ventures time and money. Instead, it could simply choose to market the so-called 'Breathing Formula' as a dietary supplement. The upside is speed to market, flexibility, and the avoidance of ongoing scrutiny from an often-overbearing Food & Drug Administration. The downside is that it won't have the tacit support from the prescription-writing medical industry, and it won't be able to promote it as a therapy for the chronic obstructive pulmonary disease.
On the surface it seems as if going around the FDA and giving up the COPD-oriented marketing is the wrong decision. That may not be the actual case though. Yes, it will make it tough to compete with the likes of GlaxoSmithKline, Theravance, MediciNova, and Novartis AG. But, bear in mind most of those treatments for chronic obstructive pulmonary disease are still years away from winning widespread approval, and several of the ones that have been unveiled have hit headwinds. At least with MILV, there's the potential for a 'here and now' revenue generator.
Besides, U.S. consumers are warming up to the idea behind Asian medicines, which are often based on plants and organics. If it's as good at dealing with COPD as the company says it is, patients will know it and find it soon enough. And with a market cap of only $25 million, the gamble is a relatively small price to pay... if it can get actually a product on some shelves.
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