Ibio (AMEX:IBIO) Price Movement From Ebola/Enterovirus Hype
Ibio (AMEX:IBIO) ($1.47) is a leading provider of plant-based biotechnology for developing and manufacturing biological products. As expected, the hype surrounding the Ebola and Enterorvirus outbreaks in the U.S. will inevitably led to aggressive share price moves of undeserving stocks. We think IBIO will be one of these cases, once the hype subsides. Shares of the company have risen 481% to $2.50 (current pre-market price) since August 1st 2014 when a promotional email was distributed.
It appears the rise of the company’s shares have been helped along by an October 6th, 2014 article published on a site called smallcapnetwork.com which includes the following passage where the President of IBIO was quoted as saying the following:
“iBio has exclusive rights to technology directly relevant to increasing yields and accelerating production of anti-Ebola antibodies and vaccines, issued U.S. patents that cover important processes needed for production of such products in plants, and a longstanding and productive relationship with Caliber Biotherapeutics. We expect to perform an important role in the emergency response to the current outbreak and to see our technology and products used in other important human healthcare applications in the future.”
The company claims it has licensing/royalty agreement with an entity called Caliber Biotherapeutics. The article mentions that:
“The Department of Health and Human Services is in advanced discussions to enlist Caliber Biotherapeutics, a Texas company that can produce the drug in millions of tobacco plants, according to federal officials and pharmaceutical industry executives.”
It appears that its agreement with Caliber will allow IBIO to receive royalty payments based on sales of products by Caliber that incorporate IBIO’s technology. It is unclear to our team if Caliber is actually applying IBIO’s technology to develop its Ebola drug. The author of smallcapnetwork.com article posed this question where we feel that the IBIO’s President did not give a clear answer.
“ Question: If Caliber wins the Ebola contract would IBIO be in a position to confirm its use in a press release?
‘Answer: Technology used to produce the ZMapp antibodies in plants is covered by issued U.S. patents owned by iBio, and iBio also has additional proprietary technology that can be applied to increase the antibody yields over current levels. However, we cannot speculate on contracts that might or might not be awarded.’”
Just answer the Question! Is Caliber using your technology to develop the Ebola drug it is working on?
But a few facts are certain:
- The company generated only $200,000 revenue in 2014 (year ends in June).
- The company has been a dilution machine. For example, shares outstanding have increased 109% to 67 million since June 2011.
- The company has accumulated deficit of $41.2 million.
- Interestingly, the date of the smallcapnetowrk article (10/06/2014) coincides with an S-1 registration allowing shareholder, Aspire Capital, to buy shares at a significant discount to market prices which it can immediately sell at market prices. Pump in shares of IBIO coincides with the S-1 which we calculate could result in Aspire Cap owning $9.5 worth of shares it can purchase at significant discount to market prices that it can immediately sell at market prices.
- We are unable to locate the financial details surrounding IBIO’s licensing arrangement with Caliber.