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Tuesday, June 30, 2009

Tuesday's Stock Briefs: AGEN, SIRI, INSM, ONTY, CSUH.ob

AGEN: Shares of Antigentics (AGEN) spiked to over two dollars during mid day trading on Tuesday, in part due to a rumor circulating around the Internet of a possible early approval for Oncophage. Specifics of the rumour are unclear, but since Oncophage is not currently under FDA review the speculation is probably regarding the European application for approval.

There is undoubtedly little truth to this rumour, in VFC's opinion, and the spike is most likely the result of mere manipulation more than anything else. Any news, or legitimate speculation, regarding additional approvals for Oncophage would cause a spike in the AGEN share price of more than 10%.

Continue accumulating under $2 and ignore the small, manipulative, spikes in price.

Disclosure: VFC is long AGEN.

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SIRI: Last Friday's ten cent drop at the close also proved to be nothing more than a head fake as the SIRI stock rebounded nicely to forty two cents on Monday.

The initial hype of the SiriusXM iPhone application launched the application to near the top of Apple's 'most popular' list. The 'app', which is downloaded on the iPhone for free, will bring in additional revenue to SiriusXM as existing customers upgrade to 'Premier' packages in order to use their service on the iPhone. Also, just having the application available at the Apple store gives SiriusXM a nice marketing and advertising edge.

With XM's 2009 debt no longer a pending burden on the stock price, due to the senior notes issued last week, I still predict a spike to over a dollar in the near future (few months time, at most).

I believe that SIRI is still a highly manipulated stock and when the big boys are ready for to move it, it'll move.

Disclosure: VFC is long SIRI.

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ONTY: Shares of Oncothyreon (ONTY) have approached four dollars again, although no news has been released of late to justify the spike.

I still like the Stimuvax story, although I will wait for the stock to drift back down to three dollars, or below, before I resume accumulation of the stock.

That being said, any additional positive news on Stimuvax, or other cancer vaccine candidates, could propel the stock northwards of five dollars on short notice. I don't forsee that happening anytime soon, but as awareness of cancer immunotherapy treatment grows and products such as Dendreon's (DNDN) Provenge move closer to market, the whole cancer-vaccine 'sector' could see a boost.

As DNDN has already proven twice, a boost in this sector is pretty significant.

Disclosure: VFC is long ONTY.

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INSM: Shares of Insmed (INSM), freshly cut in half after disappointing IPLEX MMD Phase II results, have again dropped below the dollar mark. IPLEX is far from a finished drug and a sub $1 price is a good time to buy as the swing/day/momentum traders all move out of the stock. IPLEX has not even been declared completly dead for the treatment of MMD.

While my expected timeframe for seeing signficant returns on the stock has moved further down the road, sub $1 is a great price to make an investment in the future of IPLEX, an already approved FDA drug.

There has been recent speculation about the timing of the CEO leaving the company and the subsequent disappointing MMD results, but controversy such as that give the small investor a chance to get in on the cheap.

I wouldn't be surprised if INSM drifted into the sixty cent range again, but with cash on hand and an already approved FDA drug, Insmed still has a future.

Disclosure: VFC is long INSM.

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CSUH.ob: Shares of Celsius Holdings (CSUH.ob) have been re-testing the 52-week high of twenty cents this week, and for those who do not already have a position in the stock, now may be the time to buy- before second quarter earnings are released, most likely in August.

The company should also launch the calorie-burning "energy shot" later this year.
With consumer awareness and distribution continuing to escalate, earnings could surprise, which would most likely lead to another significant pop in stock price.

Speculation before earnings could also lead to a rise in price, in my opinion, maybe to the twenty five cent level.

CSUH.ob is a speculative risk-reward play, so while I am positive on this stock, I don't suggest an investor put 'all their eggs in the basket' at twenty cents. There is a chance for a drop back into the mid-teens, or below if quarterly earnings don't meet expectations, so I suggest buying some now and then waiting to see what happens.

If the price drops, buy more. If it doesn't and earnings are solid, CSUH.ob will be a safer buy at that point than it is now at a speculative 52-week high.

Those who have been in since below ten cents, this is a non-issue; you're already sitting pretty good.

The Celsius product still has a lot of room to grow in both distribution and awareness and if the product takes off, so should the stock.

I'm still waiting for a major celebrity to jump on board.

Disclosure: VFC is long CSUH.ob.

Comments from CEO Steve Haley.



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Saturday, June 27, 2009

Monday Morning Stock Watch: SiriusXM (SIRI)

SIRI: Shares of the Satellite Radio company SiriusXM (SIRI) have traded with increasing volatility of late before culminating in a 20% drop on Friday on over seven times the normal trading volume. Of note, SIRI was trading up most of the day before the last hour sell-off.

Last week Sirius XM's sale of Senior Secured notes, due in 2013, were extremely popular and the company was able to raise over $500 million to pay down existing debt that was to come due this year. Shares traded had traded nearly 20% higher on that news before Friday's drop.

The surprising popularity of the notes is a good sign for investors and the paydown of XM's massive debt eliminates any imminent possibility of bankruptcy. The company narrowly escaped that fate earlier this year when John Malone of Liberty Media rescued SiriusXM at the eleventh hour.

On the content front, two press releases, one each issued by Sirius and the Associated Press, stated that Rosie O'Donnell will launch a morning program this fall on the Sirius Starz channel (SIRIUS channel 102 and XM channel 155). While I'm no fan of O'Donnell, she is a perfect fit for Satellite Radio and if she proves to be as controversial as she has been in the past, she'll bring in a fair amount of viewers and provide free press for the company. Free press translates into free advertising.

Also of note, the company received an upgrade by Barrington Research last week.

This week could be an exciting one for shareholders of SIRI. Friday's drop was a head fake (contrary indicator), in my opinion, and judging buy the volume, someone is loading up on shares and the much anticipated spike to over a dollar may be in the works.

That's not to say that an investment in SIRI is without long term risk, the debt payments are just delayed, not eliminated, but the company now has a long time to ride out the economic recovery and streamline towards profitability.

I maintain that SIRI is a good buy for under a buck, but it will take another quarter or two of economic recovery to get a good indication of weather Sirius can turn profitable anytime soon.

Disclosure: VFC is long SIRI

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Friday, June 26, 2009

BDSI Spikes to Nearly Seven Bucks, Take Some Profit!

With BDSI trading at nearly seven dollars on anticipation of an FDA decision regarding Onsolis, it's a good time for investors to realize some profits to protect their exposure to the stock in the event that the decision is negative.

I like the chances of an FDA approval, but nothing is a sure thing in the stock market and if you're already sitting on significant gains, now is a good time to realize some of them; not all, just some.

Selling into a spike, even while believing that the stock will still move higher, will have you missing out on some gains but will also prevent you from losing everything.

I sold some shares of DNDN earlier this year on the day before positive Phase III trial results were released in order to protect myself against negative results. I lost out on some significant gains, but I don't regret the decision to sell; of course, I did leave enough shares in my account to also make a lot of money.

The point is to not be greedy. The biotech market allows investors to bank doubles and triples (at least) on good news releases or positive trial results, percentage gains that you'll never see in 'safe' investing, but they are only paper gains until they are realized.

There are a lot of unhappy INSM investors today after the release of sub-par MMD trial results and, although that company is far from finished, many investors wish that they had sold during the most recent runup.

Insmed will recover, but it would be wise to allow the lessons of that stock convince investors of BDSI to sell some of their position now, before the news is released. It only makes sense, especially since so many purchased shares for just under two dollars earlier this year! Selling those shares for over six bucks would make that trade a triple!

Disclosure: VFC is long BDSI

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Thursday, June 25, 2009

The Outrage of Insmed (INSM) Investors

INSM: As has already been posted here, shares of Insmed (INSM) were cut in half on Thursday after the release of sub-par results in an exploratory Phase II trial.

The amount of negative investor response to the MMD press release and subsequent collapse of the stock intrigues me. Certainly, it was a bad day for shareholders of INSM, but Iplex is far from dead in the water. In fact, Iplex is not even dead in the water regarding MMD!

Had the press release indicated that Iplex was a complete failure, I could understand the outrage, but Thursday's news was far from that extreme. There is still potential for Iplex and there is still potential for the INSM stock.

A few things to keep in mind:

Investing in biotechs is a risky business. An investor has got to know his or her limitations and tolerance for risk.

If you don't have the stomach for risk, stay away from biotech.

If you think every clinical trial is going to go your way, stay away from biotech.

If you tend to make investing decisions based on emotion- buy a mutual fund and, stay away from biotech.

On the other hand, today's drop also highlights a couple of other points I like to emphasize:

Don't be greedy! Realize some profits and sell some shares on any significant spike. This will reduce your overall risk to bad news and eventually could have you 'playing on house money', meaning you've sold enough to cover your initial investment; if the stock price were to go to zero, you'd still break even.

Don't put your all your money into one or two investments. That will alleviate the panic if that stock does not perform up to expectations.

Don't buy 'one trick pony' stocks. Insmed has more to offer than just Iplex for MMD.

To the shorts- congrats, it was a good day for you.

Day/Swing/Momentum traders can be done with INSM and move on; the patient, long-term investors should stay put and ignore the apocalyptic nonsense.

For the longs, today is not the end of the world for this company or it's lead drug. In fact, it's far from it. For many investors that have accumulated over the past year, a $1 INSM stock is still a double from where they bought in.

As I stated early on Thursday, I'm using this stock decline to buy. I wasn't satisfied with the amount of shares that I owned before the latest runup, but now I have an opportunity to add.

Take a deep breath, everyone, and relax. Tomorrow will be a new trading day.

Disclosure: VFC is long INSM.

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Comments on Advanced Cell Technologies (ACTC.pk)

In response to poster HA65MPH who asked for my comments on Advanced Cell Technology on my Seeking Alpha Page:

I looked at ACTC a few months back, based on the company's Myoblast program, but I put my money into TTNP instead. I do, however, think that ACTC.pk is a good speculative 'stem cell' play and, with the early stages of clinical trials coming to an end and the mid-to late stage trials nearly ready to begin, the stock could double from this point on pure speculation alone. In given time, the potential for higher gains is there if their pipeline products start to look promising. If you've been in since below ten cents, good on ya!

The stock is only trading for a quarter per share, so the risk-reward makes it an attractive speculative play. As I like to say, "for the cost of a good night out on the town," the small investor can buy a nice chunk of shares of this company and not feel cheated if it doesn't work out- at the same times the potential for huge percantage gains exists.

For a speculative play in the 'stem cell' market, ACTC.pk is a decent pick. Keep in mind, if you intend to ride this one to an FDA approval, it's a long time away from that.

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Comments From the CEO of Celsius Holdings, Steve Haley

When searching for a good risk-reward stock, investors should always give extra consideration to a company that has, in addition to a good product, a solid management team. Anyone can come up with a good business idea, but only solid management will bring it to market.

Celsius Holdings (CSUH.ob) fits that profile.

Celsius is a growing company that offers a novel, first-of-it's-kind product (also called Celsius) and is led by a solid management team. CEO Steve Haley has always made himself easily accessible to both investors and consumers and his commitment to the company and it's shareholders is a large part of the reason why investors hung in there when the stock dropped to under five cents late last year.

For those that may be new to the company, Celsius produces and markets the world's first calorie burning beverage. 'Celsius', comes in five 'sparkling' flavors (Cola, Orange, Wild Berry, Lemon/Line and Ginger Ale) and two non carbonated Green Tea flavors (Raspberry Acai and Peach Mango) in addition to the recently-launched powdered packets that, when mixed with water, provide the same calorie burning benefits as the drink.

CEO Steve Haley and the Celsius team, which now includes former Chairman of Rexall Sundown and vitamin industry mogul Carl DeSantis, have slowly grown the distribution and marketing of the product while managing to keep overhead costs at a minimum.

The company is on pace to record a million dollar quarter and with advertising and distribution picking up along with revenues, I thought it was time to check in with Mr. Haley and see if he could offer some insight into a couple of questions that I, as an investor, had on my mind.

My questions relate to the television and radio ads running in areas of high distribution as well as to some new product and distribution updates. My questions are posted below and Mr. Haley's responses are posted in bold, followed by my own comments labeled VFC's Take:

1. Are the television ads currently running? If yes, in which markets and how long can we expect the ads to run?

Currently, we are running the ads in some markets in the Northeast. I would characterize it still in the experimentation phase. As methodically as possible, we are working to determine the impact of Television vs radio vs other forms of promotion. We primarily only do mass media types of marketing where we have good distribution. In areas where we may only be in one retail chain, we resort to more guerrilla type marketing such as events and in store samplings. Since we have some great retailers carrying Celsius in the northeast that is the best place for the TV right now. We will try a different commercial and format in Florida in the near future. We are trying different formats and lengths of television ads and working to measure the impact. We want a productive and replicable process in place as we expand across the country.

VFC's Take: Recent press releases (PRs) by the company have confirmed the building of an expansive distribution network in the northeast. The next two quarters should give us good insight into just how well these ads are working. The growth demonstrated in Quarter One, the first full quarter of radio ads, is an early indication that the ads are providing the desired effect.

2. Has the company increased advertising in any other medium (print ads/magazines, etc)?

As stated above, we are using various methods of promotion. We have some print media but most of it is on a regional basis. We are doing all we can to keep overhead low so we can invest all we can into building the brand and learning the most efficient way to do that.

VFC's Take: Emphasize "keeping overhead low." Mr. Haley knows what he is working with and understands the importance of patience. This slow and methodical building of the company has made investors antsy at times, but the strategy is beginning to pay off. As they say, 'Rome wasn't built in a day' and it takes patience to grow a company, even if the product offered is great. Carl DeSantis has enabled the company to refinance existing debt at more favorable terms.

3. Are the radio ads continuing?

We are doing radio in several markets currently. Again, in markets with good distribution.

VFC's Take: Again, if Q1 is any indication, I'm looking forward to another full quarter of radio ads.

4. Can you comment on the 7-11 distribution? I haven't seen a press release regarding 7-11 distribution, but I noticed that your Red Chip had it [7-11] on the map down south and up north.

In keeping with our policy of not formally announcing retailers until we are on or very close to being on the shelves, I don’t want to comment too much. We are getting a significant amount of free publicity with the various television networks doing special news segments on Celsius. The 7-Eleven relationship was mentioned while one of the news crews was here in the office and then the news anchor mentioned it on one of the newscasts. I then happened to click on that specific segment when I clicked on the map during my presentation at RedChip. We are in some 7-Eleven stores and will be formally announcing more about the relationship with 7-Eleven next month.

VFC's Take: The free publicity via the news reports can do wonders to boost sales. Unconfirmed reports from Celsius fans in Philadelphia informed me that the product was sold out in various locations around the city after the news segment played.

There's obviously no doubt that Celsius is in 7-11 stores in some markets, so we can sit back and wait for the press release. If marketed correctly, 7-11 could be a big-seller, especially for the soon-to-be-released 'energy shots.' I say "marketed correctly" because I visited some Valero shops in Texas that sold Celsius, but the product was located in the far top corner of the display case and didn't sell. Consumer awareness was not then what it is now, so I have high hopes for 7-11.


5. Can we expect the powdered packets in stores or is that solely a web based product?

We have received orders for the packets from a couple of retail chains and they are just being shipped. Many times, the larger the chain, the longer their planning horizon. We have presented the packets to many and some are verbally committing for their next cycle of planning. If you remember, it took a good six months for the teas to start hitting the shelves in some of our larger chains. It looks like the packets will beat this in several of the retailers but for some it will still be a few months out.

VFC's Take: Good news and patience. 'Nuff said.

6. Any update on the Celsius 'Energy Shot'?

We did not want to release our calorie burning energy shots until we completed a study. This has not been done yet. We are watching the shot market closely during the interim. We have several directions that we can take our MetaPlus formula and will put the most focus on the markets that will have the greatest impact in building the Celsius brand and calorie burning category.

VFC's take: The tests are great for the credibility of the claims. In foreign markets, the tests may actually be required for marketing and distribution.

Some may notice that I did not ask Mr. Haley a question regarding the vote to increase the number of authorized shares to a billion. In my opinion, the number of authorized shares is irrelevant- for now. For one, authorized and actual shares are two different things and for two, if this products takes off, investors who are in now are going to be handsomely rewarded regardless of how many shares are authorized.
I'm also highly confident that Mr. Haley is not out to screw the shareholder here, it's just a necessary action for a growing company.

In closing, Celsius is a growing brand in popular markets (weight-loss products and the food and drink industry) at a time when Americans are beginning to spend money again. That bodes well for future business.

Celsius is marketed towards it's ability to burn 100 calories per serving, but keep in mind that people will also drink it because, with no sugar and no carbs, it is a healthy alternative to sugar-laden energy and recreational drinks. There's a lot more going for this product than just the weight loss claims.

The stock price rose from three to twenty cents in a hurry and, especially if next quarter shows significant growth, there is room for the stock to move higher.

The wild card is a celebrity endorsement. If a high-profile celeb is spotted with Celsius and that picture ends up in US Weekly or OK!, then look out. If 10 million people can tune in to watch 'Jon and Kate Plus 8', then there's no doubt fans will flock to the stores to drink their favorite stars' weight loss product.

Disclosure: VFC is long CSUH.ob

Insmed(INSM) Hammered on Sub-Par MMD Results

Contrary to press releases issued by most biotech or biopharm firms after the completion of clinical trials, Insmed seems to highlight the negative before the positive in Thursday's release regarding an exploratory Phase II trial that tested the effectiveness of Iplex in treating MMD.

Keep in mind that this was an exploratory trial, so there were no 'primary endpoints' to meet. That being said, according to Thursday's press release, Iplex failed to show "statistically significant improvement in the functional measure of endurance by the six-minute walk test, muscle function, muscle strength, or quality of life in any of the tests utilized in this study." In other words, the use of Iplex was demonstrated to provide no benefit over the use of insulin.

The trial was not a total loss, as Iplex did demonstrate some improvements in patients, specifically in a subset of those patients who were severely insulin-resistant. Based on that subset, and the fact that a larger scope of patients needs to be investigated than just the 69 who took part in this trial, Insmed plans to initiate an additional Phase II trial and will apply for a grant with the Muscular Dystrophy Association (MDA) to do so.

Disappointing results aside, Iplex is far from dead in the water. Even though this trial indicated that the MMD market for Iplex may be sinficantly less than earlier speculated (if used only to treat insulin-resistant patients), the full potential of the drug remains strong in the treatment of other indications, such as ALS.

Insmed is also sitting on a boatload of cash from their earlier sale of the Follow-on Biologics (FOB) pipeline to Merck for $130 million. The sale of the FOB pipeline indicated, at the time, that the company was confident enough in the future of Iplex to have let go of a potentially significant future cash cow. In my opinion, nothing has not changed there. I believe, based on the actions of the past few months, that this company has full confidence that Iplex will prove to be hugely profitable in the future.

Also take note of the fact that Insmed management is not sugar coating anything. Many other companies would have issued a fluff PR stating that "Insmed's IPLEX demonstrated positive results in a subset of MMD patients in a Phase II trial". Press Releases like that one tell investors that a company is doing anything it can to keep people interested because the prospects of the company on their own won't.
Insmed's PR is pretty straight forward in stating that Iplex is not dead, just the MMD market may not be as big as previously thought.

I'm always disappointed for the patients of a particular illness when a potential treatment fails to work, but I am not disappointed that the INSM stock is again trading for little over a dollar. I had accumulated INSM for a while, but I was not satisfied with my position. As the stock price was cut in half during early trading on Thursday, I'm using this opportunity to accumulate more.

There is also the potential that the company, with a lot of cash on hand and an already FDA approved drug, may be sold. These results will lower the value of a sale, but shareholders could make out handsomely if a transaction does go through. However, never buy solely on the prospects of a sale- if you don't have confidence in the future of Iplex, don't buy INSM, it's simple as that.

For VFC, the Insmed story is far from over; I say buy this most recent dip.

Disclosure: VFC is long INSM

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Wednesday, June 24, 2009

Wednesday's Stock Briefs/Updates

KERX: It's usually a positive indicator for a stock when insiders buy shares of a company because it tells investors that those insiders are confident enough that they are willing to put their own money on the line alongside the common shareholders. This week insiders continued to buy shares of Keryx Biopharmaceuticals (KERX).

While it may be a positive indicator for the KERX stock, I got a good chuckle out of the amount of shares that were purchased and the total cost of the transactions. The most recent transactions, according to filed SEC paperwork, were for a whopping total of a few hundred bucks! Don't get me wrong, an insider buy is an insider buy, but you expect to see a whole lot more shares purchased and money spent when insiders buy.

I'm not quite sure how to take these small buy amounts, but I'd never buy based solely on the actions of insiders anyway.

I have accumulated a few shares of Kerx over the past couple of months based on the positive Phase II results of their lead drug candidates.

KRX-0401, an oral anti-cancer agent, is being prepped for a Phase III trial and has demonstrated to be effective and safe in Phase II trials.

Zerenex was also shown to be safe and effective in the treatment of Hyperphosphatemia in End-Stage Renal Disease Patients.

KERX could be a while before paying off investors, but I like to stagger my investments from short to long term and I thought KERX made a fairly compelling long term pick.

I'm still chuckling over the most recent insider buys, however.

Disclosure: VFC is long KERX

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CRYP: Shares of online gaming software maker CryptoLogic Limited (CRYP) have remained stable at around six dollars and could benefit from proposed legislation by Barney Frank to legalize online gambling in the United States.

A couple of years ago shares of CRYP traded for nearly thirty dollars before Congress put a ban on online gambling in the US.

CryptoLogic has numerous contracts in place to supply software to the online gaming market, as well as the on and off line gambling markets. Additionally, various licensing deals, including with DC Comics, Marvel (MVL) Entertainment and Paramount, allow them to utilize copyrighted characters in conjunction with their software which helps to boost their exposure.

The company has recently undergone corporate restructuring and, in an effort to return to profitability, has also undertaken significant steps to reduce cash burn as a slew of recent marketing agreements have been established. These restructuring measures, a growing business and a push by members of Congress to legalize online gambling could make CRYP a bargain at $6.

Let's make no mistake about the intentions Barney Frank and Congress, however. By no means are they looking out for the American people or for companies such as CryptoLogic; this is simply another revenue stream, as Congress will heavily tax gambling profits and then use those taxes to fund a whole bunch more pork barrel projects that the American people don't want.

That being said, I like the chances of CRYP trading significantly higher over the course of the next year. If a measure to allow online gambling in the US ultimately garners approval in Congress, CRYP should rally just as easily as it dropped after the ban took effect.

Disclosure: VFC is long CRYP

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TTNP.pk: The pink sheets and a drop in volume has Titan Pharmaceuticals (TTNP.pk) out of the spotlight again, but with Vanda's (VNDA) Fanapt due to hit pharmacy shelves later this year, TTNP is bargain for a dollar.

Titan will receive up to 10% in royalties on net Fanapt sales.

Even if Vanda were to completely bungle the Fanapt launch, the current market cap of Titan does not warrant the value of the pending revenue stream.

Disclosure: VFC is long TTNP and has no position in VNDA

CVM: Shares of Cel Sci (CVM) are back to trading for forty cents as the company prepares to launch a Phase III trial for it's head and neck cancer treatment, Multikine, later this year- if all goes as expected.

Cel Sci also holds inherent value with the potential of it's L.E.A.P.S. technology and potential shelf-life extending products.

I'm continuing to add at these low prices.

Disclosure: VFC is long CVM

C: I can't help but get the feeling that Citi wishes it never went into business with the government. To paraphrase a famous Don Corleone line, "Citi keeps trying to get out, but gets pulled back in!" That goes for everyone who took tarp.

It's tough to look around at the auto makers and financial institutions and not feel like we're living in Venezuela, but at least the unions and the thousands more who will get hired into increased government bureaucracy over the next few years are sitting pretty.

For Citi, $3 continues to be accumulation level for VFC.

The bad times are far from over and some credit card and mortgage write-downs will continue, but things are stabilized enough to where these big financial institutions could come out with surprising profits over the next few quarters.

Citi has also announced that they will be increasing employee pay to offset the loss of bonuses. I don't see them making this move if they seriously hurting for cash and I also see it as a thumb in the eye to lawmakers who are continuously butting into private industry.

C is more beat down than most and could therefor be in for a better recovery than most.

Disclosure: VFC is long C

CSUH.ob: I could be wrong, but I have a feeling we're going to see a very good quarter from Celsius Holdings.

Advertising in the northeast has been picking up and local news reports, such as the most recent one in Miami, that highlight the product in 'weight loss success stories' does wonders for product awareness.

Although settled in my position of this stock, I added this week in anticipation of possible surprise earnings for next quarter.

I also like the fact that the trading volume has remained fairly consistent with the daily average.

Disclosure: VFC is long CSUH.ob

Tuesday, June 23, 2009

Stock Briefs/Updates

MHAN.ob- Manhattan Pharmaceuticals issued a long overdue press release (PR) last week updating investors on the approval process for Hedrin, a non-pesticide head lice treatment, in the United States.

According to the release, the company, in a joint venture with Nordic Biotech, has requested a meeting with the FDA to confirm that a Phase III trial is necessary to garner Hedrin's approval.

While Manhattan is not known for stellar management or communication, which is part of the reason why the stock traded for a penny not too long ago, investors are sometimes left to read between the lines whenever a press release is issued.

The text of this most recent PR suggests that the company is expecting to have to conduct a Phase III trial in the United States. The timing of the PR, after a long bout of silence from the company, seemed to want to put a damper on the stock price of MHAN.ob which had multiplied significantly in the weeks prior. The tone suggests that the company is not sure whether it will even need to conduct a trial, adding fuel to the speculative fire.

Amid this speculation and judging by the significant trading volume of late, someone is accumulating shares of this company. The PR, which essentially called for patience, halted the price increase and allowed that someone to continue to accumulate below ten cents (although the stock traded slightly higher on Tuesday).

MHAN is great risk-reward play (an even better one while it traded below five cents) and if Hedrin gains early approval, MHAN will have become the next TTNP.

Regardless, shares for a dime are worth holding onto as we wait for additional news.

Disclosure: VFC is long MHAN.ob

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CEGE- Shares of Cell Genesys (CEGE) dropped on Tuesday after the company announced results of it's latest tender offer as it continued to "pursue strategic alternatives."

While the decreased stock price may make Cell Genesys an attractive candidate to an investor looking for a good rebound story, there are far better risk-reward plays out there than this one.

For all intents and purposes, Cell Genesys looks more like a company on the way out than one with any chance to rebound.

When clinical trial failures of the company's GVAX prostate cancer vaccine sent CEGE shares tumbling to below ten cents a while ago, that was the time to sell and, day trading aside, that was the time to stay away forever.

By comparison, Cel Sci (CVM) is trading for about the same price and is loaded with potential.

Leave this one for the day traders.

Disclosure: VFC has no position in CEGE

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INSM- Shares of Insmed have dropped this week to an attractive buying level for those who have missed out on the runup from sixty cents.

Two dollars could turn out to be a bargain price if the potential of the company's lead drug IPLEX lives up to it's hype.

IPLEX was already FDA approved to treat short stature in children and investors, as well as patients, are anxiously awaiting results from a recently completed Phase II trial that measured the drug's effectiveness in treating MMD.

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CPST- Shares of Capstone Turbine are back to trading for under a dollar as the company looks to demonstrate it's ability to turn it's low-emission microturbines into a profitable business.

The microturbines, according to recent company press releases (PRs), are gaining in popularity and demand around the globe and pending orders have the company 'enjoying' a healthy backlog of production, but investors are still waiting for potential to translate into profits.

Capstone is not a bad choice for a patient investor with a long term outlook searching for a 'green' stock to add to the portfolio.

Disclosure: VFC is long CPST

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Couldn't Refuse the BUY- AGEN

In mid-day trading on Tuesday, shares of Antigenics (AGEN) dropped over 15% and in keeping with my mode of accumulation by buying on the dips, I pulled the trigger and added at $1.66. The stock dropped lower after my trade, but as I've noted here before, AGEN is a gift while it's trading for sub-$2.

Today's drop, in my opinion, is a shakeout of 'weak hands', otherwise known as shareholders who become inclined to sell on any unexpected declines in share price, and reminds me of the contrary indicator that sent AGEN inexplicably lower last month before tripling in price shortly thereafter. If bad news were the cause of the drop I would expect more of a significant price decline than 15% on much higher volume.

Shareholders who have stop-loss orders in also fall victim to these shakeouts as their shares are gobbled up by share-hungry Big Boys.

Oncophage, Antigenics' kidney cancer vaccine, is another day closer to it's commercial launch in Russia, and hence a revenue stream, and GlaxoSmithKline (GSK) recently announced that they have commenced a Phase III trial for a potential malaria vaccine that utilizes Antigenics' QS-21 Stimulon component.

It's been all good news of late for this company and I still believe that the AGEN stock will ultimately be looked at as a steal for any price below $2.

Buy the dip.

Disclosure: VFC is long AGEN and has no position in GSK

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VFC's Take on the BDSI Insider Sells

A lot has been made of the large number of recent insider sells at BioDelivery Sciences (BDSI) who, as we know, received notification from the FDA of a minor delay in the pending approval decision for BioDelivery's treatment for pain in cancer patients, Onsolis.

I usually take Insider trading activity into consideration when deciding whether to buy or sell a particular stock and, admittedly, the recent selling activity would give me pause if I was just now looking at purchasing the stock. However, I do believe that this is one of the rare cases where insider selling is a non factor.

While insider buying is almost always a positive sign, insider selling is not always so cut and dry. Insiders are investors, too, and their investment decisions are not always based on how the shareholders will react to their transactions; rather their decisions are often based on what makes the most financial sense for them. Insiders are limited by insider trading laws which stipulate that they cannot buy or sell stock based on news that has yet to be made public and often times that stipulation dictates when they can buy or sell their shares without raising too many eyebrows.

Based on that fact, if insiders were selling now because they have received indications that Onsolis is not going to be approved, it would be illegal. However, illegal insider trading does occur, as Martha Stewart and the dimwits at Enron could attest to, and only some get caught. I don't think that this is the case with BioDelivery.

More than likely the insiders sold simply to realize significant profits. A few short months ago BDSI was trading for under two dollars only to repeatedly set new 52-week highs in May and June. Most estimates place BDSI between eight and twelve dollars after an Onsolis approval, so with the stock trading as high as it has lately, the insiders who sold into the spike were being smart investors by banking significant gains- gains that were not too far off the mark from where the stock would trade on approval. Also, none sold out of their positions completely and are in good position to benefit if a bigger move were to follow.

While approval of Onsolis looks promising, nothing is a sure thing in the stock market and it is always smart to realize profits while you can, even when you think that a stock will continue to rise. A few weeks ago I noted here that I had sold off a portion of my position in this stock to realize profits and ensure that I was playing on 'house money' from that point on. Even if BDSI were to drop to zero, I would break even on my investment in the stock and it wouldn't surprise me if the insiders, who are also looking out for their own best financial interests, did the same thing.

Also, the insiders sold right at the point where news of approval was originally supposed to be released, so they were probably holding until that point. When the delay came they may have sold into the price spike to ensure that they had cash on hand. It is summer time, maybe they had vacations to take. I know I recently sold some stock in another company (that I didn't want to sell) because sometimes the good life calls and it takes cash, not stock, to fly off to a great vacation destination.

Remember, Insiders are investors too. They've got bills to pay, vacations to take and gains to realize. Smart investors bank profits as a stock rises, even when they feel the stock will continue to rise, and many insiders are also smart investors.

I completely understand why common shareholders are nervous after all the insider sells. Even though negative news may not have been released yet, the general 'tone' of their correspondance with the FDA could have been such that influenced their decision to sell.

In my opinion, nothing has changed with the prospects of Onsolis and BioDelivery Sciences, so I'm holding onto my remaining shares in anticipation of news of approval.

Disclosure: VFC is long BDSI

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Monday, June 22, 2009

Three Stocks That Held up Well in a Down Day Monday

SIRI: Sirius XM closed the day Monday nearly five percent higher amid a big market drop as the XM unit of the merged satellite radio company issued $350 million in senior notes that will come due in 2013. According to a press release the company will use the money to pay down XM's huge debt load.

That takes care of the immediate future for Sirius XM, but the company is far from in the clear as the auto industry continues to suffer and Sirius XM struggles to hold onto, let alone add, customers.

For the first time ever the company posted a net-loss of subscribers last quarter.

Long term, the SIRI stock is far from a sure thing. The cost of contracts, such as the half a billion dollars shelled out to Howard Stern, weigh heavily on the bottom line, but nothing has hurt the company more than the collapse of the auto industry. There is hope, however, that the new SiriusXM application for the iTouch and the iPhone will offset some of the recent customer losses, but the jury is still out on that one.

I believe that the content that SatRad offers is better than any other alternative out there and that the company will ultimately continue to attract new subscribers, but I also have doubts that SiriusXM can survive if the costs of content continues to be so high.

Additionally, Sirius can't afford to dish out another $500 million to Stern when his contract expires in a couple of years and if he does not remain, his followers could very well rid themselves of the SatRad service.

Short term, I can see the iPhone hype pushing this stock to near, if not over, a dollar but until investors see some real synergy savings from the merger and an increase in customer base, SIRI is a pretty risky play.

I'll continue to hold onto some long shares for the next few quarters, but I'll be selling my trading shares on any significant spike towards a dollar.

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EPCT: Although Epicept announced a stock offering last week that sent shares of EPCT to nearly seventy cents after previously approaching a dollar, the stock held up well on Monday while trading on nearly three times it's daily volume.

At first glance the timing of the stock offering would indicate that an announcement of a much-anticipated partner for Ceplene is not close, otherwise the company could have released that news and then announced a stock offering for a higher price.

It's yet to be seen whether a European partnership will materialize or not, but the offering does allow Epicept to move forward with Ceplene's named patient program in addition to covering costs incurred while filing for approval in the US and Canada.

EPCT is still a bargain while trading below a dollar, in my opinion, because even if Ceplene fails to take off, any positive news regarding Azixa, a treatment for metastatic brain cancel partnered with Myriad, could significantly spike the share price of the stock.

ONTY: Shares of Oncothyreon soared 30% Monday on news that Merck KGaA will test the company's cancer vaccine, Stimuvax, against breast cancer in a Phase III trial. Stimuvax is also being tested in the treatment of lung cancer in a Phase III trial.

If Stimuvax continues to prove effective in training a patient's immune system to attack cancerous cells and thereby prolonging the life of the patient, three dollars will be looked upon as a steal for the ONTY stock.

I'm still continuing my accumulation of this stock that could very well be the next Dendreon (DNDN)

As always, it should be noted that the benefit that the cancer vaccine can potentially provide a cancer patient far outweighs the potential financial gains for investors.

Disclosure: VFC is long ONTY, long SIRI and long EPCT.

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Tuesday, June 16, 2009

Stock Briefs

INSM: Insmed has been fairly quiet of late after a significant price increase from sixty cents to over two dollars. This week the company announced that long-time CEO Geoffrey Allan has resigned due to a health condition which was not revealed and Dr. Melvin Sharoky has assumed the role of chairman of the board. The change in leadership should mean little for the direction of the company, which is dependant upon the progression of IPLEX.

The stock price did not respond to the news of Dr. Allen's resignation, but imminent news regarding results from a Phase II trial which tested IPLEX's effectiveness in treating MMD could, if positive, significantly boost the stock.

Results are expected to be released by the end of this month.

AGEN: Shares of Antigenics fell below two dollars in Tuesday's trading, a level where I call the stock $2 is a gift for investors who are just now building a position. For those who have accumulated AGEN over the past year while it was trading below a dollar, I say HOLD.

The company is expecting a revenue stream later this year when it's kidney cancer vaccine, Oncophage, launches in Russia. Any update on European approval will also move the stock.

AGEN could very well turn into the next DNDN and I love the stock under two.

CVM: While the Cel Sci stock price has declined back to the fifty cent level after a spike to over a dollar, the company is intent on keeping itself in the news. A recent press release highlighted the company's process that could maintain the shelf life of stem cell drugs.

The real bread and butter for Cel Sci is Multikine, a head and neck cancer vaccine that is due to begin Phase III trials any time. However, the shelf-life extending manufacturing process and the company's LEAPS technology, although only in early phases of development, may offer additional value to the company, if successful.

CVM is bargain for under a dollar, in my opinion, and I'm still accumulating as long as it remains under that level.

CSUH.ob: Shares of Celsius Holdings closed the day Tuesday at nineteen cents, close to the stock's 52-week high of twenty cents. As the second quarter, which saw a new product launch and multiple new distribution deals signed, comes to an end the stock could set new highs as investors anticipate earnings significantly higher than the one million dollar mark which was nearly reached in quarter one.

A full quarter of GNC sales combined with a radio advertising campaign in the northeast could leave the twenty cents mark in the rear view mirror for this growing company.

If a major celebrity were to promote the world's first calorie burning beverage, sales of the drink, as well as the stock price, could take off.

MHAN.ob: Manhattan Pharmaceuticals is still trading on huge volume as investors load up on the stock in probable anticipation of Hedrin approval in the United States.

One million shares traded is significant for a stock that sometimes saw 3,000 shares traded per day over the last few months.

Possibly the next TTNP, MHAN has more than doubled in a little over a week but remains a good risk-reward play based on the potential Hedrin news.

My faith in the company does not have me holding onto the stock after the news is released, however, and I'm planning on selling my entire position after any potential spike.

NVD: Shares of NovaDel are still trading in the thirty cents range and, based on the company's potential with two approved drugs, I'm still buying. As with Epicept (EPCT), investors have been long awaiting partnership news and once (if) that news ever hits a spike to over a buck is probable.

C: Citi Group is worth mentioning because the stock's recent decline has it trading near three dollars again- my BUY price.

I've already added long calls this week during the decline.

This company is getting a bad rap lately as the White House continues to gain control over as much private industry as possible. Once Citi is out from under the government's thumb, I expect a rebound, but this may not happen quick.

A great long term pick right now, in my opinion, and if three dollars is breached, I'll continue buying.

Disclosure: VFC has positions in all of the above mentioned stocks.

Monday, June 15, 2009

Celsius Holdings (CSUH.ob) Re-Tracing to BUY Territory

After recently announcing two new distribution contracts, the stock price of Celsius Holdings (CSUH.ob) is slipping back into the mid teens after trading at it's 52-week high of twenty cents. Any price below that number offers a good buying opportunity for those that wish to speculate on a good company with a great product.

Celsius Holdings is the maker of the world's first calorie burning beverage and offers the drink, simply called Celsius, in five carbonated flavors and two Green Tea flavors. Additionally, the company just launched the powdered version of the drink, which mixes with water, and the launch of the Celsius 'Energy Shot' is pending.

After long relying on word-of-mouth advertising Celsius is featured in a radio ad campaign in the northeast and a television spot is in the works. In addition to the paid-for advertising, some television stations in Philadelphia and Miami have highlighted the product in the health segments of their local news programs and a member of Katie Holmes' entourage was spotted sporting a bottle earlier this year. If an 'A-list' star ever promotes the drink things could get going in a hurry.

The increased awareness campaign seems to be paying dividends as Celsius reported nearly one million dollars in revenue last quarter and, with increased distribution and product awareness, that number could double by next quarter.

CEO Steve Haley leads an ambitious and quality management team which recently gained the support of Carl DeSantis, a deep-pocketed pioneer of the nutritional supplement business who has offered leadership and much needed capital to the company.

While trading at these levels Celsius is a great risk-reward play.

Consumer awareness is still growing and the stock has the potential to realize significant gains moving forward.

The downside with CSUH.ob is still minimal while trading in the teens, but if next quarters numbers show the significant gains in revenue of last quarter, twenty cent trading could become a distant memory.

That being said, there is always the risk that the Celsius product fails to catch on in the mainstream and the company can go bust.

For less than twenty cents, however, the potential of the product outweighs the risk of failure.

I'm a fan of the Celsius drink as well of the stock and although I'm set with my position in the stock, I will add on any significant dips.

Disclosure: VFC is long CSUH.ob.



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