The Mice of Men: NTI & The Buck & The Drug

By Thom Calandra

Tiburon, Calif. (TC) -- Good morning, voldy morts. Where we live is just a Shrekian stone's throw up the freeway from the Buck Institute for Age Research.

The labs there in Novato, Calif., are just starting the process of licensing molecular compounds, peptides and other formulations to commercial interests. In exchange for cash, companies receive development and royalty rights for some of the new drugs, those that clear the early testing hurdles.

Treatments for Parkinson's, Huntington's and Alzheimer's some day might derive from the Buck Institute's age research in the hills of northern Marin County. (Not more than a mile or two from the factory where those Birkenstock sandals are made!) Or treatments for these obiterating diseases might not stem from the nonprofit Buck Instutite for Age Research. Few things are a lock in such laboratories where proteins and peptides are nurtured and injected into little critters in mazes.

When those compounds -- the audacity of hope on Pharma Planet -- apply to neurological regions of mammals, NOTHING is a lock. As any investor and scientist can tell you, neuro companies are deperate acts of faith, run by big-hearted desperadoes seeking to plant a small flag on the pharmacology map against the odds.

In the case of Neurobiological Technologies, whose shares I own and whose CEO and scientists I respect, vast amounts of wealth have been destroyed in the search for novel drugs that treat head trauma, ischemic stroke and other brain bonkers. Yet the company, based here in California, is one more tiny example of how investors can crack the BUYSIDE CODE and become actionable and LARGE. All whilst supporting an enterprise that might become a neuro powerhouse.

I have to be frank here. I feel as if I have lost more money in NTI, as the company is called, than that unfortunate trader in Paris who "bet the bank" on a soiree sadly gone south. Gone, baby, gone, the actor Casey Affleck might comment. On a percentage basis, since I started investing in NTI shares four years ago, I must be in the hole by 60 percent. I've been diluted down, reverse-split beaten down and just plain down downed. Gone, baby.

So the world does not care for a tiny company that is hoping to stake some markers inside the neural pathways of the brain? Apparently. Even were NTI to succeed in developing compounds to treat stroke, for example, in a six-hour patient window, the company still has to license the drug and promote the drug.

So what does the fellow, the writer (moi) whose current project is the nonfiction Actionable & Large: Stocks Guru Cracks Buyside Code, what does he do? Why, he goes out and cracks the code, buys even more at absurdly low prices. Naturally, he thinks he knows how the neuro story will turn out. Correct?

Actually, no. Not entirely correct. I have no idea how the story will turn out. I believe merely that NTI, and other small companies with vision, drive and the focus of a freaking laser beam, are worth the immense investment risk they pose. Even with all of my additional purchases of NTI shares over the years, the stock still, at post-reverse-split levels now, will have to hit $8 a share for my stake to become profitable.

At $8, tiny NTI becomes a $250 million market capitalization vs. its current $80 million or so. Still such a pittance for a company that might have the next great stroke clotbuster, for a company that owns the Alzheimer's treatment Memantine, that already has licensed its Xerecept head trauma drug to an independent company and that hopes to collaborate with a worthy institute, the Buck, in an effort to explore Huntington's and Alzheimer's solutions.

Neurobiological Technologies will back the Buck's Alzheimer's drug-dev for up to three years and be set back at least $1.2 million in Year One. Paul Freiman, the chief executive of the company, says he is looking to broaden NTI's exposure to research into central nervous system disorders.

There was a time when the relentless slide in NTI's share value had me in an extreme state of nervous system disorder. I mean, even doing my ethereal laps at Strawberry Pool up the road, in the water womb that keeps me and about 40 or 50 other members young and active beyond their years, even in my chlorinated haven, I was ruminating about the destruction of value that a biomedical firm can wreak on its supporters.

That was before I'd refined fully the principles of cracking the BUYSIDE CODE. Now that the book and my brain are on the same page, all is wonderful again with the world, and with my backstroke. It still might takes years, and perhaps never, but if the improbable becomes the probable, if NTI's viper-venom stroke candidate, Viprinex, survives Phase III human tests, and if Xerecept the head trauma peptide sails through its Phase III trials, and if the company continues to see a stream of income from the sales of Memantine for Alzheimer's relief, and if ... and if ... well, even if all of those matters resolve happily, and the Buck Institute's research proves to be more than mice in a cage, there is still the matter of marketing and licensing and royalties and the accounting details. Now that's a world that mystifies me.

NTI will have its first drug research day for interested parties this week in NYC. I will be doing laps in Strawberry, in my water womb. For more on all this, see these ThomInAtor Bullets:

• The Buck starts here: http://www.buckinstitute.org.
• NTI starts here: www.ntii.com.
• For Actionable & Large: Stocks Guru Cracks Buyside Code: www.thomcalandra.com.

That's all for now voldy morts! See you in the lane.

-- Thom Calandra in Tiburon