Will Silver Turn to Gold?

In a recent post, I mentioned a company called Nucryst Pharmaceuticals, which makes nanocrystalline silver (Silcryst) particles that have an antimicrobial action. These are incorporated into wound dressings called Acticoat, which are marketed by Smith and Nephew, a large medical products company. Nucryst is also developing a powdered silver to be used as an ingredient in pharmaceuticals and a silver-containing lotion that may help heal eczema. Nanocrystalline silver kills at least 150 kinds of bacteria, even the nasty drug resistant kind. There is also some evidence to suggest that silver has anti-inflammatory properties

Unbeknownst to me (the press release was sandwiched into the pre-Christmas rush), even as I was writing my blog, Nucryst was preparing to go public. This was not one of that back-door, reverse-mergers-into-a-shell-of-a-company just to get a trading symbol type of deals, but an honest-to-god initial public offering. Nucryst, which is a subsidiary of Westaim Corporation [NASDAQ-WEDX], offered 4.5 million shares at a price of $10 each, taking home $45 million minus the usual underwriting fees. Nucryst common is now marketed under the ticker NCST on NASDAQ and on the Toronto exchange under NCS, and at last look was trading just above its offering price of $10.00.

A better band aid may seem like an unlikely product to hang an IPO on, but the silver-coated variety could turn into a very important product. That is because it helps to heal wounds that are otherwise intractable, like diabetic ulcers which are the leading cause of foot amputations in this country.

Still, Motley Fool's Jack Uldrich has some reservations about Nucryst. He cites the lack of profits so far, a high price to book ratio, and an uncertain future for the company’s products beyond its wound dressings, among other reasons for caution.