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Hello Readers,
Since the last Newsletter, we at last ended a long drought and closed four positions; three for gains and one for a loss.
Novatel Wireless (8/5/12). Closed position 5/14/13 at $3.60 for a 52% GAIN.
UNILIFE CORPORATION (1/5/13). Closed position 5/13/13 at $3.82 for a 70% GAIN.
RELM WIRELESS (11/5/10). Closed position 5/13/13 at $3.43 for a 67% GAIN.
OCULUS INNOVATIVE SCIENCES. Closed position 5/7/13 at $5.60 for a 60% LOSS.
(price reflects reverse stock split)
Sometimes a good earnings report can really propel a stock and that seems to be the catalyst for Unilife. And, ditto for RELM Wireless as it, too, posted decent earnings and it also helped that the Privet Fund took a 6.3% stake in the company; yes, it was a long wait that paid off. Also, Novatel Wireless came out with some really decent numbers that gave the stock a nice pop. And, we closed Oculus Innovative Sciencesfor a loss.
It looks as if small stocks are grudgingly starting to join the party, after being left out in the cold for most of this year. However, we are not feeling overly giddy, just yet. Small stocks have miles to go before catching up with their big cap and mid cap brothers and sisters. In the meantime, anything can happen to upset these markets, although, given the generosity of the world’s central banks that seems unlikely, anytime soon. It appears that, for now, the only thing that can stop this bull is a major catastrophe.
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 for feel the news to be high significant.
MELA Sciences (MELA)(5/5/13). Balance sheet still looks pretty good as company starts generating some revenues.
Cytori Therapeutics (CYTX)(5/5/13). Balance sheet still looks good.
Nanosphere (NSPH)(4/20/13). Announces distribution and collaboration agreement with Hitachi. Post record 1st QT revenue and strengthens balance sheet with $27 million debt and equity financing. To present at the UBS Global Healthcare Conference on May 20.
Synacor (SYNC)(4/20/13). Stock gets a nice boost as company is selected for Google I/O developers sandbox. Quarterly results were pretty good; balance sheet still looks strong.
iPass (IPAS)(4/5/13). Quarterly results a little disappointing; balance sheet still looks good. Zain Kuwait to bundle iPass with iOS and Android phones. Partners with Accuris Networks to deliver device-based AAA on Wi-Fi Networks.
XOMA Corporation (XOMA)(4/5/13). Balance sheet still looks very healthy. Ladenburg raises price target on stock to $6.00.
Joe’s Jeans (JOEZ)(3/20/13). To present at the B. Riley Investor Conference on May 21.
Oncothyreon (ONTY)(3/20/13). Balance sheet still looks very healthy as company posts some quarterly revenues.
Echelon (ELON)(3/5/13). Receives patent for self-installation technology. Company beats expectations although revenues could have been better; balance sheet still quite strong.
AlphaTec Holdings (ATEC)(2/20/13). Posts revenue numbers that are pretty much in line with expectations; balance sheet still looks pretty good.
Ventrus Biosciences (VTUS)(2/20/13). All sorts of lawsuits are being thrown at the company over what appears to be disclosure issues. These have not impacted the stock price, yet.
TranSwitch (TXCC)(2/5/13). Recent numbers not great; balance sheet weakens and company hires Needham & Co. to explore strategic alternatives. Sorry, but we’ve heard this recording before and are placing this on the “Endangered List”.
Apricus Biosciences (APRI)(2/5/13). Balance sheet still looks okay.
Gevo, Inc. (GEVO)(1/20/13). Court dismisses all claims in Gevo case against Butamax. Balance sheet still looks pretty good.
EnteroMedics (ETRM)(1/20/13). Balance sheet still looks good.
Codexis (CDXS)(1/5/13). Balance sheet still looks strong. To present at the UBS Healthcare Conference on May 20.
Horizon Pharma (HZNP)(12/20/12). Balance sheet still looks healthy.
Palatin Technologies (PTN)(12/5/12). Receives notification of patent allowance for ‘238 application. Balance sheet still looks pretty good.
Limelight Networks (LLNW)(11/20/12). Orchestrate 2.0 announced. Recent quarterly numbers disappoint; balance sheet still looks very strong.
Telecommunication Systems (TSYS)(11/5/12). Quarterly numbers could have been a little better; balance sheet still looks strong. Receives $2 million for Marine Corps contract and another $4 million funded order from the U.S. Army.
Lionbridge Technologies (LIOX)(11/5/12). Recent numbers not too exciting; balance sheet still looks pretty good. The Street.com downgrades the stock to a “hold”, which caused a sell off.
Response Genetics (RGDX)(10/20/12). To present at the UBS Global Healthcare Conference on May 22. Balance sheet still looks good.
Delcath Systems (DCTH)(10/20/12). This has turned into a real mess for a number of reasons, and, sadly, we are placing it on the “Endangered List”.
Anthera Pharmaceuticals (ANTH)(10/5/12). Announces additional data from Phase 2b PEARL-SC Blisibimod study. Balance sheet still looks good.
Zynga (ZNGA)(10/5/12). The usual several dozen news stories and releases; of note is that Jana Partners has taken a stake in the company.
ImmunoCellular Therapeutics (IMUC)(9/20/12). Balance sheet still looks pretty good.
AXT, INC. (AXTI)(9/5/12). Quarterly numbers disappoint; balance sheet still looks pretty good.
pSivida (PSDV)(8/5/12). Reports that ILUVIEN is available in the UK. Announces commercial launch of ILUVIEN in Germany with first patient treated. Balance sheet still looks good.
Overland Storage (OVRL)(7/20/12). Quarterly numbers not great; balance sheet still looks good.
Aviat Networks (AVNW)(7/20/12). Recent numbers were not bad but some investors were probably expecting more; balance sheet still looks very strong.
Metabolix (MBLX)(7/5/12). Balance sheet still looks good as company releases upbeat update.
Athersys (ATHX)(7/5/12). Balance sheet still looks pretty good.
Vermillion (VRML)(6/20/12). Raises nearly $12 million in secondary offering. Balance sheet still looks okay and recent offering will help it greatly.
Rare Element Resources (REE)(6/20/12). Reports pretty good cash position.
Avanir Pharmaceuticals (AVNR)(6/5/12). Reports pretty good revenue numbers; balance sheet still looks very strong.
Bacterin Int’l Holdings (BONE)(5/5/12). Revenue numbers show growth but earnings slip into negative territory; balance sheet could use some more cash.
Air Media Group (AMCN)(4/20/12). Elect-Tech to invest in AMCN’s gas station media network. Recent numbers disappointing; balance sheet still appears to be very strong.
Axcelis Technologies (ACLS)(4/5/12). Extends Purion Platform with the launch of the Purion XE High energy Implanter. Revenues drop year-over-year; balance sheet still looks strong.
Echo Therapeutics (ECTE)(3/20/12). Company had wider than expected losses; balance sheet still looks okay. However, stock has weakened even more and this is making us nervous; wait and see.
Ballard Power Systems (BLDP)(3/20/12). Issues pretty good quarterly numbers and says balance sheet still looks good. Also, about seven or eight product press releases.
Anadigics (ANAD)(11/20/11). Recent numbers about what were expected; balance sheet still looks pretty good. Stock upgraded to a “buy” at Charter Equity. To present at the IEEE symposium on June 4-6.
ECOtality (ECTY)(11/5/11). Company posts some good revenue numbers; balance sheet okay but could use more cash. Texas Instruments to install 46 Blink charging stations.
Synthesis Energy Systems (SYMX)(8/20/11). Balance sheet still looks pretty good.
Cover-All Technologies (COVR)(7/20/11). Posts pretty good quarterly numbers on both the top and bottom lines; balance sheet still okay but could use more cash.
On Track Innovations (OTIV)(6/20/11). Provides update about patent infringement suit against T-Mobile.
Neostem (NBS)(5/20/11). To present at multiple conferences in May. Raises $11.5 million in secondary offering, which, of course, put pressure on stock price.
GSE Systems (GVP)(4/20/11). Quarterly numbers could have been better; balance sheet still looks good.
Thermogenesis (KOOL)(4/5/12). Gets registration approval of AXP in China. Revenue numbers okay as is balance sheet.
Jamba, Inc. (JMBA)(3/20/11). Release okay quarterly numbers; balance sheet still looks good. To present at the B. Riley investor confab on May 21.
Real Goods Solar (RSOL)(1/20/11). Launches PowerOn series that it claims eliminates the guesswork out of purchasing residential solar systems. Quarterly number could have been better; balance sheet could use more cash.
Pixelworks (PXLW)(11/20/10). Introduces display processor for mainstream DLP projectors.
Inovio Pharmaceuticals (INO)(10/20/10). Claims its DNA vaccine against Ebola and Marburg filoviruses provides complete protection in preclinical challenge study. Balance sheet still looks very healthy as company still garners revenues.
Alpha Pro Tech (APT)(7/20/10). Quarterly numbers show a little weakness; balance sheet still looks okay.
NovaBay Pharmaceuticals (NBY)(4/20/10). Balance sheet still looks good.
Novavax (NVAX)(4/5/10). H7N9 influenza vaccine enters animal testing. Balance sheet still looks very healthy.
Qualstar (QBAK)(10/20/09). Recent numbers not great and balance sheet could use more cash.
GlobalScape (GSB)(5/20/08). Reports pretty good numbers on both the top and bottom lines; balance sheet still looks good.
Our picks for this Newsletter are a couple of medical device makers, both listed on NASDAQ.
INSPIREMD, INC. (NASDAQ: NSPR) – $2.65. Twelve-month hi-low has been $10.16 – $1.88. Based in Tel Aviv, Israel, with about 60 employees, this medical device company has 31.1 million shares outstanding, $9.1 million in total current assets, $11.59 million in total assets, and $11.39 million in total liabilities, of which $6.46 million is debt. Institutional ownership is around 13%. Two analysts rate the stock a “buy”. www.inspire-md.com
Since its public offering at the start of this year, InspireMD, Inc. has had its share of knocks. But, in the last few months, certain developments give the company a brighter outlook. Recently, the company closed a $25 million secondary, not reflected in the above numbers, has seen what could be called a ton of insider buying, has received a key FDA approval for a trial, and has had OrbiMed Advisors take down a 6.99% in the company.
Founded in 2005, and public for just under a year, InspireMD is focusing on developing and marketing its stent platform technology called MGuard. MGuard provides embolic protection in stenting procedures by placing a micron mesh sleeve over a stent. The company’s initial products are marketed for use mainly in patients (not in the U.S.) with acute coronary syndromes, notably acute myocardial infarction, or heart attack, and saphenous vein graft coronary interventions, or bypass surgery. Its initial MGuard Coronary products incorporated a stainless steel stent. InspireMD subsequently replaced this stainless steel platform with a more advanced cobalt-chromium based platform, which the company refers to as the MGuard Prime version of its MGuard Coronary.
At the end of April, InspireMD received FDA approval with conditions for its Investigational Device Exemption application. An approval with conditions indicates that the FDA concurs with the overall design and while minor details are being finalized, allows the company to initiate enrollment in the MASTER II IDE trial. The multi-center, randomized trial will consist of 1114 patients suffering from ST Elevation Myocardial Infarction throughout 35 sites in the U.S. and 35 sites in Europe, and should support the company’s application to market the MGuard Prime Micronet covered coronary stent system in the U.S.
For the six months ending 6/30/12, revenue was $4.14 million with $15.48 million in losses. These are the most recent numbers we could find, since reporting requirements for overseas companies can be different than for U.S. firms.
This one has a lot of promise and, obviously, a few people feel strongly about the company’s technology.
Our 24-month target for the stock is $4.50 to $5.00.
For more information, contact NSPR at 212-926-1733; inspiremd@redingtoninc.com
ANTARES PHARMA, INC. (NASDAQ: ATRS) – $3.95. Twelve-month hi-low has been $5.58 – $2.60. Based in Ewing, N.J., with about 40 employees, this medical device maker has 126.2 million shares outstanding, $85.22 million in total currents assets, $95.52 million in total assets, little debt, and $8.98 million in total liabilities. Institutional ownership is around 35%. Five analysts rate the stock a “strong buy” and one has it on “hold”. www.antarespharma.com
Once again we walk down memory lane with Antares Pharma, Inc., which we picked some years ago and it worked quite well. Now, the company is showing some revenues, has a huge pile of money and nearly half dozen analysts who are very high on the stock. So, why not go again?
Founded in 1979, and public for nearly eighteen years, Antares develops self-administered parenteral pharmaceutical products and technologies and topical gel-based medicines. Their products include Tjet/Zomajet, the needle-free auto injectors to deliver human growth hormone treatment to children without the use of a needle; twin-jector EZ II needle-free injectors; Medi-Jet auto injectors; Elestrin, an estrogen replacement gel for treating hot flashes; and Gelnique 3%, an oxybutynin gel product for treating overactive bladder. Antares is also developing OTREXUP, a product for delivering methotrexate using Medi-Jet technology for treating various types of arthritis and psoriasis; and VIBEX QS T, an auto injector for treating testosterone deficiency or replacement therapy. In addition, the company is developing Vibex auto injectors; disposable pen injectors, and Nestragel, a contraceptive gel.
Antares has collaborative and license agreements with Ferring Pharmaceuticals, Teva Pharmaceuticals, JCR Pharmaceuticals, Actavis, Daewoong Pharmaceuticals, BioSante (a former pick of ours that did well), Meda Pharmaceuticals, The Population Council, and Pfizer.
In early April, Antares announced the notice of allowance for a new patent on the VIBEX QuickShot device. Also, at the time the company disclosed the first shipment of commercial VIBEX auto-injector devices to Teva Pharmaceuticals.
For FY2012, ending 12/30/12, revenue was $22.57 million with $11.42 million in losses compared to 2011 revenues of $16.45 million and $4.39 million in losses.
There is a case of “what’s not to like?” They are showing increased revenues, have a sturdy-looking balance sheet, have licensing pacts with some big-name pharmas, and more than several analysts are juiced on the company.
Our 24-month target for the stock is $6.50 to $7.50.
For more information, contact ATRS’ Jack Howarth at 609-359-3016; jhowarth@antarespharma.com
Look for the June 5, 2013 Newsletter to be posted on 6/3 or 6/4.
Thank you,
George