7-21-09 - FDA Approval In Waiting Makes Nuvo Research, Inc. (NRIFF.PK) Perfect

I've got a new post here at http://theperfectstock.blogspot.com/ . The last selection of CIT was not necessarily a terrible one. I just didn't time it correctly. This next stock, I believe, is timed perfectly though. It's "technically" perfect and has one of the best setups I've seen in a while for an explosive two week run. The next perfect stock is Nuvo Research, Inc. (NRIFF.PK or NRI.TO). Since many people don't readily have access to the Canadian exchanges, we'll focus on NRIFF.PK.

First of all, I cannot take all the credit for this one if it does do well. One of the readers of the blog named Aroramax, "bought" it to my attention last week. Now, I think is great time to pull the trigger.

Nuvo Research is a Canadian drug development company focused on the research and development of drug products that are delivered to and through the skin. The Company’s lead product Pennsaid, is used to treat the pain and symptoms associated with knee osteoarthritis (OA). Pennsaid has been approved for marketing and sales in the countries, including Canada, the United Kingdom, as well as certain European countries.

Pending News

Currently, the Pennsaid is up before the FDA for US approval. If approved, Nuvo will receive an up-front, payment of US$10 million and is also eligible to receive a US$15 million milestone payment on Pennsaid's approval by the FDA, which will increase to US$20 million if certain labeling criteria are agreed to by the FDA. Also, the submission to the FDA was after the company had already received an "approvable letter" for Pennsaid. In other words, they were told by the FDA that if they just did a couple more things, they would get approved if they resubmitted. Consequently, NRIFF is almost assured of approval. It is scheduled to be announced on 8/5/09.

Technicals

See below for the chart of NRIFF.




The stock did nothing for months, then it finally began to move beginning in May. After settling in the 30 cent area for a month and a half, this week marks the beginning of a breakout as the stock surges to new highs. Most people believe the stock briefly stalled in the low 30's due to warrant pricing. Those warrants finally expired earlier this week and seemed to correspond with the breakout. Looking at the volume chart, you can also see that the volume is beginning to pick up again as well. All signs point to a substantially higher move.

Momentum

NRIFF seems to be following the same pattern as some other successful biotech stocks that were awaiting FDA approval. HEB and NEPH are just a couple of many names that more than doubled under similar circumstances. Investors/traders always keep in their memory banks what has recently worked. This should strongly work in NRIFF's favor.

Insider Trading

Because Nuvo is a Canadian company, you can easily keep up with Canadian insider transactions at http://www.canadianinsider.com/ . No insider has sold the stock this year, but several members acquired shares through a pre-approved ownership plan at just under 11 cents a share. The fact that we are now near 40 cents and still none of them have sold, has got to be considered bullish.

Conclusion

Everything is pointing to NRIFF really being a big winner in the next 2 weeks. Nuvo has quite a few shares outstanding (over 300 million), but because the share price is so low and interest in the stock is beginning to mount, the float is slowly, but surely thinning. Don't be alarmed by the number of shares traded on NRIFF.PK. NRI.TO gives you a much better indication of the true volume. The price of NRIFF.PK adjusts as the value of the dollar vs the canadian dollar changes. Currently the stock sits at 38 cents. I'm expecting a steady rise until the 5th and see 60 cents as an eventual trading level. Nuvo Research Inc. (NRIFF.PK) is the next perfect stock.