YM BioSciences (YMI)

Speaking of busted biotech's ... a subscriber to my paid service asked me to look at YM Biosciences (YMI), a Canadian cancer company trading for its cash -- it is down from $6 to a buck and change.

Is this a buy signal?

Reflexively, many traders and speculators (as opposed to investors) are attracted to busted biotech's with lots of cash. At its current burn rate YMI can last four years without new money, and needs just one catalyst -- an approval, new trial data, something -- to make the stock double.

If you go to YM BioSciences' Web site, it (along with its partners) has more trials underway than a tort attorney in Mississippi, but a couple of big ones, if successful, could move the stock. Watch these deveopments:

• A Phase II, 50 patient trial for their own drug, nimotuzumab, in combination with irinotecan for the treatment of colorectal cancer. This drug is a humanized monoclonal antibody targeting something called and their claim is equal or slightly better efficacy but much better side effects. Data could be available in Q2 2008, maybe. Nimotuzumab has been designated an Orphan Drug by the US FDA and by the EMEA for a form of cancer called glioma.

• The FDA is reviewing an application and has asked for more data for AeroLEF, a pain medication for cancer patients that is inhaled and enables patients to treat themselves.

• The company has trials underway for nimotuzumab for adult and pediatric glioma. The pediatric trial in Europe will only suffice for a potential European drug application and the company has just begun a trial for pediatric brain cancer in the United States.
  

Well, there's no proof their approach works; YMI has second- and third-tier partners and no meaningful U.S. partner; it has a very scattered development approach and if nimotuzumab does not work, it is, in my opinion, out of luck.

That's why the stock is trading for a buck.

But a biotech with lots of trials, three to four years of cash on hand, lots of potential catalysts in 2008 and an enterprise value of zero, may be worth a look for some of you -- especially the traders and speculators. I typically invest in and recommend more solid speculative bets, if there's such a thing. I do not own or recommend YMI -- but it is now on my radar.