Rock Creek Pharmaceuticals Inc (OTCMKTS:RCPI) Finally Bounces

To say Rock Creek Pharmaceuticals Inc (OTCMKTS:RCPI) has been a horrible investment is an understatement. Bad management combined with toxic financings destroyed a company that many had thought had such great promise. Now after hitting 52 week lows and putting in a double bottom on the charts, investors are asking if this bounce is for real and will it last?Rock Creek Pharmaceuticals Inc is an emerging drug development company focused on the discovery, development and commercialization of new drugs, formulations and compounds that provide therapies for chronic and acute inflammatory diseases. Its compound is a small molecule, cholinergic agonist that exhibits anti-inflammatory pharmacological characteristics, distinct from other anti-inflammatory drugs available such as biologics, steroids and non-steroidal anti-inflammatories. The Company's lead compound has been investigated extensively in pre-clinical (in vitro and in vivo) studies resulting in several peer reviewed and published scientific journal articles, covering models of multiple sclerosis, Alzheimer's disease, and autoimmune thyroiditis. All these studies demonstrated the anti-inflammatory effects of the Company's compound. In addition, the Company's compilation of human exposure safety and tolerability data, has provided important insights for ongoing clinical and regulatory pharmaceutical development.In the first quarter, RCPI recorded a net loss of $2.7 million for the three months ended March 31, 2016, compared to a net loss of $338 thousand for the same period in 2015. The net loss for the three months ended March 31, 2015 included a one-time receipt of $3.5 million of insurance proceeds. General and administrative expenses were $1.2 million for the three months ended March 31, 2016, a 63% decrease of $2.1 million, from $3.3 million for the same period in 2015. CEO Dr Michael Mullan said:

"As reflected in today's filing, apart from advancement of the Company's clinical program, the Company's past legal challenges are also beginning to ameliorate. We are pleased that we have recently resolved the consumer class action lawsuit and we have made favorable progress on other legal matters, the details of which are included in today's filing. The Company continues to move forward with our focus on psoriasis and dermatological skin diseases, as a means to attaining proof of concept for our compound. Our drug has a novel anti-inflammatory mechanism of action, and contingent upon continued access to sufficient capital, we expect to test its therapeutic potential in our Phase IB Psoriasis study in Q4 of 2016."

One of the problems facing the company is that its Phase IB Psoriasis study is still a long ways off. The company needs to deliver some news in the meantime and we think the answer lies in its IP portfolio. The Company's IP portfolio currently includes a composition of matter patent for anatabine citrate, a patent for large scale anatabine synthesis, and numerous US and foreign patents pending for "use" of anatabine and salts thereof, and its isomers and derivatives for inflammatory conditions. Those conditions include, but are not limited to, such diseases as psoriasis, thyroiditis, arthritis, Alzheimer's disease, and multiple sclerosis, as well as a recently published "patent pending" application for use of anatabine in various conditions of inflammatory lung disease. We see great value in its IP and makes RCPI certainly worth more than $.02 per share. RCPI recently said:

Rock Creek Pharmaceuticals had retained a major, national intellectual property advisory and investment bank (IP Advisor) to value and monitor the growth of the Company's IP. Since that disclosure, the Company has achieved a number of milestones, further developed the Company's clinical assets, and defined and embarked upon a commercial development pathway in dermatology, all of which has reinforced and enhanced the Company's IP positions. Given the current market capitalization of the Company, together with the Company's belief that its assets and technology are undervalued in the market place, management has decided to re-engage the IP Advisor to recalculate and update the valuation analysis of the Company's intellectual property. This may position the Company for potential alternative capital sourcing strategies.

Shares of RCPI bounced almost 42% on Tuesday. We believe this is the start of a very powerful short covering rally. We believe the bounce players are going to be jumping into RCPI. After all, shares were trading at $.20 just last month, which would be a 10 bagger from current levels. The days of being short RCPI look to be over. We will be updating Insider Financial as soon as we know more. For continuing coverage on RCPI, sign up for our free newsletter today and get our next hot stock pick!Disclosure: We have no position in RCPI and have not been compensated for this article.