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Hello Readers,
Since the last Newsletter, we closed five more positions; three for a nice gains and two for losses.
TENGION (1/20/11). Closed position 2/14/11 at $5.09 for a 70% GAIN.
SOLTA MEDICAL (10/5/09). Closed position 2/15/11 at $3.56 for a 70% GAIN.
TRANSITION THERAPEUTICS (2/5/11). Closed position 2/15/11 at $3.20 for a 55% GAIN.
SUNESIS PHARMA (11/5/07). Closed position 2/14/11 at 42 cents for a 84% LOSS.
AKEENA SOLAR (10/20/08). Closed position 2/15/11 at 53 cents for a 77% LOSS.
There is a reason why we put notices of investor conferences in the below updates, when we know about them. Sometimes, like once in a blue moon, a company scores a home run, which seems to be the case when Tengion presented at the 13th Annual BIO & CEO Investor Conference on Valentine’s Day; something impressive had to be uttered since the stock shot up nearly a dollar that day. We have no clue as to what propelled both Solta Medical and Transition Therapeutics, but we are happy to take the gains without explanation. Conversely, we finally closed Sunesis and Akeena Solar for a big losses. Over the last ten weeks, we have closed over 30 positions for the simple reason that we had had a lot in the pipeline, and, periodically, everything seems to explode at the same time.
The markets continue to slog upward despite “revolutions” in the Middle East. What we don’t understand about Egypt is that the Godfather was removed but the capos are still left, and the army still owns or runs many of that country’s businesses. Then, strangely, that is why the markets have remained unnerved – the status quo remains.
Here are the headlines since the last Newsletter about companies in the Current Portfolio; dates in parentheses are when we first recommended them. We are not giving up dates about companies on the “Endangered List” unless we feel the news is highly significant.
Great Basin Gold (GBG)(1/5/11). Updates Hollister and Burnstone mineral reserves and announces new term loan financing.
Sprint Nextel (S)(1/5/11). The usual several dozen news articles; one of the more noteworthy being that the company added subscribers for the first time since 2007 enabling losses to narrow.
Trident Microsystems (TRID)(12/20/10). Stock takes a tumble as 4thQT numbers and 1stQT outlook disappoints; balance sheet still looks good and company establishes $40 million credit facility with Bank of America.
World Heart (WHRT)(11/20/10). Pauses enrollment in the Levacor VAD bridge-to-transplant study pending FDA review, causing brokerage Wedbush to downgrade the stock to “neutral”.
RELM Wireless (RWC)(11/5/10). Successfully completes testing of P25 trunking interoperability on competitors infrastructure.
Inovio Pharmaceuticals (INO)(10/20/10). Unveils needle-free, contactless electroporation technology for DNA vaccine delivery. Claims its dual-antigen SynCon DNA vaccine for prostate cancer induces robust responses in preclinical trial.
Blue Phoenix (BPHX)(10/20/10). To announce financial results on February 28.
Advanced Analogic Technologies (AATI)(9/20/10). FY and quarterly numbers show decent revenue growth as losses remain somewhat steady; balance sheet still looks strong.
NAPCO Security Technologies (NSSC)(7/5/10). Latest numbers not bad; balance sheet needs bolstering.
NovaBay Pharmaceuticals (NBY)(4/20/10). Provides summary of 2010 accomplishments and 2011 outlook.
China Direct Industries (CDII)(4/5/10). Posts pretty good quarterly numbers; balance sheet still looks strong.
Novavax (NVAX)(4/5/10). Presents H1N1 VLP influenza clinical data.
Cerus Corp (CERS)(3/20/10). Sets earnings call for February 22.
Cytokinetics (CYTK)(2/5/10). End of year balance sheet still looks pretty good. CYTK/Amgen plan boosts optimism for heart failure drug.
NIVS IntelliMedia (NIV)(1/20/10). China Telecom selects NIV mobile phone as a key 3G promotion product in China; first month sales exceed $4 million.
CytRx (CYTR)(1/5/10). To receive shares of ADVENTRX Pharmaceuticals in exchange for 19% stake in SynthRx. Says Bafetinib demonstrates ability to prevent cancer-related bone loss.
Qualstar (QBAK)(10/20/09). Latest QT numbers not bad; balance sheet still looks good.
BioSante Pharmaceuticals (BPAX)(9/20/09). Reports positive LibiGel safety data in Phase III program.
BioClinica (BIOC)(8/5/09). List about a half dozen events in which it will be participating or making presentations.
Performance Technologies (PTIX)(7/20/09). Debuts highest capacity SEGway X401e signaling solution for large carriers worldwide.
Oilsands Quest (BQI)(10/20/08). Names new CEO and president.
Identive Group (INVE)(10/5/08). Subsidiary awarded $3 million order for multi-year IRS security project.
U.S. Geothermal (HTM)(8/5/08). Balance sheet still looks good.
Bridgeline Digital (BLIN)(6/5/08). Quarterly numbers so-so; balance sheet could look better.
Microvision (MVIS)(5/20/08). Stock price takes a header as 4th QT loss was wider than expected.
GlobalScape (GSB)(5/20/08). Stock gets a nice boosts as company expands cloud services with launch of hosted enhanced file transfer server for SMB market. Announces development of appShield.
Biolase Technology (BLTI)(4/5/08). Pays off entire $3 million debt facility. Receives CE mark approval for Waterlase iPlus all-tissue laser.
Move, Inc (MOVE)(1/5/08). Although revenue is down slightly, company turns a 4th QT profit; balance sheet still looks very strong.
LRAD Corp (LRAD)(10/5/07). Receives $4.3 million through warrant exercise. Recent revenue numbers not great but company points to big order backlog; balance sheet still looks good.
XATA Corp (XATA)(9/20/07). Although recent revenue numbers decline year-over-year, company is upbeat; balance sheet still looks okay.
YM Biosciences (YMI)(11/5/06). Recent balance sheet still looks strong.
Our picks for this Newsletter are two more small biotechs, one trades on the AMEX and the other on NASDAQ.
ADVENTRX PHARMACEUTICALS, INC. (AMEX: ANX) – $2.08. Twelve-month hi-low has been $9.00 – $1.50. Based in San Diego, CA, with under ten employees, this biotech has 14.7 million shares outstanding, $30.45 million in total current assets, $30.48 million in total assets, little debt, and $1.7 million in total liabilities. Institutional ownership is under 2%. One analyst gives the stock a “strong buy” and another a “moderate buy”. www.adventrx.com
It’s not often that we pick a small biotech that is basically a one-trick pony, but Adventrx Pharmaceuticals, Inc. has been attracting a lot of money, of late. Not included in the above “total current assets” is an additional $22 million in recent financing that the company garnered last month. So, our guess is that their limited portfolio of drug candidates may be worth a look.
Founded in 1995, and public for under ten years, Adventrx focuses on products for treating cancer. Its lead drug candidates include ANX-530, an emulsion formulation of chemotherapy drug vinorelbine to treat advanced non-small cell lung cancer as a single agent or in combination with cisplatin, as well as to treat advanced or metastatic breast cancer; and ANX-514, an emulsion formulation of the chemotherapy drug docetaxel for treating breast, non-small cell lung, prostate, gastric, and head and neck cancers. The company is also trying to grow through acquisition as it proved in early January when it signed a term sheet to acquire a private company that holds certain rights and know-how to poloxamer-based therapeutics, which looks to be one of the uses for that $22 million Adventrx just raised.
At the end of January, Adventrx announced that the FDA has established a Prescription Drug User Fee Act (PDUFA) date of September 1, 2011 for the review of the Exelbine (ANX-530) New Drug Application (NDA). The acceptance of the Exelbine NDA is the FDA’s determination that the application is sufficiently complete to permit a substantive review, and the PDUFA date is the goal date for the FDA to complete its review of the NDA.
Adventrx is typical of many small biotech in that it has little revenue and mega losses. For example, during the quarter ending 9/30/10, revenue was zilch with losses of nearly $2 million.
The company has a ton of money, a drug that is under NDA review, and may be acquiring another company that could have more promising drug candidates.
Our 24-month target for the stock is $3.50 to $4.00.
For more information, contact ANX at 858-552-0866; ir@adventrx.com
BIODEL, INC. (NASDAQ: BIOD) – $2.00. Twelve-month hi-low has been $6.25 – $1.50. Based in Danbury, CT, with about 50 employees, this biotech has 26.43 million shares outstanding, $29.56 million in total current assets, $32.61 million in total assets, little debt, and $8.56 million in total liabilities. Institutional ownership is around 27%. Two analysts rate the stock as a “strong buy” and three have it as a “hold”. www.biodel.com
Biodel, Inc. is another of those small biotechs that has been getting a lot of notice, lately, as has the biotech sector. And, it, too, is loaded with cash, which it may need to overcome what may be a temporary setback.
Founded in 2003, and public for less than four years, Biodel is developing novel forms of insulin and other peptide hormones for use in treating diabetes and its complications, including hyperglycemia, hypoglycemia, cardiovascular complications, and weight control. Biodel develops its product candidates by using its proprietary VIAdel technology that allows it to study the interaction between peptide hormones and small molecules. Its product candidates include VIAject, an injectable formulation of recombinant human insulin, which has completed two pivotal Phase III clinical trials for treating Type 1 and Type 2 diabetes; and VIAtab, a sublingual tablet formulation of insulin, which has completed Phase 1 clinical trial for Type 1 diabetes.
Last November, 2010, Biodel suffered a setback when the FDA declined to approve the company’s product without new clinical studies. The agency asked for two clinical trials in patients with Type 1 and Type 2 diabetes to prove that Linjeta, the name for the fast-acting insulin, is safe. However, that doesn’t seem to have thwarted optimism for the company. About a month ago, an analyst for Wedbush Securities said that she believes a partnership for Linjeta, or an acquisition, could be a possibility, at some point.
And, here we go again in telling you that Biodel is another small biotech that has zero revenue and huge losses. For the FY ending 9/30/10, revenue was zilch and losses totaled a whopping $38.29 million.
Despite the FDA snag, Biodel still seems to be hanging in there, thanks to some analysts’ votes of confidence. Our guess is they may know something that we don’t.
Our 24-month target for the stock is $3.25 to $3.75.
For more information, contact BIOD at 203-796-5000; shareholders@biodel.com
Look for the March 5, 2011 Newsletter to be posted on 3/1 or 3/2.
Thank you,