Novelos Therapeutics, Inc. (OTC:NVLT) With an Optimistic Start of the Year
05 Jan 2011

The shares of Novelos Therapeutics, Inc. (OTC:NVLT),a biopharmaceutical company developing oxidized compounds for treating patients with cancer, has enjoyed a good deal of interest over the past week. Since Dec. 30th, the price has been going steadily up from $0.022 per share to $0.05 at the yesterday`s session. Interestingly enough, there is no immediate reason for this sudden interest. Novelos shares are actually no stranger to sudden price shifts in short periods of time. More often, though, interest from investors was a result of some sort of announcement, stock promotions, etc.

Another fact worth mentioning is that during 2010 there were only a few cases when the stock price has continued to rise for more than 3 days. There have been dramatic falls on many occasions, a perfect example of which is the difference between the price in Jan. 2010 (around $2.50 per share) and the price in end-December. Of course, as with any pharmaceutical company, investors are mostly interested in the results from Phases 1,2 and especially 3 clinical trials. So, it is fair to assume that the drop in share prices was in a way a representation of the actual results from tests, performed with Novelos products.

Considering all the above-menitoned, there is a good possibility that the upward movement of stock prices would soon come to an end since there’s a high chance it was a result of speculations and rumors. An interesting fact about Novelos is that according to its last 10-Q statement the company is on exact break even in terms of total assets versus total liabilities, redeemable preferred stock and stockholders` deficiency. Yet, the 10-Q states that NVLT has capital to sustain its business only through the first quarter of 2011. After that, if no additional funding is secured, a slow-down in some of its activities might follow, affecting the prices of its shares as well.

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