Innovative cures may always prove a marketing success and this is the possibility that stands behind ChromaDex Corp. (OTC:CDXC
, CDXC message board
). So far, the marketing success has not occurred, but the hype surrounding it was used in paid promotions and series of press releases, leading to a spike and 50-percent losses on heavy-volume selling.
The company so far has released one drug at the end of 2011 and is researching new formulas based on herbs to capitalize on the fact that more than one-half of adult Americans take some form of supplement.
Several laboratory trials are underway, trying to isolate and test active ingredients from plants.
Although promising, the company has lost stock positions in the past year and a half, spiking speculations it may become a takeover target for a bigger pharmaceutical company, one waiting to expand its line of drugs with herbal treatments. The long wait for new drugs somehow strains ChromaDex's financials:
- $3.9 million annual operating loss
- 150 million authorized shares at par value
ChromaDex was promoted in the spring by SmallCap Network, a paid pumper busy now with pink sheet Graphite Corp. (PINK:GRPH), promising the upward hike in the stock will continue. The relationship with a paid promoter may tarnish the reputation of ChromaDex, which otherwise performs valid and well-designed clinical trials. The long wait, combined with the too-good-to-be-true image of this penny stock may cause a lot of confusion and a call to make careful and focused judgment.
However, despite the possibility for quick release of food supplements without Food and Drug Administration approval, the company fails to inspire too much confidence and so far behaves like other penny stocks after a pump, rising and then shyly moving back due to loss of investor confidence.