Today we are initiating coverage of Viral Genetics (PINK: VRAL). The full report (PDF) is available via this link.
- Viral Genetics is in the process of ramping up two innovative drug and biofuel development platforms based on promising proprietary biotechnology developed in conjunction with the company’s lead researcher, M. Karen Newell Rogers, Ph.D., and an experienced and talented advisory board that includes two Nobel laureates in medicine and several prominent business executives.
- The company has two drug technology platforms, Targeted Peptide Technology (TPT) and Metabolic Disruption Technology (MDT), with broad applicability because they fundamentally manipulate cellular proteins and metabolism, respectively. There are six research programs built upon these platforms with targets including drug-resistant cancer, HIV/AIDS, and Multiple Sclerosis.
- Catalysts for future growth include clinical trials for various indications including HIV, Lyme disease, Multiple Sclerosis and drug-resistant cancer. Viral Genetics recently received a grant of $1.5 million through its affiliation with Dr. Newell Rogers and Texas A&M/Scott and White Hospital to begin clinical testing. Additionally, a pre-IND for the HIV/AIDS compound was filed, and further news should be forthcoming in the near future.
- Another catalyst for growth is the newly created subsidiary, VG Energy. VG Energy is developing a potential solution for high yields of algae biofuel production that incorporates Viral’s Metabolic Disruption technology. The same family of inhibitor molecules that block tumors from burning fat also cause algae to increase lipid accumulation by a minimum of 300 percent. Viral is currently exploring all options to develop their algae biofuel technology.
- The recent successful settlement of a major lawsuit with a former partner that impeded Viral’s business development and growth over the past several years is another positive development for the company.
- Viral’s current financial condition is fragile and the shares are suffering under ìpenny stockî status. Additional equity capital and grant-based research funding will be required to maintain current operations and foster corporate development and growth, both of which we believe will be forthcoming. We’ve used three different intrinsic valuation (IV) scenarios to arrive at a range of values for the shares. Our base case suggests a valuation of $0.47/share.
Although Viral Genetics is a very small capitalization stock with limited trading volume our work indicates that this is a company that deserves additional investment and has a chance to make some fundamental marks on a wide range of medical and energy challenges.
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