Propanc Health Group (OTCMKTS:PPCH) has been on a downtrend ever since the company hit its highs of $.13 last summer. PPCH benefited as it got favorable coverage from the investment newsletters the Wealthy Biotech Trader, Microcapspeculators, and a paid feature in the NY Times Sunday Edition Magazine under Health Essentials: Cancer Prevention & Treatment. To promote PPCH, the parent of company of The Wealthy Biotech Trader received a $60 thousand convertible note from PPCH as well as a monthly fee of $5000. The Microcapspeculators' disclaimer states that their parent company had been compensated $6,000 by Regal Consulting, LLC. on behalf of Propanc Health Group, Corp.The coverage on PPCH has been relatively positive. Propanc is currently focused on developing new cancer treatments for patients suffering from pancreatic and colorectal cancers. PPCH has developed a formulation of anti-cancer compounds which exert a number of effects designed to control or prevent tumors from recurring and spreading throughout the body. Its products involve or employ proenzymes, which are inactive precursors of enzymes.
In the near term, PPCH intends to target patients with limited remaining therapeutic options for the treatment of solid tumors such as colorectal or pancreatic tumors. In future, the company intends to develop its lead product to treat (i) early stage cancer and (ii) pre-cancerous diseases and (iii) as a preventative measure for patients at risk of developing cancer based on genetic screening.
The current focus for PPCH has been animal toxicology studies as part of the next phase of development for PRP. PRP is administered by I.V injection, selecting the right dose will be determined by completing a dose range finding study. A more detailed GLP (Good Laboratory Practice) animal safety toxicology study will be released around June of this year.The one problem with all of this is that in order to fund these studies, PPCH made a deal with the devil. In this case, PPCH negotiated a $4 million toxic deal with MG Partners II Limited, an affiliate of Magna Corp. Magna is perhaps the biggest toxic funder in penny stock land. The conversion price for the initial $1.2 million is $.0346. Since we are below that price, "the Note shall be convertible at a price per share that is equal to a twenty percent (20%) discount to the average of the two (2) lowest closing prices of the common stock on the Maker’s then current trading market in the five (5) trading days prior to the date of conversion."Our guess is that the reason for the weakness in PPCH's share price has been that Magna has been aggressively shorting the stock. This is what typically happens when a company does a deal with Magna.The good news is that PPCH does have potential if it can overcome this toxic deal. PRP, is a once-daily pro-enzyme treatment as a clinically proven therapeutic option in the treatment and prevention of cancer. PRP would be the first therapy of its kind, as there are no FDA approved therapies used for the long-term prevention or management of these conditions. Propanc is focusing on providing oncologists and their patients with more effective metastatic cancer therapies with a substantially reduced side effect profile; specifically, colorectal and pancreatic cancers. Improvement is needed for the standard of care for late stage cancer, with the incumbent treatments causing significant adverse effects for the modest benefits provided.
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PPCH currently has $1.2 million in cash to fund its studies. The company needs a breakthrough with its animal studies. As CEO James said:
"Conducting these important animal studies is a critical step wise approach which will help characterize the safety profile of PRP and define the most appropriate starting dose for Phase I human trials."
Phase I human trials would be a game changer for the company. In the end, regardless of the deal with Magna, it all comes down to the science. If the science is proven, PPCH will not only bounce, but shares are off to the races. We will be updating Insider Financial subscribers with the latest on PPCH as soon as we know more. Be sure to sign up so you don't miss out on current updates.
Disclosure: We have no position in PPCH either long or short. We have not been compensated for this article.
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