Rich Pharmaceuticals (OTCMKTS:RCHA) Looks Poised For A Breakout

Rich Pharmaceuticals (OTCMKTS:RCHA) is a biotechnology stock to watch right now.Last time we covered the company, it had just run up to $0.0078 a share on the back of some news that detailed a partnership with an entity called Hypgen and a joint effort to bring a Parkinson's disease drug to market.Fast-forward a couple of months and the company currently goes for just $0.0008, firmly in the 000's and struggling to pick up any degree of positive sentiment. RCHA Daily ChartOver the last week or so, however, we have seen a spike in volume (more than 200 million shares traded hands at the start of last week and more than 130 million shares traded during two of the subsequent four days, versus average daily volume of less than 50 million shares) and the chart is teed up for what could be a considerable breakout.We know that the stock moves on news and we know that the company is primed for some fresh releases, meaning an entry at current levels could be both a quick turnaround spike play and an opportunity to pick up some cheap shares of a longer-term recovery.So where might the news be coming from?As of a couple months ago, we learned that Rich had picked up approval for an investigational new drug (IND) application from the FDA related to its lead oncology asset. The drug in question is called RP-323 and, if it's mechanism of action proves effective, it could be a real winner for both its target patient population and Rich and its shareholders going forward.Its mechanism of action (MOA) is pretty complicated but it can be simplified as follows: the drug activates what's called protein kinase C (PKC), which then produces something called NF kappa. NF kappa then produces NF kappa B, which is a protein complex that is able to enter the nucleus of cells. When something enters a cell's nucleus it has the ability to change the activity of the cell in question and, in this instance, the NF kappa B enters the nuclei of cancer cells and induces apoptosis, which is a sort of mechanical cell death that doesn't work as it should in cancer cells and, in turn, leads to the excessive proliferation associated with the disease.Anyway, in this instance, the company is trying to put this MOA to work in a target indication of acute myeloid leukemia (AML) and Hodgkin's lymphoma (HL), both of which are blood cancers and both of which, theoretically, RP-323 should be able to combat.Subsequent to the FDA approving the IND, Rich announced that it had named a principal investigator in Thailand to conduct a phase 1/2 trial in the above-mentioned AML and HL indications, so it's from this trial that we are looking for news and, in turn, catalysts that could initiate the breakout alluded to above. Management said that the trial was ongoing in its latest communication but chances are that this doesn't mean anyone has been enrolled as yet. As such, as a major near-term catalyst, we are looking for the initiation of enrollment primarily because said initiation will allow us to form some expectations related to timeframes – completion, topline etc.And that's if we don't get any news between now and then related to the Parkinson's asset that forms the basis of the Hypgen collaboration.Bottom line here is that volume is picking up and share price remains subdued, but any news should get things moving far and fast and there is plenty of scope for near-term operational updates. There is a dilution risk rooted in the necessity to fund the ongoing clinical trial, but any raise should be outweighed by the upside revaluation once some fresh information hits the tape.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on RCHA, sign up below!Image courtesy of Libertas Academica via FlickrDisclosure: We have no position in RCHA and have not been compensated for this article.