Another Look At Nexus BioPharma Inc (OTCMKTS:NEXS)

Nexus BioPharma Inc (OTCMKTS:NEXS) first caught our attention back in September when we identified the stock as Trader's Choice new pick. Since that time, we've gotten daily emails saying how NEXS was the greatest thing since sliced bread and that we are stupid if we don't own the stock. We've even got counseling on market psychology from a junior partner at Trader's Choice named "Evan Foster." He reminds us of the junior broker Bud Fox in the movie Wall Street. "Evan" says:

It is easy to get caught up in the moment, concentrating on the short-term. Daily price fluctuations are unimportant in the big picture. Investors all too often forget why they invested in a company in the first place and make rash emotional decisions. It is only natural to lose sight of the true underlying fundamental value and the true potential in the future. It takes strength, discipline and wisdom to look past the short-term fluctuations and focus on what is to come. The greatest traders and investors do not act on their emotional instinct. In fact, the vast majority of the time, wise investors actively work to perform the exact opposite by careful analysis of the underlying facts. "Buying when others are selling."

He ends the email by saying:

Are you going to miss that opportunity with NEXS? Right now, you could acquire a substantial position under $0.60. A move to the minimum $4.00 bid price would be equal to 566% gains in your portfolio in an incredible short period of time given the NASDAQ up-listing timeline intended by NEXS.

In looking closely at NEXS, the company describes itself as "developing a revolutionary new weight loss drug that works by adjusting the body's metabolism to increase the burning of fat by activating the AMPK metabolic pathway, the same pathway activated by intense physical exercise."

The company says that "in completed pre-clinical trials of the pharmaceutical activation of this pathway, test subjects showed reduced fat mass with no loss of lean muscle mass, plus a higher rate of energy expenditure, increased insulin sensitivity, increased fatty acid oxidation, improved plasma and tissue triglyceride levels, with lower cholesterol. Upon translation of this pharmaceutical activation to humans, these effects are expected to have a significant impact on obesity and diabetes."

According to the company, "Nexus BioPharma has identified small molecule compounds in a number of discrete chemical structure families that can efficiently activate the pathway. The Company has filed for intellectual property protection on a selection of compounds in a number of discrete chemical backbones. The Company's goal is to advance to pre-IND trials in preparation for FDA human trials of a drug that will safely mimic this effect in humans."

So far, the stock has been range-bound and we have not seen the breakout Trader's Choice claims to be coming. According to the company, the catalysts that could drive value include:

• Meet with FDA for Preliminary Investigational New Drug application (Pre-IND) regarding Phase I study of weight loss compound as treatment for obesity in Q4 2016-Q12017;
• Commence study of a selection of compounds as a treatment for Alzheimer's Disease (AD) in Q1 2017. Published studies (FYN Inhibition Rescues Established Memory and Synapse Loss in Alzheimer Mice, Annals of Neurology 2015; Jun;77(6):953-71; Adam C. Kaufman, et al) have shown that inhibition of FYN kinase in an animal model of AD can restore memories and increase synaptic density;
• Plan with FDA the company's application for Fast Track Designation for weight loss drug as a treatment for Prader Willi Syndrome in Q3 2017; and
• Meet the requirements and apply for full NASDAQ listing in Q2-3 2017.

Currently trading with a market cap of $36 million and steady volume, we urge caution with NEXS and urge investors to trade it and don’t get left holding the bag. Keep in mind that the latest financials from NEXS showed ZERO revenues, a loss of $7000, NO cash, and $93000 in total liabilities making it very hard to justify a $36 million market cap. We will be updating our subscribers as soon as we know more. For the latest updates on NEXS, sign up below!Disclosure: We have no position in NEXS and have not been compensated for this article.