Noxopharm (ASX: NOX) (OTCPK: NOXOF) shares are up 48% in Australia this morning. The equal and equivalent stock OTC in the US, NOXOF, is so far unchanged. Obviously, for the OTC market has not opened as yet. Which provides a possible opportunity for early birds. That Australian stock is now suspended. But the OTC stock isn’t and won’t be. It’s therefore possible to use the one to speculate upon the other.
As to what the company actually does: “Noxopharm Limited, a biotech company, discovers and develops treatments for cancer and inflammation, and mRNA vaccines in Australia. It primarily develops Veyonda, a formulation of idronoxil for the treatment of solid tumors. The company also develops LuPIN with combined therapy of Veyonda and 177Lu-PSMA-617 for the treatment of late-stage prostate cancer; and IONIC program with Veyonda, which is combined with the Bristol Myers Squibb checkpoint inhibitor Opdivo for the treatment of various solid tumor types. “
OK, possibly interesting and possibly just another pharma development company. But it’s this which interests.
Noxopharm share price from Google Finance
There’s something happening here. Our assumption is that the news leaked, buying started and that led to this: “NOXOPHARM LIMITED Security Code: NOX Pause in Trading Trading in the securities of the entity will be temporarily paused pending a further announcement.” That pause lasts another couple of days, or until that announcement. But that pause does not apply to the OTC stock in the US. So, it’s possible to play in the OTC stock as a speculation on what’s to happen to the Australian - but now suspended - shares.
Now, yes, this is Pink Sheet stuff. There’s not much volume but it might be possible to squeeze a few thousand shares through. Spreads are going to be wide. And do not forget that the US quote is in real dollars, not those bijou Australian ones like the main - and suspended - quote.
Now, this is one of those things which in truly efficient markets should not be possible. The OTC stock price will adjust, instantaneously, to the Australian one. But markets are only efficient because people trade across such price differences. It’s the arbitrage itself which causes the price movements which are the efficiency. Whether it’s actually going to be possible to trade across this price difference, well - but perhaps someone might think it worth trying?
