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Hello Readers,
Since the last Newsletter, we closed two positions; one for a gain and one for a loss.
CORCEPT THERAPEUTICS (10/5/11). Closed position 2/21/12 at $4.86 for a 65% GAIN.
MICROVISION (5/20/08). Closed position 2/29/12 at $3.34 for an 88% LOSS.
(price reflects reverse split).
Since we picked it last October, Corcept Therapeutics had been lingering at, and even falling below, our recommended price; then, the stock smoked on news that the FDA had approved its drug candidate for treating Cushing ‘s syndrome. And, we finally closed Microvision for a loss.
Forget about Europe. Forget about Iran. Forget about soaring oil prices. Forget about everything bad. At least that’s what the markets have been saying. Everyone is a bull and that cockiness, along with relatively light trading volume, is some cause for alarm. Keep in mind that the markets move as a herd, and, too often, they don’t see the approaching cliff. How much longer and how much higher can all of this keep going? Who knows? Enjoy the moment.
Here are the headlines since the last Newsletter about companies in our 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 significant.
Complete Genomics (GNOM)(2/20/12). Co-authors paper demonstrating impact of Hepatitis B virus on liver cancer genomes. Named to MIT’s Technology Review Top 50 Innovative Companies list. Launches genomic discovery software partners program.
Orexigen Therapeutics (OREX)(2/20/12). Stock got a nice lift when Vivus got FDA okay its obesity drug.
Geron Corporation (GERN)(2/5/12). Sets March 7 for earnings call.
Nanosphere (NSPH)(1/20/12). Balance sheet still looks strong.
Navidea Biopharmaceuticals (NAVB)(1/5/12). To release earnings on March 1, the day we post this Newsletter.
Vermillion (VRML)(12/5/11). Balance sheet still looks okay. Concerned shareholders nominate new members to board of directors.
Anadigics (ANAD)(11/20/11). Receives 2012 China ACE Award. Coverage initiated by Avian. Company beats earnings expectations although it swung to a loss; balance sheet still looks pretty strong. Unveils new power amplifier duplexer family. Launches multimode multiband power amplifiers.
Keryx Biopharmaceuticals (KERX)(10/5/11). Sets earnings call for March 1, the day we post this Newsletter.
Cover-All Technologies (COVR)(7/20/11). Revenue numbers about the same as a year earlier while earnings drop; balance sheet still looks okay.
Gale Biopharma (GALE)(7/5/11). Establishes March 8 as record date for spin-off stock dividend of subsidiary RXi Pharmaceuticals to be distributed to GALE shareholders.
Opnext (OPXT)(6/20/11). To demonstrate industry-first 40G CFP interoperability achieving expanded reach. Demonstrates 100Gbps coherent OIF MSA module interoperability.
On Track Innovations (OTIV)(6/20/11). Sets earnings confab for March 7.
Idera Pharmaceuticals (IDRA)(6/5/11). To present at Cowen’s annual health care conference on March 7.
Energy Recovery (ERII)(5/5/11). Awarded PX technology contract for Israel’s largest desalination expansion project. Sets earnings call for March 8.
GSE Systems (GVP)(4/20/11). Announces $8 million in new orders.
Jamba, Inc. (JMBA)(3/20/11). Sets earnings call for March 7. Expands product offering with Talbott Teas. Gets new $6 million credit agreement.
Oculus Innovative Sciences (OCLS)(3/5/11). Partners with Quinnova Pharmaceuticals to launch Microcyn-based Atrapro products.
Sprint Nextel (S)(1/5/11). The usual several dozen articles and news items. Stock popped a little when the company backed off purchasing MetroPCS.
Astex Pharmaceuticals (ASTX)(12/5/10). Schedules earnings call for March 5.
RELM Wireless (RWC)(11/5/10). Sets earnings news for March 7.
Inovio Pharmaceuticals (INO)(10/20/10). Company researchers successfully demonstrate RNA drug delivery via electroporation. To present at Cowen healthcare conference on March 5 and at the Roth annual confab on March 14.
CombiMatrix (CBMX)(8/20/10). Releases pretty good numbers; balance sheet still looks okay.
Novavax (NVAX)(4/5/10). To report earnings on March 9.
Cerus Corp. (CERS)(3/20/10). Reports pretty good revenue numbers; balance sheet still looks strong. To present at Cowen healthcare conference on March 7.
Cytokinetics (CYTK)(2/5/10). To present at the Cowen healthcare conference on March 6 and at the Roth confab on March 13. Starts early-stage study of heart drug with Amgen – this could get interesting.
CytRx (CYTR)(1/5/10). To present at Cowen healthcare confab on March 5. Receives non-compliance notice from NASDAQ due to minimum bid requirements.
Performance Technologies (PTIX)(7/20/09). Announces year-end earnings.
GlobalScape (GSB)(5/20/08). Gives business users secure and convenient mobile file access.
YM Biosciences (YMI)(11/5/06). Raises $80 million in secondary stock offering, which may pressure stock price; we are almost ready to pull the plug on this one.
Our picks for this Newsletter are another drug developer and a video game publisher, both NASDAQ-listed.
CELSION CORPORATION (NASDAQ: CLSN) – $2.00. Twelve-month hi-low has been $4.37 – $1.64. Based in Lawrenceville, NJ, with just under 20 employees, this drug developer has 33.18 million shares outstanding, $22.21 million in total current assets, $23.18 million in total assets, little debt, and $4.93 million in total liabilities. Institutional ownership is around 15%. Three analysts rate the stock a “strong buy” and one as a “moderate buy”. www.celsion.com
Not only does Celsion Corporation have a decent balance sheet and some nifty-looking products in the pipeline, it also has alliances with some major names in both the U.S. and Japan. Trading at near its 52-week low, the company seems to be a good entry for the Current Portfolio.
Founded in 1982, and public for almost a dozen years, Celsion is an oncology drug developer targeting chemotherapeutic oncology drugs based on its proprietary heat-activated liposomal technology. The company is developing its lead product, ThermoDox that is in Phase III clinical trial for primary liver cancer; and in Phase II clinical trial for treating recurrent chest wall breast cancer. It has a license with Yakult Honsha to commercialize and market ThermoDox for the Japanese market. Celsion also has a license agreement with Duke University under which it received exclusive rights to commercialize and use Duke’s thermo-liposome technology. In addition, the company has a joint research pact with Royal Phillips Electronics to evaluate the combination of Phillips’ high intensity focused ultrasound with its ThermoDox to determine the potential of this combination to treat a range of cancers.
In mid-February, Celsion announced that the first patient was enrolled in the Phase II study of ThermoDox in combination with RFA in colorectal liver metastases. The multicenter Phase II study is expected to enroll up to 88 patients.
Like many small R&D drug developers, Celsion has little to none revenue and mega losses. I.e. for the quarter ending 9/30/11, revenue was zilch and losses totaled $6.39 million.
We like the Duke connection, though we are not big Duke b-ball fans, since the school gives Celsion a mega dose of credibility. Also, the balance sheet looks good, and biotechs have been a hot stock group.
Our 24-month target for the stock is $3.50 to $4.00.
For more information, call CLSN’s Jeff Church at 609-896-9100.
MAJESCO ENTERTAINMENT COMPANY (NASDAQ: COOL) – $2.48. Twelve-month hi-low has been $4.53 – $1.27. Located in Edison, NJ, with about 80 employees, this gaming company has 41.33 million shares outstanding, $50.98 million in total current assets, $52.37 million in total assets, little debt, and $29.14 million in total liabilities. Institutional ownership is around 8%. Two analysts rate the stock a “strong buy”, one as a “moderate buy”, and one as a “hold”. www.majescoentertainment.com
We have never been big on gaming stocks over the years, but it’s rare when we see one like Majesco Entertainment Co. that appears to have some popular products, a good balance sheet, and huge year-over-year revenue growth.
Founded in 1998, and public since 1999, Majesco publishes video games for almost all major current generation interactive entertainment hardware platforms, including Nintendo’s DS, Game Boy Advance, or GBA and Wii, Sony’s PlayStation 2 , or PS2, and PlayStation Portable, or PSP, Microsoft’s Xbox and Xbox 360 and the PC. It also publishes games for various digital platforms consisting of mobile platforms, such as iPhone, iPad, and iPod Touch, as well as online platforms, including Facebook. The company sells its wares to specialty stores, video game rental outlets, and retail chains such as Wal-Mart, GameStop, Best Buy, Target, and Toys ‘R Us.
In mid-February, Majesco launched Zumba Fitness Rush nationwide, exclusively on Kinect for Xbox 360.
The numbers speak for themselves. For the FY ending 10/31/11, revenue was $125.29 million with net income of $6.83 million compared to the previous FY revenues of $75.64 million and $972,000 in net losses. During the current FY, Majesco foresees revenue of between $125 million and $140 million with earnings of 25 cents to 35 cents per share, which are slightly below analysts’ expectations (give us a break!).
Majesco seems to be a growth story and, needless, to say, half the world appears addicted to video games of some sort.
Our 24-month target for the stock is $4.25 to $4.75.
For more information, contact COOL at 732-225-8910.
Look for the March 20, 2012 Newsletter to be posted on 3/16 or 3/19.
Thank you,
George