Sometimes when a public company is being quiet, the only way to figure out what they’re up to is to connect dots and assess risk. Stony Hill Corporation (STNY.OTC) is one company in that category.
The US-based weed play, with music star and Jay-Z support act Damian “Jr Gong” Marley at the helm, has a low profile, especially among Canadian investors, as it quietly grabbed a piece of the recent $70 million High Times Magazine acquisition, opened a Colorado dispensary, and has gathered a group of advisors that have serious pharma background.
The star power of its Bob Marley-bred director notwithstanding, who named his recent hit album after the company, Stony Hill isn’t what you might expect of an OTC weed play. It doesn’t claim billions in future revenues, it doesn’t so weird deals with weird companies designed to crank a market cap. It acts like a vertical integrator, snapping up assets without fanfare, putting together a puzzle that will only become clear when it’s done.
While I can appreciate a lack of over-hype and false promises, my struggle with STNY, and the reason it has traded lightly, is that it’s moving silently, like a submarine stalking destroyers, while the market (especially the OTC) obviously loves a loudmouth.
It’s an odd thing for an OTC play, especially one in weed, to not blurt out a million promises to anyone who’ll listen, but STNY has been especially stingy with its news. Indeed, when it added to its advisory board recently, there was no news release announcing it, though the addition was a solid one.
Dr Raymond Urbanski is the is Chief Medical Officer at GT Biopharma, the $250 million NASDAQ pharma group that is focused on “targeting multiple myeloma, triple-negative breast cancer, non-Hodgkin’s lymphoma and more with highly potent biopharmaceutical drugs designed for targeted therapy.”
Urbanski oversees the development of products in the GTBP pipeline so, my first thought, when I saw this addition on the Stony Hill bio pages, was, “Ah ha! Is there a GTBP-STNY connection coming?”
If there was, it would explain why STNY is so quiet. When you’re doing a deal with a bigger player, you kind of shut the hell up until the ink is dry on a deal. But I couldn’t find any indication there was anything going on there.
So I looked deeper.
“Previously, he served as Chief Medical Officer and Senior Director of oncology research and development at Pfizer Inc. (PFE:NYSE).
Holy crap! A Pfizer connection would be lights out on this stock, if there were any indication of a deal in place. But, nothing I could find there either.
He served as CMO of Mylan Inc, Senior Director of US Medical Affairs for AventisCMO at Cymabay Therapeutics/Metabolex, CMO and VP for Research and Development at Suntory Pharmaceutical, he’s been at Aventis and AstraZeneca… It’s a hell of a resume.
But there was one connection that made me seriously think about possibilities.
Urbanski only recently joined GTBP, but previously served as the Chief Medical Officer of MannKind Corp. from 2015 until recently, as its Corporate Vice President.
From his bio, “Dr. Urbanski led MannKind’s overall drug development activities and is a member of the Executive Leadership Team.”
So let’s go see what Mannkind has been up to recently.
MannKind (MNKD:NASDAQ) investors have approved the authorization of an additional 140,000,000 shares in a special meeting held on December 13th. With these new shares the company now has an authorized share count of 280,000,000. The newly minted shares are not immediate dilution. Dilution happens if shares are issued.
With the formalities out of the way, the speculation by investors can now begin. What will MannKind do with the shares? This becomes an exercise in contemplating what is possible and assessing what is probable.
There’s been a lot of speculation about MNKD recently, after the company share price tripled in a few months, allowing it to raise $60 million, before shrinking back again by 2/3.
MNKD needs a deal. And a MNKD exec just joined STNY’s advisory board.
Now, for me there’s always going to be a question that should be asked after the question most likely to be asked. If you’re wondering if a MNKD/STNY deal is likely, the next question should be, would it serve either party?
STNY’s advisory board reads like an instruction manual on how to build an early stage biotech play.
Dr. James Mulé is Associate Center Director, the U.S. Senator Connie Mack & Family Endowed Chair for Melanoma Research and Treatment, and Director of Cell-based Therapies at the Moffitt Cancer Center, Tampa, Florida. He is recognized for his research and clinical trial contributions to cancer immunotherapy, particularly in melanoma.
Dr. Urbanski spent eight years with Pfizer and held several positions with the company, including CMO of the Established Products Business Unit, senior medical director of oncology clinical R&D, senior medical director of breast cancer products and medical director of diversified products.
Rounding these guys out, Professor Oded Shoseyov is a renowned Israeli plant science expert, and James Bailey is a venture capitalist focused on the pharma biz.
On the Mannkind side, it could use some marketing shove getting its Afrezza inhaled insulin product more widely known. It could probably also use a little CBD goodness tied into its story, at a time when CBDs are a hot ticket for investors.
If a deal were likely, MNKD could use those newly minted shares to make it happen.
Is a deal likely? Well, now we’re venturing into guesswork. But it would make sense to keep a hairy eyeball on STNY for any signs that things are firming up. Small volume trades move that stock a lot, so any sort of buzz is likely to have an interesting impact on share price.
— Chris Parry
FULL DISCLOSURE: Stony Hill Corporation is an Equity.Guru marketing client. The author has purchased stock in the company on the open market.
NB: BEVERLY HILLS, CA / ACCESSWIRE / March 7, 2018 / Stony Hill Corp. (OTCQB: STNY), a diversified cannabinoid therapeutics company focused on the medical, bioceutical, and pet health industries, announced today that it will change its name to Applied BioSciences Corp., to better reflect the focus and resources of the Company.