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Hello Readers,
Just when we thought it couldn’t get any worse, it did. And, yes, it has been a few years since our Current Portfolio has looked this badly; can you say 2008 during the heart of the financial crisis? Despite the fact that Doomsday is appearing just around the corner, we go back to our thoughts during May and June. Then, you may remember, we said that the Fed will not let the markets go completely in the tank for the simple reason that Chairman Ben has too much on the line. He is beyond the point of no-return. We are still expecting him to throw a few trillion more into the financial system, and that could come sooner than many anticipate. So, just hold tight a while longer.
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 updates about companies on the “Endangered List” unless we feel the news to be highly significant.
Glu Mobile (GLUU)(9/5/11). Launches 3D Safari Zoo with new APP for iPad, iPhone, and iPod touch. Provides sneak peak of next four titles.
Synthesis Energy Systems (SYMX)(8/20/11). Sets earnings call for September 22.
Somaxon Pharmaceuticals (SOMX)(7/5/11). Downgraded by Oppenheimer.
RXi Pharmaceuticals (RXII)(7/5/11). FDA lifts hold on RXi breast cancer vaccine trial.
On Track Innovations (OTIV)(6/20/11). OTIV’s Warsaw e-Ticketing contract’s transaction fee revenues expected to increase to $25 million as a result of a four-year extension.
Gleacher & Company (GLCH)(6/5/11). To buy back up to ten million shares.
Neostem (NBS)(5/20/11). To present at the Cell Therapy Investor Forum on September 19; and at the JMP Securities Healthcare Conference on September 28.
Energy Recovery (ERII)(5/5/11). Enhances its devices.
ThermoGenesis (KOOL)(4/5/11). Balance sheet still looks good.
Sprint Nextel (S)(1/5/11). The usual several dozen stories and news releases; one of the most notable is the company hopes to sell the iPhone with unlimited data plans.
Trident Microsystems (TRID)(12/20/10). Announces new family of audio DSP SoCs featuring network connectivity for Internet radio and audio streaming. Both Loewe and Philips select DTV chipset solutions. Collaborates with LG CNS for advanced android STB. Announces new generation of set-top box SoCs.
Astex Pharmaceuticals (ASTX)(12/5/10). This is SuperGen’s new name and stock symbol.
RELM Wireless (RWC)(11/5/10). Reaches agreement with Spectra Engineering.
Inovio Pharmaceuticals (INO)(10/20/10). Completes PENNVAX-B HIV vaccine Phase I study; demonstrates best-in-class T-Cell immune responses.
Adolor (ADLR)(5/5/10). Buys back Entereg rights from GlaxoSmithKline.
NovaBay Pharmaceuticals (NBY)(4/20/10). Reports positive results in sinus infection study.
China Direct Industries (CDII)(4/5/10). Enters definitive agreement to acquire 100% of Golden Trust Magnesium and 80% of Lingshi Xinghai Magnesium. These acquisitions may have put pressure on the stock price.
Novavax (NVAX)(4/5/10). Announces publication of results from H5N1 influenza virus-like particle vaccine Phase I/IIa clinical trial.
Cytokinetics (CYTK)(2/5/10). To present at UBS Global Life Sciences Conference on September 20 and JMP healthcare confab on September 27.
Anadys Pharmaceuticals (ANDS)(8/20/09). To present at the UBS Global Life Sciences conference on September 20 and at the JMP Securities Healthcare confab on September 27.
USA Technologies (USAT)(6/5/09). Says August transactions processed up 81% year over year.
Hollywood Media (HOLL)(1/5/08). MovieTickets.com signs Cinepolis, Mexico’s leading exhibitor.
MicroVision (MVIS)(5/20/08). Secures $35 million equity financing facility. Demonstrates the future of mobile 3D displays.
GlobalScape (GSB)(5/20/08). To present at America’s Growth Capital conference on September 19.
XATA, Inc. (XATA)(9/20/07). XATA Turnpike now runs on Intermec handhelds. Selected by Army, Air Force exchange service.
Our picks for this Newsletter are two more biotechs, both NASDAQ-listed.
BIOMIMETIC THERAPEUTICS, INC. (NASDAQ: BMTI) – $3.70. Twelve-month hi-low has been $14.80 – $2.69. Located in Franklin, TX, with about 95 employees, this medical supplier has 28 million shares outstanding, $73.6 million in total current assets, $91.06 million in total assets, and $22.06 million in total liabilities, of which $14.09 million is deferred revenue. Institutional ownership is around 56%. Two analysts rate the stock a “strong buy” and one has it as a “hold”. www.biomimetics.com
When a company has a balance sheet like BioMimetic Therapeutics, Inc. the belief must be that some savvy investors took a big bet on the company’s technology. Having said that, there is a big BUT here. More FDA trials will probably be needed on the company’s lead device before there is a product launch, which has prompted several shareholder lawsuits.
Founded in 1999, and public for a little over five years, BioMimetic is developing regenerative protein therapeutic products primarily for use in bone and tissue regeneration, repair and healing of musculoskeletal injuries, and conditions affecting bones, tendons, ligaments, and cartilage. The company’s orthopedic products include Augment Bone Graft for open fracture and fusion treatment; and Augment Injectable Bone Graft for open or closed fracture treatment and minimally invasive fracture/fusion treatment. Its products also comprise Augment OCD for cartilage and bone repair; TBD for treating injuries due to tendon overuse; Augment Bone Graft for spine fusion, and Augment Rotator Cuff Graft for rotator cuff tendon to bone repair.
BioMimetic has either completed or initiated patient enrollment for several clinical trials; one for hindfoot fusion indications and the other to assess the safety for repairing large rotator cuff tears.
The company is pretty typical of most early-stage medical companies in that it has little revenue and some ugly losses. For example, during the QT ending 6/30/11, revenue was $72,868 with $8.24 million in losses.
As we said, a lot of money was raised to advance this company’s technology – usually a good sign. Are we worried by setbacks? Our gut says the company has enough money to weather the storm.
Our 24-month target for the stock is $6.00 to $7.00.
For more information, contact BMTI’s Kearstin Patterson at 615-236-4419; kpatterson@biomimetics.com
CELLDEX THERAPEUTICS, INC. (NASDAQ: CLDX) – $2.70. Twelve-month hi-low has been $4.98 – $2.26. Based in Needham, MA, with about 90 employees, this biotech has 44.15 million shares outstanding, $73.28 million in total current assets, $118.47 million in total assets, and $26.47 million in total liabilities, of which $10.41 million is long-term debt. Institutional ownership is around 20%. Five analysts rate the stock a “strong buy” and one as a “moderate buy”. www.celldextherapeutics.com
Usually, we don’t like to see this much long-term debt, but Celldex Therapeutics, Inc. has a pretty nice pile of money to more than offset that, for now, thanks to an injection of more funding earlier this year. That was probably prompted, to an extent, by the company’s collaborative pacts with some of the biggest names in the drug industry.
Founded in 1983, and public for over 25 years, Celldex’s targeted immunotherapy platform includes a portfolio of monoclonal antibodies, antibody-targeted vaccines, antibody-drug conjugates, and immunomodulators to create disease-specific drug candidates. The company offers Rotarix for treating rotavirus infection. Its clinical development programs include CDX-110, which is in Phase IIb clinical trial for treating glioblastoma multiforme; CDX-011, a Phase I clinical trial product for treating colorectal, bladder, pancreas, ovarian, and breast tumors, as well as CDX-1401 and CDX-1135, which are in PhaseI/II clinical trials for treating multiple solid tumors and renal diseases, respectively. The company’s preclinical product candidates comprise CDX-301 for treating cancer, and autoimmune diseases and transplants; CDX-1127 for immune-modulation and multiple tumors; CDX-014 to treat renal and ovarian cancer; and CDX-1189 for renal diseases.
Celldex has collaborative partnership agreements with GlaxoSmithKline, Pfizer, Vaccine Technologies, Inc., and TopoTarget A/S, as well as research collaboration and licensing agreements with Medarex, Alteris Therapeutics, 3M Company, Amgen, Amgen Fremont, and Seattle Genetics.
At the end of August, Celldex announced in vivo efficacy data for CDX-1135 in pediatric kidney disease, claiming data from animal models show control of kidney damage in Dense Deposit Diseases.
Once again, this is the case of another small biotech with scant revenue and mega-losses. For the quarter ending 6/30/11, revenue was $1.95 million with $10.24 million in losses.
Here, we have nearly half a dozen analysts giving the stock a “strong buy” and almost half a dozen of the biggest names in pharmaceuticals interested in the company’s product candidates.
Our 24-month target for the stock is $4.75 to $5.25.
For more information, contact Celldex’s Avery Catlin at 781-433-0771; IR@celldextherapeutics.com
Look for the October 5, 2011 Newsletter to be posted on 10/3 or 10/4.
Thank you,
George