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Hello Readers,
Since the last Newsletter, we closed nine more positions; seven for gains and two for a losses.
AMICUS THERAPEUTICS (10/5/10). Closed position 1/14/11 at $6.30 for a 64% GAIN.
THRESHOLD PHARMACEUTICALS (8/5/10). Closed position 1/14/11 at $2.18 for a 56% GAIN.
MARKET LEADER (12/20/08). Closed position 1/13/11 at $2.98 for a 78% GAIN.
ZELICUS (5/5/10). Closed position 1/11/11 at $2.40 for a 67% GAIN.
PHC (5/20/10). Closed position 1/11/11 at $1.84 for a 52% GAIN.
ACADIA PHARMACEUTICALS (9/5/10). Closed position 1/10/11 at $1.64 for a 63% GAIN.
ORBCOMM (9/5/10). Closed position 1/6/11 at $3.10 for a 67% GAIN.
UROLOGIX (2/20/07). Closed position 1/13/11 at 76 cents for a 78% LOSS.
HESKA (7/5/07). Closed position 1/3/11 at $4.95 for a 79% LOSS. (price reflects reverse split).
Market Leader went on a three-day surge after announcing a strategic partnership with Keller Williams Realty; yes, it took over two years for the stock to work, but was well worth the wait. After giving an upbeat yearly outlook, Amicus Therapeutics had a nice pop, to say the least. No real apparent news caused Threshold Pharmaceuticals to shoot up a dollar, but who cares? Zelicus went on a tear after announcing plans for advancing product candidates; announcing ‘plans’ rarely moves a stock, but, hey, we’ll take it. For the last several months, PHC had been moving steadily upward, and, finally, pierced our 50%-plus target. Acadia Pharmaceuticals shot up upon news of a $15 million private placement. Earlier this month, telecom stocks were a trader favorite and we suspect that this sentiment helped to drive ORBCOMM for a pretty nice gain. And, sadly, we closed Heska and Urologix for a bad losses.
Many of you have noticed that over the last few months, we have closed what seems to be a boatload of Current Positions. This sort of binge, if that’s the right word, periodically occurs, especially in highly speculative and frothy markets. Enjoy it while it lasts.
We are still shocked by the markets’ continued upward push to the stratosphere, which, of course, has been fueled by government printing presses working triple time. When does this policy slow down? Good question. Now we hear that the states may need Federal bailouts and that the Fed very well could begin to buy their debt, if they haven’t already started.
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 is highly significant.
Sprint Nextel (S)(1/5/11). There are literally several dozen articles and stories that mention the company, which will usually be the case.
Trident Microsystems (TRID)(12/20/10). Partners with Yahoo! to deliver the first connected cinema TV into the home. Ships 100 millionth set-top box chipset powered by ARM technology. Licenses to MSTAR Semiconductors certain MEMC patents. Several other news items about product advancements and collaborations with other companies. Lowers 4thQT revenue guidance.
Ceraplast (CERP)(12/20/10). Brokerage firm Ladenburg Thalmann puts a “buy” on the stock – better late than never. Enters into agreement with BioWorks PI to supply bioplastic resin to the Polish market. Opens European HQ in Germany.
I.D. Systems (IDSY)(12/5/10). Receives purchase orders totaling about $1.1 million from the Raymond Corp.
SuperGen (SUPG)(12/5/10). Enrolls first patient in first human trial of SGI-110 in MDS and AML patients.
Pixelworks (PXLW)(11/20/10). Updates 2010 4thQT guidance.
WorldHeart (WHRT)(11/20/10). Announces Levacor VAD implant at Tampa General Hospital; enrollment in bridge-to-transplant study continues to be slow as company makes refinements to Levacor VAD.
RELM Wireless (RWC)(11/5/10). Receives FCC okay for its P25 UHF KNG mobile radios. Lands $1.5 million order from the U.S. Forest Service.
Inovio Pharmaceuticals (INO)(10/20/10). Preclinical efficacy of Chikungunya DNA vaccine featured in PLoS Neglected Tropical Diseases. Novel DNA vaccine for Clade C HIV achieves immune responses and protection in non-human primates.
BluePhoenix (BPHX)(10/20/10). Completes sale of ASNA subsidiaries for $2 million.
Adolor (ADLR)(5/5/10). Expands Phase 2 Opioid induced constipation program.
NovaBay Pharmaceuticals (NBY)(4/20/10). Reports activity of Aganocide NVC-422 against deadly “superbug” producing NDM-1.
China Direct Industries (CDII)(4/5/10). Provides update for its magnesium segment sales. Subsidiary enters into contract to supply iron ore from Bolivia.
Novavax (NVAX)(4/5/10). Launches Phase 1 clinical trial to evaluate its novel vaccine against Respiratory Syncytial Virus (RSV).
Cytokinetics (CYTK)(2/5/10). Opens Phase IIa “Evidence of Effect” clinical trial of CK-2017357 in patients with Myasthenia Gravis.
CytRx (CYTR)(1/5/10). Raises $7 million from sale of remaining equity interest in RXi Pharma.
BioSante Pharmaceuticals (BPAX)(9/20/09). Confirms female sexual dysfunction as an unmet medical need – not sure if this is really news.
Anadys Pharmaceuticals (ANDS)(8/20/09). Initiates Phase IIb study of ANA598 in HCV patients.
Performance Technologies (PTIX)(7/20/09). Creates signaling development alliance with GENBAND.
USA Technologies (USAT)(6/5/09). Expects to report record 2ndQT revenues. This is on the “Endangered List”.
Oilsands Quest (BQI)(10/20/08). Gives operations update.
MicroVision (MVIS)(5/20/08). Demonstrates mini-tablet with embedded projector.
Move, Inc (MOVE)(1/5/08). Pact with AOL expands online real estate marketplace.
LRAD Corp (LRAD)(10/5/07). To report $2.2 million in FY01 1stQT revenues and over $7 million of LRAD systems order in transit.
Our picks for this Newsletter are another solar company and a medical researcher, both NASDAQ-listed.
REAL GOODS SOLAR, INC. (NASDAQ: RSOL) – $2.60. Twelve-month hi-low has been $4.80 – $2.25. Based in Louisville, CO, with about 200 employees, this solar installer has 18.3 million shares outstanding, $40.84 million in total current assets, $50.26 million in total assets, little debt, and $18.65 million in total liabilities. Institutional ownership is around 22%. Two analysts rated the stock a “strong buy” and two have it as a “moderate buy”. www.realgoodssolar.com
Not only does Real Goods Solar, Inc. have a half-decent balance sheet, but the company has been turning profits for the last four quarters. So, why isn’t the stock moving? Solar stocks have been out of vogue, for now; however; most things usually go full-circle.
Founded in 1978, and public for a little over two years, and a subsidiary of Gaiam, Inc., Real Goods Solar operates as a residential and commercial solar energy integrator in California and Colorado. In fact, the company sold the first retail solar panel in the U.S. in that year. To date, the company has installed over 6000 systems and offers various turnkey services, including design, procurement, permitting, build-out, grid connection, financing referrals, and warranty. It installs residential and commercial solar energy systems that are between 3 kilowatts and 250 kilowatts output, as well as commercial projects of up to 5 megawatt output.
Back in September, 2010, Real Good announced an agreement with Akeena Solar, d/b/a Westinghouse Solar, whereby the company will become an authorized dealer for Westinghouse. Some of you may remember that Akeena.Westinghouse was one of our old picks that went sour. Westinghouse will transition the majority of its existing backlog and pipeline of products from its former installation operation to RSOL. Going forward, Westinghouse Solar will be providing Real Goods Solar with leads and referrals to help expand this distribution pact.
For FY2009, ending 12/31/09, revenues were $62.32 million with $1.57 million in losses. During the first nine months of the current FY, ending 9/30/10, revenues are $57.2 million with earnings of around $989,000.
Obviously, picking up Akeena/Westinghouse’s scraps seems to be helping the company, and, as we said above, it should only be a matter of time before solar stocks again catch fire.
Our 24-month target for the stock is $4.50 to $5.00.
For more information, contact RSOL’s Erik Zech at 415-295-4952; erik.zech@realgoods.com
TENGION, INC. (NASDAQ: TNGN) – $3.00. Twelve-month hi-low has been $5.24 – $2.03. Based in East Norriton, PA, with about 60 employees, this medical researcher has 12.4 million shares outstanding, $19.3 million in cash/equivalents, $37.23 million in total assets, and $21.84 million in total liabilities. Institutional ownership is around 29%. Two analysts rate the stock a “strong buy”. www.tengion.com
Sometimes, the least heard of companies with intriguing technology and healthy balance sheets can be a surprise, and we think Tengion, Inc. could be one of those.
Founded in 2003, and public for under a year, Tengion is a regenerative medicine company focusing on developing a range of replacement organs and tissues, or neo-organs and neo-tissues. To achieve these goals, the company uses a patient’s own cells, or autologous, in conjunction with its Organ Regeneration Platform, which was developed over the past two decades by scientists at Children’s Hospital Boston, MIT, Wake Forest Institute for Regenerative Medicine, and the company. Tengion currently owns or licenses over 30 U.S. patents and patent applications and over 100 international patents and filings related to its platform and product candidates. Tengion is aiming their technology to address needs in urologic, renal, gastrointestinal, and vascular diseases.
Tengion’s lead product candidate, the Neo-Urinary Conduit, is an autologous implant that catalyzes regeneration of native-like bladder tissue for bladder cancer patients requiring a urinary diversion following bladder removal, or cystectomy. It expects to implant five patients by the middle of this year . The company has also completed two Phase 2 human clinical trials with its Neo-Bladder Augment for children with neurogenic bladder due to spina bifida and in adults with neurogenic bladder due to spinal cord injury. Its product pipeline also includes various candidates in early developmental stages, such as Neo-Kidney Augment for patients with advanced chronic kidney disease, or CKD.
Tengion is pretty typical of many small biotechs in that it has zilch revenues and hefty losses. For example, for the 3rdQT ending 9/30/10, revenues were non-existent and losses were $6.72 million.
We like the science and the company’s arsenal of patents. This is the sort of stock that can take off on any sort of good clinical news.
Our 24-month target for the stock is $5.00 to $5.50.
For more information, contact TNGN’s Brian Davis at 610-292-8364; ir@tengion.com
Look for the February 5, 2011 Newsletter to be posted on 2/1 or 2/2.
HAPPY NEW YEAR!! (again)
George