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HAPPY NEW YEAR READERS! (We hope)
Since the last Newsletter, we closed another position, for a gain.
FSI INTERNATIONAL (11/20/11). Closed position 12/28/11 at $3.74 for a 54%GAIN.
Even though FSI International missed on revenue expectations, the company did guide higher for the next quarter, which added even more juice to the stock that has performed well almost from the day we picked it. And, with the closing of FSI, we have now closed our 700thposition since we began publishing in 1996. For the year 2011, we closed 46 positions, 31 were for gains and 15 were for losses, if we counted right.
So, what does this new year hold for the markets? We see much turbulence (duh!), which will encompass a messy presidential election, budget and debt ceiling battles in Washington, turmoil in Europe, and other factors yet to be named. In other words, hold on for the wild rides.
Here are the headlines since the last Newsletter about companies in our 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.
Vermillion (VRML)(12/5/11). Completes acquisition of Correlogic Systems’ ovarian cancer diagnostics business.
Nexxus Lighting (NEXS)(12/5/11). Expands Array product line with new PAR20 and PAR30 LED replacement lamps.
ECOtality (ECTY)(11/5/11). To install Blink Pedestal chargers at Kohl’s stores.
BioDelivery Sciences (BDSI)(11/5/11). Says ONSOLIS to benefit from FDA approval of class-wide REMS for all transmucosal fentanyl products. Confirms final formulation of BEMA Buprenorphine/Naloxone based on positive BNX-102 study.
Celldex Therapeutics (CLDX)(9/20/11). Completes accrual of CDX-011 Phase 2b EMERGE study in advanced breast cancer; plans to present results during first half of this year.
Glu Mobile (GLUU)(9/5/11). ID packs launch on select Sprint devices.
Synthesis Energy (SYMX)(8/20/11). Provides progress update on strategic equity investment and collaboration in China; agrees to extension through March 31.
Antares Pharma (AIS)(8/5/11). Enters licensing deal with Pfizer.
Cover-All Technologies (COVR)(7/20/11). Board okays share buyback.
Somaxon Pharmaceuticals (SOMX)(7/5/11). Sadly, we are placing this on the “Endangered List” as the company cuts jobs and explores strategic options.
Opnext (OPXT)(6/20/11). Sees continued impact on sales from Thai floods.
On Track Innovations (OTIV)(6/20/11). Expands EasyPark solution to Turin, Italy’s largest on-street parking market.
Biostar Pharmaceuticals (BSPM)(4/20/11). Signs twelve-month distribution pact with Huikang Pharmaceuticals.
Jamba, Inc. (JMBA)(3/20/11). Jamba and Sysco extend distribution alliance to include Texas and Colorado. To present at the Annual ICR XChange conference on January 12. Forms distribution pact with US Foods.
Oculus Innovative Sciences (OCLS)(3/5/11). To present at the Biotech Showcase 2012 on January 9. Plans to raise $2 million in secondary offering.
Great Basin Gold (GBG)(1/5/11). Provides operational update.
Sprint Nextel (S)(1/5/11). The usual several dozen stories and releases.
Astex Pharmaceuticals (ASTX)(12/5/10). Announces FDA ODAC meeting of sNDA application for Dacogen in treatment of elderly acute myelogenous leukemia (AML).
China Direct Industries (CDII)(4/5/10). Announces new purchase contracts valued at $11 million. Reports FY2011 results. Says that its magnesium batteries could establish US leadership in EV battery market.
CytRx (CYTR)(1/5/10). Initiates international Phase 2b clinical trial with INNO-206 in advanced soft tissue sarcoma.
USA Technologies (USAT)(6/5/09). Selected by Unified Strategies to provide ePort cashless payment and wireless telemetry solution to membership.
U.S. Geothermal (HTM)(8/5/08). Announces mechanical completion of new San Emidio power plant.
Our picks for this Newsletter are another biotech trading on the AMEX and a healthcare products provider trading on the NASDAQ.
NEOPROBE CORPORATION (AMEX: NEOP) – $2.55. Twelve-month hi-low has $5.48 – $1.62. Located in Dublin, OH, with about 30 employees, this biomedical company has 95.11 million shares outstanding, $31.76 million in total current assets, $33.37 million in total assets, little debt, and $4.9 million in total liabilities. Institutional ownership is around 20%. Four analysts rate the stock a “strong buy” and three as a “moderate buy”. www.neoprobe.com
And, yes, Neoprobe Corporation is another one of those pesky biotechs that has a decent balance sheet and some promising technology. We should note that the company will soon be changing its name to Navidea Biopharmaceuticals and will have a new stock symbol on January 5.
Founded in 1983, and public for over fifteen years, Neoprobe bills itself as a world leader in gamma detection technology and as the only gamma detection company working to optimize both radiotracers and gamma detection hardware. The company is developing and commercializing targeted agents aimed at identifying occult (undetected) disease. Neoprobe’s two lead radiopharmaceutical agent platforms, Lymphoseek and RIGScan, are intended to help surgeons better identify and treat certain types of cancer. Lymphoseek is a diagnostic imaging agent intended for radiolabeling and administration in radiodetection and visualization of the lymphatic system draining the region of injection for delineation of the lymphatic tissue; while RIGScan is an intraoperative biologic targeting agent consisting of a radiolabeled murine monoclonal antibody.
Neoprobe has a biopharmaceutical development and supply agreement with Laureate Biopharmaceutical Services to support the initial evaluation of the visibility of the CC49 master working cell bank, as well as the initial steps in re-validating the commercial production process for the biologic agent used inRIGScan CR. In mid-December the company announced that it had in-licensed the worldwide exclusive rights from AstraZeneca to the late stage radiopharmaceutical imaging candidate, AZD4694, for aid in diagnosing Alzheimer’s disease.
This is typical of most small biotechs in that it has scant revenue and mega-losses. For FY2010, ending 12/31/10, revenue was $10.7 million with nearly $50 million in losses.
We like the company that Neoprobe is keeping and we like the fact that there are a half-dozen analysts urging buys in the stock.
Our 24 month target for the stock is $4.50 to $5.00.
For more information, contact NEOP’s Michael Rice at 201-408-4923; info@neoprobe.com
TRANS1, INC. (NASDAQ: TSON) – $1.87. Twelve-month hi-low has been $5.42 – $1.39. Based in Wilmington, NC, with about 125 employees, this healthcare products provider has 27.2 million shares outstanding, $55.88 million in total current assets, $57.35 million in total assets, little debt, and $3.27 million in total liabilities. Two analysts rate the stock a “strong buy”, two as a “buy”, and one has it on “hold”. www.trans1.com
Anyone who has ever experienced back pain should be able to relate to TranS1, Inc. Besides a decent balance sheet, aided by a recent secondary offering, the company could get a boost thanks to some insurance companies approving its procedures.
Founded in 2000 as aXiaMed, and public for over four years, TranS1 is developing and marketing products that implement its proprietary approach to treating degenerative disc disease and instability affecting the lower lumbar region of the spine. The company offers TranS1 pre-sacral approach that enables spine surgeons to access and treat degenerative lumbar discs, as well as to perform fusion and motion preserving surgeries in the L4/L5/S1 region. Its products include AxiaLIF lumbar fusion implant, a threaded titanium rod to enable one-level L5/S1 fusions and two-level L4/L5/S1 fusions; AxialLIF 360 degree implants, which consist of 3D Axial Rod plus its titanium facet screws for supplemental posterior fixation; and TranS1 access and disc preparation instruments. In addition, TranS1, through a partnership agreement with Life Spine, Inc., distributes Avatar, a minimally invasive pedicle screw system.
One reason why the company revenues have been somewhat stagnant over the last few years is the lack of payer coverage for its procedures, but things may be changing. In mid-December the company announced that Palmetto GBA, a Medicare administrative contractor, had removed its non-coverage policy for AxiaLIF effective January 1, 2012, bringing total AxiaLIF payer coverage to almost 23 million covered lives; prior to this decision, the total coverage was for 14 million lives.
For FY2010, ending 12/31/10, revenue was $26.15 million with $19.53 million in losses. During the first nine months of FY2011, ending 9/30/11, revenue was $15.16 million with $13.36 million in losses. Obviously, the new boost from Palmetto should be helpful to future revenue growth.
This is a play on possible future revenue growth that should be aided by the Palmetto decision, and we feel that the analysts believe the same thing.
Our 24-month target for the stock is $3.50 to $3.75.
For more information, contact TSON at 910-256-1700; info@trans1.com
Look for the January 20, 2012 Newsletter to be posted on 1/16 or 1/17.
HAPPY NEW YEAR!!
George