Dr. Krause Comments On Local OTC Stock Seeking To Jump To NASDAQ

Cellectar Biosciences is trying to go from an over-the-counter (OTC) stock to trading on the Nasdaq stock exchange-and the stakes are high for the small Madison, WI-based biotech. Winning approval to join the Nasdaq stock market could give Cellectar a lift in getting its tumor drugs and imaging products to market-assuming the company can capitalize on the opportunity.

And at the minimum, Cellectar would raise its profile in both investment and research communities by getting into the best leagues of a significant exchange. Whether it’s fair or not, small companies whose stock trades OTC often are associated with penny stocks-a “pejorative term,” says Eric Blanchard, a partner with lawyer Covington & Burling in New York. As “The Wolf of Wall Street,” last year’s raucous Martin Scorsese flick, vividly describes, penny stocks can be manipulated in deceptive “pump-and-dump” strategies. But many OTC shares can’t be tarred with the same clean as dubious penny stocks, provides Blanchard. 5 per share, generally OTC.

Biotech and software startups sometimes go the OTC path because they lack the tangible resources, like industrial manufacturing equipment, you can use as collateral to easier obtain financing, he says. Or they can finish up as an OTC stock as the total result of a merger, as regarding Cellectar.

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The once privately-held company was obtained in 2011 by Newton, MA-based Novelos Therapeutics, that was already an OTC stock, and which relocated the head office of the combined company to Madison, where Cellectar was centered. It’s not the most well-liked path, Krause says. “Firms would try to avoid it if they could because of the connotation.” He equated it to hawking wares at a pawnshop.

That’s why some ambitious professionals view trading OTC as a way station in relation to better things. Making the jump to a major stock exchange starts the business up to more liquidity and a bigger pool of investors, says Matt Rossiter, a commercial partner with Fenwick & West in San Francisco. Cellectar’s executives and traders wish right he’s. The company recently enacted a 1-for-20 reverse stock split and announced it had applied to trade on the Nasdaq Capital Market, while planning for a open public offering of additional stocks also.

4 per talk about, at least 300 shareholders, and at least 1 million publicly kept shares, among other requirements. A Cellectar spokeswoman declined to comment, citing an organization peaceful period as the Nasdaq considers its software. 6 per share, and its own investors held 2.87 million stocks. The ongoing company has disclosed plans to trade on the Nasdaq at least once before, back in July 2011, 90 days after Novelos acquired it.

But the business pulled back until now, when its stock price is higher and the R&D pipeline looks stronger. “My personal opinion is I’m quite self-confident that people will succeed this time,” says Wisconsin businessman Jeff Straubel, an early on buyer in Cellectar. “It offers most to do with the fact that I believe we are gaining a great deal of acceptance with the right community,” scientists namely. However the potential of Cellectar’s science won’t affect the outcome of its Nasdaq application, that will be decided upon in the next 60 days or so, Marquette University’s Krause estimates. Your choice will have a huge impact on the company’s future.

Cellectar’s ability to raise additional financing to develop its tumor drugs and imaging agencies likely hinges on which makes it on the Nasdaq exchange, says buyer Straubel. Straubel is majority and chief executive owner of Wisconsin-based Greenway Properties, which holds nearly 22 percent of Cellectar’s shares currently, SEC filings show. Cellectar was founded in 2002 by UW-Madison radiology teacher Jamey Weichert, who presently serves as main scientific officer. 23 million in capital raising between 2002 and 2010 to develop compounds from Weichert’s lab called phospholipid ethers (PLEs).

Dr. Krause Comments On Local OTC Stock Seeking To Jump To NASDAQ
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