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Hello Readers,
Since the last Newsletter, we closed four positions; three for gains and one for a loss.
VERMILLION (12/5/11). Closed position 3/6/12 at $2.95 for a 122% GAIN.
GALENA BIOPHARMA (7/5/11). Closed position 3/5/12 at $1.70 for a 70% GAIN.
KERYX BIOPHARMACEUTICALS (10/5/11). Closed position 3/5/12 at $5.00 for a 67% GAIN.
TRIDENT MICROSYSTEMS (12/20/10). Closed position 3/5/12 at 35 cents for an 89% LOSS.
Vermillion really screamed when an AMA panel voted to approve the company’s application for a Category 1 CPT code for its OVA1 test. To say that Galena Biopharma was a roller coaster ride would be an understatement. Back in December, the stock was hovering at under 50 cents, but, over the last month, began to go on a tear on news that it was spinning off its RXi Pharma subsidiary. Keryx Biopharmaceuticals was also another wild ride, having dipped to $1.50 in December, but, during the first few days of this month, the stock soared on speculation that FDA approval on one of its drug candidates was close at hand. And, we finally closed Trident Microsystems for a nasty loss.
Yes, this market seems to be defying all logic, even without small investor participation and relatively light trading volume. Actually, it is not that hard to figure out. The Fed is still causing the creation of easy money and the ETF funds, along with their brother/sister options traders, have been dictating the tone of the markets. When does a turnaround occur? When this crowd decides it is time that the next big money will be made on the downside, or if a catastrophic event happens.
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 there is news that we feel to be very significant.
Celsion Corp. (CLSN)(3/5/12). Balance sheet still looks pretty good.
Majesco Entertainment (COOL)(3/15/12). Recent revenue and income numbers beat expectations; balance sheet still looks strong. However, stock falls on guidance.
Complete Genomics (GNOM)(2/20/12). Revenues grow as do the losses; balance sheet still looks strong.
Geron Corporation (GERN)(2/5/12). Balance sheet still looks very strong.
A123 Systems (AONE)(1/20/12). To develop lithium ion battery packs for new plug-in hybrid electric vehicle from Geely. Revenues miss expectations; balance sheet still looks strong. Stock has been hurt because of Fisker Karma car disappointments.
ECOtality (ECTY)(11/5/11). To install First Blink DC Fast Charger in Washington at Vulcan Real Estate’s South Lake Union Discovery Center.
BioMimetic Therapeutics (BMTI)(9/20/11). Balance sheet still looks pretty healthy.
Antares Pharma (AIS)(8/5/11). Year-end balance sheet looks pretty good.
Idera Pharmaceuticals (IDRA)(6/5/11). Balance sheet still looks good as company gives an update about its product candidates.
Opnext (OPXT)(6/20/11). Commercializes 100Gbps coherent technology.
On Track Innovations (OTIV)(6/20/11). Reports pretty good revenue numbers as losses lessen; balance sheet still looks okay.
Neostem (NBS)(5/20/11). Says recent research looks promising. To present at Maxim Group’s conference on March 26.
MediciNova (MNOV)(5/20/11). Receives notice of a Japanese patent allowance for a method of treating neuropathic pain.
Energy Recovery (ERII)(5/5/11). Awarded its second largest desalination contract for one of the world’s five largest RO plants. Latest numbers not great; balance sheet still looks good.
GSE Systems (GVP)(4/20/11). Recent revenue and earnings numbers look good, as does balance sheet.
Jamba, Inc. (JMBA)(3/20/11). Recent numbers show slight decrease in year-over-year revenue growth but losses was halved; balance sheet still looks good.
Oculus Innovative Sciences (OCLS)(3/5/11). Company partner, Eloquest Healthcare, launches Microcyn wound care products into U.S. hospitals and other care centers.
Biodel (BIOD)(2/2011). Provides update on stabilized Glucagon program.
Network Engines (NEI)(2/5/11). Plans to launch new products based on Intel’s Xeon processor E5-2600 product family.
Real Goods Solar (RSOL)(1/20/11). Recent revenue numbers reflect some nice growth; balance sheet still seems to be strong.
Great Basin Gold (GBG)(1/5/11). Provides Tranter update. Announces C$50 million secondary offering. Provides operational and exploration update.
Sprint Nextel (S)(1/5/11). The usual several dozen news releases and articles.
Astex Pharmaceuticals (ASTX)(12/5/10). Releases pretty nice revenue numbers and still show earnings; balance sheet still looks very healthy.
RELM Wireless (RWC)(11/5/10). Latest numbers flat as compared to a year ago; balance sheet still looks good.
Inovio Pharma (INO)(10/20/10). Says that its PENNVAX-B HIV vaccine demonstrates strong T-Cell immune responses in therapeutic vaccine trial. Also reports that its vaccine for head and neck and other HPV-related cancers induces robust T-Cell immune response in mice. Recent balance sheet still looks pretty healthy.
ProPhase Labs (PRPH)(10/5/10). Recent numbers reflect good revenue growth and less losses; balance sheet still looks good.
Rexahn Pharmaceuticals (RNN)(7/20/10). Enrolls first subject in exploratory Phase 1 clinical study of RX-3117.
Alpha Pro Tech (APT)(7/20/10). Quarterly revenue and earnings look better versus a year ago; balance sheet still appears to be good.
NovaBay Pharmaceuticals (NBY)(4/20/10). To present at the Maxim Group confab on March 26.
CD Int’l Enterprises (CDII)(4/5/10). Formerly called China Direct Industries, board votes for name change and okays recent acquisitions.
Novavax (NVAX)(4/5/10). Launches Phase II clinical trial of seasonal influenza vaccine. Balance sheet still looks good as company begins to show some nice revenues.
Cytokinetics (CYTK)(2/5/10). Company’s ALS drug wins orphan status in Europe.
CytRx (CYTR)(1/5/10). Balance sheet still looks pretty healthy.
GlobalScape (GSB)(5/20/08). To release earnings on March 22. Receives two global excellence awards.
YM Biosciences (YMI)(11/5/06). Discovery Capital Management reports 7.2% passive stake in company.
Our picks for this Newsletter are another drug developer and a maker of hydrogen fuel cells, both trade on the NASDAQ.
ECHO THERAPEUTICS, INC. (ECTE) – $2.16. Twelve-month hi-low has been $4.98 – $1.62. Based in Philadelphia, PA, with about a dozen employees, this drug developer has 34.97 million shares outstanding, $2.74 million in total current assets, $12.69 million in total assets, little debt, and $3.04 million in total liabilities (not yet included in these numbers is $3.6 million raised in early January through warrant exercises). Institutional ownership is around 15%. Three analysts rate the stock a “strong buy”. www.echotx.com
When we saw the phrase “needle free drug delivery” we had to learn more about Echo Therapeutics, Inc. Yes, we would like to see a meatier balance sheet, but the technology is intriguing.
Founded in 1989, and public since 1997, Echo Therapeutics bills itself as a medical device and specialty pharmaceutical company developing several non-invasive systems. The first is Symphony, a non-invasive, wireless, transdermal continuous glucose monitoring system for use in hospital critical care units and for patients with diabetes; and the other is the Prelude SkinPrep System, which is a needle-free platform technology for enhanced skin permeation for delivering topical pharmaceuticals, as well as a range of transdermal reformulations of specialty pharmaceuticals.
Echo Therapeutics also is developing specialty drugs based on its proprietary AzoneTS transdermal drug reformulation technology. Its drug candidate is Durhalieve, an AzoneTS formulation of triamcinolone acetonide for treating corticosteroid-responsive dermatoses. Durahalieve has successfully completed Phase III studies. The company has a licensing agreement with Ferndale Pharma Group to develop and market Prelude for skin preparation prior to the application of topical anesthetics in North America and the UK. It also has a license agreement to develop and market Symphony to medical facilities and diabetics in South Korea.
At the end of January, Echo Therapeutics initiated trials of its Symphony tCGM System in critical care patients. The clinical studies will enroll up to 30 patients and will compare data obtained from its Symphony system with the YSI 2300 STAT Plus Glucose Analyzer.
As with many small biotechs/drug makers, Echo Therapeutics makes almost zilch money and has some hefty losses, i.e. for the quarter ending 9/30/11, revenue was zero and losses totaled $7.9 million.
As we said above, this is intriguing and may be worth the wait. The company will need to raise more money, but, so far, over the years, they have been able to do so for the most part.
Our 24-month target for the stock is $3.50 to $3.75.
For more information, contact ECTE at 215-717-4100; info@echotx.com
BALLARD POWER SYSTEMS, INC. (NASDAQ: BLDP) – $1.50. Twelve-month hi-low has been $2.51 – $1.07. Based in Burnaby, BC, Canada, with about 440 employees, this fuel cell maker has 84.35 million shares outstanding, $77.9 million in total current assets, $165.29 million in total assets, and $70 million in total liabilities, of which $15.34 million is long-term debt. Institutional ownership is around 6%. Three analysts rate the stock a “buy” and two as a “hold”. www.ballard.com
Yes, at first glance, the long-term debt threw us a little, but Ballard Power Systems, Inc. has been showing pretty good revenue growth over the years, although “The Street” thinks it could be faster, and the company has a nice chunk of cash/cash equivalents on hand.
Founded in 1979, and public for over 15 years, Ballard Power designs and sells hydrogen fuel cell products for motive and stationary power markets, primarily in the U.S., the UK, and Germany. It operates in three segments. The Fuel Cell Products segment provides fuel cells and services for material handling, buses, backup power, supplemental power, and distributed generation applications. The Contract Automotive segment provides contract technical and manufacturing, testing, and other engineering services. The Material Products segment provides carbon fiber material products principally for automotive applications and gas diffusion layer material for fuel cell products.
Ballard Power has strategic partnerships with Dantherm Power A/S, which develops clean energy backup power by using the company’s hydrogen fuel cell technology; and with Automotive Fuel Cell Cooperation Corp. that develops fuel cell products for the automotive fuel cell market.
For FY2011, ending 12/31/11, revenue was $76 million with $36.16 million in losses compared to previous year revenues of $65 million and $35.44 million in losses. Analysts were expecting better 4thQT 2011 revenues, which came to $21 million; they were expecting about $27 million.
Okay, so the company whiffed on 4thQT numbers. Ballard is still expected $100 million in 2012 revenues, and despite all of the angst over alternative energy, it’s here to stay, regardless of whom occupies the White House next January.
Our 24-month target for the stock is $2.50 to $3.00.
For more information, contact BLDP’s Lori Rozali at 604-412-3195; investors@ballard.com
Look for the April 5, 2012 Newsletter to be posted on 4/2 or 4/3.
Thank you,
George