Quick Analysis: Rexahn Pharmaceuticals Corp (RNN)

RNN: Rexahn Pharmaceuticals Corp

Recent Range: $1.25/share - $3.50/share (Current Price: 2.50, as of close of 4/20/10)
Price/Sales (P/S) = 2782.05 (1002.08, Industry)
Price/Book (P/B) = 25.22 (6.16)
Gross Margin = Not Available
Pre-Tax Margin = -8,516.6% (-4,752.1%)
Debt/Equity Ratio = 0.00 (0.36)
Current Ratio = 9.9 (6.0)
Return on Equity = -118.2% (-8.1%)
Return on Assets = -90.6% (-20.9%)

Analysis: This is not one of those “sure bets,” unless you mean a sure bet to lose.

I only see a couple glimmers of hope with this company. It has a nice cash supply, and it does not have any debt—NONE. This allows them to work on their time schedule more than if they were under the thumb of someone demanding an immediate return on their investment.

It seems to be a company of researchers. They are trying to develop a drug for erectile dysfunction (ED). They are developing a drug to fight cancer, although I am not clear as to which type of cancer. They are progressing with a drug to moderate, if not cure, Parkinson’s Disease. They seem to spend a lot of effort researching neurological disorders, which has a strong demand.

The problem is that they don’t provide any supply. They are not approved for any of its drugs. (If they are, their marketing department made it too hard for me to find them.)

The drug that with the farthest progression is called Serdaxin. One source called this an anti-depressant. Not only is this market saturated with anti-depressants, but it got slammed in its Phase II study results. The data was not substantial enough. Another source cited this to be used to treat Parkinson’s Disease. Either way, it lacks data, which means that it lacks credibility, according to the FDA.

This does not lead to a very good profit. This underdeveloped business model leads me to think that bigger pharmaceutical companies are watching this group closely in the event they begin to make progress. If that happens, I’m guessing that one of them will try buying out this company. It has a ton of researchers with access to cash, but it seems to be short of business people.

When you see the term “speculative stock,” this company’s name is beside that entry. It is a perfect example of it.