Neoprobe (NEOP): seeking FDA's nod with a novel tracer

Company:  Neoprobe (AMEX: NEOP)
Location:  Dublin, OH
Founding year:  1983

Investigational product:  Lymphoseek
Lymphoseek is a proprietary radioactive tracing agent being developed for use in connection with gamma detection devices in a surgical procedure referred to as Intraoperative Lymphatic Mapping (ILM). Neoprobe has an exclusive worldwide license agreement to Lymphoseek through the University of California at San Diego (UCSD). Lymphoseek is protected by U.S. Patent #6,409,990. All of the tracing agents that are currently used in ILM are used “off label” (i.e., not specifically cleared by regulatory authorities for that intended use), and Neoprobe believes there is a need for agents with a faster injection site clearance and less pass through from the sentinel node to distal nodes. UCSD has completed various Phase I clinical trials using Lymphoseek which were funded through research grants from the Susan B. Komen Breast Cancer Research Foundation or the American College of Surgeons. The clinical results from these trials, in which Lymphoseek demonstrated rapid clearance of the injection site and less “pass through” from the sentinel lymph node, have been presented at a variety of medical meetings over the last few years including meetings of the Society of Nuclear Medicine and the World Sentinel Lymph Node Congress. If approved, Lymphoseek will be the first tracing agent specifically labeled for lymph node detection. Lymphoseek is being investigated in other solid tumor cancers besides breast and melanoma.

Timeline to filing NDA:  3Q2011
According to Neoprobe, "[the company] has completed the initial Clinical Trial phases of Lymphoseek and [is] currently preparing the NDA for submission to the FDA".  In other words, they have the data on hand and are ready to release them (likely at the ASCO conference in June 2011).  Neoprobe has expressed strong confidence in achieving the end points of their phase III study in their February press release.
 
Recent development (as of 2011-04-27)

Neoprobe (NEOP) Files $100M Mixed Shelf; 12.5M Common for Selling Shareholders
Neoprobe Corp. (AMEX: NEOP) filed a registration with the U.S. Securities and Exchange Commission to sell.  


Shelf registration is a procedure that allows firms to file one registration statement covering several issues of the same security. SEC Rule 415, adopted in the 1980s, allows a corporation to comply with registration requirements up to two years prior to a public offering of securities. With the registration "on the shelf," the corporation, by simply updating regularly filed annual, quarterly, and related reports to the SEC, can go to the market as conditions become favorable with a minimum of administrative preparation and expense.

Trading map
Today's shelf registration announcement by Neoprobe will likely cause an overreaction, as some traders scramble to exit before the share price drop.  This will cause a chain reaction to bring the share price down, temporarily halting the recent upward momentum.  However, the number of catalysts lined up for Neoprobe will likely attract investors back, and eventually induce a quick rebound; therefore this will be a great entry opportunity to open a position in either the stock or options.  Based on the timeline of the ASCO meeting (June 3-7), June or July $5 call options seem most appropriate.  I will be looking to buy some cheapened calls tomorrow morning.