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Hello Readers,
Our favorite saying of late has been “hit the replay button”. The markets and our Current Portfolio are still in their worst slump in over three years and for all of the reasons we cited in our last several Newsletters. But, remember one thing. This, too, shall pass. When? We’re optimistic that it will be sooner rather than later, however, in the meantime, expect more gut-wrenching days laced with a few euphoric ones.
Here are the headlines since the last Newsletter about companies in our Current Portfolio. Dates in parentheses are when we first recommended them.
Curis (CRIS) (6/5/06). Publishes data claiming Hedgehog pathway activation promotes coronary growth.
02Diesel (OTD) (5/20/06). Included in preliminary listing for Russell MicroCap Index.
Kintera (KNTA) (5/5/06). Company report says donor advised funds more convenient than donating stock directly.
Pharmos (PARS) (4/20/06). Starts patient dosing in Phase 2a Cannabinor Nociceptive pain study. Dutton Associates upgrades stock rating. To begin U.K. study of pain drug.
Spherix (SPEX) (6/20/06). Hopes to launch anti-diabetes drug trial in March, 2007.
Cytogen (CYTO) (3/20/06). CFO resigns. Says trial shows bone cancer treatment has some effect when used in combination with Velcade.
Gateway (GTW) (2/5/06). Makes latest technology and upgrades standard features across its entire direct PC line. Winona State extends deal with GTW worth $6.5 million. New rack and tower servers to offer dual-core Intel Xeon 5100 series. Expands Enterprise storage line.
8X8 (EGHT) (1/20/06). Names acting CFO.
Castelle (CSTL) (1/5/06). Announces integration of FaxPress fax servers with EFI SendMe.
Fusion (FSN) (12/5/05). Filipino actress joins FSN to help expand subscriber base. Introduces efo out and demonstrates efonica FREE VoIP services at trade show. Files patent application for worldwide internet area code. Launches free Internet phone service.
Cognitronics (CGN) (10/20/05). Announces corporate revamping. Will cut jobs and take a $200,000 charge.
RAE Systems (RAE) (10/5/05). Expands offering of personal radiation detectors for first responders with GammaRAE II responder. Provides wireless and portable WMD/HazMat detection for the World Cup games.
EntreMed (ENMD) (9/5/05). Company’s brain cancer treatment drug, Panzem, granted FDA orphan drug designation. This sort of news should have sent the stock much higher, but in this market?
Electric City (OTCBB: ELCY). Effects 1 for 15 reverse split. This one is on the “Endangered List”.
Commerce Energy (EGR) (6/5/05). Wins contract to provide gas to Los Angeles schools.
Verticalnet (VERT) (4/5/05). Releases upgrade of XE Spend Manager application. This is on the “Endangered List”.
Loudeye (LOUD) (4/5/05). Renews Internet agreement with Planet for broadband access to digital music downloads. Coca Cola to close British music download site which is powered by LOUD. This, too, is on the “Endangered List”.
Advancis (AVNC) (12/20/04). Signs contract sales pact with Innovex to promote Keflex capsules.
Applied Micro Circuits (AMCC) (11/20/04). Gets subpoenaed on stock options.
Nova Measuring (NVMI) (11/5/04). Names new board chairman.
Aviza Technology (AVZA) (10/5/04). Ships Celsior ALD tool to leading European DRAM manufacturer.
Palatin (PTN) (4/5/04). PTN and King Pharma publish results of clinical study of treatment for female sexual dysfunction.
NexMed (NEXM) (4/5/04). Terminates agreement with Schering AG and provides operational update. On “Endangered List”.
Socket Communications (SCKT) (3/20/04). To present at investor confab on July 12.
Open TV (OPTV) (3/20/04). Collaborates with StarHub to develop new technologies. Demonstrates advanced digital TV and advertising solutions at SCTE 2006.
Insmed (INSM) (11/5/03). Reports positive data from three Iplex studies.
Our picks for this Newsletter are an AMEX-listed entertainment company and another biotech that is listed on NASDAQ.
NTN BUZZTIME, INC. (AMEX: NTN) – $1.42. Twelve-month hi-low has been $2.05 – $1.15. Located in Carlsbad, CA, with about 200 employees, this entertainment company has 54.1 million shares outstanding, $12.9 million in total current assets, $29.58 million in total assets, little long-term debt, and $8.2 million in total liabilities. Institutional ownership is around 20%. One analyst gives the stock a “strong buy”, one a “moderate buy”, and another has it on “hold”. http://www.ntn.com
Over the years, we really haven’t picked companies whose main reason for being is to make fun stuff. However, NTN Buzztime, Inc. has a half-decent looking balance sheet and has had three straight profitable quarters. BTW, the company was formerly known as NTN Communications.
Founded in 1983, and public for over a dozen years, NTN develops and distributes multiplayer play-along TV games for restaurants and sports bars, cable and satellite TV, mobile phones, home electronic games, the Internet, airlines, books, and other outlets in the U.S. the UK, and Canada. It operates through four segments: The NTN Interactive Television Network is a promotional entertainment network that transmit various multiplayer interactive trivia, card, and sports games to restaurants, sports bars, and pubs. NTN Wireless Communications provides wireless guest paging systems used at restaurants, hospitals, church and synagogue nurseries, salons, offices, and retail stores. Its products include on-site wireless communication management products such as GuestCall and ServerCall paging systems, repair and replacement programs for pagers and transmitters used in conjunction with its Software Solutions table management software.
The NTN Software Solutions segment designs and markets software for the restaurant and hospitality industry. Its products include ProHost, a Windows-based seating management system; and RSViP, a Windows-based reservation management system. The segment also provides customer support for Vision point-of-sale software. Lastly, Buzztime Entertainment licenses single-player and multiplayer interactive TV games and technology to interactive consumer platforms.
A few weeks ago, NTN named a new CEO. In early June, the company launched its interactive Sudoku game to Canadian satellite TV subscribers via Bell Canada’s ExpressVu, the country’s largest satellite TV provider. In May, NTN launched a new multiplayer billiards game on its restaurant and sports bar iTV Network.
For FY2005, ending 12/31/06, revenue was $40.75 million with $2.1 million in losses. During the first quarter of FY2006, ending 3/31/06, revenue was $11.06 million with $76,000 in net income.
Over the last few years, NTN’s stock has hardly budged to over $3.00. However, there just seems like there is too much going on here to have the situation go on for another few years.
Our 24-month target for the stock is $2.75 to $3.00.
For more information, contact NTN’s Andy Wrobel at 760-930-1177; Andy.Wrobel@ntn.com
POINT THERAPEUTICS, INC. (NASDAQ: POTP) – $2.42. Twelve-month hi-low has been $4.47 – $2.35. Located in Boston, MA, with about 45 employees, this biopharmaceutical has 21.8 million shares outstanding, $32.46 million in total current assets, $33.32 million in total assets, little debt, and $6.23 million in total liabilities. Institutional ownership is around 40%. One analyst gives the stock a “strong buy” and another has it as a “hold”. http://www.pther.com/
Despite the current market climate, we still must think long-term, and one approach has been to hone in on small biotechs with good-looking balance sheets and nifty-looking product candidates, such as Point Therapeutics, Inc.
Founded in 1993, and public since then, Point Therapeutics focuses on developing dipeptidyl peptidase (DPP) inhibitors for use in cancer, type 2 diabetes, and as vaccine adjuvants. DPPs are enzymes that appear to regulate several different physiological processes including those involved in tumor growth and host responses to cancer, type 2 diabetes, and immune responses to vaccines. Point’s lead product candidate is talabostat, a novel, oral, and anticancer agent that is in two Phase 3 clinical trials for treating metastatic nonsmall cell lung cancer; and is in various Phase 2 clinical trials for treating metastatic melanoma, advanced chronic lymphocytic leukemia, and pancreatic cancer.
Point claims that in preclinical models and clinical studies, talabostat has demonstrated activity in combination with several chemotherapeutic agents, monoclonal antibodies, and as a single agent. Talabostat has also shown activity in a number of different cancer indications, including both solid tumors and hematologic malignancies.
The company’s product portfolio also includes two DPP inhibitors in preclinical development. One is PT-630 for type 2 diabetes and the other is PT-510, which is being developed as a potential vaccine adjuvant for both cancer and infectious disease.
In early June, the FDA granted talabostat Fast Track designation for treating Stage IIIB/IV non-small lung cancer (NSCLC) patients who have failed prior platinum-based chemotherapy.
As expected, Point is fairly typical of a small R&D biotech in that it has scant income and huge losses, i.e., for the quarter ending 3/31/06, revenue was $139,000 with $7.9 million in net losses.
The FDA usually does not put a product candidate on “fast track” unless it feels somewhat comfortable that talabostat can have some sort of impact.
Our 24-month target for the stock is $4.50 to $5.00
For more information, contact POTP at 617-933-2130; inquiries@pther.com
Look for the July 20, 2006 Newsletter to be posted on 7/17 or 7/18.
Have a good 4th!
George