Blake Insomnia Therapeutics Inc : A Beta Blocker As Sleeping Pill?

The only sensible way to approach an early stage biotechnology play is with a critical eye. Pump and dump schemes are perhaps more prevalent in micro cap biotech than they are in any other industry, and this means that, if you come across something that looks like a great opportunity – something that, as yet, wider markets seem to have missed – chances are, it's nothing but hype. A few times a week I'll rifle though my screener to see what's moving at this end of the sector, and pick a few that catch my eye. At the same time, I'll run through the promotional tab on my Gmail account and see what the touters are putting out (I sign up to as many of the penny stock mailers as I can, as I find it serves as a sort of red flag indicator).

Penny stock promotion is often a danger sign, but at this end of the biotech sector, investor relations is a must if a company wants to raise capital, and so while it's a red flag, it's not always a nail in the coffin.

Ninety-five percent of the time, scratch off the surface of the company that is moving, and that is the subject of email communications' pitch, and the stock turns out to be worthless. This becomes evident very quickly with even the loosest of due diligence. Still, of course, thousands of have-a-go investors take the bait, and end up on the buy side of a market into which sellers are offloading their shares for a quick take. Five percent of the time, however, and even that's probably a generous proportion, I come across something that stands up to due diligence (as much as a preclinical biotech company can, that is) and I consider taking a punt.

Here's one that has popped up a few times over the last couple of weeks in my mailbox, but that – when I take a closer look – seemingly falls into that 5%.

First, a bit of background.   

In the US, right now, millions of people are struggling to get to sleep, or are tired because they didn't get a good night's sleep last night. Millions more are suffering from what's called residual daytime sedation (RSD), a symptom of sleeping pills that results in what is colloquially referred to as "zombification" – an overhang of the active ingredient in the pills that individual took to help them get to sleep the night before. For the former group, those who are struggling to sleep unaided, the only real option is to take prescription sleeping pills. Of course, this results in them then falling into the second category, and having to endure RSD the day after dosing.

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Disclosure: I do not own shares in any of ...

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