What Just Moved Sunshine Biopharma, Inc. (OTCMKTS:SBFM)?

Sunshine Biopharma, Inc. (OTCMKTS:SBFM) looks to have finally bottomed as bullish sentiments come back into the stock. In this article, we take a look at what's driving the recent price action in Sunshine Biopharma. SBFM Daily ChartThis is one we have looked at on a couple of occasions the past and highlighted as potentially being a company to watch at this end of the biotechnology space. However, it goes without saying that companies of this size are notoriously difficult to assign a valuation to and equally difficult to pin down from a risk profile perspective.In light of the recent run, however, we are going to give it a go. Specifically, we are asking the question, what drove the latest action, and where will this go next?So, as mentioned, this one is a biotechnology play, and its primary focus right now is in the oncology space. The company has four generic drugs on its roster by way of four Cross-Referencing Agreements, each of which targets a specific type of cancer.These are Anastrazole, which is targeting breast cancer and is a generic form of AstraZeneca plc (ADR) (NYSE:AZN)'s Arimidex; Letrozole, which is also targeting breast cancer but, unlike Anastrazole, is a generic form of Novartis AG (ADR) (NYSE:NVS)'s Femara; Bicalutamide, another AstraZeneca drug, this time called Casodex and targeting prostate cancer; and Finasteride, a generic form of a Merck & Co., Inc. (NYSE:MRK) drug called Propecia that goes after benign prostatic hyperplasia (BPH).Right now, the company isn't allowed to sell or manufacture any of these drugs (at least directly), but the latest announcement looks set to change this fact near term. Last week, management announced that it had filed an application for what's called a Drug Establishment License (DEL) with Health Canada, the Canadian equivalent of the FDA. A DEL is the first step in the certification process of a company to be able to handle drugs, including manufacturing, storage, tracking and distribution. In other words, it's a hurdle to being a drug seller/maker and Sunshine needs to/is working on clearing it right now.So that is the short game, but the real value in this one is its long game.The company intends to use the revenues it generates from the sale of these generic assets to fund a development program for a drug called Adva-27a. This one is what's called a topoisomerase II inhibitor and there exists plenty of evidence that these sorts of drugs can be effective in inducing apoptosis (another word for cell suicide) in the cancerous cells associated with a variety of solid tumor cancers – breast cancer, lung cancer, pancreatic cancer and more.For those looking to pick up a bit more in the science associated with this one, this journal piece is well worth a look.So the process is underway for the company to become a drug seller, and to subsequently use the revenue generated from its generics operations to fund development of what looks like a promising cancer asset.That's great, but again, it's not really a 200% valuation driver – at least not right now.So this brings us to our initial question: what is driving the action?Take a look at this 8K, filed June 22 with the SEC.The filing outlines the recruiting of an accounting firm called MNP LLP, which we checked out, and it looks as though it's a pretty big and reputable Canadian firm, on remit to establish a valuation for the company's issued and outstanding shares. In the 8-K, management outlines that this decision (the recruiting of MNP) was rooted in, or rather necessitated by, certain Subscription Agreements.With that said, however, there is a chance that Subscription Agreements aside, the real driver behind this valuation establishment is that the company is dressing itself up for a buyout, and is using the MNP valuation to establish some sort of leverage in any associated negotiations.That's speculative of course, but not an unreasonable assumption.The most interesting thing about this is the valuation MNP has placed on Sunshine Biopharma's issued and outstanding shares: $977 million to $1.13 billion.First, this seems wildly optimistic, but even under the guise of wild optimism, there is still plenty of room for appreciation on the company's current market capitalization of $9 million.So that's the upside.The downside is that looks set to be plenty of dilution near term, regardless of any buyout aspirations. Management seems to enjoy issuing shares (example, in April alone, 34 million shares valued at $98,600 for $85,000 Canadian (approximately $63,912 US), 6.6 million shares issued for the purchase of laboratory equipment valued at $22,000, 100 million shares reserved for issuance associated with a $65,000 convertible note), and it is the early shareholders that are going to take the brunt of this sort of dilution going forward.With that said, however, if the MNP valuation proves anywhere close to accurate, dilution will be an afterthought long term.We will be updating our subscribers as soon as we know more. For the latest updates on SBFM, sign up below!Image courtesy of Fabio Hofnik via FlickrDisclosure: We have no position in SBFM and have not been compensated for this article.