Arch Therapeutics Inc (OTCBB:ARTH) On A Bull Run

Shares of Arch Therapeutics Inc (OTCBB:ARTH) have been on an impressive run higher. This comes as there's been an impressive strong of news announcements showing the company making substantial progress. Many investors are now jumping on board as the company's AC5 device could be a blockbuster. Further helping ARTH is that AC5 is classified as a "medical device" and not a drug, which allows for faster approval times. If all goes according to plan, this bull run in ARTH is just getting started.Arch Therapeutics describes itself as "a biotechnology company developing a novel approach to stop bleeding (hemostasis) and control leaking (sealant) during surgery and trauma care. Arch is developing products based on an innovative self-assembling peptide technology platform to make surgery and interventional care faster and safer for patients. Arch's flagship development stage product candidate, known as the AC5 Surgical Hemostatic Device, is being designed to achieve hemostasis in minimally invasive and open surgical procedures and is intended to be regulated as a medical device."What got the run started in early March was the company's announcement that it had started patient enrollment in its first clinical trial in Europe assessing its AC5 Surgical Hemostatic Device for the control of bleeding. The AC5 stops bleeding in as little as 10 seconds. It is transparent, conforms to irregular wound geometry and is not sticky or glue-like, making it ideal for laparoscopic procedures.The randomized single-blind study will evaluate the safety and efficacy of AC5 in up to 45 patients undergoing a dermatological procedure. 10 of the patients will be on antiplatelet therapy (blood thinner) during the study period. Each patient will have two skin lesions surgically removed. One of the wounds will be treated with AC5 and the other with control. The primary endpoint is time to hemostasis (bleeding has stopped). Top-line results should be available in sometime during the third quarter of this year. CEO Dr Terrence Norchi said:

"The start of this trial marks a major milestone for the Company. It is firmly underway with patients being actively screened, enrolled, and treated or scheduled for treatment. Our team has put in tremendous effort to get us to this point and we are pleased with this progress. This clinical trial is a key component of our commercialization plan, representing the first time that AC5 has been used on humans in a surgical setting. Further, it highlights that Arch has completed a number of important achievements that are required before a patient could be treated with AC5. As we are getting closer to bringing AC5 to market, we continue to advance our pre-clinical work and clinical-regulatory planning for additional indications for AC5 and other products, in each case with the ultimate goal of making a difference in patients' lives."

On March 22, ARTH reported favorable data from a 21-day repeat exposure skin test to evaluate the irritation potential of AC5 to human skin. This represented the first safety data obtained for AC5 from human testing. The study was a Cumulative Irritation Evaluation test designed to determine the skin irritation potential of AC5 and controls after each was applied daily for 21 sequential days to the skin of a total of 41 healthy male and female human subjects. Results were obtained by evaluating and comparing the subject's skin in areas where AC5 and the controls were repeatedly applied. Based upon the results, AC5 was not considered an irritant. In addition, blood tests were performed both prior to and 24 hours after the testing period to evaluate any changes from baseline levels. No change was attributed to exposure to AC5 or the controls, indicating that there were no adverse events associated with the absorption or metabolism of AC5.Currently trading with a market cap of just $40 million, ARTH is sitting on $3.9 million in cash and $2.4 million in liabilities. We believe AC5 will be a winner and will one day be found in every operating room, emergency room, and EMS vehicle. While the company will need to raise more money to fund its R&D, a rising stock price helps lessen the dilution.Overall, we couldn't be more excited about ARTH and think there's the potential for the company to be a multi-bagger. When you consider that the CEO left his job as a portfolio manager of the Putnam Healthcare Fund to run ARTH, it's obvious that Dr Norchi sees big potential with ARTH. We will be updating Insider Financial as soon as we know more. For continuing coverage on ARTH, sign up for our free newsletter today and get our next hot stock pick!Disclosure: We have no position in ARTH and have not been compensated for this article.