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Hello Readers,
Since the last Newsletter, we closed three positions; two for some nice gains and one for a loss.
ADOLOR CORP (5/5/10). Closed position 10/24/11 at $4.42 for a 130% GAIN.
ANADYS PHARMACEUTICALS (8/20/09). Closed position 10/17/11 at $3.66 for a 60% GAIN.
NANOPHASE TECH (1/20/08). Closed position 10/21/11 at 59 cents for a 83% LOSS.
5
We wish this happened more often! Within a week of one another, two of our picks became acquisition targets for some very hefty gains. First was Anadys Pharmaceuticals, which nearly wore out its welcome in the Current Portfolio, but, presto, along comes Roche to acquire the company; ANDS was down 54% before the acquisition. Then, Adolor is acquired by Cubist Pharmaceuticals for an eye-popping 130% gain. We closed Nanophase Technologies for a disappointing loss.
It’s true. A rising tide does lift all ships. Our still-battered Current Portfolio looks better than it did a few weeks back. We owe it all to the fact that the markets torched on expectations, and, then, on the news, that Europe has a roadmap to resolving its financial mess. Hey, we’ll take anything, for now! However, keep in mind that Europe still needs to do the hard part, which is implementing the new grand plan. We hate to be pessimists, but one cannot help but think that Europe is still a financial nuclear disaster waiting to happen. But, enjoy the current moment.
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 significant.
BioCryst Pharmaceuticals (BCRX)(10/20/11). Says BCX4208 gout data accepted at annual scientific meeting. To release earnings news November 2, the day after we post this Newsletter.
MGIC Investment (MTG)(10/20/11). Growing delinquency rates still weigh on company. Quarterly losses wider than expected, but stock catches a nice ride on recent market rally.
BioMimetic Therapeutics (BMTI)(9/20/11). Receives approval to commercialize Augment bone graft in Australia.
Celldex Therapeutics (CLDX)(9/20/11). Announces Orphan Drug designation in the European Union for Rindopepimut, a novel EGFRvlll vaccine for Glioblastoma.
Netlist (NLST)(9/5/11). PCI Express mini SSD drives included on PCI-SIG integrators list. Expands flash product line with mSATA Half Slim and 1.8″ SATA SSD drives. HyperCloud memory streamlines Swift’s CFD HPC Sims.
Nautilus (NLS)(8/20/11). Announces global commercial license for its leading TreadClimber patent technologies.
Satcon Technology (SATC)(8/5/11). Sets earnings news for November 8. Company said to be bracing for economic slowdown. SATC’s 1.25 megawatt Equinox prism platform medium voltage inverter system receives North American certification with 98% CEC efficiency.
Cover-All Technologies (COVR)(7/20/11). XL Group selects company for enterprise business intelligence.
Somaxon Pharmaceuticals (SOMX)(7/5/11). Sets earnings call for November 3.
Opnext (OPXT)(6/20/11). Plant in Thailand closes due to floods, so, next few months look to be slow ones for company.
On Track Innovations (OTIV)(6/20/11). PARX subsidiary to introduce EasyPark in Brazil.
Gleacher & Co. (GLCH)(6/5/11). Company beats on earnings and misses on revenues.
NeoStem (NBS)(5/20/11). Acquires Amorcyte, a clinical-stage cardiovascular disease cell therapy company.
MediNova (MNOV)(5/20/11). Announces repeat dose clinical trial with MN-221 in chronic obstructive pulmonary disease patients.
Energy Recovery (ERII)(5/5/11). Earnings news set for November 3. Selected by Cadagua for desalination plant in the United Arab Emirates.
Innodata Isogen (INOD)(5/5/11). Latest numbers look pretty good on both the revenue and earnings side; balance sheet still appears strong.
Biostar Pharmaceuticals (BSPM)(4/20/11). Acquires Shaanxi Weinan Huaren Pharmaceuticals and expands its portfolio with an additional 86 drugs.
Jamba, Inc. (JMBA)(3/20/11). Provides update on franchise store development acceleration. Sets earnings news for November 9.
Oculus Innovative Sciences (OCLS)(3/5/11). Slates 2ndQT results for November 3.
Network Engines (NEI)(2/5/11). Schedules earnings news for November 10. Announces advanced server health monitoring and alarm management software.
Great Basin Gold (GBG)(1/5/11). Provides operational update, and, no, we do not know why the stock keeps dropping.
Sprint Nextel (S)(1/5/11). The usual several dozen stories and news releases, of note is that the company reported 3rdQT results, which were mixed.
Trident Microsystems (TRID)(12/20/10). To announce quarterly results on November 3.
Astex Pharmaceuticals (ASTX)(12/5/10). To present a novel targeted approach to treating HCV at industry meeting. Reports good-looking financial results; balance sheet still looks very healthy.
Pixelworks (PXLW)(11/20/10). Latest number show positive growth; balance sheet still looks good. To present at the Wells Fargo Securities Technology Conference on November 9.
Inovio Pharmaceuticals (INO)(10/20/10). Cervical Dysplasia and cancer treatment highlighted as one of 10 promising therapeutic vaccines; Phase II clinical study currently enrolling.
Blue Phoenix (BPHX)(10/20/10). To sell AppBuilder business to Magic Software. This one is on the “Endangered List”.
Novavax (NVAX)(4/5/10). Schedules earnings news for November 4.
Cytokinetics (CYTK)(2/5/10). Balance sheet still looks healthy as company provides updates on clinical trials.
CytRx Corp (CYTR)(1/5/10). Announces “favorable” initial results from its ongoing Phase 1b/2 clinical trial in patients with soft tissue sarcomas.
Performance Technologies (PTIX)(7/20/09). Debuts Monterey 8000, a ‘groundbreaking’ MicroTCA.4 application-ready platform.
USA Technologies (USAT)(6/5/09). Achieves $42 million in transaction processing volume during quarter ending 9/30/11. CEO resigns over Internet posts.
MicroVision (MVIS)(5/20/08). SHOWWX+HDMI becomes first Pico projector RIM offers to customers. Quarterly report upbeat; balance sheet still looks okay. Receives NASDAQ listing deficiency notice.
GlobalScape (GSB)(5/20/08). Slates earnings news for November 10.
Move, Inc. (MOVE)(1/5/08). Sets earnings call for November 3.
LRAD Corp. (LRAD)(10/5/07). Thailand orders LRAD Systems to support flood relief operations.
YM BioSciences (YMI)(1/5/06). To report Nimotuzumab results at SIOP conference. Yes, we know this one has been in the Current Portfolio since the beginning of time, but we keep hoping that it may be bought out, at some point.
Our picks for this Newsletter are an eco-company and another one of those small biotechs, both NASDAQ-listed.
ECOTALITY, INC. (NASDAQ: ECTY) – $1.62. Twelve-month hi-low has been $5.24 – $1.31. Based in Based in San Francisco, CA, with about 160 employees, this eco-company has 23.67 million shares outstanding, $33.27 million in total current assets, $44.92 million in total assets, little debt, and $15.85 million in total liabilities. Institutional ownership is around 27%. Four analysts rate the stock a “strong buy”. www.ecotality.com
Remember the gold rush days. It wasn’t so much the miners who made the money, but it was their suppliers, or general stores. When you think about ECOtality, Inc., think in this dimension. This company is angling to become a future service station of the future for electric vehicles. Of course, that isn’t its only angle.
Founded in 1999 as Alchemy Enterprises, and public traded for over five years ECOtality bills itself as a leader in clean electric and storage technologies. Operating through several subsidiaries with names like Innergy Power and the Fuel Cell Store, the company is probably best known for the “Blink” network, which offers residential and commercial charge stations for electric vehicles. Blink allows customers to safely and efficiently charge their electric vehicles at the lowest utility rates. Blink stations are now operational in about half dozen states. And, thanks to the EV Project, backed by the Department of Energy, ECOtality sees further expansion over the next several years, at least.
ECOtality also offers energy engineering services comprising hydrogen, solar, battery, coal gasification, and energy delivery infrastructure; hydrogen internal combustion engine vehicle conversions, industrial battery systems; specialty solar solutions; specialty thin-sealed lead battery products; and third-party hydrogen and education related products. The company also operates an online retail store providing a range of fuel cell products.
In early October, ECOtality was awarded $26.4 million by the Department of Energy for advanced vehicle testing and evaluation. Also, around the same time, the Blink DC fast charge system received the Underwriters Laboratories (UL) certification as Electric Vehicle Charging Equipment (EVCE) for public and commercial use.
Although the company has been losing money, it has been seeing revenue growth. For FY2010, ending 12/31/10, revenue was $13.73 million with $16.44 million in losses. During the first six month of the current FY, ending 6/30/11, revenue was $10.37 million with $12.37 million in losses.
The stock prices of companies like ECOtaltiy got whacked pretty hard during the recent Solyndra scandal, and, too often, we throw the baby out with the bath water.
Our 24-month target for the stock is $3.00 to $3.25.
For more information, contact ECTY at 480-219-5005.
BIODELIVERY SCIENCES INTERNATIONAL, INC. (NASDAQ: BDSI) – 95 cents. Twelve-month hi-low has been $4.05 – 91 cents. Based in Morrisville, NC, with about 20 employees, this biotech has 29.56 million shares outstanding, $22.25 million in total current assets, $35.52 million in total assets, little debt, and $22.98 million in total liabilities. Institutional ownership is around 30%. Two analysts rate the stock a “strong buy” and one as a “buy”. www.bdsi.com
Much like most of the rest of our Current Portfolio the stock price of BioDelivery Sciences International, Inc. was whacked pretty hard during the late summer market selloff. And, like most small stocks, it will have a tough time getting back to its recent highs. However, the stock is near its yearly low, and the company has a decent balance sheet and seems to own some promising technologies. Another reason that stock was clocked is that a recent trial result didn’t go as planned, and investors may have over-reacted.
Founded in 1997, and public for over nine years, BioDelivery Sciences, or BDSI, is developing products for pain management and oncology supportive care. The company uses its patented BioErodible MucoAdhesive (BEMA) and Bioral cochleate drug delivery technologies in developing it products. The BEMA technology is a small erodible polymer film for application to the buccal mucosa (the inner lining of the cheeks); and the Bioral cochleate drug delivery technology encapsulates a selected drug or therapeutic in a cochleate cylinder.
The company’s pain franchise consists of products utilizing the patented BEMA technology, including ONSOLIS, a fentanyl buccal soluble film for managing pain in opioid tolerant adult patients with cancer; and BEMA Buprenorphine, which is in the development stage for treating moderate to severe chronic pain, as well as treating opioid dependence. BDSI is also developing product candidates using the BEMA platform for other conditions, such as nausea and vomiting.
At the end of September, BDSI did not get the desired results from a Phase 3 trial on BEMA Burprenorphine, but the company feels the results were good enough to continue with development. Cushioning this setback is the fact that ONSOLIS is already on the market in the U.S., and once certain issues are resolved, which, could be soon, the product could see some revenue. Also, ONSOLIS is due to launch in Canada where there aren’t any issues or roadblocks to the product. Also, weighing against the stock, of late, is a patent infringement lawsuit, which the company feels to be without merit.
Like many small biotechs BDSI has been short on revenue and long on losses. For example, during the quarter ending 6/30/11, revenue was $464,000 with losses of $5.1 million.
We think there is some promise here and that the reaction to the BEMA trial was probably was over the top. With the stock trading at around a dollar, it may be worth a shot.
Our 24-month target for the stock is $1.70 to $1.80.
For more information, contact BDSI’s Benny Ward at 919-582-9050; bward@bdsi.com
Look for the November 20, 2011 Newsletter to be posted on 11/16 or 11/17.
Thank you,
George