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Hard To Treat Diseases, Inc. is a hard company to get a read on…as my title indicates. It is in the Pharma business, but not really much of a player.  They have operations in Serbia and China under two separate operating divisions and appear to have a “story to tell”.  .

In China they operate through Shenzhen Mellow Hope Pharm Industrial Co Ltd.. According to the company, Mellow Hope is the biggest exporter of Biological Vaccines in China.  HTDS purchased Mellow Hope in February of this year in an all-stock transaction.  It appears that the company has a viable product line and an active global client base.  Here is a link to the Mellow Hope web site that makes for interesting reading.

In Serbia, they have a controlling interest in a company called Slavica Bio Chem Company. Their primary focus involves the enhancement and modification of existing approved drugs such as “Virazole” for the purpose of chemical repair of damage to the CNS (central nervous system), MS (Multiple Sclerosis), SARS, Hepatitis C and HIV.  Here is the link to Slavica’s web site.

HTDS has garnered a huge amount of attention on the boards and as a stock to trade. Here is the chart:

The chart is not really compelling and tends to indicate that the stock is “taking a breather”. The MACD, while above the zero line, is indicating bearishness.  The stock is under distribution and is being sold (profits takers, anyone?).  Volume has dropped off lately and indicates that the stock is out of favor right now.  Let’s put my last statement in perspective, though.  The stock still traded 196 Million shares yesterday, off significantly from its 3-month average.  What is amazing is that the trading activity of this magnitude is occurring with only 1,072,581,000 in the float (as of Mar 30, 2009).  The thing to keep in mind is that this is a penny stock play and subject to all the manipulation and pumping of any penny.

What I find compelling is that HTDS has done some very astute things (acquisition of Mellow Hope) and appears to be very cost efficient in searching for new products.  I will be very interested to see what kind of numbers Mellow Hope can produce for the company going forward. The Serbian operation holds out great hope for the company, too.  It is working on modifications to a number of existing drugs to treat some of the more “popular” diseases of today’s society.  Working with existing drugs also means that the dreaded FDA turndown is less likely and drugs can be brought to market quicker.

I could see this company retesting its recent highs of last week (21.9 cents) and pushing into new territory. Their is no resistance above 21.9 cents and limited resistance between 11 cents and 21.9 cents.  The stock rebounded 29.41% today and may retract a little today, but I think the direction for the stock is up.  Look for the right entry point and make sure you have a tight stop on it.

I believe that HTDS has the right formula for traders and investors.

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