Not so nu

Oct 26th, 2009 – Comment

NCS has developed wound dressings that are coated with nanoparticles of silver to accelerate the healing process.


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nucryst.jpgHi,
What is happening with NCS TSX?? It’s still getting a five star rating but there seems to be no activity. Should I hang in there??
Maria
North York, ON

Hi Maria,

Its been a long time since I have looked at Nucryst Pharmaceuticals Corp ( NCS TSX) which was spun out of Westaim Corp. Here’s the rub with NCS. They are not growing their core market and their development pipeline is thin.

NCS has developed wound dressings that are coated with nanoparticles of silver to accelerate the healing process. The problem is that sales of the the dressings have not been growing as hospital administrator have aggressively squeezed the cost out of their operations.

The other problem is that some of the efforts to broaden silver’s therapeutic uses have not worked out. The company went through Phase II trials on a treatment for eczema which they discontinued when the trials didn’t show that the therapy was effective. NCS was testing the treatment on ulcerative colitis but in May of 2008 stopped that research but it is still working on applications in the treatment of c-difficile associated disease.

ncs2.jpg

The three year chart gives a good view of the aggressive sell off that NCS experienced going back to 2006. It has made a nice advance from the lows but on thin volume which make me call the move into question. The average volume is 4,300 shares a day over the last three months. Thin gruel at best.

ncs21.jpg

The three month chart gives us a good picture of the thin volume and the choppy trading that goes with it.

Here’s a company that has a softening market for its core product, a lack of resources that is stalling its development pipeline, a 75% shareholder in Westaim which in Q1 2009 grabbed the lions share of a $14.7M cash distribution to shareholders, and thin volume.

For my money I would look for a better prospect in the pharmaceutical space.

Categories: Pharmaceuticals
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