Viaderma Inc (OTCMKTS:VDRM) Is A Big News Runner

Mid November, we highlighted development stage biotechnology company Viaderma Inc (OTCMKTS:VDRM) as being one to keep an eye on in the space. At that time, the company had run up somewhere in the region of 500% on a press release, and this run piqued our interest. When we took a closer look, the technology that underpins the company's strategy looked as though it had plenty of potential going forward, and this led us to put forward a bullish thesis on the stock. Over the last few days, Viaderma has once again gone on a strong upside run, picking up an upside revaluation to the tune of more than 360% since January 9. Again, it is a press release driven run; one that builds on the release that got things moving last month, and – in turn – one that reinforces our longer term bullish bias.As we move into the latter half of January, let's take a look at what's the latest update means for the company, and what it – perhaps more importantly – means for our expectations near term.This company is all about one technology, and that technology is called TetraStem. We went into the product in quite a lot of detail in our previous coverage, so for those looking to get up to speed, here's a link to the piece. For those not wanting to click away, however, it is a patent pending system that allows for transdermal delivery of what seems like pretty much any active ingredient at a far higher concentration than is offered by currently available technologies. It is basically a patch, which when stuck onto the patient's skin, starts an infusion process that transfers the active ingredient through the outer layer of the skin and into the bloodstream at a diffusion constant that is 10,000 times higher than the diffusion constant that characterizes water movement through the outer layer.A patent is pending, but since application submission, Viaderma has collected numerous awards rooted in various real world applications of this technology. TetraStem (by way of a product that incorporates it) received the Bronze Award for “2012 Best New Pharmaceutical Product” at the 25th Annual Edison Awards in New York City, and the tech itself was named the winner of the “Drug Store News Best New Product” as voted by key pharmacy industry decision makers at the ECRM Marketgate 2012 meetings held in Charlotte, NC. These are big awards, and for a company the size of Viaderma, offer serious industry validation to its asset.So what did the latest announcement tell us? It relates to an already approved asset called Viabecline, which the company is marketing as an OTC topical antibiotic. The active ingredient, tetracycline, is a well-established antibiotic, and Viaderm has combined tetracycline with its TetraStem delivery system to produce a drug that offers a dramatically sped up healing time when applied to localized wounds than does standard topical tetracycline without the TetraStem technology. The release announces the signing of two licensing deals with pharmaceutical companies (as yet unnamed), with the assumption being that these deals will drive topline throughout 2017.What is our take?Any licensing deal is generally a step forward, and a potentially improved topline is rarely negative. However, as a major catalyst, we are looking for the application of this technology to a blockbuster indication; something that the company has been talking about for the last few months, but is as yet to deliver on. In pretty much every communication, management states that it is working to apply TetraStem to one of the following: fibromyalgia, Cohn's disease, schizophrenia, migraine headaches, pain management for cancer and Multiple Sclerosis. When one of these gets underway from a clinical development perspective, that's when the positive news stream will really start flowing, and in turn, that's when we'll see this one pull out of the double zeros.As we noted last time, expansion capital is a major concern. The company has basically no cash on hand and will need to raise if it is going to do what we've just mentioned, and bring its TetraStem into the clinic in a premium indication. That's going to be dilutive, and will likely put some potential shareholders off an exposure at this stage.For those with a bit of risk tolerance, however, we've seen how this one can run, and we don't think it's slowing down any time soon.We will be updating our subscribers as soon as we know more. For the latest updates on VDRM, sign up below!Disclosure: We have no position in VDRM and have not been compensated for this article.