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Hello Readers,
No need to do a double –take; we did not close any positions since the last Newsletter, but considering that we closed over 30 since early November, we can’t be too stressed out over the situation. The downdraft from the markets, obviously, spilled over onto our Current Portfolio, but, for now, it hasn’t been as bad as it could have been. Currently, the markets seem to be calming because the Saudi king is throwing his money around the kingdom, about $32 billion of it. Smart man, considering the royal family is supposedly worth $240 billion. Short term, the markets’ fate is determined by the price of oil. Same goes for the medium and long-term future of the markets. Sound overly simplistic? Not really.
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 significant.
AdventRx Pharmaceuticals (ANX)(2/20/11). Says FDA seeks more study on its cancer drug. Signs definitive agreement to acquire SynthRx, Inc.
Great Basin Gold ( GBG)(1/5/11). Provides unaudited year-end results. Not included in these numbers is the secondary offering that brought the company C$86 million; which may be why the stock has hardly budged while gold has been soaring. We suspect this may be a short-term obstacle if gold prices keep flying.
Sprint Nextel (S)(1/5/11). The usual 30 or more news articles, such as the debuting of the HTC Arrive smart phone.
SuperGen (SUPG)(12/5/10). Posts good quarterly and FY numbers; balance sheet still looks strong.
RELM Wireless (RWC)(11/5/10). Sets earnings call for March 3.
Inovio Pharmaceuticals (INO)(10/20/10). To present at Cowen & Co. healthcare conference on March 9.
Blue Phoenix (BPHX)(10/20/10). Although recent numbers were not that good company says it is on track with its game plan; balance sheet still looks good.
CombiMatrix (CBMX)(8/20/10). Latest numbers show steady revenue growth; balance sheet still looks okay.
Rexahn Pharmaceuticals (RNN)(7/20/10). Granted European patent for its novel anti-cancer quinoxalinyl-piperazine compounds.
DUSA Pharmaceuticals (DUSA)(6/5/10). Sets earnings call for March 3.
Adolor Corp (ADLR)(5/5/10). Net sales show nice year-over-year increase; balance sheet still looks good.
Novavax (NVAX)(4/5/10). To present at Citi 2011 health care conference on March3.
Cerus Corp (CERS)(3/20/10). To release earnings March 3. FDA grants orphan drug designation for INTERCEPT Plasma for treating thrombotic thrombocytopenic purpura (TTP).
Cytokinetics (CYTK)(2/5/10). To present at four healthcare conferences over the next several weeks.
NIVS IntelliMedia (NIV)(1/20/10). Announces entrance into India market with two contracts valued at over $2.2 million.
BioSante Pharmaceuticals (BPAX)(9/20/09). Completes enrollment in LibiGel Phase III efficacy trial. To present at Citi healthcare confab on March 1, the day we post this Newsletter.
Anadys Pharmaceuticals (ANDS)(8/20/09). Sets earnings call for March 3.
Bioclinica (BIOC)(8/5/09). Year-end numbers look pretty good; as so does balance sheet.
Oilsands Quest (BQI)(10/20/08). Law firm slaps company with a shareholder lawsuit. We have placed this on the “Endangered List”.
U.S. Geothermal (HTM)(8/5/08). Announces $5 million financing with strategic investors. DOE approves $100 million loan aid for company.
GlobalSCAPE (GSB)(5/20/08). Cloud-based managed file transfer solution wins 2011 Global Excellence Award from Info Security Products Guide.
Biolase Technology (BLTI)(4/5/08). Slates conference call for March 10 to discuss year-end numbers. Forms new division.
Hollywood Media (HOLL)(1/5/08). Announces final results of its tender offer.
LRAD Corp (LRAD)(10/5/07). Receives $800,000 in orders from U.S. Navy.
Our picks for this Newsletter are a medical instrument maker and another biotech, both listed on NASDAQ.
OCULUS INNOVATIVE SCIENCES, INC. (NASDAQ: OCLS) – $2.02. Twelve-month hi-low has been $3.20 – $2.13. Based in Petaluma, CA, with about 40 employees, this medical instrument maker has 26.49 shares outstanding, $7.4 million in total current assets, $8.4 million in total assets, and $5.69 million in total liabilities, of which $1.86 million is long-term debt. Institutional ownership is around 6%. Two analysts rate the stock a “strong buy”. www.oculusis.com
Periodically, we come across what we like to call a “turtle company”. Oculus Innovative Sciences, Inc. has not been growing by mega-leaps, but it has been making steady progress year after year and quarter after quarter by increasing revenues and paring the losses.
Founded in 1999 and public for less than four years, Oculus manufactures and markets tissue care products based on its Microcyn platform technology to treat infections and enhance healing while reducing the need for antibiotics. This technology, a solution of electrically charged oxychlorine small molecules, treats various organisms that cause disease or pathogens, including viruses, fungi spores, antibiotic-resistant strains of bacteria such as methicillin-resistant Staphylococcus aureus and vancomycin-resistant Enterococcus in wounds, as well as Clostridium difficile. Oculus makes its Micron technology available, both as prescription and over-the-counter products, under its seven 510(k) approvals in the U.S. for use as a medical device in wound cleaning, or debridement, lubricating, moistening and dressing, including traumatic wounds and acute and chronic dermal lesions. The company’s products are purchased by hospitals, physicians, nurses and other healthcare practitioners who are the primary caregivers to patients being treated for acute or chronic wounds or undergoing surgical procedures.
Early in February, Oculus received a new FDA 510(k) clearance for its Micron-based dermatology Epicyn HydroGel for managing atopic dermatitis, radiation dermatitis and other skin dermatoses, which afflict 16 million U.S. patients. The company also announced that it has additional dermatology products in the FDA queque in hopes of enhancing its Rx and OTC dermatology product portfolio.
For the FY ending 3/31/10, revenue was $7.36 million with $8.23 million in losses. During the first nine months of the current FY, ending 12/10/10, revenue was $7.04 million with $6.25 million in losses.
The company seems to be developing a nice niche in a very populated market of patients. It is also on tract to have better numbers this FY than last FY.
Our twenty-four month target for the stock is $3.75 to $4.00.
For more information, contact OCLS’ Dan McFadden at 425-753-2105; dmcfadden@oculusis.com
INHIBITEX, INC. (NASDAQ: INHX) – $2.35. Twelve-month hi-low has been $3.10 – $1.00. Based in Alpharetta, GA, with about 30 employees, this biotech has 62.33 million shares outstanding, $24.82 million in total current assets, $26.09 million in total assets, little debt, and $5.87 million in total liabilities. Institutional ownership is around 49%. Two analysts rate the stock a “strong buy” and three have it as a “hold”. www.inhibitex.com
Here we go again with another small biotech that has been basically flat-lining for the last several years. However, Inhibitex, Inc. has a decent balance sheet and has been attracting analysts’ attention, of late.
Founded in 1994, and public for over six years, Inhibitex focuses on developing differentiated anti-infective products to prevent or treat serious infections, primarily shingles and chronic infections caused by hepatitis C virus (HCV). Its antiviral product candidates include FV-100, an orally available nucleoside analogue prodrug, which is in Phase II trials for treating herpes zoster or shingles; and INX-189, a HCV nucleoside polymerase inhibitor that has completed preclinical studies for treating chronic hepatitis C infection. The company is also developing anti-bacterials, including Staphylococcal Vaccine, which is in Phase 1 trial to prevent S. aureus infections; and Aurexis, a humanized monoclonal antibody that has completed Phase II trials for treating S. aureus bloodstream infections in hospitalized patients. It has a license and collaboration agreement with Wyeth Pharmaceuticals for developing active vaccines against staphylococcus from MSCRAMM protein platform.
In early January, Inhibitex reported positive interim safety and antiviral data from its ongoing Phase 1b study of INX-189. The company claimed that 9mg and 25mg doses demonstrated significant reductions in HCV RNA levels. Then, in early February, the FDA granted Fast Track Designation for INX-189 for treating chronic Hepatitis C infections.
Here we go again in saying that Inhibitex is typical of many small biotechs in that it has little income and huge losses. For example, during the quarter ending 9/30/10, revenue was around $288,000 with $5.27 million in losses.
This is one of those biotechs that has lingered for the last several years, but has drawn the attention of about half-dozen analysts who may know more than we do.
Our 24-month target for the stock is $4.00 to $4.25.
For more information, contact INHX’s Russell Plumb at 646-378-2922; rplumb@inhibitex.com
Look for the March 20, 2011 Newsletter to be posted on 3/16 or 3/17.
Thank you,
George