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Thursday, October 29, 2009

Readers Respond: BIEL, AGEN, Random Comments

BIEL: A comment from Shep regarding BioElectronics Corporation:

...says the anonymous poster w/ nothing verifiable to back up the statement. Umm-hmm.

Still loading up on BIEL. A little browsing led me to a story where one of the company top dogs states they are getting ready to move from the trial and development phase to more of a marketing phase. More ads, product recognition; that kind of thing. Coupled with impending FDA approvals (which as far as I can tell are nearly a done deal) and this thing could pop pretty soon. An independent analyst recently projected the company will trade at between .30 and .50 cents w/in 6 mos. (Check InvestorHub for the link). .07 could look like a steal next year. I'm in.


World of Warcraft 125x125

VFC's Take: Shep's initial comment refers to the first comment on the following post: Biotech Pullback

I like Shep's style, short and to the point; unlike mine, where sometimes I'm long in getting to the point.

My own comments to that poster who is predicting doom and gloom, I'll take your insight - there's a few out there on CNBC and FOX Business that talk the same doom and gloom, but while I consider a pullback possible, I don't see the same crash that we saw in March materializing again. The worst is behind us, in my opinion.

If your scenario were to play out, however, there might be a couple of biotechs and small pharma that go under, but I think that most of them with real potential in the pipeline have taken advantage of the recent run and have secured financing. I appreciate your comments, but I think that after Thursday's GDP report, a pullback to drastic scenarios is out of the picture.

Will the market retrace a bit? Yes. So have a bit of cash on hand to throw in - but don't fear rock bottom any more, in my opinion.

As far as BIEL is concerned, I'm with Shep. I'm not here for today's or tomorrow's gains. By this time next year - barring any unexpected setbacks - I think BIEL for 8 cents is going to look like a steal that investors look back on and say, "Why didn't I buy?"

BioElectronics is slowly moving from 'Idea' phase to 'reality' phase, and I do believe that as Acetaminophin moves out, ActiPatch has a good opportunity to move in.

I'm accumulating while this stock is below seven cents.

Disclosure: VFC is long BIEL.

Netflix, Inc.

Wednesday, October 28, 2009

Readers Respond: CVM, Stock Tips, Sub Five Cent Stocks

A comment from Nick "Confused Investor" regarding CVM:

Hello again VFC. Thanks for the reply! Your "house visit" example makes sense. Nobody gets invited to my house calling my wife a "ho" either. :) Wasn't expecting that when I read your reply and it still has me chuckling. Thanks for putting things in terms us "newbies" can understand.

I guess you can call me one of the ones who "missed the boat" on CVM, not because I did not believe in them but because I was not even into biotechs then. Even after I saw what the stock did in Sept. I was a believer and thought it wasn't too late to get in with what I've read about Multikine, CEL-1000 and CEL-2000 L.E.A.P.S. especially since their new facility and the progress/finalizing as of recently can only mean good things. Since becoming interested in biotechs my first two stocks I bought into were CVM and AGEN in late Sept. after doing my own DD. You can imagine how my biotech porfolio looks right now but I didn't get into the market thinking it would be all sunny days, so I'm staying optimistic since I bought in for the long haul on both. Still, its been a tough start.

Recently I've read news of a lawsuit against CVM in an SEC filing for Item 2.04. Any reason to be alarmed about this and do these type of allegations happen often?

Thanks again,
Nick (Confused Investor)
P.S. I'll be sure to click a few of your google ads whenever I read your blogs, least I can do for your time.


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VFC's Take: First of all, I think we've all been confused at the beginning. Getting into stock investing, especially biotech investing, is overwhelming and it takes a whole lot of 'learn from your mistakes' experiences before you find a comfort zone.

That's why I like the feedback and input we get here on the blog, everyone has a chance to share experiences and strategies because no one gets it right all the time. It's also good to have a few like-minded investors to keep each other grounded.

Also, when it starts to feel like it's taking over your life too much and you're losing sleep, risking too much money or just plane off your game, it's time to take a step back and take some time away from the game.

Once, I even sold everything, went on vacation and then came back and started over. If you're not enjoying your investing, then you're not doing it right.

Now, on to your comments: Let me clarify for those new to the board when I use the term "missed the boat" with regards to CVM and AGEN. Both of these stocks were trading for under thirty cents for as low as twenty cents over the past year. It wasn't until AGEN hit the over-three dollar level and CVM hit the over-two dollar level that the riff raff came out from the peanut gallery, slaughtered the message and shorted the stock. These guys were nowhere around when the stocks were at twenty cents. That's what I mean about missing the boat, maybe I'm using it a little bit outdated now that both stocks have been cut roughly in half since their highs.

However, there's quite a few who were accumulating heavily when the stocks were trading for dimes, and many of those investors are still on board because they believe in the long term prospects of both companies.

If you're a trader, then you're unhappy right now. If you're a long term kind of investor, then you've got the patience to ride the storm - it's as easy as that. As long as you base your decisions on your own DD and base your DD on the facts, then you'll be fine. In the end, those that live day to day in the market can duke it out daily, but I think that if a company does have something to offer, then eventually there will be no choice for everyone but to accept that fact. Sometimes it takes years - lots of years; some investors can't wait that long.

As for the lawsuit - it'll become an issue when it becomes an issue. This is America - we are known throughout the world as the country that loves to sue. Any Tom, Dick or Harry can file a lawsuit in this country so I have a hard time taking them seriously until they become serious.

If we can have 'analysts' issuing fake PRs, opinion-based bloggers claiming to be journalists and the 'elite' in our country handing billions of dollars over to Bernie Madoff, then I'm inclined to believe that someone can file a bogus lawsuit to join the rest of the misfit gang out there and knock a stock down so that they can buy in cheap.

Cel Sci is pretty good about not responding to BS - and I like that strategy because they shouldn't respond to BS - and they haven't responded to this suit yet, so let's wait and see.

Regardless, it doesn't change how I see the potential of this company for the future.

And yes, hang onto a biotech stock long enough and there will be some sort of a lawsuit involved at some point. Maybe that's and exaggeration, but they are quite common, in my opinion, because it's so easy to file suit in this country. Just look up "why health care costs are so high" in the dictionary and you'll see "because litigation is out of control in America" will be right there.

Thanks for the comment.

Disclosure: VFC is long CVM.

Flower.com

An anonymous comment:

Dear VFC,
Enjoy your information and common sense.
Where do you find these interesting penny stocks? Do You have special news letters, sites, or screens that you frequently use?

Thanks You!


VFC's Take:

Thanks for the comment, click on the following link to a recent post where I responded to a reader who had the same question:

Finding the Speculative Plays

Cheesecake

A comment regarding sub five cent stocks:

Sooo...what 3 or 4 sub-five cent stocks would you suggest as a starting point for someone to research?

VFC's Take: Readers have been throwing quite a few tips this way, but I haven't necessarily re-loaded my sub five cent stock portfolio since the likes of BIEL, TTNP, CSUH, MHAN and MHTX started rising. However, a few that I have in my portfolio still are, and I only use my 'night on the town' money to play with these:

MFLI.pk, NPDT.pk, SPNG.pk and MCET.pk. BIEL is another one that is close to the five cent mark. However, there's a load of these stock out there if you start looking. None do I consider safe bets, but if these things pop a cent then you're sitting on a thirty percent gain right there. I don't recommend going crazy in the sub five cent stocks, but if you can find one or two to follow then you can do pretty good if you play them right, in my opinion.

Do your own DD though, don't buy these solely on anyone else's tip.

Thanks for the comment.

HerRoom-Huge Clearance Sale 200x200

A Reader Comment That Put VFC on a Roll - This Post is Not Suitable for all Readers

An anonymous comment regarding CVM:

I agree with you completely on CVM. Anyone following this company for more than 6 months should be able to recognize the intentionally misleading information being put out there. I view the sell off as an opportunity to buy in again for a replay. There is plenty of positive news in the pipeline for the coming months. And by that time those who were in limboland will finally catch up on their research. One has to wonder why DNDN is trading at more than estimated future sales while still building their capacity and CVM will already be capable of almost 2 Billion worth of Multikine at the outset. If the naysayers are so certain that Cel-Sci's technologies have no potential perhaps they should vow to never accept any such treatment.

VFC's Take: I wanted to post this comment, not because whoever wrote it obviously falls in line with my views on the potential of Cel Sci and the company's products, but because the last statement touches on a subject that I truly believe in.

In today's age of greed and money - money - money, it takes a life changing experience to get some people to wake up and realize what is really important in life. Sure, it's nice to get ahead with a few bucks, but at the end of the day - if you don't have your health, family, friends, compassion - then you've got nothing, no matter how much money you've got in the bank.

You know what, though? The big and bad tough guys that make a living ripping off the little guy, they're the ones that crack when they realize that they're on their last leg; or rottin' away in jail; or holding the hand of their child as they take their last breath after being stricken with a fatal disease. They're the ones that can't take it when they realize that they never got it.

Read on, if you will, but I'm about to get a little graphic:

I think that everyone should have the opportunity to visit somewhere where people really have nothing, but always have something - each other. If you can't visit, talk to the people who have experienced the other side, and read their books - first hand accounts, not some book written by a 'scholar' who has never seen life from the gutter.

Whether it's a family in Colombia that has to live day in and day out under the fear that some narco terrorist is going to come and rape their women and steal their children to boost the numbers of their guerrilla organization that proclaims to be fighting for a cause, but in reality they're just big time drug dealers.

Learn about the remnants of the former Yugoslavia, a place where blood has been shed for thousands of years over ethnicity - and just ten years ago neighbors killed neighbors after a little booze drinking just because it was fun.
(Read: Not my Turn to Die, or Srebrenica: Record of a War Crime.

Track the stories of the hundreds of thousands of families whose children are lost to the sex-slave trade. It could be your child who comes up missing - and is forced to do despicable things for the rest of their lives, or until their too old to be useful, and then they're just 'disposed of'.

Or think about the poor young girls in the Eastern Bloc who think that they are going off to earn money to send home to their siblings, parents and grandparents, who are then taken from their new location, injected with drugs and forced to 'hook' for nothing to 'pay' for their 'freedom'.

War and death spread across Africa, the Middle East, our troops fighting in foreign lands to keep some of these people from exterminating each other - it doesn't end.

But it doesn't hit home for too many people until it's too late. September 11th - how many people changed their lives after 9/11? For some the change was temporary, but for others - that day will live forever as a reminder of what life really means.

NEVER FORGET

Then there's the worst feeling of them all - those close to you that are stricken by tragedy; there one day, gone the next. Car accidents, plane crashes, murder - it happens every day.

Then there's the "C" word - cancer. Some family members endure months and months of watching their loved one die a slow, painful and miserable death. Fathers bury sons, sons bury fathers, mothers and daughters - it hits everyone.

And some people will never get it, and I don't mean never get cancer, I mean some people will never understand.

Ego, money, power - it consumes the world. But it's important to keep things in perspective. Who's who and what's what.

So, back to the comment at hand: If the naysayers are so certain that Cel-Sci's technologies have no potential perhaps they should vow to never accept any such treatment.

Will the naysayers ever vow to turn the treatment away? Of course not. Most likely they wouldn't even recognize the name of the treatment if they needed it. I'm not talking about those who just don't believe in the science, I'm talking about the 'swarm' who move from stock to stock. These people have no idea what Multikine is, to them CVM is just another stock symbol - a company whose stock rose very quickly and is an easy target to get shorted back down. They don't know Multikine or LEAPS...with DNDN they had no idea what Provenge was. All these people see is dollar signs. Dollar this, dollar that, gimme another buck.

The retail investor is just another clown holding a few shares and companies working on potentially life changing products are just good targets to make a buck.

However, the games are a reality of life and the small investor has to stay on top of the game and be sure to realize profits when they can. If a company has a good product, eventually it will pay out - regardless of how many games are played.

Am I bringing morality into stock investing? No. I'm keeping it real; it helps me to remain grounded day in and day out and it keeps me in check when I start to get too greedy with my investing. Everyone needs something to keep them in line, because the free market can become very consuming - and when you become consumed by something, then you start to lose. You think you're winning, but you're really losing - and you don't realize it until it's too late.

I've seen some of the best that life has to offer and I've seen of the worst, and I will say this - the fact that I can sit here and write this blog and the fact that you can sit there and read it, I think we're pretty dam lucky.

Enjoy stock investing, treat it as a hobby, not as a necessity and if you disagree with others about a stock, then disagree on the facts. The real facts. Don't come in VFC's House with lies, misleading information and untruths because VFC has no time for you and I see right through you. Save it for the Yahoo! boards.

If it's attention you want, then go hang out with Mom, because I bet she misses you.

As for the rest who are hear to share ideas, strategies and tips - let's continue to keep it real, we only got one shot at this.

For those new to blog, welcome to VFC's House.

And finally, for those who know me personally and are sitting their rolling their eyes right now because they've heard this whole story a million times - nope, haven't had a drink.

But I might pour myself one right now.

Readers Respond: SPPI

SPPI: A comment from Arie regarding Spectrum Pharmaceuticals:

Hi VFC,

I have a question regarding SPPI,

I heard from seeking alpha guy justin that Spectrum may have cash around 156 million at the time.

So looking at fundamental side, it is very unlikely that stock will be drop 10% at this point, otherwise the cash in hand will be the same with market cap.

My other question is Am I wrong considering SPPI undervalued by looking at the instituional buy at 7.55/share since I believe they make better research than me. so then, I conclude SPPI price at the time is very good buy for long term play.

You considering buying at below 4, is it base on technical stand point?

Thanks, I appreciate your response


Perfume Worldwide, Inc

VFC's Take: Regarding fundamentals, technicals, common sense and logic - I think that a lot of that has been thrown out the window in this highly speculative and volatile market, especially in the biotech/small pharma sector.

I agree that another 10% drop wouldn't make too much sense - and I'm not using technicals when I say that I think the stock has a good chance to hit the below four dollar mark - but with the general market sliding and speculative money leaving the market, the shorts and naysayers are using any bad news that they can to drive stocks down as far as they can go. And it just so happens that the most recent big news out there regarding Spectrum is the Fusilev news.

I believe that Insmed (INSM) was actually trading at below the cash on hand value earlier this year, so I think investors and shorts also look at the fact that the cash pile is going to deteriorate if the company is losing money.

As for the institutional buy, I see your point, but there's quite a few institutions that have been under water for some time during the market crash. If an institutional buy is what is used to place a true value on a stock, then investing would be easy. I rely more on my own DD to make my investing decisions more than anyone else - including institutions; if your DD tells you that SPPI is undervalued, then I say jump in.

I also think that it is a good rebound play and if BDSI were not also trading for right around four bucks (even more of an illogical event, in my opinion) then I may have picked up some SPPI. Right now I'm throwing my 'rebound' money at BDSI.

Long term, I think SPPI is a decent enough play. As I said before, based on the fact that Zevalin has posted year after year of declining sales, I'm not convinced that it will be a blockbuster; but the first line treatment should significantly boost the bottom line.

Thanks for the comment.

Disclosure: No position.

RadioShack

Readers Respond: MSBT

MSBT.ob: A comment from Lenny regarding MedaSorb:

Hi Vinny,

Hope all is well!

I have a small position in MSBT and was thinking up increasing it, however the # of shares including warrants and preferreds (since they would be 'in the money') has me a little concerned.

If you have a chance and can review this link and their 10Q, what do you think?

The SEC file is: http://www.sec.gov/Archives/edgar/data/1175151/000114420408068974/v134279_s1.htm

It seems to indicate a much higher share count when you take it into consideration, am I missing something?

Let us know when you get a chance,

Tks!

Lenny


Bake Me  A Wish

VFC's Take: I've been watching the MSBT action also, and the warrants and preferred are definitely something to consider, but it depends on when the holders start converting that will determine how much of an effect it has on the stock price, in my opinion. However, that is a large amount of potential outstanding shares. Because of that consideration I'm planning on selling a large portion of my remaining shares into the run up that I think will occur later this year or early 2010.

I have to believe, however, that all of those preferred and warrants would not be converted at the same time, so I'm not too worried about them - especially if CytoSorb proves successful because I think that the stock price is going to trade significantly higher than a dollar if the CytoSorb trial goes well - with full conversion or not.

What does have me sceptical about this stock right now is that the MSBT stock reminds me of the airplane that overshot its destination last week - I think the clowns are in charge. I don't mean management, I mean the big players that have been playing the stock over the past few weeks.

If the recent spike to over forty cents was simply the result of speculation on a positive outcome of the CytoSorb trial, then I don't think that a full retracement to twenty cents would have occured. More likely, in my opinion, it was a combination of speculation and some swing/momentum/day traders bringing additional hype to the stock; most of whom started bailing at forty cents to go look for the next quick trade.

While the pull back has created a nice entry point for those that may not have a position, I'm holding any buys unless we reach the low teens. I'm still set with my remaining sub ten cent shares and it'll take a huge bargain to get me to buy more. I'm not convinced that we will see the low teens again (barring any bad news), but I wouldn't be surprised to see a dip into the high teens.

Thanks for posting the information and your insight.

Disclosure: VFC is long MSBT.

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Readers Respond: BDSI, CVM

In "Readers Respond" I do my best to answer readers' questions, but keep in mind that my responses to these questions are my opinions and personal speculation that I have based on my own research and DD.

Also, I will try to respond to a number of requests that I've received via email or comments to the board asking for 'VFC's Take' on stocks that readers have found. While I'll do my best to address as many as I can, please take a few things into into consideration while reading:

- I have not thoroughly researched all of the stocks that I'm about to comment on. I've done the initial DD but my opinions are mostly based on my first impressions of the stock. I'm merely providing VFC's Take, as requested. Use that as a starting point to do your own DD.

- Don't get testy if I don't like your stock. Remember, this is just my initial impression and I take into consideration some variables that other people don't, that's why 'VFC's Take' is not always the mainstream impression.

- I appreciate all the recent feedback, and keep the stock tips coming; this is a great forum for all investors of all levels to share tips and insights. There's a whole lot of stocks out there, but there's only a few gems. Let's keep trying to find those gems.

Generate income in a volatile market.

BDSI: A comment from Alejandro regarding BioDelivery Sciences:

Hi VFC
How are you doing?
what about BDSI? it is near to my target price, I want to load up some shares...Is it possible that the decline is due the low volume of trading and general market drop?...

Thanks!!!


VFC's Take: I enjoy the opportunity to buy shares of BDSI for under five bucks, but the prospects of buying for a level at or below four bucks is, in my opinion, a gift.

The broad market, espeically the biotech/small pharma sector, is dealing with a turn in sentiment after reaching the DOW 10,000 mark and that could be a contributor to the decline in share price.

Regardless of the price action of the stock, let's look at the facts: milestone payments due, Onsolis approved and commercial launch imminent, heavyweight Onsolis partner, solid drug delivery system that was validated with Onsolis approval and the pipeline is solid and in tact.

I only like the fact that the Meda partnership materialized quickly; that tells me that they see immediate potential with Onsolis, contrary to NovaDel who took over a year to find someone to commercialize their product.

Is there risk associated? Sure, it's the stock market. Maybe Meda will fail to fully realize the commercial potential of Onsolis on the open market and there's always the potential of a market crash, but the days of speculating with BDSI are over, in my opinion, and the facts alone should dictate that BDSI is now looking like a good long term growth pick.

It would also be foolish to ignore the wild car, in my opinion; I find it funny that when TheStreet.com decided to go positive on a biotech/small pharma stock for a change it was when a large hedge fund, which was in the process of exiting their position from the stock, could benefit from a price boost.

Disclosure: VFC is long BDSI.

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CVM: A comment from Confused Investor regarding Cel Sci Corp:

Hey VFC! I have a question for you about CVM. I'm young and new to trading (about 2 months now) and find your blogs very helpful. I do own shares in CVM and I liked the company before I started reading your posts. I've found all of your advice to be unbiased and informative but recently and only about this stock (CVM) have things started getting hairy.
There seems to be a lot of controversy over this stock. Seems like people either absolutely love this stock and you or think its complete scum and that you're somehow in cahoots. Of course with you being involved with the tour of the new facility it only made allegations worse about you being a booster of the stock.
I want to make it clear that I'm not questioning the integrity of you or your blog. I find it very helpful and I appreciate what you do for the inexperienced investor like myself since that kind of advice is hard to find. I guess what I'm asking is what in the world is going on with this stock?! The more good news I read about it the lower the price and volume seems to go. I follow other biotechs and there seems to be much less controversy and their good/bad news don't seem inversely related to their price/volume like they do for CVM.

Thanks,
Confused Investor


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VFC's Take: Dear Confused, Thanks for the comments. First of all, if you are as new to the market as you claim, then you'll have to get used to the volatility and scenarios that you've seen play out over the last couple of months with CVM - especially if you're going to stick with trading biotech stocks.

It's just a part of the game with this easily manipulated sector. Also, keep in mind that a lot of big players and hedge funds lost a lot of money during the market crash and these entities will stop at nothing to make that money back because it's their own livelihood at stake, after all. The small or long term investor is nothing but some clown holding a few shares that they want in the big scheme of things, so the small investor needs to be that much more confident in his or her DD to be able to stomach the volatility and either accumulate for the long term, buy the dips, or try to play the volatility and pick up some crumbs that the big boys leave behind. The key point here is to do your own DD and stick to the facts. Don't let the haters that are late to the game scare your shares away from you.

As for why Cel Sci went with BioMedReports for the tour of the facility, I can only speculate. The fact that I was in the area helped, but looking at it realistically, if I was Cel Sci and I had to make a decision about who's going to come and visit my house, I'll put this scenario out there:

If one guy is constantly smak-talking my family, and then suggesting that my reality does not exist - even while that reality is present every day, then there's no chance that that guy is coming anywhere near VFC's House. Essentially, that is what a few entities have decided to do with Cel Sci, for whatever reason - but I'm inclined that the attackers of Cel Sci are making out financially somehow, because why else would you pick on a company that is developing two potentially life saving treatments - unless you're just that much of a cruel and heartless coward.

On the other hand, if I've got another entity that, to date, has reported the facts as the have been presented, and then made opinions based on the available facts, then that guy has a better chance of seeing the house, meeting the family and petting the dog than the guy who spreads mis-information.

After all, some people you can trust and some you can't. Unfortunately, in today's day and age, the people that you can trust are becoming fewer and farther in between.

That's the scenario, you figure out the who's who.

Let's also take another fact into consideration, there are a lot of people who are very late to the game with Cel Sci and they are pissed off that they missed the boat. It's natural, when you're on the wrong end of a stock that just skyrocketed (in terms of percentages) to want to attack those that made off pretty good, and then pressure the stock down in order to make money off the short side; but remember that it wasn't long ago that this stock was trading for twenty cents and the peanut gallery was nowhere to be found. In fact, CVM traded in that twenty to forty cent range for quite some time and again, the peanut gallery was nowhere in sight - these guys only showed up after the fact. If Cel Sci and its technology was really that bad, then why wait to do the 'good deed' of informing the investment world of how bad an investment it really is.

Poimt is: Stick to the facts. VFC is just a guy with an opinion and a computer. The only compensation I get for this blog is when readers click on the Google text ads I'll make a little bit and if people buy products via the picture ads, then I get a small commission. In reality, the blog is just a hobby. Keeps me off the vodka tonics. I get no compensation from any company that I have ever written about and I don't care to ever do that because then I've got to compromise being me - and if I'm not calling it like I see it, then I'm not being VFC.

Do your own DD and be aware of the difference between 'pumping & bashing' and having a 'positive or negative outlook.'

Pumping and bashing generally do not include facts or information. For instance, if you read something like, "this stock is going to ten bucks" and that assertation is not supported by and reasons as to why - then that could be construed as a pump.

If someone were to say that "in my opinion, this stock will be a twenty dollar stock a few years down the road because I think that Multikine will be successful in Phase III trials, based on the solid results of the Phase II trials in addition to the fact that the FDA may approve the emergency use of the company's H1N1 treatment", then that is called - because it is based on combination of potential events and actual facts - having "a positive outlook."

Having a negative outlook would be, "I don't think that Multikine will make it to market because I'm not convinced that the Phase II results were as successful as the company makes it sound and it's a tough market for cancer immunotherapy stocks right now." A 'bash' would be "get out now, this stock is going to drop!"

There's a huge difference and any investor needs to weed through the BS. That's what the ignore button is for on the message boards.

Lastly, the peanut gallery and the such were nowhere around before the stock became a ten-bagger in under a year. The fact that they're here now should be a telling enough sign of why they showed up.

Thanks for the comments.

Disclosure: VFC is long CVM.

Realty Trac

Readers Respond: Biotech Sector Pullback

A comment from Kenneth regarding a pullback in the biotech sector:

Hi VFC,

I noticed that the biotech sector seems to be retracing downwards after its recent run. Recent press releases from several biotech companies have not garnered much response in terms of upward price movement (for eg. AGEN's glioma trial results and Peregrine's breast cancer trial results to name a few). I have not been investing in biotech stocks long enough to know if this is just an expected retracement and that the biotech sector will recover soon or that the bubble for small biotech companies has burst and won't recover for some time. Would appreciate your input.

Thanks,
Kenneth.


VFC's Take: The general market sentiment has turned negative again, in my opinion, after disappointing unemployment and economic numbers continue to dominate the headlines. Things were looking pretty good when the DOW touched 10,000, but I would think that many investors also thought that it was time to take some profits off the table.

Because the biotech sector did enjoy such a run up, it only makes sense that it's that sector from where profits would be pulled first; it's been my observation over the years that speculative money is the first to leave the market when the sentiment turns negative - especially after run ups like the one enjoyed this year by the biotechs.

In addition to pure profit taking, let's not forget the involvement of the big boys. It's a lot easier for the big boys to manipulate the relatively small floats of small and low priced biotechs, so after stretching the profits as far as they can to the upside, the big boys will go short and pressure the stock back down, rather than just selling an moving on. That trading action causes the huge price swings in a relatively short time that has many jittery investors on edge right now.

Rather than complain about the games, I like taking the strategy of playing along with them; sell into the spike when the big boys run it and then try to buy low when the big boys short - I call it 'picking up the bread crumbs that the big boys leave behind.' I think that we, as small investors, have an advantage over the big boys when they play their games because we can move in and out of a stock a lot quicker than they can.

However, to stay on top of the games takes time, patience and a high tolerance for risk and volatility. Additionally, if one were to try and play every stock that way, it could get pretty consuming and stressful. I pick a few from the portfolio where my entry strategy has me trading in and out with a handful of trading shares while others I tend to simply accumulate for the long term, unless I see a spike that I simply cannot refuse.

As for your examples of news having no impact on the stock price, in regards to AGEN, I think the fact that the glioma trial is only a Phase II update doesn't impress investors much; Phase III, maybe. Also, there were a lot of investors that were in AGEN simply anticipating an EMEA decision and when that decision didn't turn out the way they wanted, they bailed out and left. At that point, in my opinion, the big boys shorted the stock heavily and rode it down; the question there, in my opinion, is why they did not push it down to the sub-$1 level. It makes me think that there is either another leg down coming or that Antigenics may have some other news pending that could support the current, or higher, prices.

As for PPHM, the stock rose a bit after the reverse split before coming down after the news. It was also a Phase II update and in this day and age of looking to make huge gains every night, Phase II updates will not impress anyone aside from the small investor who has a long term and PATIENT outlook.

My take on the biotech pullback summed up in a short sentence: I don't mind it because it's a good time to buy those stocks that you're looking to accumulate for the long term at a 'discount'.

In today's age - the age of true greed - the small investor has to be more confident than ever in their own DD to survive the volatility and the manipulation. This is the age where people would walk across the street, kick an innocent bystander in the back in order to swipe his or her last dollar and then walk home and brag that they pulled in an extra couple of bucks that day. Just because this scenario is played out in the anonymous cyberspace of the Internet and stock manipulation does not make it any less ethical.

That being said, it's a fact of life that you've got to deal with and that's why the small investor has to try and keep up with the games that big boys play. However, if you're confident in your DD, research and the facts, then you'll have the stamina to hold through the storm; eventually, a stock price will trade in line with the potential of a product, drug, treatment or service if the technology,science and/or market trend is real - it may just be a bumpy ride getting to that point.

As for the big boys? Let them play their games. If you're in doubt that there are coordinated attacks on stocks, take a look at the message boards when dozens of new IDs show up and spew out BS hours before market open and then for the duration of the time that they want the stock to go down. After their mission is accomplished, the board goes silent and the only ones that are still left are the long timers. It's like a swarm of locusts (or just a few clowns sitting on a computer) that fly in to incite panic, fear and confusion until their job is done.

Also, watch those videos by Jim Cramer on You Tube where he explains how it's done.
Straight from the big guys mouth regarding his days at the hedge funds.

The games will be played, it's just up to us to pick up the crumbs.

This is all just my own opinions based on experiences and observations; I call it like I see it.

Thanks for the comment, Kenneth.

Follow the money with Trading Patterns.

Follow the money with Trading Patterns.

Tuesday, October 27, 2009

Stock Watch: NVD, SPPI

NVD: Shares of NovaDel Pharma Inc traded 25% higher during the after hours trading session on Tuesday after the company finally announced news of a partnership for one of its already-approved drugs.

In the deal, Mist Acquisition, LLC will manufacture and commercialize NitroMist, NovaDel's spray treatment for angina pectoris, and pay NovaDel [copied from the press release] "a $1,000,000 licensing fee upon execution of the agreement, milestone payments totaling an additional $1,000,000 over the next twelve months and ongoing performance payments of seventeen percent (17%) of net sales."

As readers of the blog well know, I grew impatient while waiting for NovaDel to come through with a licensing agreement for either NitroMist or Zolpimist and sold a while back, but it looks like those that held on through the quiet time will start seeing some rewards for their patience.

The reason that I had sold was not entirely because of impatience (I know, I usually preach practicing patience), but I also considered the fact that potential partners did not consider the potential of either product to be significant enough to put down the up-front money required to commercialize them.

I was wrong on that point, as it turns out, since NovaDel did eventually find a partner and, with a market cap of just over sixteen million (as of market close Tuesday), it may be safe to consider the fact that NVD is moving closer to becoming a long term growth pick rather than a speculative play.

I'm now intrigued to see how a possible Zolpimist deal works out, and if the stock doesn't jump too much on Wednesday, I may pick up a few shares before any Zolpimist deal is announced. However, I would not be surprised to see dilution through a stock offering following any price spike, but there's room to work with while the market cap is low, in my opinion.

What not long ago I considered dead money, I now see some potential in NovaDel and its stock. I'm not going crazy with NVD, but with a pipeline that is still in tact and a licensing deal announced, I think that a buy for under fifty cents would eventually pay off for investors; if not in the short term, then definitely over the long term - barring any significant set backs.

I'm still a bit sceptical - a licensing deal was a long time in the making - but Tuesday's announcement is a good start and lays a foundation on which to build.

Disclosure: No position.



SPPI: I received a lot of comments and feedback regarding Spectrum Pharmaceuticals earlier this month, and in my response I stated that I was looking for a buy price of under four dollars.

The stock closed Tuesday at $4.12, not yet under four, but worth watching because the lower the stock drops, the more I believe that those investors who are speculating on a rebound will jump back in.

With the stock trading this close to four dollars, I can change course and call it a good "rebound" buying point, but I'd hold back on going in big just yet; maybe pick up a few shares now (maybe a third of what you want to put into the stock) and then try to average down.

That keeps an investor happy if the stock has a premature rebound, but also keeps money on the sidelines if the opportunity arises to average down.

I still don't consider Zevalin a blockbuster - even as a first line treatment - but you'd have to believe that sales will start increasing again instead of decreasing. I'm also looking forward to the company's meeting with the FDA regarding Fusilev. I believe that an additional trial will be required, but the FDA is so unpredictable - especially these days - that the news may not be that dire.

I wouldn't expect too much in terms of short term gains with SPPI, but at the four dollar or below level, I think we've got a decent mid to long term story brewing.

As always, just my own opinion, do your own DD before investing.

Disclosure: No position.

MR.BEER® Home Brewing Kits. American's #1 Home Brewing System. Makes a great gift!

Readers Respond: GNBT

GNBT: A comment from Myles regarding Generex:

In your September 21st commentary you said phase III results for GNBT should be out at the end of this year or beginning of next year. Will this be preliminary results because the government website says Primary Completion date is July 2010. Here is the link:

http://clinicaltrials.gov/ct2/show/NCT00668850?term=generex&rank=1

This is also a good research link to bookmark for other company studies, just cut off the link after the .gov suffix before you save it.

What other websites would you suggest for people to bookmark as their "investing tool box"? Perhaps appreciative readers can offer their most useful ones too as "pay back". It's us versus the pros. Our money is just as green!

Thanx,

Myles


Another comment regarding GNBT:

Do you think it time to accumulate some more GNBT now that it took a bit of a dip from the $0.75 area? When do you think the pre Phase III news run up will begin? If it runs to over a dollar as you suggest, that would be a fairly decent short term return.
Cavaet emptor.
Thanks!


VFC's Take: Thanks for pointing that out, Myles, there should be an 'interim' in there; it is interim results that I expect to see either later this year or Q1, 2009.

Additionally, this comment from the company regarding the current positive trend of the Phase III trial, "If the current positive trend is maintained, then a large
reduction of required enrollment will suffice for formal verification of the
non-inferiority hypothesis."
has me believing that the company could file for approval with the FDA by mid-to-late 2010 based on the results that they will have on hand before the completion of the trial. As always, that is purely my own speculation.

Also, thank you for posting the link to the clinical trials website - definitely worth a bookmark for any biotech investor.

As for my comments on DD and my sources for information, I touched on that subject in a post a while back, but I like your idea of having a noticeable link for small investors to post their sources for DD. If anyone wants to share some information sources, feel free to use the comments section at the bottom of that page for now.

I've gotten a few readers asking if I have taken advantage of the GNBT dip to below sixty cents, and I have. In previous posts I mentioned that sixty cents was my 'buy price' and I took advantage of Tuesday's drop and picked up a few shares at fifty five cents.

I'll probably sit back and wait a bit before I jump in any more - a further drop could be in store - but I think that between now and the end of the first quarter next year, as interim Phase III results come out (if they do), we could see a significant bump in stock price if those results are positive.

I also believe that pure speculation on the potential of Oral-Lyn or 'playing around' by the big boys can jump the stock to a dollar at any given moment, that's why I at least wanted in when the stock was trading for seventy five cents.

The big move up for GNBT, if one were to occur, will be in 2010 - in my opinion. I'm looking to form a nice base by then and that means that I'll be averaging down in the present time.

Disclosure: VFC is long GNBT.

Internet Florist

Just Because Baskets

Readers Respond: Investing in Stocks of Various Price Levels

An email from David regarding investments in stocks trading at various price levels:

As a separate, but interesting aside, I'm curious as to your record
of success with various price levels of stocks; for example, do you
find more success in the $1 to $5 range, or in the .10 to $1 range,
or in the under .01 range? Is there a difference in the percentage
of winners among your picks in these respective ranges?


VFC's Take: This was a pretty good questions so I split David's email into two different posts.

In order to properly respond, let me first clarify my position on what I consider to be a 'penny stock'. In VFC's House, a penny stock is a stock that currently trades and has historically traded for sub-$.01. However, I don't consider penny stocks to be stocks that had previously traded for respectable levels and got beaten down to about a penny as a result of bad news or a market crash (TTNP, MHAN). I know that is not the broadly recognized definition of a 'penny stock', but the term can be misleading because most of those that trade sub-penny stocks do so strictly for trading purposes. That's a different game than finding a TTNP or MHAN that trades for about two cents but is still largely a news-driven stock.

For all intents of purposes, I don't mess around with 'penny stocks,' meaning if it trades for below a penny, it's not my game.

However, I've had the most success with stocks that trade for between one and five cents, only because a small investor can load up on those stocks - if you find one with potential - and come out HUGE if the stock makes it. For instance, Celsius Holdings (CSUH) and Titan Pharmaceuticals (TTNP), both of which I loaded up on at sub five cents, instantly became the largest two positions in my portfolio during their respective runs earlier this year - even after I sold off some profit - but before the huge percentage gains they were far from my top holdings. Manhattan Pharmaceuticals (MHAN) and BioElectronics, while not yet posting the gains of TTNP and CSUH, still had my portfolio way in the green because - while each only posted about a six cent gain - it was still a triple in price from where I had purchased each stock.

How long is a small investor going to sit around and wait for their investment in Microsoft (MSFT) to triple, let alone post the 3000% gains of TTNP?

Don't get me wrong, you need the stable stocks in your portfolio for the long term and for the kids' education and the such, but the majority of the 'night on the town' money should go to finding stocks that have potential that are still trading under the radar. That's where, in my opinion, the biggest gains can be had and it just so happens that in my portfolio, the biggest gainers (and now some of the biggest holdings - profit taking aside) are the stocks that I had purchased for between one and five cents.

Next - and keep in mind this is strictly referring to my own portfolio - I've had pretty good success in the twenty-to-fifty cent range. I loaded up on AGEN, CVM, EPCT, etc. while the market had those stocks trading at or near twenty cents. While EPCT has not yet reached the dollar mark, the other two are more than doubles, if not triples for me this year - however, since I still like the long term prospects of both I'm 'averaging up', but by no means am I buying now at the rate I was when these stocks were twenty cent stocks.

My logic in accumulating speculative stocks is this, keep in mind this is during what I term 'accumulation phase', barring any news & even driven price moves: The higher the stock rises, the more risky the buy. The lower the stock goes, the more I'll pick up the accumulation (average down). Common sense. However, the strategy will vary after either good or bad news is released.

Another item to note is that when these low priced stocks start to pay off, it's imperative to take profits and/or start trading a few shares because just as easily as they go up, they can go back down.

I like the stable, higher-priced stocks for my IRA and kids' education funds so that I know there's money there when I need it. Whenever my 'night on the town' money pays off, I always transfer some of it into the stable stuff so I don't have everything in the gut-wrenching speculative plays. I even have a few ETFs that I invest in, but I'm not a fan of mutual funds - although one or two of my IRAs that i do not personally manage use them.

Additionally, I think that which stocks you invest in has a lot to do with how much time you have to research stocks and then keep an eye on them so you can buy and sell as need be. These low priced stocks are highly volatile and you've got to be in a position to be able to spot news releases and then to buy and sell quickly enough to make the risk and the stress of investing in those stocks worth it.

I also don't recommend these highly speculative plays for those that have weak stomachs and little tolerance for risk. You've got to have the cast-iron cajones sometimes to watch a stock drop 50% overnight and then make a rational decision as to whether it is just a better buying point or if it's bail time. For instance, I purchased my very first shares of CSUH for just over sixty cents, then a few more in the twenties and then some in the teens; however, I loaded up at below five cents because while the stock was dropping, the company continued to have the same potential that I thought it had when I bought those first shares.

I'll admit, it hurts to buy stocks as they're dropping and you've got to be very confident in your DD to do that, but if you get a good one that pays off, that one stock could instantly turn your entire portfolio into 'house money.'

A HUGE Disclaimer: You've got to be responsible for your own DD, don't invest just based on a stock tip from a friend, news source or a blog - anyone. As I've emphasized before, have an entry and an exit strategy for your stock and be happy taking profits on the way up AND be patient and remain stable if the stock drops; and never look in your portfolio and see a stock that you can't instantly identify the reason that you bought it.

Remember, the larger portion of society has been trained to believe that a fifteen percent annual gain is great; but VFC doesn't want to be old and drueling all over himself when it comes time to spend money. I say stay home a few nights out of the week, since it's play money and play time anyway, use it to find some good speculative plays with potential and pick up a few shares accordingly.

If it pays off, then take your vacations now while you can still enjoy them instead of waiting until you need Sally from the United desk to wheelchair your butt onto the tarmac in Los Cabos.

Back to the question at hand, I think that a full portfolio should have a little bit of everything, but much of what you decide to invest in has to do with your own comfort level and tolerance for risk. Maybe most importantly, you've got to identify you level of patience. While we all love quick gains, some stocks take years to pay off, and your level of patience in a particular stock should be a part of your entry/exit strategy.

This is all just my own opinion based on my own experience and strategies. Do your own DD and identify your own levels of risk and comfort before investing in any particular stock.

Zecco Holdings

Bare Necessities

IdentityTruth Inc.

Readers Respond: Raser Technologies (RZ)

In "Readers Respond" I do my best to answer readers' questions, but keep in mind that my responses to these questions are my opinions and personal speculation that I have based on my own research and DD.

Also, I will try to respond to a number of requests that I've received via email or comments to the board asking for 'VFC's Take' on stocks that readers have found. While I'll do my best to address as many as I can, please take a few things into into consideration while reading:

- I have not thoroughly researched all of the stocks that I'm about to comment on. I've done the initial DD but my opinions are mostly based on my first impressions of the stock. I'm merely providing VFC's Take, as requested. Use that as a starting point to do your own DD.

- Don't get testy if I don't like your stock. Remember, this is just my initial impression and I take into consideration some variables that other people don't, that's why 'VFC's Take' is not always the mainstream impression.

- I appreciate all the recent feedback, and keep the stock tips coming; this is a great forum for all investors of all levels to share tips and insights. There's a whole lot of stocks out there, but there's only a few gems. Let's keep trying to find those gems.

Generate income in a volatile market.

RZ: An email from David regarding Raser Technologies:

Hello, Mr. VCF (I can see from other postings that your name is Vinny
- shall we address you that way?)

You are clearly busy these days, and I wish to congratulate you on your blog (which I've started reading aside from SA) and all the good work, and esp on your sincere desire to respond to others' ideas!

I wonder if you can find the time to respond to my request for your
take on a stock which may be out of your area of expertise - Raser
Technologies (RZ). Obviously the bulk of your research goes into
biotechs, but I'm wondering if this one passes your "smell test," and
what you think about the sector as well. It fits well into the
green-tech, Obama trend but since the stock has trended down for some
time, I'm wondering if to forget about it or see its current price as
a buying opportunity? And in general what do you think about the
sector - including stocks such as US geothermal (HTM) and Nevada geothermal?

As a separate, but interesting aside, I'm curious as to your record
of success with various price levels of stocks; for example, do you
find more success in the $1 to $5 range, or in the .10 to $1 range,
or in the under .!0 range? Is there a difference in the percentage
of winners among your picks in these respective ranges?

Thanks muchly! ds



VFC's Take: Regarding Raser Technologies, it passes my 'smell test' as a long term speculative buy, however - mainly because of financing - the company has a long way to go before I'd be ready to call it a solid investment.

The alternative/green energy sector is a great one to be in right now, in my opinion, but there are quite a few companies out there that are all developing the same technology; meaning that the hard part will be finding the ones that have the best potential to succeed and then being invested in them before/if they start to make it to the big time.

Raser certainly does have a lot of potential technology wrapped up in the company, but like all other companies looking to get ahead in this sector, they don't have the financing to go-it-alone. If a big player doesn't come on board in a big way, then Raser - like others in the sector - is going to have to continue to depend on government grants to survive, or even take advantage of some of the 'stimulus' money that was to be destined to support 'green energy' initiatives.

I do like the potential of this company, if Raser can find a way to bring its technology and ideas to market on a large scale, then investors will be very satisfied over the long term, in my opinion; however, for the time being I think that financing and dilution are going to continue to be an issue.

However, it is possible that Raser can make a splash this year if its first geothermal plant (Thermo No. 1) is deemed a success. The plant, according to recent public releases, should be running at full capacity by the end of fiscal year 2009. The company has stated that revenue from electricity sold to Anaheim, California has been already coming in since the Spring, but I still think the plant - let alone the company - is a long way off from profitability, so any spike in price would be met with dilution, in my opinion.

As alwys, do your DD on this one, however, I think that the risk/reward profile is decent enough if you have a long term outlook. Government money is going to be pouring into this sector for years to come, in my opinion, so any one of these developmental energy companies that looks to have an edge could be the ones to benefit most.

Also, a buyout or licensing agreement by/with a larger power/energy supplier is also a possibility, in my opinion.

Disclosure: No position.

Young Money Creative 6

Monday, October 26, 2009

Briefs: EPCT, NRIFF, CVM

EPCT: Shares of Epicept Corp traded relatively flat during early trading on Monday after a press release issued by the company during the morning hours highlighted the "pharmacoeconomic benefits" of Ceplene in a 'cost to savings' anlysis conducted by Applied Healthcare Resource Management Inc.

The report measured the costs and potential savings (in terms of British pounds) of the British Ministry of Health if Ceplene were to be offered to patients of Acute Myeloid Leukemia (AML) in first remission in the United Kingdom.

Naturally, the cost analysis proved that the use of Ceplene in the UK, because the drug would reduce the amount of AML relapses in patients, was favorable to the Ministry's budget and was "well within the established per-patient reimbursement threshold for a new drug," according to statements contained within the press release.

This news is 'good enough' for Epicept, but I think that the only news that investors of EPCT are looking for is news of a long-anticipated partnership for Ceplene in Europe; anything else is pretty insignificant right now without Ceplene being on the market.

Myriad Pharmaceuticals is due to release an update on an Azixa Phase II trial in November, so I consider positive news regarding Azixa as offering the best chance for a short term price spike in EPCT. A couple of years ago the stock jumped to over four dollars on positive Azixa news, although that was before the latest rounds of dilution. If the Azixa update is positive and the price spikes as a result, I will most likely sell into that spike as I am growing impatient while sitting around waiting for a Ceplene partnership.

The fact that a year has gone by with no news of a partnership has me believing that the Epicept management team will not be able to get the job done. I'm holding for now, but I'll probably sell into any Azixa spike and try to get back in later after the company undoubtedly takes advantage of the price spike with additional dilution.

All just my opinion.

Disclosure: VFC is long EPCT.

Free Fast

NRIFF.pk: Shares of Nuvo research have recovered nicely to above the thirty cent level after a morning drop quickly plunged the stock to nineteen cents. The company issued an official response to Monday's trading at the request of the Canadian regulatory agencies declaring that they've got nothing new to report, but the drop sure got the attention of a whole lot of investors; some of whom were terrified at the quick and very significant percentage drop while others jumped at the chance to gobble up some cheap shares in anticipation of November's FDA decision on Pennsaid, Nuvo's lead drug that has been partnered with Covidien for US distribution.

Any insight into the morning drop is purely based on speculation, but it's not so uncommon to see such a precipitous drop in the share price of a biotech stock these days - especially not when big news is pending. Some speculation would say that bad news leaked and some big players bailed quick while others would speculate that the big boys were just playing their games and dropped the price of the stock in order for them to get in cheap themselves.

It's any one's guess, at this point, although one thing is for sure: a whole lot of stop-loss orders got taken out this morning and there's a whole lot of unhappy investors out there who lost their shares via stop-loss and then watched the price quickly rebound to thirty cents. It's for reasons like this one that I am not a big fan of stop loss orders.

If you've got a stop loss in and bad news hits sending the stock price in free-fall mode, then most likely - because your stop loss will become a market order - the price that you'll get for your stop loss is going to be well below the price that you wanted. If that's your intention - to get rid of a dropping stock - then a stop loss order is the way to go, but it leaves you vulnerable to the 'big boy' games that get played, when the MMs go looking to take out stop losses - many times before a big run.

Of note, both DNDN and AGEN had significant dips before embarking on huge percentage runs shortly thereafter.

The reason for Monday's early NRIFF drop may never be known to the likes of you and me, but the fact that the stock recovered to over thirty cents has me pretty confident that nothing has changed, nothing has been leaked and we're still on track for an early November decision. Of course, that's just my own opinion.

Disclosure: VFC is long NRIFF.

Quicken Loans

CVM: In news released by Cel Sci Corp on Monday morning, it was announced that the company has raised over "$10 million over the past 60 days through the exercise of warrants by investors to purchase the Company's common stock," according to statements contained within the PR.

Additionally, the PR stated that Cel Sci has now raised about $30 million over the past two months and the money will be used to fund the pending Multikine Phase III trial and also to "accelerate the development of its LEAPS compound for the treatment of H1N1 hospitalized patient."

It looks like the pieces are falling into place for Cel Sci, and I contend that the fourth quarter should be an exciting one for the Cel Sci story.

Disclosure: VFC is long CVM.

Net2Phone.com

Celsius (CSUH) Appears in ShopRite

Shares of Celsius Holdings (CSUH.ob) remained trading for under fifty cents after the company released two pieces of news last week; one being another distribution agreement in the Northeast - an area in which the product is quickly becoming cemented.

According to a press release issued last Thursday, two flavors of Celsius (Sparkling Orange and Green Tea/Raspberry Acai) will hit the shelves of over 200 ShopRite locations throughout six Northeastern states during the month of October.

An additional note in the release stated that the new distribution will be supported by radio and print ads in the market, although the advertising comes as no surprise to investors who are well aware that a nationwide media push has been in full effect for over a month now.

I expect additional distribution to be announced during the fourth quarter of this year, leading into the first quarter of next year, based on comments made by Celsius CEO Steve Haley during an Investment Nation interview a few weeks ago. As distribution increases, the stock price continues to trade above its current earnings rate, but at some point the potential future earnings and growth of the company could spark another run in the stock price.

The ShopeRite distribution is nice, but previous statements by the company have me believing that something bigger is in the works.

Also of note last week, it was announced that the Celsius Green Tea/Raspberry Acai flavor was awarded the CSP Retailer Choice for the Best New Product of 2009.

As the worlds' first calorie burning beverage, Celsius is making a strong push to remain the recognized leader of the functional beverage category, and the recent advertising blitz combined with the distribution growth should only have a positive effect on the bottom line.

Quarter Three results are due out soon and while I do not predict breath-taking growth, I do predict very, very solid growth.

Unless CSUH dips to the mid-thirties again I'm set in my position of the stock, but I still think we're at a good 'accumulate the dips' level, based on the future growth potential of the company.

Disclosure: VFC is long CSUH.

Monday's Briefs: CVM, AGEN, KERX

CVM: Last week I had the opportunity to visit Cel Sci's new, state of the art Multikine production facility near Baltimore, MD. During the visit, I was given a tour of the interior by Dr. Eyal Talor and Mr. W. Brooke Jones of Cel Sci Corp. Upon the completion of my visit, I came to the conclusion that the company's previously announced time frame for validation of the facility (of fourth quarter, 2009) was on target.

The tour was arranged on the efforts of BioMedReports and Cel Sci and a complete report from my tour inside the facility can be read on the BioMedReports web site.

During the tour I saw nothing that would incline me to alter my stance of playing CVM as a 'buy the dips' stock; and I continue to have confidence in the fact that news regarding the commencement of the long-awaiting Multikine Phase III trial is not too far away.

Aside from the pending Multikine trial, any news regarding the L.E.A.P.S. swine flu treatment could also serve as a price mover for CVM.

I'll continue to accumulate CVM for the long term.

Disclosure: VFC is long CVM.

Appetizerstogo.com

AGEN: After last week's forty percent drop in price, Antigenics issued an early morning press release on Monday announcing promising results for the company's Phase II trial that will measure the effectiveness of Oncophage in treating patients with recurrent high grade glioma (brain cancer).

Data from the first twenty patients treated with Oncophage demonstrated a median survival of 10.1 months, well above the historic average of 6.5 months, and slightly better than Avastin's 9.2 months. However, Oncophage gets a leg up in terms of 'quality of life' (side effects), according to the press release - an important issue for patients, as we learned from the powerful patient lobby that came to the forefront during the Provenge trials.

I'll continue adding shares of AGEN with a long term outlook, although I'll get more excited about the glioma trials as the Phase II draws to an end and the outlook moves to a Phase III success.

As for the status of Oncophage in Europe - I'm not certain that we're at the end of that road. Let's see what the EMEA has to say in November and then look at the chances of Antigenics being able to provide a valid argument for appeal. Last weeks verbal negative opinion definitely puts the time frame for a possible return in stock price off by a little while, but it doesn't kill the long term potential of the stock by any means.

Dendreon and the Provenge story showed us that cancer immunotherapy treatments are just as much a political issue as a medical one, especially when it's the small biotech companies developing products that can tear into the profits of big pharma; and had it not been for the patient lobby behind Provenge and the conflicts of interest that arose with two Doctors on the FDA's Advisory Committee, I'm not so sure that Dendreon would be primed for the success that it looks like that company will realize with a Provenge approval next year.

However, I still believe that cancer immunotherapy treatments are the next big thing for cancer treatment, although I also don't believe that the full potential of the vaccines will be realized until they can be tested in patients who still have an immune system that is not already torn apart, beat down and weakened by late stages of cancer and chemotherapy treatments. Just my opinion, of course.

I'm adding AGEN on the dips; however, I'll somewhat temper my accumulation for the time being until I see if the stock drops to sub-$1, a possibility, in my opinion, if additional promising news is not released this week leading into the earnings report.

Disclosure: VFC is long AGEN.



KERX: As shares of KERX dip down towards the $2 mark, it may be a good time to accumulate for the long term; especially if the price of the stock were to dip below the $2 mark.

In the meantime, the company announced on Monday that abstract data from the recently-concluded Phase 2 trial of Zerenex will be presented on October 29th at the American Society of Nephrology (ASN) Renal Week Meeting in San Diego.

The meeting will most likely not impact the KERX share price at all since the data has already been released by the company. The next price movers for KERX, in my opinion, will be news regarding or a start date for the pending Phase III trials.

I'm still accumulating KERX, but I'll pick up the accumulation if we see a price below $2 again during the 'down time'.

Disclosure: VFC is long KERX.

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Thursday, October 22, 2009

Cel-Sci (CVM): VFC Goes Inside the Multikine Production Facility

Investors of Cel Sci Corp (AMEX: CVM) and victims of head and neck cancer have all been anxiously anticipating news regarding the validation of Cel Sci’s new, state-of-the-art manufacturing facility near Baltimore, MD where the potentially ground breaking cancer immunotherapy treatment, Multikine, will be manufactured to support an upcoming Phase III clinical trial.

For those new to Cel Sci, Multikine is the company's immunotherapeutic head and neck cancer treatment and is the first immunotherapeutic agent being developed as a first-line standard of care cancer treatment.

The clinical development of Multikine, already deemed safe and effective in a Phase II trial and then subsequently cleared for Phase III by the FDA, has been on hold as Cel Sci dedicated the majority of their time and resources to build the Baltimore production facility. However, during the construction period when news releases regarding Multikine were few and far between, many speculated that there must be something amiss with Cel Sci, some even went so far as to question the genuinity of the company and the very existence of the facility itself; even as Cel Sci's L.E.A.P.S. technology jumped into the spotlight after the FDA became aware of its potential as a treatment for victims of the swine flu.

To put any uncertainties to rest, last week I had the opportunity to get an inside look of the Baltimore-area facility - thanks to some quick coordination between BioMedReports and Cel Sci. Hosting my tour were Dr. Eyal Talor, Cel Sci’s Senior Vice President of Research and Manufacturing and Mr. W. Brooke Jones, Cel Sci’s Vice President of Quality Assurance. Both Dr. Talor and Mr. Jones undoubtedly had more pressing duties to attend to that day than walking me around the facility, however, both were also quite proud to show off the results of their vision-turned-reality.

After spending just over an hour inside the facility, I will say that at the conclusion of the tour, it was clear to me that I had not only witnessed an inside view of a top-in-its-class facility, but that the much-hyped facility was also in the final stages of validation.

In fact, according to Mr. Jones, the facility's validation phase would most likely be completed within "a couple of months"; a fourth quarter time frame that falls in line with previously released statements by the company.

As investors and followers of the Cel Sci story well know, the validation is extremely important because once the facility is validated, then the Multikine Phase III trial can commence. Of note, and this was clarified for me by Mr. Jones and Dr. Talor, the facility in itself has already been cleared by design by the FDA and the validation that is currently ongoing is internal to Cel Sci. The internal validation will ensure that the facility meets, and then can maintain, the standards of an FDA inspection which could occur at any time. The inspections, according to Dr. Talor, have become more frequent since Multikine will now be tested in a fairly large patient population during the Phase III trial; up to 800 patients, according to the trial design described on the Cel Sci website.

As the tour got underway, Dr. Talor and Mr. Jones led me through the hallways, where I could see many Cel Sci employees hard at work putting the finishing touches on what I could only imagine was a very long and consuming process of validation. Their work was not quite done yet, as the validation process is on-going, but I couldn't help but get the feeling that within the confines of the facility, the eager anticipation of all involved filled the spaces; an anticipation that would soon give way to the production of a potentially ground-breaking cancer immunotherapy treatment; a treatment that, if it works as advertised, could potentially save or extend the lives of millions of patients, over time.

I couldn't, of course, see everything during my tour. Many areas were deemed either too 'classified' or too 'clean' for the purpose of my visit, but the inner core of the facility was most certainly an impressive maze of rooms dominated by strict standards of cleanliness and air purity. Additionally, the vigorous and measured movement-of-personnel protocol within the 'clean' areas was an indication to me that the facility is just about ready for action.

Quite possibly the most impressive area of the facility was an area that I couldn't see - the 'Aseptic Filling Room'. In this space, Cel Sci scientists will be able to conduct a 'cold aseptic fill' at a temperature of only 4°C. When pressed for details, Dr. Talor explained to me the benefits of utilizing the 4°C fill over using other available options out there, and the following statement taken from a March press release best summarizes his explanation:

"The use of a cold 4°C fill, as opposed to the normal room temperature fill, significantly increases the probability of maintaining drug activity, potency and thus potentially extending the shelf life of new biological and stem cell produced products."

Additionally, once the facility is completed, Cel Sci will become the only entity offering the 4°C cold fill on a contract basis, meaning the potential to bring in significant revenue as an added bonus does exist.

In the same March press release that I quoted above, Cel Sci's CEO Geert Kersten perfectly summarizes the decision making process behind constructing the 'cold fill room' into the facility:

"We developed this unique cold fill technology over the course of many years and built this new facility for our cancer drug Multikine at a cost of about $22 million because we had not been able to find a company that could do a true 4°C cold fill for us. The best they could do was turn the temperature down to 60° Fahrenheit, without the needed humidity control. We have now created something very unique and something that addresses a true need in the market place. Through our new service we will help advance new treatment therapies while also creating substantial shareholder value through the income from the facility."

In my opinion, I think that common sense would indicate that this cold fill capability in the Baltimore facility will eventually pay for itself, in terms of product saved and contract revenue coming in.

Also worth noting from the tour is the amount of free space available for expansion. The company has made no secret of the extra expansion space, some of which is now being used a warehouse, but all of the extra space will without a doubt be needed if Multikine proves successful in the upcoming Phase III trial.

Looking into the large, empty rooms of bare floors and bare walls gives an intimate look into the state of the facility before Mr. Jones and Dr. Talor turned their vision into reality; and the reality of a fully validated production plant is not far off, nor can it come soon enough, according to Mr. Jones. At one point during the tour he mentioned the fact that CEO Geert Kersten is on the phone often checking on the status of the validation process because, as can only be expected, "he wants to get his product moving."

For Cel Sci Corp, a small biotech that has at times struggled for survival, the future has never looked so bright. A potential treatment for victims of the swine flu has cast the company onto the national stage, but long term investors can also be confident in the fact that the long-awaited and much-anticipated start of the Multikine Phase III trial is imminent.

Of course, the production facility must be validated first, and if the information gathered from my tour last week is anywhere near correct, the fourth quarter should be an exciting one for Cel Sci and CVM investors alike.

Disclosure: Long CVM.

Vinny Cassano also authors the popular stock investing web site VFC's Stock House.

Stock Watch: MSBT, SPNG, BDSI

MSBT.ob: Shares of MedaSorb continued to run on Wednesday, closing at forty three cents, another thirty four percent to the upside. Wednesday's close makes the stock a near triple over the past five trading days and a seven-bagger over the past few months.

It's hard not to imagine a pullback after a run like that, but with a market cap of still under twenty million, I think that there is still more room for an additional speculative move to the upside based on the potential of the company's treatment for sever sepsis, Cytosorb, which is nearing the conclusion of a European trial.

A run to a dollar is plausible, in my opinion, as it gets closer to trial-results time, but I also suggest that investors who are holding from under ten take a little bit of profit on the way up; as AGEN re-iterated on Wednesday, nothing is a sure thing in the stock market.

Disclosure: VFC is long MSBT.



SPNG: Shares of SpongeTech doubled on Wednesday after the company released news that it has partnered with the Cleveland Cavaliers.

On the surface, news of the sponsorship deal could be looked at as just another sports deal for a company on the brink, but more significant to me is that this announcement may indicate that SpongeTech is alive and kicking and not destined for disaster as many are predicting these days.

Just my speculation, but regardless of whether the deal was set to be announced already or not, I don't think that the Cavs - let alone the SEC - would have let this release go out unless SpongeTech provided some evidence that they are not the sham that so many are now saying they are. That's just my opinion.

Although tempted, i did not sell any of the shares that I purchased on the cheap during Tuesday's trading; I'm giving this one a chance until we hear something regarding the re-audited financials.

That being said, if the stock approaches ten cents again, I'll be taking some profit off the table.

Disclosure: VFC is long SPNG.



BDSI: Shares of BioDelivery traded down by nearly seven percent on Wednesday to close the day at $4.53 - a price that I still consider a good one to buy for those with a long term outlook.

The recently approved Onsolis is either about to launch, or already has launched - according to recent press releases - and as sales royalties start to roll in, BDSI should start trading to the upside.

I like BDSI as a long term growth pick, now that the company has an approved drug on the market, but I also see some short to mid term benefits based on the potential of Meda to register some immediate sales numbers.

I say 'buy the dips' with this one.

Disclosure: VFC is long BDSI.

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Wednesday, October 21, 2009

Antigenics (AGEN): VFC's Take on The AGEN Aftermath and Readers Respond

AGEN: After taking a 40% hair cut on Wednesday after Antigenics received a verbal indication that Oncophage was going to be denied marketing by European regulators, AGEN will be a stock worth watching for at least the rest of the week.

It's my opinion that if good news on the Russian front does not materialize soon - or any other positive developments for that matter - then AGEN could slip back to the sub $1 territory, for the short term.

If that is the case, I'll continue to add shares. I've made no secret of the fact that I like the long term prospects of cancer immunotherapy treatments, and Oncophage is one that is proving to work; I'll accumulate accordingly.

Oncophage is being investigated in the treatment for multiple cancer indications and is currently approved for marketing in Russia. While investors have heard no news from the company regarding the commercial launch in that country, news is due in quarter four of 2009.

QS-21, the company's vaccine adjuvant, is being utilized in 20 vaccines - all in various stages of clinical trials - according to the Antigenics website.

My take on maintaining a long position in the stock takes nothing away from the fact that there's a whole lot of small investors out there that are having trouble getting to sleep at night after the forty percent haircut. I know what it's like to be just starting out and only having enough cash to risk and investment in a few stocks, and then to watch one of those few take a dive. It sucks - no doubt about it.

But Wednesday's over. Pick yourself up, dust yourself off and move forward; BUY, SELL or HOLD based on your DD, not on emotions. It's the ones that quit the game that lose the most. It was tempting for me to give the game up when my portfolio was sitting at over a 50% loss during the depths of the recession in March, but I took a few Rolaids and bought the heck out of the stocks that everyone was selling and it's turned out to be one heck of a year.

The lesson there is that you get your ups and downs, but don't change your overall strategy that's worked for you before; aside from taking into account a few lessons learned.

As for my take on AGEN moving forward, I'll now conisder the stock a mid to long term speculative play instead of a short to mid term play. Wednesday was one chapter in a long story. Let the peanut gallery jump up and down for a day and enjoy watching a few small investors lose money, but rest assured: Antigenics is not shutting off the lights and closing the doors, there's still potential in the company, its products and the stock - in my opinion.

As always, do your own DD and judge for yourself whether the risk is worth the reward and invest accordingly.

I will say this, however, if you're new to the biotech game and Wednesday's dip has you losing sleep, kicking the dog or shouting at wifey, then I suggest investing in a more stable sector or in already-established stocks. It's important to balance dabbling in speculative investments with your own well-being. You don't want it to consume you. If it has, take some time off and come back refreshed and with a clear mind.

Disclosure: VFC is long AGEN.

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With all the attention that AGEN received today, I'll hit a few comments and/or emails before calling it a night.

The following comment is from Fer, referencing a couple of articles written by Feuerstein over at TheStreet.com:

Hi VFC,
I would like to know your opinion on Feuerstein today's article on AGEN at The Street. Please note I'm not his admirer but I believe he has a point.

http://www.thestreet.com/story/10614603/1/europe-rejects-antigenics-cancer-vaccine.html

http://www.thestreet.com/story/10596882/1/antigenics-vaccine-booster-baked-into-valuation-biobuzz.html

I'm mainly concern on his following statements:

1. Oncophage failed a pivotal phase III study in kidney cancer and a pivotal in skin cancer.

("Antigenics has previously stated that it cannot seek Oncophage's approval in the U.S. because of the failure of the drug's phase III study.")

2. "The timeline is uncertain at this point," said Sharp, when asked about reimbursement negotiations between Antigenics and the Russian government.

3. "Antigenics will only earn a small royalty on sales of vaccines that include QS21 and this expected revenue doesn't even support the company's current valuation."

"The company's royalty rate for its experimental vaccine adjuvant QS21 ranges from 1.5% to 6% depending on the vaccine, but is generally in the low single digits, said CFO Shalini Sharp in a response to my question after her presentation."

4. "... less than 24 hours after announcing the Russian approval of Oncophage, the company went out and raised $21 million through a PIPE, or private placement sale, through Rodman & Renshaw..."

I'm wondering why do you think Oncophage would be approved in Europe after failing a Phase III study in USA.

How come USFDA and Russia views are so different?

What do you think about Feuerstein's valuation of the company?
If I'm not wrong well below $2 a share taking into account QS21 approval and marketing.

I want to add that I'm heavily invested in AGEN.

Thanks a lot.
Fer


VFC's Take: I'll admit that I haven't read Feuerstein's blogs recently, I only glance at the headlines as they pop up on Yahoo Finance.

I'll address your questions and offer my take:

Q:I'm wondering why do you think Oncophage would be approved in Europe after failing a Phase III study in USA.

VFC: The subset of patients who were shown to benefit from Oncophage were those patients who had earlier stages of cancer. It's long been my opinion that cancer immunotherapy treatments - since they utlize a patient's own immune system - would be more effective if a patient still had an effective immune system which the treatment could utilize to fight the cancer. Once the cancer and chemo treatments have ravaged a patient's immune system, common sense says that a treatment that would utilize that immune system would be less effective. I think that Oncophage is providing evidence to that theory and over the long term I believe that cancer immunotherapy treatments will be tested in patients that have earlier stages of cancer.

I've always stressed here that the regulatory agencies are a fickle bunch, but eventually I think that approvals will catch up the 'earlier stage of progression' data - if that trend continues.

Keep in mind, I don't work in the medical profession, so I'm using discussion with some people in the cancer field and my own common sense to base my judgements.

Q: How come USFDA and Russia views are so different?

VFC: This is Geo-Political question that has to do more with culture than anything else, but as far as Oncophage is concerned, many of the subset of patients that benefited from the treatment were in fact Russian - according to previously released reports.

I also believe that Russia had a bit of that 'medical tourism' that I discussed on Wednesday in mind. Emigration is a huge problem in that country right now and giving the wealthy access to a treatment that they cannot get anywhere else is a way to draw in additional 'tourists'.

However, I get the feeling that the Russian government balked at re-imbursing costs of the treatment for anyone - even their own citizens. The economy has taken a slide in a drastic way in Russia and I'm not certain that they are willing to find the extra money to pay for re-imbursement - especially to a foreign company. that is what I believe is the hold up regarding the Russian launch.

Q: What do you think about Feuerstein's valuation of the company?
If I'm not wrong well below $2 a share taking into account QS21 approval and marketing.


VFC: I'm not sure where he values Antigenics, I haven't read his blog posts, but I will say that he has a habit of picking stocks that have posted huge runs and then say that they're overvalued. That's easy. Let's see him start picking some 'diamonds in the rough' that are undervalued, based on potential. Granted, he does that once in a while, but I think he'd rather find a stock that just gained 1000% and go out on a limb to say that he thinks it will drop.

Thanks for the comment!

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From Ian:

HI VFC,

I would also like to hear your answer to Fer's question above. Why do you think that Oncophage is still feasible when the USFDA disapprove it?

Thanks
Ian


VFC's Take: Thanks for the comment. The USFDA never disapproved Oncophage. Oncophage did not meet the endpoint of a Phase III trial so the treatment never made it to the FDA for review.

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From Srini:

Thanks VFC,

I been following you for the past 2 months. After DD, I am one of the investors who pulled the plug in AGEN at $2 level. It came as a shock to me this morning to watch my portfolio. I logged back into my account if there is a mistake with the price. After checking the news about AGEN the first think I did is to check you blog. Believe me your post made me feel very comfortable. I am going long on AGEN with their potential. I am a small invester and I would like to average down. Do you think AGEN will hit sub dollar?
Like Rocky "Yo VFC (Adrian)"Thanks and keep up the good work...

-Srini


VFC's Take: I do think that AGEN will hit sub $1, unless good news is released in the short term that would add potential value to the company and the stock. In fact, I would have thought that AGEN would have hit below the dollar mark on Wednesday. It's my opinion that either the big boys are playing their games and taking a breather before dropping it again or there may be other news pending that is propping the stock up for the time being.

If you're already in, my opinion is that it is worth waiting to see how low she drops before adding. That's just my opinion, invest according to your own DD.

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From Alejandro:

Hi VFC
Two Lessons learned!!!
Take profit at any spike!!! and only the money in your pocket is real.
I didn´t do that with AGEN when I had the chance because I thought that being aproved in Rusia it had real good chances to be aproved for EU, but apparently I was wrong...
Today I lost the same money I had earned with cvm some weeks ago, that means I have to start again.
Impatience about your thoughts on AGEN (as many others here)


VFC's Take: Two very, very important lessons for everyone, take some profit and a gain is only a paper gain until realized. These lessons are especially important for those investors that have not yet built a cash reserve to have in store in the sidelines.

I will say, however, that don't be discouraged from doing DD and sticking to your basic trading strategies. One good hit on a speculative, low-priced stock (MSBT, TTNP, CSUH) can set up that cash reserve for a long time; althoguh it takes a lot of patience, time and determination to find a gem like that. Just my opinion.

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VFC,

I'm sure you are being innundated with questions about CHMP's negative decision on AGEN and the subsequent drop. Nevertheless I am curious what is your take on the company moving forward? The FDA is even tougher so it may be time to jump on AGEN.

Thanks!


VFC's Take: I wouldn't blame anyone for jumping ship after Wednesday's news, it's definitely a setback. Those sticking around will need a bit of a longer term outlook. I'm one that is sticking around for the long term.

Thanks for reading, and Wednesday was a tough day - I'm right there with ya - hopefully everyone had another stock or two that went up to offset the AGEN dip.

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