NexMed Inc. (NASDAQ: NEXM)(D*)

* Financial staus indicator is deficient: Issuer failed to meet NASDAQ continued listing requirements.

NexMed Inc. (NEXM) is a pharmaceutical and medical technology company with a focus on developing and commercializing therapeutic products based on its delivery systems. The Company focuses its efforts on new and topical pharmaceutical products based on a penetration enhancement drug delivery technology known as NexACT, which may enable an active drug to be better absorbed through the skin. The NexACT transdermal drug delivery technology is designed to enhance the absorption of an active drug through the skin, overcoming the skin’s natural barrier properties, and enabling high concentrations of the active drug to rapidly penetrate the desired site of the skin or extremity. The Company’s products under development include NM100060, a topical nail solution for the treatment of onychomycosis; Vitaros, a topical alprostadil-based cream treatment for patients with erectile dysfunction; and Femprox, an alprostadil-based cream product for the treatment of female sexual arousal disorder. It also focuses on the development of topical treatments for psoriasis. The Company has a licensing agreement with Novartis International Pharmaceutical Ltd. for the development, manufacture and commercialization of NM100060.

NexMed Inc. was founded in 1987 and is based in East Windsor, New Jersey.

Source: Reuters.com, SEC Filings.

Financial Summary

NEXM has experienced net losses and negative cash flows from operations each year since its inception. Through September 30, 2009, it had an accumulated deficit of $141,621,302. Its operations have principally been financed through private placements of equity securities and debt financing. Funds raised in past periods should not be considered an indication of the Company’s ability to raise additional funds in any future periods.

As a result of its losses to date and accumulated deficit, there is doubt as to the Company’s ability to continue as a going concern, and, accordingly, an independent registered public accounting firm has modified its report on the December 31, 2008, consolidated financial statements included in the Annual Report on Form 10-K in the form of an explanatory paragraph describing the events that have given rise to this uncertainty. These factors may make it more difficult for us to obtain additional funding to meet obligations. NEXM’s ability to continue as a going concern is based on its ability to generate or obtain sufficient cash to meet its obligations on a timely basis and ultimately become profitable.

NEXM recorded $109,590 in revenue during the third quarter of 2009, as compared to $305,943 in revenue during the third quarter of 2008. The 2008 revenue primarily consists of $250,000 of revenue recognized in the third quarter of 2008 related to the $1.5 million milestone payment received from Novartis on March 4, 2008. Additionally, revenue in 2008 is the result of the $55,556 in revenue recognized in 2008 attributable to the up-front payment received in November 2007 from Warner as discussed in Note 10 of the Consolidated Financial Statements. The 2009 revenue consists of facility license fees for the use of the Company’s manufacturing facility and related manufacturing know-how related to the sale of the U.S. rights of Vitaros^® to Warner.

Source: Reuters.com, SEC Filings.

Analyst Consensus

No chart available.

Source: www.ft.com

No consensus estimates data available.

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=NEXM.W

Investment Highlights

NEXM announced in late December that it received a letter from the NASDAQ Listing Qualifications Panel (the “Panel”) on December 17, 2009, informing the Company that the Panel had granted the Company’s request to remain listed on the NASDAQ Stock Market, subject to the condition that, on or before March 31, 2010, the Company evidence stockholders’ equity of at least $2.5 million or a market value of listed securities of at least $35 million, which are the applicable minimum requirements for the continued listing of the Company’s securities on The NASDAQ Capital Market. The Panel’s determination follows the Company’s hearing before the Panel on November 12, 2009, at which the Panel considered the Company’s plan to regain compliance with the continued listing requirements, including through the recent acquisition of Bio-Quant, Inc. While the Company is working to satisfy the requirements set forth in the Panel’s decision, there can be no assurance that it will be able to do so.

Separately, and as previously announced, the Company remains subject to a grace period through January 25, 2010, to evidence compliance with the $1 bid price requirement for continued listing on NASDAQ. If at any time during the grace period the bid price of the Company’s common stock closes at $1 per share or more for a minimum of 10 consecutive business days, the Company will have evidenced compliance with the minimum bid price requirement. In the event it does not evidence compliance with the bid price requirement by January 25, 2010, the Company expects that it will be provided with formal notice of the deficiency and an opportunity to request an extension from the Panel to evidence compliance with the minimum bid price requirement.

NEXM in late December announced the closing of its acquisition of Bio-Quant Inc., a privately held leading research organization for in vitro and in vivo contract drug discovery and pre-clinical development services, headquartered in San Diego, Calif. Upon closing, Bio-Quant became a wholly owned subsidiary of NEXM. Bassam Damaj, Ph.D., co-founder and former CEO and chief scientific officer of Bio-Quant, was named president and CEO of NEXM, replacing Vivian Liu, who has assumed the role of executive vice president and was appointed chairman of the board of directors. The board of directors is now composed of three Bio-Quant nominees and four NEXM nominees.

Source: http://www.nexmed.com/index.php

Technical Analysis

Source: http://stockcharts.com

NEXM is trading above its 50-day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.

NEXM’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, NEXM is trading above its upper Bollinger Band. Relative to recent price action, the stock is currently overextended and due for either a pause or retracement.

The MACD for NEXM currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

Comparative Analysis

Source: Thomson Financial

Insider Trading Activity

Source: Yahoo Finance

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