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Hello Readers,
Since the last Newsletter, we have closed six more positions; four for gains and two for losses.
CRITICAL THERAPEUTICS (1/5/07). Closed position 5/31/07 at $3.80 for a 90% GAIN.
AUTOBYTEL (10/5/06). Closed position 5/22/07 at $4.63 for a 60% GAIN.
COMMTOUCH (3/5/07). Closed position 5/22/07 at $2.05 for a 50% GAIN.
CASTELLE (1/5/06). Closed position 5/21/07 at $3.85 for a 24% GAIN. (being acquired by Captaris)
AVANT IMMUNO (12/5/03). Closed position 5/21/07 at 98¢ for a 62% LOSS.
FUSION TELECOM (1/5/05). Closed position 5/21/07 at 70¢ for a 74% LOSS.
Critical Therapeutics screamed on news that the FDA approved ZYFLO, its extended-release asthma drug. In early May, Autobytel began a nice upside move, probably on news of a 1st QT profit, which can have a positive impact on a stock. Ever since picking Israeli-based CommTouch, the stock continually edged upward. A month or two ago, we said we would soon close Castelle, since it is being acquired by Captaris. We finally gave up on AVANT Immuno and Fusion Telecom, both of which had been on the “Endangered List”.
For the last half of May, the markets slogged on, with the Dow, S&P, and the Russell 2000 hitting new highs, while the NASDAQ finally pierced 2600. What’s not to like? The gurus don’t like the “feel” of the markets. They keep asking, “Where is the retail investor?” They may have a point, this time. So, even though we like the long-term prospects, the markets may be ready for a breather sometime this month – it’s better known as profit-taking.
Here are the headlines since the last Newsletter about companies in the Current Portfolio. Dates in parentheses are when we first recommended them.
Hans Biosciences (HNAB) (5/5/07). To present data on two products and debut proprietary OPTISOME platform at ASCO annual meeting.
VocalTec (VOCL) (4/20/07). First quarter numbers look encouraging; balance sheet still appears viable.
DepoMed (DEPO) (4/5/07). To present at Bank of America (BoA) healthcare confab on June 1, the day we post this Newsletter. Gets upbeat mention at The Motely Fool.
Immunicon (IMMC) (3/20/07). To present at the ASCO annul meeting. Seeks to end marketing pact with Veridex.
TTI Team Telecom (TTIL) (3/5/07). Calls for special shareholders general meeting on June 14. Introduces TrafficGuard vl.2.
Neurobological Technologies (NTII) (2/20/07). Presentations at stroke confab highlights new direction for Viprinex.
UQM Technologies (UQM) (2/5/07). Year-end fiscal numbers released; balance sheet still looks okay.
Endologix (ELGX) (1/20/07). Dawson James gives the stock a “buy” rating.
Neose Technologies (NTEC) (12/20/06). Receives milestone payment from Novo Nordisk on Factor IX program. Issued U.S. patent providing additional protection for GlycoPEGylated Erythropoietin. Gets a positive plug at the Motley Fool.
WJ Communications (WJCI) (12/5/06). Sells wafer fabrication equipment; enters into technology license and foundry agreement with AmpTech.
YM Biosciences (YMI) (11/5/06). Reports successful regulatory reviews of nimotuzumab manufacturing.
Terabeam (TRBM) (11/5/06). Walleye and Terabeam form pact to develop hand-held, portable imaging system capable of “seeing” into and through solid objects. Proxim Wireless unwires city of Malden, MA. Chicago suburb deploys Proxim technology as cornerstone of “digital city” project. With Glocalnet, Proxim launches Sweden’s first outdoor wireless network for Internet access.
Hydrogencis (HYGS) (9/20/06). Regains compliance with Nasdaq bid price regs.
02Diesel (OTD) (5/20/06). Gives an upbeat 1st QT report.
Kintera (KNTA) (5/5/06). Special Olympics Northern California expands contract. Investors laud leadership moves. Helps University of Maryland, Baltimore County, raise more money and engage more alumni.
TRI-S Security (TRIS) (5/5/06). Makes the Atlanta Journal Constitution Annual Georgia 100 ranking. Settles litigations with former Paragon shareholders.
Cytogen (CYTO) (3/20/06). Reports publication validating the utility of its proprietary ProChart database. Outcomes data continue to demonstrate value of PROSTASCINT to predict prognosis in prostate cancer.
Inventure Group (SNAK) (3/5/06). Acquires Rader Farms for $21 million.
Adherex (ADH) (2/20/06). Announces abstracts for 2007 ASCO meeting.
Gateway (GTW) (2/5/06). U.S. judge clears two GTW execs of fraud in SEC case. Earns number one rank in notebook customer satisfaction study. About ten other articles mentioning the company.
8×8 (EGHT) (1/20/06). Packet8 Virtual Office ranked most popular SMB hosted VoIP phone service in recent AMI Partners telecom report. Awarded additional VoIP patent.
Digital Angel (DOC) (12/20/05). DOC and Verichip form committee to design and develop implantable glucose-sensing microchip. Names acting CFO.
Westell (WSTL) (10/20/05). Fourth quarter FY numbers not stellar; balance sheet still looks very strong. Sees 1st QT loss and will outsource some operations.
RAE Systems (RAE) (10/5/05). To introduce two new gas detection products for industrial hygienists on June 3-6.
Nephros (NEP) (9/20/05). To initiate U.S. clinical trials. This is on the “Endangered List”.
EntreMed (ENMD) (9/5/05). Commences Phase 2 clinical trial combining Panzem NCD and Temodar in brain cancer patients.
N.A. Scientific (NASI) (8/5/05). Slates earnings call for June 4.
Vion Pharma (VION) (5/20/05). Stock takes a header on suspension of Phase 3 trial in relapsed AML. Even though company has a bucket of money, we are placing it on the “Endangered List” for now.
Applied Micro Circuits (AMCC) (11/20/04). Several news releases on products.
Aviza Technology (AVZA) (10/5/04). Receives new multiple system etch order from ASE. AVZA and Air Liquide extend JDA for advanced films and process development.
TMNG Global (TMNG) (4/20/04). Receives letter of compliance from Nasdaq. Revenues more than double in 1st quarter compared to same period last FY; balance sheet still looks very strong.
Palatin Technologies (PTN) (4/5/04). PTN and King Pharma report positive data on E-D treatment.
Our picks for this Newsletter are an AMEX-listed manufacturer of night vision devices and a NASDAQ-traded biotech.
XENONICS HOLDING, INC. (AMEX: XNN) – $2.48. Twelve-month hi-low has been $4.05 – $2.41. Based in Carlsbad, CA, with about 15 employees, this manufacturer has 17.2 million shares outstanding, $6.1 million in total current assets, $6.36 million in total assets, little debt, and $1.02 million in liabilities. Institutional ownership is around 4%. www.xenonics.com
Sometimes it’s good to look at something other than computers and biotech, and Xenonics Holding, Inc. could be a nice distraction. Its products are definitely unique to most people and it appears that sales are finally taking hold.
Founded in 1996, and public since 2003, Xenonics develops lightweight and compact ultra-high intensity illumination products, as well as low-light vision products. In other words, it makes solutions that can see in the dark, namely for the military, law enforcement, public safety, and commercial and private sector applications. The company’s two primary products are The NightHunter and The SuperVision.
NightHunter comprises several models of extremely bright illumination tools for military and security applications. Used in combat by the U.S. armed forces, this line employs short-arc lamp technology in a specially designed parabolic reflector to throw its beams of white light out to 1.5 miles. With its infrared filter NightHunter becomes a covert system of illumination with “invisible” light that can only be seen with night vision devices, such as the company’s SuperVision. Billing this line as revolutionary, Xenonics’ SuperVision takes the opposite approach of NightHunter, using a patent pending “night vision” technology to see in the dark. This digital viewing system utilizes a high sophisticated CCD sensor and digital processor to transform ambient light, invisible to the naked eye, into a sharp and clear black and white picture. The company claims this technology exceeds the performance of current military night vision (Gen II) while offering the unparalleled benefit of zoom magnification from 2x to 8x.
In its May quarterly report, Xenonics announced it was ramping up production of SuperVision to meet demand. Following modest initial shipments in March and April, the company expects to ship 1000 units in May and at least 2000 in June. Helping to fuel sales, in April, the company noted it had signed more than 40 SuperVision sales reps in various vertical markets, including recreation and public safety.
For the FY ending 9/30/06, revenue was $4.83 million with $1.49 million in losses. During the first six months of FY2007, ending 3/31/07, revenue was $2.56 million with $582,000 in net losses.
A short-term test for the company is how SuperVision will impact the current quarter numbers. Whatever the results, Xenonics seems to be doing the right things.
Our 24-month target for the stock is $4.00 to $4.50.
For more information, contact XNN’s Alan Magerman at 760-448-9700; xenonics@xenonics.com
ONCOLYTICS BIOTECH, INC. (NASDAQ: ONCY) – $2.04. Twelve-month hi-low has been $3.72 – $1.75. Based in Calgary, Alberta, Canada, with about 10 employees, this biotech has 41.1 million shares outstanding, $36.51 million in total current assets, $41.77 million in total assets, little debt, and $2.85 million in total liabilities. Institutional ownership is around 18%. www.oncolyticsbiotech.com
Too often, people in the States have a tendency to overlook Canadian companies, such as Oncolytics Biotech, Inc., which, thanks to a recent secondary offering, has a healthy looking balance sheet promising products.
Founded in 1998, and public since 2001, Oncolytics focuses on developing oncolytic viruses as potential cancer therapeutics. The company’s technologies are based on discoveries made on the 1990s and its potential products are being developed using the naturally occurring reovirus for treating cancers. The reovirus, or respiratory enteric orphan virus, has been demonstrated to replicate specifically in tumor cells that have a constitutively activated Ras pathway. The company’s main product candidate is REOLYSIN, developed from the reovirus, and may represent a treatment for Ras-mediated cancers, which can be used an as alternative to existing cytotoxic or cytostatic therapies, as an adjuvant therapy to conventional chemotherapy, radiation therapy, or surgical resections, or to treat certain cellular proliferative disorders for which no therapy exists. ONCY claims that REOLYSIN is able to replicate specifically in, and hence kill, certain tumor cells both in tissue culture, as well as in a number of animal models without damaging normal cells.
Armed with a small arsenal of 20 U.S. patents, Oncolytics has concluded six human clinical trials; is conducting a Phase II REOLYSIN/radiation combination study and a Phase lb radiation therapy/REOLYSIN combination study, both in the U.K.; and is conducting a Phase I/II recurrent malignant glioma study in the U.S. In addition, the company has permission to conduct a variety of other studies in the U.S. and U.K.
In mid-May, Oncolytics announced that the U.S. National Cancer Institute filed for a Phase 2 systemic melanoma clinical trial with REOLYSIN. At the end of April, the company announced it had successfully completed initial scale up of its manufacturing process for REOLYSIN.
The company is typical of most small biotechs in that it makes virtually no money and has huge losses. For the quarter ending 3/31/07, net losses were $4.11 million.
One-product companies make us a little nervous, but, so far, ONCY appears to have had some successes and no major blowups, that we can see.
Our 24-month target for the stock is $3.50 to 4.00.
For more information, contact ONCY’s Cathy Ward at 403-670-7377; info@oncolyticbiotech.com
Look for the June 20, 2007 Newsletter to be posted on 6/18 or 6/19.
Thank you,
George