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Since the last Newsletter, we closed four more positions; two for gains, one for a loss, and one was a wash.
DISCOVERY LABS (7/20/13). Closed position 10/4/13 at $2.90 for a 70% GAIN.
HORIZON PHARMA (12/20/12). Closed position 10/8/13 at $3.95 for a 67% GAIN.
FLOW INTERNATIONAL (6/5/13). Closed position 10/8/13 at $3.99 for a 1% GAIN.
MAJESTIC ENTERTAINMENT (3/5/12). Closed position 10/8/13 at 57 cents for a 77% LOSS.
Discovery Labs rocketed on news that the FDA agreed to update product specs for SURFAXIN for preventing respiratory distress syndrome. Sometimes a stock gets a nice lift when a brokerage flashes a “buy” signal and this appears to be what happened with Horizon Pharma as R.F. Lafferty did just that. We closed Flow International for a breakeven as the company is being acquired by American Industrial Partners. And, we finally closed Majestic Entertainment for a loss.
What was the point? Why did they even bother? We cheered when the Republicans shut down the government at the beginning of the month. It finally looked as if that party had grown a pair and were going to make a serious effort to reverse the national debt, now hovering at around $17 trillion. We didn’t mind the lost business and the hit to our portfolios when the market plunged, if it meant that the country was going to be better off. But, the GOP, short for Grand Old Punters, pulled out the rug from under all of us. In the end, we are somewhat poorer and a lot angrier. So, we are now stuck with an inept president, an even more inept opposition party, and a Democrat Senate lead by what many have called a seriously disturbed individual. This won’t be good for the long-term financial health of the country, although it may give the markets a huge lift between now and year’s end, once some sort of deal is done, even if it is for a few months.
Here are what we feel to be the important 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 quite significant.
IntelliPharmaceuticals (IPCI)(10/5/13). Balance sheet still looks okay.
NeoGenomics (NEO)(9/20/13). Sets earnings call for October 23.
Transcept Pharmaceuticals (TSPT)(9/5/13). Sets special stockholders meeting for December 19 to explore strategic alternatives.
Galena Biopharma (GALE)(8/20/13). Launches Abstral sublingual tablets for treating cancer pain.
Mindspeed Technologies (MSPD)(8/20/13). Sets earnings call for November 5.
MeetMe (MEET)(7/20/13). Launches stand-alone dating app charm.
Baxano Surgical (BAXS)(7/5/13). Launches iO-Tome, a novel minimally invasive facetectomy instrument.
Antares Pharma (ATRS)(5/20/13). Reports OTREXUP injection receives FDA approval treatment for adults with rheumatoid arthritis, children with polyarticular idiopathic arthritis, and adults with psoriasis.
Mela Sciences (MELA)(5/5/13). Slates earnings call on November 6. MelaFind featured on “The Rachael Ray Show”.
Cytori Therapeutics (CYTX)(5/5/13). Patents adipose-derived cell therapy for cardiovascular disease in Australia. Receives Celution System approval in Singapore.
iPASS (IPAS)(4/5/13). Introduces new online Wi-Fi hotspot locator for mobile professionals.
Joe’s Jeans (JOEZ)(3/20/13). Revenue numbers a little disappointing; balance sheet still looks pretty good.
Oncothyreon (ONTY)(3/20/13). Presents final results from Phase 1 trial of ONT-380.
Echelon Corp (ELON)(3/5/13). Announces next-generation multi-application control node to accelerate utilities’ grid modernization efforts. Echelon and Kapsch Smart Energy announce new smart meter pilots in Austria.
AlphaTec Holdings (ATEC)(2/20/13). Releases preliminary 3rd QT results; finals to be posted on November 7.
Apricus Biosciences (APRI)(2/5/13). Gets national phase approval for ED cream Vitaros in Germany.
EnteroMedics (ETRM)(1/20/13). Lake Street initiates coverage with a “buy”.
Limelight Networks (LLNW)(11/20/12). Orchestrate V2.5 platform speeds website performance and reduces visitor wait-time by up to 88%.
Lionbridge Technologies (LIOX)(11/5/12). Acquires application development and testing firm E5 Systems.
Zynga, Inc. (ZNGA)(10/5/12). Slates earnings news for October 24. Also, the usual several dozen stories and releases.
AXT, Inc. (AXTI)(9/5/12). Schedules earnings call for October 30.
Aviat Networks (AVNW)(7/20/12). Stock takes a haircut as company lowers quarterly revenue guidance.
Metabolix (MBLX)(7/5/12). Launches 16003rp, a new bio-based performance additive to improve the processing and performance of recycled PVC.
Capstone Turbine (CPST)(5/20/12). Expands marine market product offering with LNG/diesel-fueled marine microturbines. Cowen initiates coverage on the company with an “outperform”.
Mattson Technology (MTSN)(4/5/12). Earnings news set for October 22.
Synthesis Energy (SYMX)(8/20/11). Signs MOU with Hongye for large scale glycol project.
Cover-All Technologies (COVR)(7/20/11). Announces strategic alliance with MFX. Company recognized in Novarica analyst report.
GSE Systems (GVP)(4/20/11). GOSP simulation training tool prepares operators to manage critical petroleum process.
Thermogenesis (KOOL)(4/5/11). Case study demonstrates autologous stem cell product safely treats primary heart attack in 60 minute clinical procedures.
NovaBay (NBY)(4/20/10). Earnings call set for October 28.
Our picks for this Newsletter are two more small biotechs, both NASDAQ-listed.
GTX, INC. (NASDAQ: GTXI) – $1.63. Twelve-month hi-low has been $7.24 – $1.31. Located in Memphis, TN, with about 85 employees, this biotech has 63.2 million shares outstanding, $32.64 million in total current assets, $33.49 million in total assets, little debt, and $8.74 million in total liabilities. Institutional ownership is around 23%. Six analysts have the stocks as a “hold”. www.gtsinc.com
Back in July, GTX, Inc. was over $7 a share but tanked when a Phase III trial did not meet everyone’s expectations. This may have been a knee-jerk reaction since insiders recently have been buying the stock as what they see as a bargain. Given the company’s optimism for their product line and the cash in its arsenal, plus the fact that six analysts have the stock as a “hold”, the price very well could be a bargain.
Founded in 1997, and public for over eight years, GTX is developing small molecules for treating cancer, cancer supportive care, and other serious medical conditions. It is involved in developing Enobosarm, which was the Phase III trial that fell a little short, an androgen receptor modulator (SARMs) for preventing and treating muscle wasting in patients with non-small cell lung cancer in the U.S., Europe, Russia, and South America. The company still seems pretty confident that recent trial results will give Enobosarm a boost, particularly in Europe. GTS also develops Capesaris, an oral nonsteroidial estrogen receptor alpha agonist that is in Phase II clinical trial for secondary hormonal therapy in men with metastatic castration resistant prostate cancer. In addition, the company’s preclinical development stage products include inhibitors of steroid biosynthetic enzymes anticancer therapies, estrogen receptor beta agonists, and other novel compounds for potential treatment of cancer, metabolic diseases, ophthalmic diseases, psoriasis, and pain.
We don’t usually get too enthusiastic about insider buying, but this may be an exception. Well known biotech investor Jack Schuler now owns about 7 million shares of GTX. In August, after the stock plunged he bought several hundred thousand more shares over several days at around $1.40 a share, or $640,000 worth of stock. Mr. Schuler, a former top executive at Abbott Labs, doesn’t seem like the type of person to invest this sort of money willy-nilly.
GTX is another of those small biotechs that makes squat on the top line and has big losses on the bottom. For the quarter ending 6/30/13, revenue was nil and losses came to $12.8 million.
This is more of a hunch than anything else, based on Jack Schuler and the fact the company still has a ton of cash.
Our 24-month target for the stock is $3.00 to $3.25.
For more information, contact GTXI at 901-523-9700; email@example.com
AGENUS, INC. (NASDAQ: AGEN) – $2.67. Twelve-month hi-low has been $5.40 – $2.45. Located in Lexington, MA, with about 50 employees, this biotech has 22.7 million shares outstanding, $14.44 million in total current assets, $21.37 million in total assets, $38.63 million in total liabilities, and $6.8 million in long-term debt. Institutional ownership is around 32%. One analyst rates the stock a “strong buy” and five as a “buy”. www.agenusbio.com
Here’s another walk down memory lane, if memory serves us correctly. Back then, Agenus, Inc. was known as Antigenics and, at the time it worked for us, as we recall. We are not overly concerned, right now with the liabilities totaling was more than the assets, since most of those are “other liabilities”, which can mean things like unexercised options, convertible notes, etc. Our focus is on the company’s pipeline and the fact that half a dozen analysts give the stock a “buy”.
Founded in 1994, and public for nearly a dozen years, Agenus is developing technologies to treat cancers and infectious diseases. Its portfolio consists of saponin adjuvant-based technologies and heat shock protein based technologies. The company offers Oncophage vaccine for treating renal cell carcinoma in patients at intermediate risk of recurrence. Products under development include QS-21 Stimulon adjuvant, which is in Phase III clinical trials for treating malaria, melanoma, non-small cell lung cancer, and shingles, as well as for treating various infectious diseases, multiple cancer types, and Alzheimer’s; and HerpV, a therapeutic vaccine candidate that is in Phase 2 clinical trial for treating genital herpes.
Agenus products under development comprise Prophage series of cancer vaccines, including R-series candidates in RCC, M-series candidates in melanoma, and G-series candidates in glioma. Its Prophage series of cancer vaccines were tested in Phase III clinical trials for treating renal cell carcinoma and metastatic melanoma; and are in Phase I and Phase II clinical trials for various indications, and in Phase II clinical trials for treating diagnosed and recurrent glioma.
In late September, Agenus announced that it was raising $6.5 million through a secondary offering, which may have put some pressure on the stock price. Also, around that time, the company reported a positive follow-on Phase 2 brain cancer result.
This is another small biotech that chalks up major losses and garners squat for income. For example, during the quarter ending 6/30/13, revenue was $807,000 with $11.14 million in losses.
As we said above, we like the company’s pipeline and those six analysts who give the stock some sort of “buy” rating.
Our 24-month target for the stock is $4.50 to $4.75.
For more information, contact AGEN’s Jonae Barnes at 617-818-2985; firstname.lastname@example.org
Look for the November 5, 2013 Newsletter to be posted on 11/1 or 11/4.