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Hello Readers,
We did not close any positions since the last Newsletter, and, as many of you know, these droughts happen, periodically, though not often. Thanks to the updraft in the markets over the last few weeks, many of our Current Positions strengthened, particularly those picks of the last year or so. Why the mini-surge in the markets? Pretty simple to answer, still. Rates are at zero and many future calamities are being postponed by various banks and governments around the globe; the most recent that was placed on cruise control was the Greek Crisis. What we are witnessing is perhaps the only time in our nation’s history when the markets are not in sync with the realities of the pending disasters. It is also the only time that we can remember such horrible contortions in the markets thanks to government intervention. So, in the meantime, enjoy the ride, but, as we have been stressing for months, be afraid, be very very afraid.
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 highly significant.
Achillion Pharmaceuticals (ACHN)(3/5/10). Recent balance sheet looks good.
Clarient (CLRT)(3/5/10). Recent numbers show revenue growth though losses edge up a bit; balance sheet still looks good.
Rosetta Genomics (ROSG)(2/20/10). To present at the Roth stock confab on March 16, the day we post this Newsletter.
ZAGG, INC (ZAGG)(2/20/10). Files annual report. To present at Roth stock conference on March 17.
Microtune (TUNE)(2/5/10). Digivision selects TUNE’s TV tuner for hi-def set-top box design. DTV chipset delivers high-quality reception to China’s TV makers. Automotive amplifier chip deployed in BYD cars targeted for China market.
Cytokinetics (CYTK)(2/5/10). To begin Phase II testing of ALS drug after FDA grants orphan drug designation.
Chelsea Therapeutics (CHTP)(1/20/10). To present at the Roth stock confab on March 17. Completes $18.2 million secondary offering. Company revenues drop but losses are pared; balance sheet still looks good.
CytRx (CYTR)(1/5/10). Recent balance sheet still looks strong. To present at the Roth stock conference on March 16, the day we post this Newsletter.
Real Good Solar (RSOL)(12/5/09). Reports record 4thQT and second consecutive quarter of profitability; balance sheet still looks good.
Orchid Cellmark (ORCH)(12/5/09). Reports some good quarterly and year-end numbers; balance sheet still looks strong. Awarded multi-year contract for DNA paternity testing for state of Michigan.
OXiGENE (OXGN)(11/20/09). To raise $7.5 million in financing. Arthur Laffer resigns from board to pursue other interests.
Uranerz Energy (URZ)(11/20/09). Provides update on NI 43-101 uranium resources for PRB properties.
Solta Medical (SLTM)(10/5/09). Completes acquisition of Aesthera Corporation.
BioSante Pharmaceuticals (BPAX)(9/20/09). FDA grants Orphan Drug designation for GVAX pancreatic cancer vaccine. Says leukemia vaccine shows promise in study. Closes $18 million secondary offering. Receives two new patents for making proteins, including antibodies.
Anadys Pharmaceuticals (ANDS)(8/20/09). To present at Roth stock confab on March 16, the day we post this Newsletter.
BioClinica (BIOC)(8/5/09). Partners with Health Sciences and PRL Central Laboratory Services
Performance Technologies (PTIX)(7/20/09). Adds IP-based radar/sensor recording and playback platform to its air traffic control and defense communication systems.
Salary.com (SLRY)(7/5/09). Expands salary structures functionality for compensation professionals.
USA Technologies (USAT)(6/5/09). Devices connected by USAT network increases to about 71,000.
Ligand Pharmaceuticals (LGND)(2/20/09). Announces approval for Revolade in Europe.
SuperGen (SUPG)(2/5/09). Eisai says FDA approved new Dacogen dosing. Recent numbers reflect revenue gains and profits; balance sheet still looks strong.
Oilsands Quest (BQI)(10/20/08). Files quarterly report and provides operational update.
Akeena Solar (AKNS)(10/20/08). To present at the Roth stock conference on March 17 – this is about our tenth pick that is presenting at this confab; wonder if Roth reads our Newsletter?
Identive Group (INVE)(10/5/08). Further expands its product portfolio. Recent numbers show revenue growth and paring of losses; balance sheet could look a little better.
U.S. Geothermal (HTM)(8/5/08). Announces $8.6 million in private placement financing.
Microvision (MVIS)(5/20/08) Recent numbers not great; balance sheet still looks good. SHOWWX Laser Pico Projector available for sale to U.S. customers.
GlobalScape (GSB)(5/20/08). Earnings call set for March 19. Receives Network Products Guide 2010 product innovation award for managed file transfer.
Biolase Technology (BLTI)(4/5/08). To announce earnings on March 18. Extends and amends licensing and distribution pact with Henry Schein.
ActivIdentity (ACTI)(3/5/08). Ensures trust between federal government agencies and non-federal organizations.
Hollywood Media (HOLL)(1/5/08). Sets earnings release for March 17.
MOVE, Inc (MOVE)(1/5/08). Revenues are down but company pares losses year-over-year.
Harbor BioSciences (HRBR)(12/20/07). Reports new Phase I/IIa data and announces plans to advance prostate cancer treatment Apoptone to Phase IIb.
Linktone (LTON)(11/5/07). Sets earnings news for March 18.
XATA, Inc (XATA)(9/20/07). Company unit chosen by Predestination Transportation for fleet management. Partners with SpeedGauge to provide enhanced speed data for increased safety.
A.P.Pharma (APPA)(8/5/07). Balance sheet still looks okay.
Radcom (RDCM)(7/20/07). To supply UMTS monitoring expansion to Cellcom Israel.
YM BioSciences (YMI)(11/5/06). Announces AACR acceptance of two Nimotuzumab poster presentations. Closes $17.5 million financing. Sees Nimotuzumab license unaffected by civil claim against licensor.
Hydrogenics (HYGS)(9/20/06). Does a reverse 1 for 25 stock split, which seldom work for existing shareholders. This is on the “Endangered List”.
Inventure Group (SNAK)(3/5/06). Expands Burger King snack chip line.
8×8 (EGHT)(1/20/06). Business subscriber base surpasses 20,000 customers. Inks joint marketing deal with New Edge Networks.
Our picks for this Newsletter are a medical device company and another biotech, both listed on NASDAQ.
NEUROMETRIX, INC. (NASDAQ: NURO) – $2.05. Twelve-month hi-low has been $3.60 – $1.11. Based in Waltham, MA, with about 90 employees, this medical device company has 23 million shares outstanding, $38.8 million in total current assets, $40.56 million in total assets, little debt, and $4.5 million in total liabilities. Institutional ownership is around 46%. One analyst rates the stock a “strong buy”. www.neurometrix.com
NeuroMetrix, Inc. is another small company that got kicked in the teeth during 2009 and is making no promises for 2010. However, the company says it is taking steps to grow its market, mainly physicians, and appears to have the sort of balance sheet that can provide it the time needed to do so.
Founded in 1996, and trading on NASDAQ for less than six years, NeuroMetrix develops products that aid physicians in assessing, treating, and repairing peripheral nerve and spinal cord injuries and disorders, and that provide regional anesthesia and pain control. The company provides what it calls ADVANCE NCS/EMG system, a platform for the performance of traditional nerve conduction studies and needle electromyography procedures; NS-stat system, a point-of-service neurodiagnostic solution for performing nerve conduction studies; and consumables and accessories for use with its neurodiagnostic equipment.
Its products under development include ASCEND, a nerve localization system, which is in clinical stage development for minimally invasive delivery of therapeutic agents using a proprietary delivery system for regional anesthesia, pain control, and treating neuropathies; and Andara OFS, an investigational device for treating acute spinal cord injuries. NeuroMetrix offers NC-stat System primarily to primary care and internal medicine physicians; and ADVANCE NCS/EMG System to neurologists, physical medicine and rehabilitation physicians, neurosurgeons, orthopedic and hand surgeons, and pain medicine physicians.
For FY2009, ending 12/31/09, revenues were $26.13 million with $11.9 million in losses compared to 2008 revenues of $31.12 million and $27.73 million in losses. Although revenues drop somewhat in 2009, the company shaved its losses by over half.
Our thinking here is that the company should be a able to regain revenue growth over the next year, and an end to the health care debate should also help.
Our 24-month target for the stock is $3.25 to $3.50.
For more information, call NURO’s Thomas Higgins at 781-314-2761; neurometrix.ir@neurometrix.com
CERUS CORPORATION (NASDAQ: CERS) – $2.80. Twelve-month hi-low has been $3.57 – 60 cents. Located in Concord, CA, with about 100 employees, this biotech has 38.7 million shares outstanding, $19.93 million in cash/equivalents, $34.49 million in total assets, little debt, and $13.04 million in total liabilities. Institutional ownership is around 24%. One analyst gives the stock a “strong buy” and one has it as a “hold”. www.cerus.com
At first glance, Cerus Corporation does not have a lot of sex appeal, but it is garnering revenue while advancing its R&D, which, for a small biotech, is no small feat. The company also has a good balance sheet and some big name collaborators.
Founded in 1991, and public for nearly a dozen years, simply put, Cerus develops products to make the blood supply safer. The company’s INTERCEPT system is designed to inactivate blood-borne pathogens in donated blood components intended for transfusion. While not yet approved in the US, Cerus markets the INTERCEPT system for platelets and plasma primarily in Europe, the Russian Federation, and the Middle East. The company is also developing INTERCEPT Blood System for red blood cells or red blood cell system, which is designed to activate blood-borne pathogens in donated red blood cells for transfusion. It has collaborations with Baxter International, BioOne Corp., Laboratorious Grifols, and Establishment Francais Du Sang, as well as the US armed forces.
In early February, Cerus announced that its US Phase I trial of red blood cells treated with the INTERCEPT Blood System met its primary endpoint, with preliminary analysis demonstrating that greater than 75% of treated cells continued to circulate 24 hours following transfusion. It was also at that time that the company entered into its collaboration with the French National Transfusion Service on INTERCEPT red blood cell development. In mid-January, Cerus reported a positive outcome in a European study of 7-day INTERCEPT platelets.
For FY2009, ending 12/31/09, revenue was $17.98 million with $24.14 million in losses compared to 2008 revenues of $16.5 million and $29.2 million in losses.
We like with whom Cerus has affiliated itself and the recent developments in Europe could give the company a boost.
Our 24-month target for the stock is $4.25 to $4.50.
For more information, contact CERS’ Kevin Green at 925-288-6138.
Look for the April 5, 2010 Newsletter to be posted on 4/1 or 4/2.
Thank you,
George