Here it is, gonna publish it sometime tomorrow:

After writing about a dividend paying retirement home with my last post I will now return to more familiar ground, writing about a speculative stock.  

Resverlogix is a company I've opined on several times here at ATB going back to June of 2016, and over the past year it has certainly performed.  

Here's a link to that first post:  

http://www.avoidthebag.com/2016/06/resverlogix-phase-iii-clinical-trial.html

And here's the 1 year chart:

That's a jump from the $1.20 to $1.30 area to its current price in and around $2 for a gain in the neighbourhood of 60%.  However I must admit to being very greedy on this one because of what I consider to be the "mind blowingly" blockbuster potential of the company's lead compound Apabetalone.  

You know you're in love with a stock when you start inventing words to describe it like "blowingly".  

Those who've followed this blog or the company already know the story.  Apabetalone has shown itself to be an inhibitor of Bromodomain and Extraterminal Domain, (BET for short) proteins.  The biggest promise seems to rest in the area of Cardio Vascular Disease or CVD for short.  CVD affects many people, especially those with conditions like Diabetes and Chronic Kidney Disease (CKD).  

I'm not going to go over old ground except to list some of the potential applications that Apabetalone could have, beyond the aforementioned Diabetes and CKD there's also Alzheimer's, at least one form of Muscular Dystrophy, Degenerative Retinal Disease, Thrombosis and more.  

So what's new with Resverlogix that compelled me to write another blog post?  What's this smoke referred to in the subject line?  Relax I'm getting there, but I'm getting older and I like to take my time.  

There are a couple of expressions about smoke that contradict each other.  One says:  'Where there's smoke, there's fire'.  But another is used about someone who talks out of his nether regions, where the bromide goes something like:  'He's just blowing smoke'.  So the question with Resverlogix begs: Is there really a fire cooking up something big, or is it nothing more than the company blowing smoke?

Bottom line answer, I don't know.  I hope the fire is burning hot and cooking up an absolute feast, but I can't say that with any certainty whatsoever.  That's what makes the market game so compelling, it is anything but easy.  If there were no risk and Apabetalone was assured to fulfil its billion dollar potential, then shares wouldn't be trading for Canadian Toonies.  

Okay....so what is this smoke I'm referring to?

The fist is FDA approval for the company to proceed with a 2a clinical trial for patients with Chronic Kidney Disease who are undergoing dialysis.  This is on top of the on-going Phase III trial for patients with Diabetes called BETonMACE.  The news about CKD trial came out on May 15th just passed, here's the link:  

https://ca.finance.yahoo.com/news/resverlogix-receives-approval-fda-cardiovascular-141100850.html

The second "puff of smoke" came out on May 23rd and is much more intriguing for me because it involves mention of Pfizer and the fact that they have applied for a patent for the treatment of a rare disease called Friedreich's Ataxia with BET-family bromodomain inhibitors including Apabetalone. The patent application specifically cites Apabetalone as a compound developed by Resverlogix.  

Here's the link to that news item:

https://ca.finance.yahoo.com/news/recent-publication-patent-application-referencing-110000770.html

And more intriguing (for me) still is that this news was picked up two days later by a portal for Friedreich's Ataxia news stories that had a very interesting take on Pfizer's patent application.  Here's the link:

https://friedreichsataxianews.com/2017/05/25/pfizer-seeks-patent-covering-friedreichs-ataxia-therapy-resverlogixs-has-already-developed/

And here's the intriguing part:

• Resverlogix, which is based in Calgary, Canada, responded to news of the patent application in an understated way. Instead of indicating it would challenge the patent request, the company’s president and chief executive officer, Donald McCaffrey, said that “we welcome the attention drawn to Resverlogix and apabetalone from significant industry groups such as Nature Reviews Nephrology and Pfizer.”

Could there be something brewing between Resverlogix and Pfizer?  Again I don't know, but I do think its a possibility.  Obviously deals of this nature, when they do come together....its not something that's whipped up on the spur of the moment.  

Still reading?  Good, because adding to the smoke was the recent Bio Equity Europe event in Paris where the company was scheduled to present on Monday May 22nd, but didn't attend. That fact was confirmed to me by email from the company's IR department.  No explanation was given as to why Resverlogix decided to forgo this opportunity to present itself to investors.  

All this is happening at a crucial time, because a look at the company's financial disclosures reveals them to be, if not broke, very close.  As of January 31st of 2017 they reported having just under $5 million CDN left in cash with a burn rate of between $2 and $3 million per month.  You don't need to be Stephen Hawking to do the math.

On top of that they have a loan with Citi-Bank that is coming due in August for a little under $70 million CDN.  That loan is guaranteed by one Kenneth Dart who's investment arm Eastern Capital is a major shareholder.  The loan is collateralised by the company's intellectual property, including Apabetalone...default on the loan and Eastern gets pretty much everything.  

All this makes for anxious investors....I can see it it going both ways.  Either we open the kitchen door to find a huge feast laid out, with the possibility of Chef Ramsey being represented as Pfizer stepping in to satisfy the appetite of Resverlogix shareholders.  That or its just smoke coming from the kitchen stove for an overdone pot of Mac&Cheese.

The clock is ticking.