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Wednesday, November 25, 2009

Briefs: CVM, CSUH - And Thanksgiving Thoughts



CVM: In response to some feedback from readers regarding my previous post abou Cel Sci Corp., I want to emphasize that the "residents of Whoville" that I referred to in that post include the entire class of investor that had previously been inclined to give up a portion (or all) of their shares each and every time Feuerstein wrote a negative piece about the company.

It's my opinion that either potential and existing investors are starting to see right through the biotech blogger's games (which, in my opinion, is either a personal vendetta or a quest for clicks) and/or the shorts and stock manipulators have not been able to play their games quite so freely of late.

Additionally, I did not give mention to an MIT "Technology Review published Tuesday morning. The positive review on LEAPS and Cel Sci is what most likely incited another 'hate Cel Sci' article from TheStreet.com - in my opinion.

As always, each investor should do their own DD and invest accordingly. By no means should anyone buy or sell a stock based on my views, the views of the TheStreet.com's biotech blog or what they read on the message board. Solid DD allows an investor to hold with confidence through the storm (volatility) that is biotech investing. (However, that's not to say that I don't recommend having some 'trading shares' on hand to play the volatility.)

I'll be looking forward to some pending fourth quarter news updates from Cel Sci, the next of which should be either the validation of the Baltimore area manufacturing facility or an update on the Johns Hopkins LEAPS trial.

Disclosure: VFC is long CVM.



CSUH.ob: The recently battered stock of Celsius Holdings limps into the holiday season trading at the same level that it did about five months ago, before high volatility led to a series of fairly significant spikes and dips based on speculation and potential for the future.

The Celsius story is still unwinding, although it looks as if many impatient (live for today and tomorrow) investors bailed on news of significant dilution and that the company would also undertake a 20:1 reverse split in preparation for a move to the AMEX.

I continue to maintain that it is far too early to judge the success of this company and its product - the world's first calorie burning beverage - and as CEO Steve Haley mentioned many times before, 2010 should be one of huge growth for Celsius.

In my opinion, the fact that the company is even entertaining a move to the big boards at this point is a telling sign that distribution will be in place by then to support a growing ad campaign and - this is the most important factor - growing revenues.

Once potential consumers - who are trending towards healthier beverages anyway - key into the fact that Celsius is not 'just another energy drink', growth could hit with a boom and sales revenue should follow.

In the meantime, long term-minded shareholders are chomping at the bit to purchase the CSUH stock for levels that could be considered a speculative discount.

The volatility is far from over, in my opinion, and if sales revenues cannot support the post-split stock price, then the slide in price could continue.

I would base additional buys based on your own opinion of how quickly sales numbers can grow; if you're in the boat that sales numbers will grow significantly enough in the fourth quarter of this year to support the immediate post-split price, then adding shares now would seem like a good deal.

If you're in the boat that sees another quarter or two of growing distribution before significant sales growth kicks in, then I'd wait until post-split to add shares.

I think that Haley is setting this company up for a big 2010; and based on the CEO's previous comments, I expect to see 'full distribution' by March.

In my opinion, if you're speculating on the success of the product and the company, you want to be in well before that point.

I may add a small amount of shares at the current prices, but I'm mainly going to wait and judge the post-split trading action before adding much more. One thing is for certain, if sales numbers cannot support the market cap when/if the company hits the AMEX, then that opens up the possibility that the shorts can have a field day with the stock.

It all comes down to the consumer. We can all speculate on the future until we're blue in the face, but it's the consumer that has the power to make or break this stock.

I'm a fan of the product; it works, it's backed by clinical studies and I've seen people who try get hooked on it and Steve Haley has slowly and methodically built this story from the ground up - therefor, I'm speculating that this company will ultimately become a nice success story and I will hold/add shares accordingly.

Disclosure: VFC is long CSUH.



Happy Thanksgiving to everyone, I appreciate the readership, the comments and the thoughts that are brought to this board. Amid the riff-raff that sometimes join us, for the most part their are honest, hard working investors out there that always bring something to the table and I think that we are all more informed investors because of it.

On the day of Thanks, let's also try and remember those in our own country and all over the world who are far less fortunate than we are - the unemployment lines are long, and wars, starvation, guerrilla actions and diseases are claiming the lives of innocent people everywhere as we settle around the turkey table with our own family and friends for the holidays.

As you raise the glass to offer a toast on Thanksgiving Day, offer at least a silent shout out to those who are not so lucky to even have the means to put food on the table, let alone buy shares in a company.

Happy Thanksgiving, all, from VFC's Stock House.

You guys make this fun.

Vitamin World

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Tuesday, November 24, 2009

Briefs: CVM



CVM: Shares of Cel Sci Corp. continued to hover right around the $1.30 mark even after TheStreet.com's infamous biotech blogger thrust his most recent blogging salvo at Cel Sci in an attempt to keep his ongoing vendetta against the company alive - for reasons that are still yet to be known.

We can only speculate as to why Feuerstein spends so much time attempting to attack Cel Sci, but in my opinion, the reasons range from hooking up his friends who are either short the stock and looking to cover and/or hooking up his boys that may want in on a good thing. Additionally, any article regarding Cel Sci will undoubtedly draw many 'hits' to his blog - and those hits are very important for advertising revenue when your living is blogging; hence the need to both stretch out one article over multiple pages (one reader then accounts for multiple hits) and the need to make sure that a Cel Sci article is somehow attached to another published article that has nothing to do with Cel Sci. Pretty slick, I guess the past few days will make up for the lost 'clicks' due to the Thanksgiving holiday.

As for what's important - Cel Sci - news regarding the validation of the Baltimore area manufacturing facility has to be imminent, when considering the previous time frames announced by the company; and once the facility is 'good to go', I would expect an announcement stating that the long-awaited and much-anticipated Multikine Phase III trial is finally set to begin.

Any updates from the Johns Hopkins LEAPS/H1N1 trial would be an added bonus, in my opinion.

The holiday season is ripe, and regardless of the amount of time that the grinch is spending trying to ruin the holiday cheer for shareholders of Cel Sci, it looks like the residents of Whoville are starting to ignore the incessant and highly predictable griping of the grinch.

In my opinion, a few shares of CVM as stocking stuffers for this holiday season could pay off very well down the road - based on the potential of Multikine and LEAPS.

As always, each investor should do his or her own DD and invest accordingly.

Disclosure: VFC is long CVM.

Boden

Briefs: SIGA

Golfballs.com

SIGA: Shares of Siga Technologies, Inc. broke the eight dollar mark Tuesday afternoon on anticipation of the possibility that some big government orders could be imminent.

BioMedReports issued a mid-day trade alert on Tuesday, alerting readers that the recent price action of the SIGA stock could indicate that news is pending.

If news hits that the government has in fact placed a big order with SIGA, the stock could move fairly significantly as shorts cover and new investors buy in based on the possibility of additional orders from the government.

While I'm not an owner of the SIGA stock, I am the owner of some call options that I will hold in anticipation of news.

If an announcement of government orders does hit - SIGA shareholders may enjoy a very happy holiday season.

I don't suggest chasing a stock without doing the proper DD, but when the government likes a company - that company could turn out to do very well in the future as additional government orders becomes an immediate possibility.

Keep an eye on SIGA.

Disclosure: No position in SIGA, long some call options.

Cafe Britt Black Friday & Cyber Monday

Monday, November 23, 2009

Readers Respond: AGEN



With Antigenics back in the news after the EMEA officially recommended against approving the company's kidney cancer vaccine (Oncophage) in Europe - followed by the subsequent withdrawal of the approval application by Antigenics - a few readers of VFC's Stock House have requested comment.

An email From J.B.:

Well, the news is now official re Oncophage in Europe. What do you think the "formalization" of this decision will do to AGEN now? Appreciate your insight, candor and humor.

J.B.


From Anonymous:

Hey VFC, why haven`t you comment on AGEN? This stock just keeps falling, and we who follow your website would appreciate an update on this stock you have been recomending for some quite time. Thanks.

From Playtrader:

Just hold your AGEN. This happens a lot. Just put it on the back burner for a while and before your know it, it comes raging back to life. It takes a lot of intestinal fortitude and some big kahunas to play the market.

Bare NecessitiesBare Necessities

VFC's Take: I appreciate the comments. Please keep in mind that I attempt to keep up on all the stocks that I cover or mention, but this blog - and stock investing in general - is a hobby of mine and sometimes I'm pressed for time. I try to get to all the emails, comments and updates that i can, but I can't get to all of them, all the time; but I do appreciate the feedback, comments, questions and stock tips. Keep them coming!

That being said, here are a few of my latest posts regarding AGEN since the EMEA negative vote sent the stock spiraling downward:

Long Term Potential of AGEN is Still Alive
Biotech Sector Pullback
Cancer Immunotherapy, The Next Big Thing For Cancer Treatment
Antigenics: The Aftermath
Antigenics to Anticipate a Negative Opinion Regarding Oncophage Approval in Europe

As I've mentioned in the above posts, my long term opinion of AGEN has not shifted, although I no longer believe that the short term potential is as great as it was before the European news hit.

After it became apparent that Oncophage had no immediate future in Europe, along with indications that news regarding a launch in Russia was not imminent, I stated that AGEN would move to the 'Phase II' section of my portfolio alongside such stocks as PPMD, PCYC and KERX.

News from the Phase II glioma trial has been encouraging and I also continue to believe that Oncophage still has a future in treating kidney cancer, based on the subset of patients that received the treatment earlier along in the progression of the cancer; but it is a matter of whether the company will be able to secure enough financing to conduct the additional Phase III trial that may be required for approval in the United States or Europe.

Short term, QS-21 can potentially move the stock - although not to extreme levels - and if Oncophage ever gets off the ground in Russia, then I think that AGEN may get a new lease on life. Many investors do not predict any serious revenue being generated from sales in Russia, but I tend to believe that medical tourism and rich Russians and Western Europeans looking for alternative treatments could find solace in Russia - which would be the only country in the world currently offering a cancer vaccine such as Oncophage as a treatment.

Additionally, evidence from a subset of the Oncophage Phase III trial shows that the treatment works effectively on those who received it at earlier stages of disease progression (that is the subset on which the Russian medical authorities approved); and that evidence falls in line with what I consider to be common sense - if an immunotherapeutic agent is used to boost an immune system, it only makes sense that it will work better if it is used on an immune system before it is degraded by chemo, radiation and extremely progressed cancer.

Just my opinion - but I believe that future trials will allow these cancer immunotherapeutic treatments to be used on patients that still have an immune system in tact and the results will then be much more favorable to the treatments.

It's been no secret here that I believe that cancer immunotherapy treatment is the next big thing in cancer treatment, and AGEN - in my opinion - has much to offer to that transformation of care; hence the fact that I will take advantage of the dip in the stock price to add shares to my long term portfolio.

In stock investing (especially when dealing with highly speculative biotechs) you've got to be able to take the dips as well as the spikes - but you've also got to be confident in your DD to be able to stomach the dips.

If you're a patient investor with a long term outlook, then AGEN is still a decent pick - in my opinion. Those looking to make their huge gains overnight - I wouldn't consider AGEN having the same short term potential that it carried a few months ago, although there is the chance that short to mid term gains can be had with the right news.

Disclosure: VFC is long AGEN.

Vitamin World

Readers Respond: MHAN, CABL



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.

LEGO

MHAN: A comment regarding Manhattan Pharmaceuticals:

What is your take on MHAN? They put out a 10-Q on Monday and the volume hit 1 million shares, but not much price movement. My reading of the 10-Q suggests any revenues from Hedrin have been pushed to next fall. So was Monday a sell off, or am I reading something wrong?

VFC's Take: I agree with your reading of the 10-Q; that document, and previous announcements by the company have indicated that Hedrin could receive FDA approval some time in the first half of next year. If that is the case - and the FDA does ultimately approve the product - then the time frame of expecting revenues by fall of 2010 is realistic.

Before that time, however, the company is going to need cash to survive. Although the 10-Q mentioned the possibility of licensing some of its products (most likely those acquired through the recent merger with Ariston), it's just as possible that additional dilution could be coming our way, so I'm going to wait and see how that scenario plays out before adding to my position - unless the stock dips to below five cents, at which point I'll add regardless.

Since we're not looking at imminent FDA approval, I see another dip below five cents as a possibility before an upturn in anticipation of possible trial/FDA news early next year.

Also, for those new to MHAN, keep in mind that Manhattan only has rights to Hedrin (a pesticide-free treatment for head lice) in North America. The company has no claim to overseas sales of the product.

For the short term, I'll continue to hold this stock, but I'll add if it dips low enough.

Disclosure: VFC is long MHAN.

HOLIDAYS GIFT REPORT at FORZIERI.COM

CABL: A comment from Martin regarding China Cablecom Holdings, Ltd.:

Hi VFC!
I came across a Chinese stock, CABL and it seems very undervalued right now.

What are your thoughts about it? They're a cable company, earnings in about two weeks, good EPS so far this year and growing number of clients. They also bought back debt, they're in good shape IMO.

I really don't understand why this stock is so low.. I'm thinking about investing in it to gain back my CSUH losses (I sold in a panic because I had lost a lot already)


VFC's Take: My first comment would be to differentiate any investment in CABL from a CSUH loss. From my experience, when you start looking at an investment "to make up for" losses in another stock, that could start getting us into trouble. While diversification is key, each and every investment should be independent of each other and each should come with its own entry and exit strategy -in my opinion.

Regarding China Cablecom Holdings, while I definitely see potential in the stock - especially with the hype of increased revenues and subscribers leading into the December earnings report - I'm hesitant to jump in right now because I know absolutely nothing about the Chinese cable market and I'm also sceptical about business practices over there; sceptical enough to where I would have to consider any investment into a Chinese company as a 'trade play' and not a long term growth investment. How do I know that subscriber growth is not the result of some suit kicking down doors telling people that they're now subscribers? We know what the Chinese Government's version of 'free' means.

That's just my opinion and I know there are many that disagree.

That being said, I'll buy into American companies investing in China because they have to answer to us at the end of the day, and just have to 'pay due' to the Chinese Government.

But back to the CABL stock, if current investors are really that high on the upcoming earnings release, then a short term spike is possible. I wouldn't go 'all-in' with this one; if the stock attracts you then use about half of what you'd want in the stock for an 'up-front' buy and then try to average down. If the earnings incite a run-up in price as some are predicting, then you won't miss the boat - but you're also protected if the stock continues to decline in price.

Judging by the current hype around the stock, if earnings aren't terrific then some impatient players are likely to bail out and move on. Remember, the same thing happened with CSUH when third quarter earnings came in below estimates; those in for the short term bailed and the stock sank as a result.

The same could happen to CABL.

Just my opinion.

In short, I definitely see the short and long term potential of the company and its stock, but I would say proceed with caution - as with any investment.

Disclosure: No position.

Bare Necessities

Friday, November 20, 2009

Readers Respond: Feuerstein's Comments regarding CVM, BIEL

An anonymous comment regarding Feuerstein's latest comments on CVM

Have you seen the newest article from AF?

http://www.thestreet.com/_yahoo/story/10629106/1/biotech-stock-mailbag-fda-playbook.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

Someone asked a question about DSCO and CERS and he went out of his way to say CVM is full of bull. Notice he didn't say a word abou their work with Johns Hopkins or their new facility. Its like he goes out of his way to drive the stock down. I really question this guy's motive.


VFC's Take: I agree, and as I've stated before, I believe that Feuerstein operates with motives other than simply reporting the news and commenting on it.

His blog posts have appeared with suspicious timing, in my opinion, and the fact that when he did go positive on a stock (BDSI), it was when a hedge fund was looking to exit the stock and surely benefited from the higher price that resulted from 'TheStreet.com' buy recommendation.

Coming from another angle, however, there's no doubt that Feuerstein's day job of blogging for the 'TheStreet.com' benefits anytime he mentions a popular stock because it draws viewers to his page. At the end of the day, he needs to attract readers to keep his job as top biotech blogger, so I think that stocks like DNDN, CVM and BIEL (among many others) will be mentioned as much as he can fit them into a blog post in an effort to draw as many viewers as he can.

After all, the man's gotta eat.

I noticed that I get a lot more viewership to my own blog when I post about a hot stock, that's what keyed me on to Feuerstein's game.

Another neat trick that he does to pump his 'clicks' statistics is making a one or two page blog post into an eight page ordeal. You read about a paragraph and a half of his article before having to click to the next page. All those clicks count as a click even when it's just one viewer clicking eight times to read one article, I'd presume.

Regarding the article (BIEL was also included in the most recent), I don't read his stuff anymore unless someone posts it on a message board. I've rarely felt that I got an un-biased view of a company or a stock from his blog postings and since I feel that 'TheStreet.com' has an agenda different than my own, I don't give them the clicks - especially not eight of them.

Manipulation can control the day to day price action of a stock, but overall, a good company and a good product combined with an investor's own DD will win out.

And as the reader who posted this comment mentioned - you can't have a conversation about CVM without including the ongoing Johns Hopkins study; any study being conducted in conjunction with JH gives instant credibility to that study.

More than likely, Feuerstein was trying to put a subtle CVM bash in that article, but he was also undoubtedly looking for a few clicks to his blog.

Disclosure: VFC is long CVM.




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Readers Respond: CSUH Financing Fears (Again)

To be fair, I'll address the recent Celsius financing again this week, but this is a dead horse at this point.

Either you believe in the company and the product or you don't. VFC's Stock House is not the CSUH Yahoo!

Message Board where the same one or two people use multiple IDs to beat the same issue into submission over and over again. I like to entertain both sides of the story here, so I'll give fair time to any oppossing views - but the same old rumbo-jumbo isn't going to cut it.

It's time to come up with something new. Here's another one from Scott:

VFC,

I'm beginning to believe that you don't understand finance. I don't want to believe that, but your use of allegories in substitution for mathematical facts is leading me to that conclusion.

This is not "fear of dilution" as you say, it is real, hardcore dilution. Not a threat, real honest to goodness, in the flesh dilution. Now, how does the investor protect himself from losing the value of his/her original investment, if he believes so strongly in the future of Celsius?

You must match each round of dilution. In this case, you would have to buy 25% more stock when the stock drops due to a 25% dilution, so that your original investment remains whole. So, if you want to keep pace with the last month's "financing deals", double down to match Carl and then add another 25% to that to match the registration offering. Now you are even, in shares anyway.

Just saying that you don't get scared when financing deals come along does not let your readers know what is happening to their investment. I hope I cleared this up for some people. That is the only reason I've been posting on CSUH.

Good luck to all invested, like most people, I love an underdog story.

Scott M


VFC's Take:

Scott, is it March already?

When dilution occurs, then potential profits are also diluted - we got that. That's obvious.

The point is, if the company can grow a lot more and a lot faster with the influx of cash now, then today's dilutive effect could turn out to be a wash in the long run; because let's face it, without money to advertise and raise awareness, then Celsius goes nowhere; especially if one of the big boys in the beverage industry comes up with their own version of Celsius (not talking Enviga) and immediately has that product at 'full distribution'. I think that is highly possible and I think that is why Haley is pushing to make a big splash now.

In that scenario, if Haley decides to go the status quo and not dilute, the shareholder would be happy to know that the value of their shares was not diluted - but they'd be pretty disappointed if Celsius trickled along and allowed one of the big boys to make their big splash first. Then the value of an investment would drop with the stock.

However, if as a result of the dilution the company is able to grow on a massive scale - a scale a lot higher than would have been allowed without the funds raised by dilution - then the dilutive effect turns into a wash because growth will have reached levels not possible without the money raised.

Of course, we're speaking hypotheticals.

It's like the Obama Adminstration claiming that they 'saved and created' jobs.

I happen to believe that an investor's original investment will actually end up being worth more down the road as a result of the dilution than it would have had the dilution not occurred. Why?

Because I think that it's imperative that Celsius become a household name as soon as possible, before one of the big boys comes up with their own version of Celsius - and not Enviga, one that actually catches on.

So, yes, Scott's mathematical equations for the dilutive effect are spot on - but here's one thing that a math equation cannot account for: The fact that the dilution allows for more growth than would have been there without it.

I'm not a tree kinda guy, I look past the tree and see the forest.

Now, if Steve Haley and the board were to start using the funds raised through this dilution to buy house boats and head to Scores instead of growing the company, then I'd be worried; OR if dilutive deals were to continue AFTER the product has become a success and the company no longer needed to dilute, then I'd be gone.

So far, that hasn't been the case.

In my opinion, Haley has plans for this money - plans that will allow Celsius to grow to a higher level more quickly than would have been possible without the dilution. So, I emphasize again - if the dilution allows the company to bank more profits at a quicker rate, then an investor's investment that looks diluted today - could be worth more down the road than what it would have with less and slower growth.

Is the ante upped right now? Yes.

But if you don't take risk, you don't get results.

Right now, I repeat, it all depends on how Steve Haley spends this money and how well Celsius is received in the market place.

I also emphasize that if you're an investor that has no stomach for risk and dilution, then you've got to stay away from speculative stocks.

Disclosure: VFC is long CSUH.

Readers Respond: CPYE, OVIT

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.

optionsXpress

CPYE.ob: An email from Conrad regarding Conspiracy Entertainment:

Hi There,
I wanted to thank you for your well reasoned thoughts and patience with all the different investors. I have followed you for a few months and made decisions which have been good - CSUH, MSBT, CVM and not so great BDSI, but it has only been around 4 months so they can all turn around for the better or worse..

I did want your thoughts on a little company - CPYE. It seems to fit your bill and I think has some good potential.

I am definitely looking for some more of your thoughts on companies that are still in the single digit penny range.

Best,
Conrad


VFC's Take: I like the portfolio - holds a lot of potential. Celsius should hit 'full distribution' in 2010 and I like the prospects of that product catching on with the right advertising supporting it.

Hang in there with BDSI, in my opinion; once the Onsolis sales numbers start rolling in and/or we get an update on the pipeline, that stock should well recover.

As for CPYE, I do see some potential with the stock and it passes my "smell test" of being a valid speculative play with some potential, but with that being said, I personally tend to shy away from 'video game' stocks.

In my opinion, it's a fiercely competitive market and a company can really only wrack up significant sales numbers if it were to release multiple hits. I'm not a video game guy and I know very little about that industry or the consumer trends in that sector; and I have no idea of what would constitute a potential hit game, so like I said - I tend to stay away.

If you ask VFC about video games, I'd take Pong, Asteroids, or anything else on my Atari 2600 and be happy with it.

Evidently there are high hopes for Conspiracy's Wii Firefighter game and there are up to fourteen additional games due to be released in the coming year, so the potential to generate significant sales numbers may be there.

I'll leave this one for the gamers.

Disclosure: No position.

Lord of the Rings Online

World of Warcraft 300x250

OVIT.pk: A comment from Alejandro regarding OncoVista Innovative Therapies, Inc.:

Hi Vfc
I would like to know your take with OVIT.
Thank you very much

Good luck


VFC's Take: OVIT definitely passes the VFC 'smell test' as an early stage, speculative biotech play - especially while the stock is trading for about fifteen cents with a market cap of three million.

Although not having a product beyond the Phase II stage, OncoVista is already pulling in revenues from sales of AdnaGen in Europe. AdnaGen is a patented cancer diagnostics kit that is used for the detection of circulating tumor cells in patients with breast, colon, ovarian and prostate cancers. AdnaGen is developed and sold by OncoVista's subsidiary in Germany, AdnaGen AG.

OncoVista's most advanced pipeline product is a Phase II ready treatment for metastatic breast cancer, Aviation Upgrade Technologies, Inc. According to the most recent quarterly report, enrollment should soon begin - assuming that the company has working capital available.

Cordycepin, the company's next most advanced product that treats a type of Leukemia, has been granted Orphan Drug Status by the FDA.

The company also has additional pre-clinical products in the pipeline.

While OVIT holds some long term potential as sales of AdnaGen potentially increase and the pipeline advances, financing will always be a concern for the time being.

Good long term speculative play, but as always with these early stage companies, I'd try and trade the spikes and dips in order to reduce my overall risk exposure by the time the products reach Phase III. With a current market cap of only about three million, I think that trading into one or two speculative spikes could have you playing on house money before long.

OVIT is worth the DD time, in my opinion, for those with a long term outlook.

Disclosure: No position.

Everbank MMA 200 x 200

Thursday, November 19, 2009

Readers Respond: MHTX

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MHTX.ob: An email from E. Spencer regarding Manhattan Scientifics:

VFC - any idea what caused the enormous volume and price spike to MHTX? their site said that they had a first ever profitable quarter but the volume is nuts. bought some after reading your last article and learning more about the company.

VFC's Take: When I saw the price spike and the volume, I took it as that the 'first profitable quarter' news had finally sunk in and investors were reacting accordingly.

However, there is also the possibility that there is additional news pending; maybe something from the Carpenter/nano-metal technology front. I've always said that if that light-weight metal alloy technology makes it to market, the potential applications are endless. If in fact Carpenter has something big lined up for that technology, then I'd expect to hear some revenue guidance from Manhattan before long.

I think that Manhattan is still trading under the radar, so I wouldn't be surprised to see the stock run a little bit more as potential investors discover the technology held by the company, but I think that significant news would have to be in store to justify the market cap going much higher.

One thing is for certain, things are getting interesting for shareholders of MHTX.

Disclosure: VFC is long MHTX.

Just Because Baskets

Readers Respond: CSUH

Insuranceagents.com LLC

A comment from Shep regarding Celsius Holdings:

I wasn't heavily invested in this one compared to some others in my portfolio. Gotta be honest however and say I was looking towards a nice run up to a buck or more and perhaps cash out w/ a nice double or better. Getting listed on a major exchange can only be a good thing in my view, but at the expense of most of my shares??? That sucks. I think it's going to be a long time if ever before I recoup my initial investment however small it may have been. As I do my math today it becomes apparent that the only way to come out ahead in a reverse split is to have many, many, many shares on hand (assuming the new share price is sweet enough). If you only have as we say "night on the town" money invested then your odds of being out of luck are pretty high. Remains to be seen what happens with this one and I'll stick, but I hope not many more of my holdings go the reverse-split route.

VFC's Take: I'll attempt to respond to a few comments and emails here, not just Shep. Here's the immediate point to be made: this is a game of market cap, not share count. The number of shares we own is going to be significantly less, but the value per share - in terms of percentage of the market cap - remains the same.

If you bought twenty shares for a buck each ($20 investment), then you'll be left with only one share - but that share will be worth $20. If the market cap were to eventually double from where you originally bought, then your original investment is going to double as well - whether it's twenty shares you hold or one. The only difference is that a 10% gain when your share trades for a buck is ten cents, where a 10% gain on a twenty dollar share price is $2.

The bottom line is that nothing has changed in terms of future potential - it all comes down to how well the product sells.

It's a psychological factor to have a greater number of shares, but it's the market cap that matters and if future sales justify a higher market cap, then our investments will grow accordingly.

Reverse splits also have a psychological effect on investors. Aside from the fact that most companies enact reverse splits as a desperation move in an attempt to 'stay alive', a post-reverse-split stock is left in a prime position for short sellers to drive the price down. This creates some panic selling from the weak longs and that can add to a dramatic drop.

In the case of CSUH, the company is entering a growth phase, possibly a huge one, and if the result of this reverse split is a listing on the Amex, then I can't argue with that. There's no arguement that I can see being made that would say that CSUH is better off trading on the OTC boards than a main board as the company enters into the huge growth phase.

I won't rule out a post-split drop in price, but I say it again - if future sales can justify a higher market cap, then the stock will rise. If Celsius fails to catch on in the market place, then the stock will drop. It's that simple.

Longs are invested in the belief that future Celsius sales will justify a price spike while shorts will stay short on the belief that they won't. Again - it's that simple.

However, who's right and who's wrong is far from becoming clear. Only the future sales numbers can tell the story - and we at least have to wait for Celsius to reach full distribution before calling the product a success or a failure.

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From Scott:

Wow, this is an amazingly bold move. The shares should be down at least 25%, that is the level of dilution that just occurred. (2.5 million shares on top of a post reverse outstanding of 7.5 million)

And right on the heels of a 50% dilution for Carl & Co. He can exercise all 65 million shares of common for market price (issued for 6.5 m in debt, so he pockets the difference above 10 cents) whenever he wants and 95 million shares of convertible preferred at .05 cents per share.

I just don't understand why you don't mention these numbers. I was going to wait to comment, but what they are doing to the shareholders is just shocking to me, and I felt that honest hardworking investors should know this. It makes me so upset for current shareholders (that includes me of course) that I want to be present on the next conference call. The little guy just took another punch to the stomach.

Scott M

VFC's House: Is it March already, Scott?

As always, I understand your concerns, but as you know - I don't panic when I see financing deals. That's part of the game.

The game is life. When we're all young (aside from those born into priviledge), we're not born on the top of the game - we've got to have an idea of what we want to do in life and then get there.

Unfortunately, in this world, nothing comes without a price. We take on huge debt burdens as young people to get a college education in the hopes that we'll land a job that allows us bring in enough cash to both live good AND pay off the debt. Along the way, we also accumulate a lot of credit card debt that eventually needs to be paid off. Then there's the car loan - and if one were to get married and have kids young, that adds on another whole debt burden.

The hope is, while growing from children to adults, that when we're a little bit older we will be in a position where our income allows us to pay off all the debt that got us to where we are; not to mention have enough left over to live the good life.

My point is that no one gets 'miracled' into a position of comfort (aside from those born with silver spoons in their mouths like Paris Hilton), not even Celsius Holdings.

The Celsius product is an idea - call it a child - that is growing. In order for that child to get where it's going to end up, she needs funding. Now, the world's first calorie burning beverage doesn't need funding for a college education, but she needs money to produce all of her brothers, sisters and cousins in the bottling plant. Then she needs money to gets her pretty face on TV.

When she's old enough, Celsius needs a boyfriend. Rather than hang out with the washed up has-beens on the store shelves, she decides to pay for a washed-up child actor who hosts gossip shows; but this actor does have a following, so Celsius is happy.

However, now is where it gets interesting. Celsius is now in a position where she has to perform in the market place well enough to make it on her own. She needs to start bringing in the dough - just like we did when we left mom and pop behind and went to the 'big city'.

Just like us - either you make it or you're destined to a life of accumulating debt and dead beat jobs or you make enough to live good and pay off debt.

I certainly didn't invest in CSUH on the presumption that Steve Haley was going to close his eyes, click his heels and miracle Celsius to the mainstream. Stock deals and dilution are a part of the game. Period. To be honest, anyone that is that afraid of dilution shouldn't dabble in speculative stocks - that's just my opinion.

I maintain my stance, if Celsius catches the wave of changing health trends in the market place, then all this fear of dilution is going to be a moot point.

Thursday's announcements are not going to make or break the company or anyone's investment. What will break the company is if the product doesn't sell.

Granted, the last couple of quarters didn't meet the expectations of many investors, but little girl Celsius has her degree, she's just got a job with some large scale companies and she's just landed a well known boyfriend.

I think that little girl Celsius is growing up and now let's give her a chance to perform.

Of course, each investor should do their own DD and invest accordingly.

Disclosure: VFC is long CSUH.

CSUH: Celsius Holdings Announces a 20:1 Reverse Split in Preparation for a Move to the Big Boards

Celsius announced on Thursday morning that the company's board has approved a 20:1 reverse stock split in preparation for a move to the NYSE Amex. Celsius also announced a financing deal with Ladenburg Thalmann & Co. Cash raised from that stock sale will be used for 2010 marketing and development efforts, among other general corporate expenses.

Shortly after the announcement, the CSUH stock plummetted to just over twenty cents before quickly rebounding to over thirty cents. I'd love to sit here an say that I was able to gobble up a boat-load of shares during the drop, but I was just a bit too slow to respond. This drop is an example of why it's important to always have some spare cash on hand because that's how quickly things can move in the market. For those that were able to add in the low twenties are already sitting on hefty gains just on today's trading alone.

Unfortunately for VFC, my spare cash was tied up in my Sharebuilder account - which won't trade CSUH anymore - and not Zecco - where I've been doing most of my trading and investing. I'll be kicking myself for missing this big drop for a while, but I still feel set with my CSUH holdings moving forward.

Stock volatility aside, let's digest the news. I wouldn't be being honest if I didn't first say that I am not a fan of reverse splits and once one is announced, I will usually hold off any additional buying and accumulation until after the split goes into effect; usually the stock price drops immediately post-split - unless significant news is announced to prop up the share price. After all, it is a game of market cap, not share price, that ultimately matters. It's yet to be seen whether or not the CSUH market cap will be supported by the boom in sales that many are predicting.

Since Celsius is still in the early stages of growth, Thursday's news has not changed anything about the future prospects of the company; the future of Celsius Holdings and shareholder's investments still remains in the hands of the consumer.

Quite simply, if the consumer buys the product on a scale that is equal to the growth of distribution, then Celsius Holdings and its shareholders are going to be very well rewarded - still, even after Thursday's news. However, Thursday's news has upped the ante for investors because there will be a lot more sceptical eyes on the stock by those who do not like reverse splits.

However, I also look at it like this - if the reverse split gets CSUH listed on the NYSE Amex more quickly, then let's do it. I don't see anything negative about being listed on a legitimate board where a whole new group of investors can/will jump on board; especially when the company is positioned for huge distribution and sales growth. But again, the bottom line is sales growth; if sales growth booms and looks to continue to grow into the future, then Thursday's moves would have been instantly justified.

My investment in CSUH continues to be that I think that huge growth is on the way - nothing has changed that fact.

As I've said before, the first and second quarter of 2010 are huge because next March is when CEO Steve Haley said he expects to see full distribution. Last quarter's numbers did not meet the expectations of many investors, but the key here is to be patient. Rome was not built in a day, and Celsius is bringing an entirely new twist to the beverage market. It will take time and effective advertising for the consumer to absorb or become aware of the fact that Celsius is not just another energy drink. On that note, I believe that the 'effective advertising' has yet to hit the airwaves. The 15-second commercials that I've seen on the television are great at putting the catchy tune 'Burn Baby Burn' in the heads of consumers, but the commercial ends with the assumption that a potential consumer is going to jump on their computer and research the product. In my opinion, the consumer needs to know exactly what they're getting at the conclusion of the commercial and I'm looking for the new thirty second ads to do just that.

There's also the Mario Lopez factor. Granted, the guy wouldn't be any one of our's number one choice to pitch the product, but his face is highly recognizable and let's just see how well he can get the message out.

The bottom line is this - while reverse splits are usually a sign of a desperate move by a company on the brink of disaster, Celsius is in the beginning of a huge growth phase (in my opinion) and the reverse split is a tool to get the stock listed on the big boards in a quick and more timely fashion.

VFC, "Pinky" Pete and Joe Schmoe may invest in the OTC market, but many big investors do not. Who knows who's out there that will buy in once the stock is listed on a legitimate exchange.

There's no doubt that Celsius is offering up a product that will potentially revolutionalize the beverage industry; that's why I have invested here and that's why many others have also.

The company was smart to throw that tidbit about moving to the NYSE Amex; they knew that a reverse split would scare many investors away, but they also knew that a move to a major exchange could also only be perceived as a positive - in my opinion, the news is a wash. If the move to a major exchange does not occur, however, then I'll raise the BS flag.

But again - sales are going to dictate the future.

Some will say a boom in both distribution and sales is pending and others see Celsius as a failed 'me-too' product that will never catch a foothold in the market.
Since the story is still in the beginning stages of development, it's too early to say who's right at this time.

I'm invested on the basis of future potential - and I expect that the first half of 2010 should start to turn that potential into reality.

Celsius, DeSantis and Ladenburg Thalmann raised the bar with Thursday's news - either big things are on the way or a few rich guys just got a whole lot richer at the expense of the little guy.

You decide which is the case - and invest accordingly.

Disclosure: VFC is long CSUH.



Readers Respond: Options Trading

Hi VFC! Do you mind explaining a little about options? I'm a new investor and I'm interested in learning about options, how they work, and the benefits of them. I love your blog and you explain everything so well. I just thought I would ask you about your expertise. How did you learn about options? Any advice or book recommendations would be very helpful and much appreciated! Thanks again!

VFC's Take: I'll start by saying that if you are a new investor, I would suggest reading Jim Cramer's book, Real Money.

Let me say that I'm no fan of Jim Cramer because I believe that he's got his own personal interests and ego at heart with anything he does or says, but I'll give credit where credit is due and he does a good job at explaining stock and options investing in 'Real Money'.

I'll dish out a short description of options trading, but I suggest also reading the suggested book and doing a google search to augment this information.

In basic options trading, you're buying either a 'call' or a 'put' option contract. A 'Call' option means that your are looking for the price to go higher in a specified time frame while a 'Put' option means that you're looking for a price to go lower in a specified time frame.

If the stock hits the price that is specified in the option contract (strike price), then you will have the 'option' to either purchase (exercise the option for) 100 shares of the stock at the strike price or you can simply sell the option contract.

One options contract controls 100 shares of the stock, so if you 'exercise' your option, then you will have 100 shares of the stock that you purchase for the 'strike price'.

For instance, if shares or Citi Group (C) are trading for four dollars in June of 2009, but you think that the stock will be trading for above five dollars in January of 2010, you can buy a Citi January 2010 call option with a five dollar strike price. That means that in January 2010, if C is trading for above five bucks in January, your contract will be 'In the Money' and you can exercise that contract for a profit; this is good because you'll be buying one hundred shares of the stock for $5 when the stock is trading for $5.50 - you'll have banked fifty cents profit on one hundred shares (minus contract fees paid up front).

On the other hand, if C were trading for $4.99 come options expiration day (the third Friday of the month), then your option expires worthless - you get nothing back.

That is the most important note to emphasize with options is that if your contract does not meet the specified 'strike price' in the allotted time, then your contract expires worthless and you LOSE ALL of your money. Options trading is a risky proposition - more risky than stock trading, in my opinion - because of the fact that you only have a limited time to wait for your contract to perform.

Options serve a purpose in the portfolio of a small investor - I bought DNDN ten dollar strike price options in late 2006 for for fifty bucks each and sold the highest contract for nearly $1500 at one point - but they are risky and I wouldn't suggest leveraging too much into option contracts; I also had a number of DNDN 2010 contracts expire worthless.

In my opinion, the best way to play the options is to trade them - this allows you to reduce your overall risk to the contract expiring worthless and may allow you to bank some profit along the way.

Again, I've just briefed the subject; please do additional research and reading before dabbling with options.

optionsXpress

Dolan’s Money Revolutions

Readers Respond: MSBT, ACTC, ABPIQ, BVTI



A comment from Sheila regarding Medasorb and Advanced Cell Tech:

If Medasorb (MSBT) delivers positive phase III results in Europe and gets approved, what do you think the market capitalization might be as they ramp up in 2nd half 2010 and full year production in 2011?

Question 2: Do you think ACTC will spike before/after submitting a NDA in December?

Thank you,

Sheila


VFC's Take:

MSBT.ob: If Medasorb delivers positive results from the European trial, then I fully expect the stock to be trading for ten times its current value after the results are released.

However, since there is no effective, currently-approved treatment for severe sepsis, significant potential exists for MSBT to move significantly higher as the company ramps up for commercial launch of the product, in my opinion.

Until that time, I still expect a move to the one dollar level in anticipation of the results, only now I expect that move to be pushed over to the first or second quarter of next year since the most recent PR from Medasorb indicated that the trial was not moving along as swiftly as investors had thought.

Additional financing announcements are also a possibility as the stock moves up and dilution can be a concern, but if CytoSorb works then the short and long term prospects of this company and its stock look very good.

Also, keep a look out for speculative moves up and down on any given day; MSBT moved to over forty cents not too long ago on what i consider a Pump & Dump move and then opened at twenty eight cents earlier this week before quickly retreating to the twenty cent level - so there's also money to be made along the way by trading the stock, in my opinion.

Unless we get bad news from the trial, investors should expect significant gains from MSBT over the next few quarters - in my opinion.

ACTC.ob: Advanced Cell Tech is far from filing an NDA, but an IND should be filed with the FDA in December for ACTC's RPE program; RPE would provide treatment for various eye diseases.

There's always the possibility of a speculative move in the stock at any given moment, but I no longer expect significant moves from biotech stocks on announcements of early-stage product candidates.

I view ACTC as strictly a long term stem cell play to accumulate and I'll continue to average down in my position. Any significant spike would most likely be followed by an announcement of financing, in my opinion, so I would sell some trading shares into a short term spikes. Again, just my opinion.

Disclosure: VFC is long MSBT and ACTC.

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ABPIQ.pk, BVTI.pk:

An anonymous comment regarding Accentia Biopharmaceuticals and Biovest:

What are your current thoughts on BVTI and ABPIQ? Do you think ABPIQ will have any shareholder equity or their underware left after bankruptcy? Too bad they went belly-up because they have good technology.

VFC's Take: The way I see it, I wouldn't start loading up on either of these two stocks right now but I also wouldn't completely sell out of a position either.

I still hold a very small amount of BVTI (I never held ABPI), after selling some shares into the recent spike to over fifty cents, but I'm taking a 'wait and see' approach with BiovaxID right now. BiovaxID is currently being used in a named-patient program in Europe.

If you like speculation, it may be worth holding onto a few shares - just in case the bankruptcy proceedings leave some shareholder equity in tact - but keep in mind it's entirely possible that the boxer shorts will be all that's left standing after proceedings.

Short term volatility may allow for some good trading opportunities, in my opinion.

Disclosure: VFC is long BVTI, no position ABPIQ.

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Wednesday, November 18, 2009

Readers Respond: CVM



CVM: A comment from Michael regarding Cel Sci Corp.:

Hi VFC

I first heard about CVM from one of your articles on SeekingAlpha. After that I did my own DD on CVM and have since taken a position in it because I believe the risk/reward is definitely worth the amount of money I'm putting in it. I'm definitely willing to lose the money I put in b/c I feel that if Multikine succeeds, this stock will easily follow Dendreon.

However, I'm not a science guy (I'm an accountant and more of a finance guy) and thus I don't know much about how the FDA works. My question is basically what is the difference between phase 2 and 3? I saw the CVM November Powerpoint on their site and they said they avoided many of the problems other companies ran into. However, even so, I am wondering what the chances are that Phase 3 succeeds? Is it 50/50? 60/40? In other words, if phase 2 was such a success, what could go WRONG in phase 3 for Multikine to not get FDA approval?

I first bought in at $1.5 and have been averaging down happily...I'm hoping it falls below $1 again so I can load up the boat. Thanks for your insight VFC and I hope you're right on CVM.

PS: I read the Yahoo Message Boards daily and they are very entertaining. A lot of people are saying how Byron is fake and how CVM hasn't delivered since inception. Any comments on those. Thanks.

Michael


VFC's Take: I agree that CVM is still worth the risk/reward right now, even for those that are just now gaining a position in the stock. If Multikine is proven successful in Phase III trials, I think that Cel Sci will not only follow Dendreon (DNDN), but probably surpass it. Multikine, unlike Dendreon's Provenge, is being developed as a first-line standard of care.

However, before we get too excited, we all must remember to temper our expectations of success until we start seeing some results from the Phase III trial which haven't even started yet.

The main difference between a Phase II and Phase III trial is the scope and size of the trial. In short, Phase I generally tests the safety of a potential product; Phase II is a continuation of safety studies in a larger patient group, but mainly is used to see if the product actually works; Phase III is the 'make or break' trial - the potential product candidate is tested in a much larger group of patients. The trial not only confirms how well the potential product works, but also measures how much (if at all) better it is than what's already out there. That's just VFC's brief description of the clinical trials, a Google search will most definitely provide you with more detail.

As for the chances of a Multikine Phase III success, I'm not in a medical position to place an estimate based on 'percentage of success', I can only account for what I read and/or discuss with people in the medical (cancer) field, but I like what I have seen enough to consider the risk of an investment in CVM to be well worth the possible rewards.

Each investor will have to determine for his or herself how much money is worth risking in an investment based on his or her own financial situation, stomach for risk and - most importantly - their own DD.

I do know that Cel Sci has been in contact with the FDA reguarly regarding the development of Multikine and the Multikine manufacturing facility near Baltimore, Maryland (after all, the FDA gave Cel Sci the go-ahead to move forward with the Phase III trial), but as far as what can go wrong - I can only speculate. If Multikine does not work, that would certainly be a show-stopper, and every investment comes with the inherent risk that the stock will go to zero; CVM is no different. Multikine is no sure thing, but all indications so far is that it works, so I like my chances with this one.

As far as anything going wrong with the production of Multikine, Cel Sci has taken precaution after precaution to ensure that nothing goes wrong inside that facility. There are double-checks and repetitive measures in place that will virtually guarantee a smooth operation of production.

Now, addressing the message board fodder that you speak of, I'd have to believe that Byron is somebody - somebody owns the Multikine rights to South Africa. I can speculate as to who that 'somebody' is all day long, but in my opinion, it has no bearing on whether or not I deem Multikine or LEAPS - the real bread in the Cel Sci basket - to be successful.

Byron could be Jimmie "Spoons" selling a Rolex on my street corner and I couldn't care less; but if Multikine is successful and enters the South African head and neck cancer market, then I expect that Jimmie "Spoons" is going to be rich.

And the 'not delivered' question has no bearing. It takes years, sometimes decades for great products to get to market. Those shareholders that were loading up on Cel Sci for thirty cents would also disagree that it has not delivered.

Every investment that you make should come with an entry and exit strategy. Your exit strategy should specify which events would cause you to sell. If you exit your position in the stock for less than what you bought it, then you could say that that investment did not deliver.

My exit strategy with Cel Sci has nothing to do with Byron and Yahoo! message boards and everything to do with Multikine, LEAPS and the cold-fill contracting service that Cel Sci will soon provide.

We have only seen the tip of the iceberg on all three, in my opinion, so it's way too early to claim a non-delivery from Cel Sci. There are plenty of posters on the

Thank you for reading and as always, each investor should do their own DD and invest accordingly.

Disclosure: VFC is long CVM.

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Readers Respond: BIEL

Dolan’s Money Revolutions

BIEL.pk: Some reader comments regarding BioElectronics:

From Shep:

Yep...it's a bummer to have a basically positive news released and then watch the thing lose .03/.04 in value. My opinion on todays' slump is that those "in the know" were expecting much more, and they viewed this as weak PR. Some (many) became frustrated and took some profits. Day traders looking for the quick buck sold and moved on. Hence the dip back to the 6's and 7's.

My own take is a little different however. BIEL is a pink sheet micro cap with little exposure as a stock or a product. I read the press release on CNN.com along with millions of others I'm sure. Hundreds of thousands of those readers probably just learned about BIEL and Acti-Patch for the first time. My hope is many of them will become curious and down the road customers. This, or any penny stock, is so speculative that success depends on your perspective. Those that were hoping a PR lead to a spike to .15 were sorely disappointed. Those like me that are long and strong took advantage and bought into the dip. Heck my only complaint is after my buy went through today it dropped another penny.

Am I 100% certain I'm going to cash in on BIEL? No. That's why I'm diversified. But I feel pretty darn good about its chances. We have a company we know is not a sham operation. We have a product that works and is proven safe. We have a better than average shot at FDA approvals soon. We have independent analysts offering their stamp of approval. We're just waiting on market share now, but that won't happen overnight. I think those that hold will be rewarded soon enough. If all goes well, within 6-12 months we could be looking at significant share price increases. Compared to many other speculative plays, me thinks this one is a winner.


VFC's Take: I agree with Shep on many fronts. Most importantly, he mentioned market share (sales numbers) being a prime mover of the stock - and that point is key. Until revenue numbers start rolling in, BIEL is destined for volatility and long term investors will have to stomach some fairly extreme spikes and dips while the story plays out.

For the short term, investors are looking for positive news regarding the pending FDA approvals to drive future sales and revenue predictions. Until those approvals (or not) are announced, trading in BIEL for many will be purely speculative and/or manipulative, but that is not to say that the volatility is finished once those approvals are announced. In my opinion, we won't see a cessation of volatility in this stock until serious revenue numbers start rolling in.

There will always be a solid base of serious longs here, but there will also be a solid percentage of swing/day/momentum traders that will play the short term volatility - it's ultimately up to the individual investor to let his or her DD solidify a buy or sell decision.

The big-boy traders will play their games in this environment - and if you have a handful of trading shares on hand you can, too - but the bigger picture shows that BioElectronics has a safe alternative to Acetaminophen and Ibuprofen on hand that can potentially shape the future market of OTC pain treatment.

However, even great stories take time to play out. It's been months since the FDA announced approval for Vanda's Fanapt. Titan Pharmaceuticals will receive up to 10% in royalties from Fanapt sales but spent months trading for between fifty cents to a $1.30 before recently spiking to over two bucks now that potential revenue is only six weeks away.

The point is to exercise patience. There's no sure thing in the stock market, but you have to trade according to your DD.

If Actipatch receives approval and then begins generating nice sales numbers, then the present day volatility is going to be looked back upon as a gift for those looking to add the dips.

And to tell the truth, I like the current trend of biotech stocks dropping after good news. It allows me to add a lot more shares than I would have if I was purely speculating. If BIEL wants to dip after every bit of good news, that's fine with VFC - because long term, I think we have a winner.



An anonymous post regarding BIEL:

VFC,

BIEL, while having a great product, is becoming a problematic stock. Aside from company reps. possibly posting information on message boards, an official press release from the company last Wednesday announced the timing of the press release regarding the comparative results of ActiPatch and Tylenol. Thus, the run up late last week and the sell off today. In short, management is either very naive or are actively aiding short term profiteers.

I also have concerns over the filings with the FDA, on-going dilution, and the some details about the most recent study. 48 hours of Acti-Patch treatment compared to having ingested Tylenol 90 minutes ago. C'mon, no wonder Acti-Patch turned in the superior performance.

This is looking more and more like a great product/bad management scenario. I am still in, but I've reduced my exposure considerably since my initial purchases in July.


VFC's Take: All valid points, but I have a bit of a different look regarding management. I'm not fully in the boat that believes that the management team at BioElectronics is sub-par. In my opinion, these guys need to be moving forward with the idea that they are building a business, not a stock; if the business is a success, then the stock price will follow.

Sometimes, as was the case with the 'Caveat Emptor' rating on the Pink Sheet stock listing of BIEL, the two go hand in hand, but for the most part, the management team shouldn't be watching the day to day movement of the share price.

That being said, there are some things that could be more professional, as I've mentioned. If the company is actually spreading info via the Yahoo! Finance message boards, that doesn't cut it in VFC's House. That's not how a company looking to move into a huge market should be conducting business and if it's simply a case of the PR guy acting on his own accord, then the company should put a stop to that and rely on PRs or statements from the CEO to get the message out.

In turn, antsy investors should rely on their own DD for comfort in their investment, not stock message board posts (although the boards do serve their own purpose for DD).

As for the other concerns mentioned, I think that they are all valid questions, but I continue to believe that it is far too early in the story to chalk BioElectronics as a good product/bad management story. If the company cannot generate revenue after the pending approval are announced (assuming that they are positive), then I could buy that argument at that point.

For now, however, the product has been advanced to the eyes of the FDA, the stock is no longer 'Caveat Emptor' and the marketing phase is beginning. I'm not yet ready to call that bad management.

Ab Circle Pro

From Lenny:

Hi Vinny,

Just wanted to throw a couple of logs into the fire. (-:

MHTX - I bought a small amount, and in the 10Q discovered they have 1 full time employee, namely Manny Tsoupanarias, their CEO. What if he gets hit by a bus?

BIEL - I also have a holding. Sometimes I think things are not so 'kosher' with Biel. They recently issued a financial statement (see pink sheets, Biel, Filings) and even though it is for the Sept 30 2009 quarter it is signed Sept 13, 2009 (see the end). Hmmm. Then, the famous Biel PR consultant Joe Noel who appears on the MB's and twitters, he has 25,000,000 shares and is performing the famous 'pump'. Do you remember that famous report that came out a couple of months ago which indicated Biel should rise to about $.30? The person who wrote it did not disclose their relationship with Joe Noel (they used to work together). Also, from the wording of your blog today, I also think you have concerns ... maybe I am reading too deeply into it?

Anyways, I sold at .08 as it was dropping and bought back in just over .07 - pccketing a small chunk of change. Maybe it is just me, but I am nervous about this management team.

Lenny


VFC's Take: Regarding MHTX - nice comment. Keep the guy away from the road.

Regarding BIEL: If the company is going to start entering the phase of full legitimacy, then management is going to have to start acting a little bit more professional - it's that simple. The days of Joe Noel disseminating unsubstantiated info on message boards have to come to an end.

Right now it's not enough to have me concerned about the future potential of the company and its stock, because all start-ups rely on some sort of 'sweet deal' for someone to get them going, but now is the place in time where BioElectronics starts acting like a legitimate 'title contender' in the market place because the product could be THAT good.

BIEL needs to start shaping up the Mickey Mouse rag-tag PR department on the way to credibility. I'd personally prefer silence from the company over thinking that their methold of 'getting the word out' is a message board.

That being said, there's nothing wrong with issuing a PR or two commenting on current developments.

But that's just me.

I'm not yet ready to call the management team a failure, as I mentioned before, but I am here to say that it is time to take a step up and start acting like a Macy's outfit; right now investors have the feeling that they're shopping at K-Mart.

Disclosure: VFC is long BIEL.

Bare Necessities

Tuesday, November 17, 2009

Briefs: TTNP, MHTX

TTNP.pk: It was a quick rise to the $2.40 level for shares of Titan Pharmaceuticals, as it finally looks like the stock is starting to trade towards its potential.

With the heavyweight Novartis set to commercially launch Fanapt early next year, the schizophrenia drug could quickly gain a foothold in a huge market ($14 billion huge)that has the lowest selling product raking in over $1 billion in annual sales.

As both long and short term followers of Titan Pharmaceuticals well know, Titan will receive royalties of 8% on Fanapt sales up to $200 million and 10% on all sales thereafter; royalty rates that barely justify the current market cap of the company alone when considering the fact that Novartis, with their push and influence, could make Fanapt an instance force in the schizophrenia market.

And then there is Probuphine; for those new to TTNP, Titan recently received a grant from the NIH to fund a Phase III trial for Probuphine to confirm the drug's effectiveness in treating Opioid addiction.

Probuphine is also being tested in Phase II trials for the treatment of chronic pain.

While I have no doubt that TTNP continues to hold significant potential for the future, I sold a few shares into last week's spike to $2.30 in order to free up some cash and move it around a bit.

With Fanapt ready to launch in a couple of months, the next events that could/should move the TTNP stock price are:

- buyout news. I continue to believe that this is a possibility.

- Fanapt sales updates by the end of 1Q 2010.

- Probuphine pipeline updates. Shouldn't come until next year.

- Partner for probuphine. Could come at anytime, or Titan could go it alone for the time being, using grant money and/or Fanapt royalties.

- News of a TTNP move to a major exchange, although this only becomes a possibility if no buyout occurs, in my opinion.

In the event that Titan is not acquired, then a stock sale could become a possibility in order for the company to raise funds. If that were to be the case then I would expect it soon after the recent runup.

However, with a Fanapt revenue stream imminent and Probuphine looking more promising with every update, the days of Titan existing solely as a speculative company are dwindling.

Much of this is a rehash for long term readers, and while Titan still has some nice potential moving forward, it's not a bad time for those still holding sub-five cent shares to realize some profits, spread it around, buy wifey a new pair of shoes and take a vacation.

Of course, this is all just my opinion. Do your own DD.

Disclosure: VFC is long TTNP.

FTPress.com (Pearson Education)

MHTX.ob: Of note, Manhattan Scientifics, Inc. reported their first quarterly profit ever for the third quarter of 2009 - a significant milestone for any company, let alone one that still holds the promise and potential of Manhattan - in my opinion.

According to Manhattan CEO Manny Tsoupanarias, revenues will continue to grow as a result of the recent licensing deal with Carpenter Technologies.
That agreement gives Carpenter the right to bring Manhattan's nano-metal technology to market.

Of note, Manhattan also holds the rights to micro and mid-range fuel cell technology, a cancer early warning detection system and (this is my favorite) Haptics 'touch and feel' computer screen application technology where users could realistically 'touch and feel' any object on their computer screen. Haptics would give whole new life to the on-line version of the Sports Illustrated swimsuit addition.

Shares of MHTX has traded flat since the news, but this is a company with some big potential upside if the technology on hand were to gain a foothold in the market.

Disclosure: VFC is long MHTX.

FreshPolos.com, Inc.

B2C Jewels - Diamond Pendants

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