By: Dylan Sikes - AllPennyStocks.com News

Friday, September 27, 2013

The pace of merger and acquisition activity remains steady as September winds to a close. The month kicked-off like no month ever before with about $150 billion in deals announced in the first week. Of course, the total was largely the result of Vodafone agreeing to accept $140 billion from Verizon Communications (NYSE:VZ) so the U.S.’s largest wireless carrier could have the company to itself, but deals all month came in all shapes and sizes. Those multi-billion-dollar deals amongst industry stalwarts are great, but we like to hear about small- and micro-cap deals as well as juniors looking to build a name for themselves.

Easton Pharmaceuticals (Pink Sheets:EAPH) has contributed in a much smaller fashion to acquisition activity this month, but for a company with a market capitalization of only $639,000 going into Friday, the specialty biotech has taken two steps in the right direction. Easton has five topical products in its pipeline focused on skin and circulatory conditions, including health issues related to female and male sexual dysfunction, treatment of certain pain, wound healing, scar and stretch marks, cellulite and varicose veins.

The company’s first commercial product is slated to be Viorra™ for Female Sexual Dysfunction, or FSD, a condition that is estimated to affect 43 percent of women with no FDA-approved therapies available currently. Viorra is a topical, daily-use product classified by the FDA as containing GRAS (Generally Recognized as Safe) ingredients. Viorra Sensuality Solution has been clinically shown to help to restore and improve moisture and vaginal elasticity, improving sexual functioning for women. Easton said on Friday that it has received the shipment of the main ingredient, Hyulronic Acid, for final trial batches of Viorra and other products, but is still awaiting other ingredients (expected shortly). The company is pursuing regulatory approval in Mexico in Latin America, where the products will be shipped upon completion of manufacturing.

Easton also announced on Friday that it has signed a Letter of Intent to acquire a line of anti-ageing and beauty care products and intellectual property. Joining a growing trend surrounding the HEMP and medical marijuana space, the target acquisition includes HEMP oil and a HEMP-based moisturizer as well as other serums that dovetail with the company’s existing pipeline.

Easton now has 60 days to complete a due diligence period on the potential acquisition and said it will not disclose more information on the product line or company until a definitive agreement is signed.

The news comes on the heals of a September 16 announcement disclosing that the company issued 100 million restricted shares to acquire a 50-percent ownership interest in a yet-unnamed drug designed to treat FSD. A private Canadian pharmaceutical company holds the other 50-percent interest in the drug. The deal also included options for more shares (at an undisclosed price and total) based upon certain developmental milestones being met. Easton said that the main ingredient in the drug is alprostadil, which is a group of vasodilator medicines, meaning that they expand blood vessels. Alprostadil is commonly used to treat erectile dysfunction. It has also been shown to induce vulvar and clitoral engorgement and increase vulvar erythema and edema, which indicates increases blood flow to the genital area.

Included with the acquisition of the drug are certain patents filed in the United States, Canada and Europe, which includes a transdermal delivery technology which are presently not being used in any of Easton's current product lines.

Shares of EAPH have climbed 20 percent to $0.006 in Friday trading with the latest acquisition news. Shares had hit a bottom of $0.0014 late in July before surging 1,000 percent to 1.47 cents as the company disclosed ordering the ingredients for a product launch, a re-work of their website in progress (still not done yet) and corporate initiatives to enter the medical marijuana space, a sector that has seen a big boon in value in 2013. The industries it is in – specialty pharma, medical marijuana, cosmetics, etc. – are certainly robust enough to present a significant opportunity for growth. Now, investors will be watching for the execution of the business model. Proper due diligence is, as always advised.

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