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Hello Readers,
Since the last Newsletter, we closed three positions; two for gains and one for a loss.
PSIVIDA (8/5/12). Closed position 9/19/13 at $4.25 for a 54% GAIN.
GERON (2/5/12). Closed position 9/23/13 at $3.17 for a 62 GAIN.
NEOSTEM (5/20/11). Closed position 9/23/13 at $8.84 for a 47% LOSS.
(price reflects reverse split).
pSivida had been on a steady upward move for the last few months, mostly on high expectations for the success of its drug candidate pipeline, so, we took the 50%-plus gain. Out of the blue, Geron got a nice pop on no real apparent news at the time, and, not wanting to look a gift-horse in the mouth, we took the gain. And, we finally closed Neostem for a loss; too bad they did that reverse split.
The last part of September was rough for the markets due mostly to consternation from Washington. Most of the blame has been aimed at Texas senator Ted Cruz and Tea Party Republicans who are trying to defund Obamacare. Don’t the Democrats deserve some blame for funding it? Oh, well. October is usually a daunting month for the markets, so, tread carefully. Any sell offs will probably be Washington-related. The next big drama will probably be about the debt ceiling. Doesn’t anyone care that the national debt is now nearing $17 trillion?
Here are what we feel to be the relevant 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 highly significant.
Neogenomics (NEO)(9/20/13). Revises its 3rd QT guidance upward.
Transcept Pharmaceuticals (TSPT)(9/5/13). Rejects $4.00 a share takeover offer from Retrophin. Law firm probes turndown. Signs global licensing deal with Shin Nippon.
Galena Biopharma (GALE)(8/20/13). Announces closing of over-allotment option, increasing total gross proceeds to $40 million.
Mindspeed Technologies (MSPD)(8/20/13). Introduces next-generation 28G clock and data recovery device for 100Gbps applications.
MeetMe (MEET)(7/20/13). Teams with Beanstock Media for web-based yield optimization.
Baxano Surgical (BAXS)(7/5/13). Announces international expansion; AxiaLIF Plus and VEO regulatory approval in Mexico and Colombia, IO-Flex approved in Turkey.
Flow International (FLOW)(6/5/13). This came from out of the blue as company announces it is being acquired by American Industrial Partners. Right now, the purchase price is around our recommended price, but we won’t close the position until everything is 100% wrapped up.
InspireMD (NSPR)(5/20/13). Recent balance sheet still looks healthy.
Antares Pharma (ATRS)(5/20/13). First patients dosed in VIBEX QS T study evaluating testosterone deficient males.
Oncothyreon (ONTY)(3/20/13). Announces Merck Serono decision to continue developing Tecemotide in stage 3 non-small cell lung cancer.
Alphatec Holdings (ATEC)(2/20/13). To showcase product portfolio at Euro-Spine 2013 in Liverpool between 10/2 and 10/4.
Palatin Technologies (PTN)(12/5/12). Releases 4th QT and year-end results.
Zynga (ZNGA)(10/5/12). The usual several dozen news articles and releases.
SemiLEDS (LEDS)(8/20/12). Receives NASDAQ notice for failure to maintain minimum bid price; we are not too concerned about this, right now.
Metabolix (MBLX)(7/5/12). Launches Mvera B5010, a new compostable film grade resin.
Rare Element Resources (REE)(6/20/12). Closes $8 million offering. Enters into memorandum of understanding to prepare environmental impact statement for Bear Lodge.
Anadigics (ANAD)(11/20/11). To exhibit at SCTE Cable-Tec Expo 2013 between 10/22 and 10/24.
Synthesis Energy Systems (SYMX)(8/20/11). Recent balance sheet looks pretty good.
Alpha Pro Tech (APT)(7/20/10). Announces additional $2 million expansion to share repurchase program.
Novabay Pharmaceuticals (NBY)(4/20/10). Announces positive results from Phase 2 clinical study of Auriclosene to reduce urinary catheter blockage and encrustation.
Qualstar (QBAK)(10/20/09). Recent numbers not great; balance sheet still looks okay. We will probably be closing this one, soon, since it has been in the portfolio way too long.
Our picks for this Newsletter are two more small biotechs, both trading on the NASDAQ.
INTELLIPHARMACEUTICS INTERNATIONAL, INC. (NASDAQ: IPCI) – $1.96. Twelve-month hi-low has been $3.72 – $1.50. Based in Toronto, Canada, with nearly 40 employees, this biotech has 21.2 million shares outstanding, $2.16 million in total current assets, $3.6 million in total assets, and $2.82 million in total current liabilities. Institutional ownership is around 26%. One analyst rates the stock a “strong buy” and one as a “buy”. www.intellipharmaceutics.com
Yes, we would like to see a better balance sheet from Intellipharmaceutics International, Inc., but the company seems to have a lot going on and, over the years, it has been able to raise additional funds when need.
Founded in 1998, and public for about four years, Intellipharmaceutics is developing novel and generic controlled and target release oral solid dosage drugs. It has a pipeline of products based on its patented Hypermatrix technology in various stages of development in therapeutics areas, including neurology, cardiovascular, gastrointestinal tract, and pain. The company’s products under FDA review include Focalin XR, and extended release capsule for hyperactivity disorder; Effexor XR, an extended release capsule for depression; Protonix, a tablet for gastro esophageal reflux disease; Glucophage XR, a tablet for managing type 2 diabetes; Seroquel XR, a tablet for treating Schizophrenia, bipolar disorder, and depressive disorder; Lamictal XR, a tablet for anti-convulsant for epilepsy; and Keppra XR, a tablet for treating partial onset seizures for epilepsy, as well as a product filed with the FDA comprising Pristiq, a tablet for depression.
Intellipharmaceutrics has a license and commercialization agreement with Par Pharmaceutical, Inc. for developing and commercializing generic Focalin XR. Its late-stage development product includes Coreg CR, a capsule for heart failure and hypertension; and Phase I clinical trial products include Lyrica, a capsule for neuropathic pain and Oxycodone Hydrochloride, a controlled release capsule for pain. The company’s non-generic products under development include Rexista, an oral formulation for pain relief and Pregabalin, an extended release capsule for neuropathic pain.
This is another of those small biotechs with zilch revenues and hefty losses. For example, during the quarter ending 3/31/13, revenue was zero and net losses total $1.75 million.
The main attraction here is that the company appears to have a large pipeline of drugs close to approval, and even if a few don’t make it, there is still a good chance of profitability in time just based on the sheer number of drugs up for government review.
Our 24-month target for the stock is $3.50 to $3.75.
For more information, contact IPCI at 416-798-3001; investors@intellipharmaceutics.com
AMICUS THERAPEUTICS, INC. (NASDAQ: FOLD) – $2.32. Twelve-month hi-low has been $6.82 – $/2.06. Located in Cranbury, NJ, with about 110 employees, this biotech has $77.17 million in total current assets, $82.33 million in total assets, little debt, and $42.78 million in total liabilities. Institutional ownership is around 74%. Three analysts rate the stock a “strong buy”, one as a “buy”, one as a “hold”, and one as a “sell”. www.amicustherapeutics.com or www.amicusrx.com
And, here is another oldie that worked well for us in the recent past, and, so, why not again? Even though Amicus Therapeutics, Inc. had a setback earlier in the year, the company seems to have found other potential avenues for possible successes. Also, let’s not forget its healthy balance sheet and the fact that the company has some revenue.
Founded in 2002, and public for over six years, Amicus Therapeutics focuses on developing molecule drugs known as pharmacological chaperones to treat lysosomal storage disorders. The company’s development programs include small molecules and monotherapy treatments for Fabry and other lysosomal storage diseases, and enzyme replacement therapy (ERT). Its therapy programs comprise chaperones co-administered with currently marked ERTs, as well as proprietary therapeutics enzymes co-formulated with pharmacological chaperones as next-generation ERTs. Amicus primary product includes migalastat HCI, a product candidate for Fabry disease that is in Phase III global registration studies for patients with genetic mutations, which leads us to why the stock got whacked a few months ago. The company said the drug did not meet its main or secondary goals in late-stage trial and is running an extension of that trial and has proposed doing additional statistical analysis, and those results are expected during the first half of 2014.
The company’s products also comprise AT2220, which has completed Phase II safety used for treating Pompe disease; and AT3375 and afegostat that are in preclinical studies used for treating Gaucher disease.
In early September, Amicus entered into collaboration with Biogen to develop novel small molecules for treating Parkinson’s disease. Under terms of the multi-year agreement, the companies will collaborate in the discovery of a new class of small molecules that target the GCase enzyme. Terms of the agreement were not disclosed, but Amicus can receive milestone payments if the drug advances through clinical testing and regulatory review.
Even though the company still has some mega losses, it does receive some nice research or other revenues. During the six months ending 6/30/13, revenues totaled $18.4 million with $32.81 million in losses.
Despite the setback, the company still has four “buy” analysts and a lot of cash on the balance sheet, which should help it through its new chapter with the likes of Biogen.
Our 24-month target for the stock is $4.00 to $4.50.
For more information, contact FOLD at 609-662-2000; ir@amicusrx.com
Look for the October 20, 2013 Newsletter to be posted on 10/16 or 10/17.
Thank you,
George