Headquartered in Geneva, Switzerland, Acrongenomics, Inc. (AGNM.OB-$2.65), is a research and development nano-biotechnology company pioneering the development of uniquely advanced nano-molecular diagnostics for the Life Sciences Industry.
The 10-Q Detective became intrigued with this nanotechnology company after reading its February 14, 2006, announcement that corporate was currently in negotiations to collaborate with an International group of experts towards the development of unique "nanoweapons" that exhibit extraordinary properties in eliminating hospital related infections.
What caught our attention in the press-release was not the fact that “antibiotic resistant infectious diseases impose a significant burden on society, and surpass $30 billion in annual direct treatment costs in the U.S,” but the seemingly innocuous sidebar mentioning the following:
“Dr. Eleftherios Georgakopoulos (Doctor G.), the former president, retired from the board earlier this week. The leadership change coincides with the transfer of the former president's 4 million shares to the treasury of the company, while the company keeps full title on all its technology developed to date.”
In perusing an 8-K filing with the SEC on February 16, 2006, the 10Q Detective discovered that Acrongenomics—in the aforementioned promulgation—neglected to mention a big AND attached to the term ‘full title.’ Dr. G had originally acquired the 4.0 million shares in exchange for patents the Company needed to complete the development of its first product known as the EP-CAM Detection Kit, which was a highly predictive molecular diagnostic test for micrometastic cancer of epithelial origin. As per their original agreement, when the Company re-acquired the 4.0 million shares from Dr. G., corporate had to exchange the shares for a royalty of 50% for any future revenue that the Company expected to generate from so-called ‘Nano-Jeta’ technology. [ed. note. The principle behind fusing nanotechnology with molecular biology in the development of an expanded—and more accurate—Cancer Detection Kit can best be understood by reading page six of Acrongenomic’s 2004 Form 10-KSB, filed on April 27, 2005.]
For the nine-months ended September 30, 2005, the Company had reported losses from operations of $3.5 million. The Company has accumulated a deficit of $5.4 million since its commencement
What follows is a history of the Company to date:
- · During the year ended December 31, 2004, the Company abandoned the development of a Website designed to earn income from companies who were prepared to advertise on the Website for a fee.
· In 2005, the Company transformed its existing product EP-CAM Detection Kit for the detection of epithelial cancer into the first nanomolecular diagnostic kit, the Neo-EPCAM cancer detection kit. Neo-EPCAM is capable of detecting all types of cancers of epithelial origin such as, lung, breast, colon, prostate, head, and neck, stomach, ovarian, pancreas and esophagus. According to management, this Nano-JETA technology offers great advantages compared to the performance of existing molecular diagnostics by achieving nucleic acid amplification and the detection and quantification in greatly reduced time.
· The simplicity and speed of the Nano-JETA technology platform is based upon the incorporation of a family of nano-materials with unique physicochemical properties. The advanced nano-materials used play a crucial role in the technology’s performance regarding application in terms of speed, accuracy and reliability. During the first half of 2006, the Company, therefore, has decided to focus its research on the full characterization of the aforementioned nano-materials by setting up a series of sophisticated experiments that will enlighten further the mechanism of action of the technology.
· Acrongenomics is currently searching to establish collaborations with international university research centers that are equipped with suitable personnel and instruments for such testing purposes [The 10Q Detective smells stock dilution here, pay for play]
Acrongenomics Inc. is still in the development stage and does not anticipate earning any revenues until such time as it can establish an alliance with targeted companies to market or distribute its product, the Neo-EPCAM Detection Kit. As of September 30, 2005, the monthly cash burn-rate was approximately $400,000 per month.
Corporate raised approximately $5.8 million in two private placements of securities in the 4Q:05, which should be sufficient to fund anticipated R&D and operating expenses for FY ’06.
Fundraising, in our opinion, will continue to remain a key challenge for Acrongenomics as it tries to sustain product development. Witness the aforementioned announcement of corporate intent to enter the $30 billion market for antibiotic resistant infectious diseases. [ed. note. The Company has nor even brought to market its Cancer Detection Kit—and already its getting set to enter a new market. REALLY!!!] In our opinion, that news was strictly a PR stunt—to draw investor attention to Acrongenomics proprietary nano-bio platform.
Nonetheless, cheap PR tricks aside, we do embrace management’s tenet that the constant search for better products and processes will spread the application of nanotechnology across various industries, including health care.
Nanotechnology can be characterized as one of the key enabling technologies of the twenty first century. The United States National Science Foundation predicts that the total market for nanotech products and services will exceed one trillion dollars by 2015. Market research firms are in agreement that the impact of nanotechnology will be felt first in sectors like biotechnology, electronics, energy and industrial products.
In our opinion, there are serious doubts as to the longer-term viability of Acrongenomics as a going concern. How will the Company show operating profits when fifty-cents of every dollar in future sales of the Cancer Detection Kit [for epithelial testing] has to go to Doctor G?
Bernard Baruch, a Wall Street Wizard in the early 1900’s, is quoted as having said: “A speculator is a man who observes the future, and acts before it occurs.”
What the hay—when the momentum monies come back to nano-plays—readers should look at Acrongenomics like its a speculative call LEAP [Long-term Equity AnticiPation Securities] option—with a 12-month shelf-life!