DDSS: Labopharm on the Rebound?

It's been a little while since I last reminded readers not to forget about Labopharm, and as I emphasize this point again, it's quite possible that DDSS may already be on the rebound.

Shares of Labopharm significantly declined after the company received FDA approval in February for OLEPTRO, a once-daily formulation of Trazodone intended to treat Major Depressive Disorder (MDD).

After a pre-approval runup, the stock has since traded for as low as eighty cents, reaching that mark barely a month ago. The drop in price and the lull in news opened up a fine opportunity for investors with a mid to long term outlook to load up on shares, and that patience may now be starting to pay off as the price action over the past couple of weeks indicates that a rebound may be in effect.

Labopharm closed the week last week at $1.16, near the high for the week - possibly in anticipation of a decision from the Canadian medical regulatory authorities who on August 4th are expected to rule on OLEPTRO approval. If OLEPTRO is approved in Canada, a likely scenario in my opinion, another market opens up for the product providing additional long term value for the stock.

However, we saw what happened to DDSS after US approval, so it would be foolish to assume that the share price would increase based on that news alone.

It's also possible that the sudden uptick is related to the pending commercial launch of OLEPTRO in the United States, as it's long been projected that the Labopharm Angelini joint venture would launch the product in the third quarter of this year.

News of product launch in the US combined with any positive news from Canada could be enough to immediately spike the price of the stock, although I believe that it will only be solid sales numbers further on down the road that can keep the share price trading significantly higher without the volatility. The antidepressive market is a huge one - over $10 billion annually - so it's certainly possible that OLEPTRO sales will eventually annually surpass the current market cap of Labopharm.
Of course, that depends a lot on how well the product is accepted and how well it is marketed.

Labopharm also has a once-daily version of Tramadol to treat moderate to severe pain already on the market globally and the potential for sales growth for that product is fairly significant being that it is available in nineteen countries.

A twice-daily combination version of Tramadol and acetaminophen is also being prepared for regulatory filings in Europe, Canada and the United States while a twice-daily version of acetaminophen alone is in earlier stages of development.

I thought investors were getting a great deal in terms of risk/reward while DDSS was trading for right around a buck, and depending on what transpires on Monday and Tuesday, it may not be too late to add.

As always, no matter how promising a company's future looks, there's no sure things in the stock market; therefore, I always suggest flipping a few shares into any nice spikes in price in order to end up on 'house money' as quickly as possible.

I do like the prospects for Labopharm and, if nothing else, DDSS is a stock to watch right now. In a couple of years down the road we could be looking back at these prices wondering why didn't buy more.

All just my own opinion, each investor should do his or her own DD before investing and develop his or her own entry and exit strategies.

Disclosure: Long DDSS.

CPST: Capstone Turbine, Still Worth The Risk

It's been a while since I last posted about Capstone Turbine, a leading producer of low-emission, clean technology microturbine systems, but with the stock back to trading for at or below a buck and with products under development that could significantly impact the alternative energy market, it's definitely worth taking a look at this one as a 'green pick.'

Although still climbing towards profitability, Capstone already has a growing world wide distribution network in place and is constantly improving its products and developing new ones with an eye towards the future of green technology.

While having a significant backlog of product orders is not necessarily something to write home about, the fact that Capstone does have quite the backlog is a pretty good indication that the company's products are in demand.

The past couple of days have provided a good example of the types new products that Capstone may be able to roll out in the future, including a solar powered microturbin under development with Israeli partner HelioFocus, and a microturbine powered hybrid drive system currently being tested with a major US heavy-duty truck manufacturer.

The positives are a-plenty for this company, but it's always worth looking at the negatives, too. For Capstone, the negatives revolve mostly around the long trek towards making money.

Some of the company's newer models of microturbines give Capstone a higher margin of profit than the older models, but the sales and production rate still have them working in the red. Stock offerings and credit lines have kept Capstone afloat in the past, and it's possible that those strategies will be needed to keep the company afloat for the foreseeable future, also.

That said, green and alternative technology is still an emerging market - and will be as long as the black gold keeps spewing from the ground, in my opinion - so Capstone's products can still make major headway in the market as it continues to emerge. That leaves plenty of room for growth.

However, I think that Capstone - as a relatively small player in a huge market - is working at somewhat of a disadvatage to the big players who have unlimited size and resources, as evidenced by the growing backlog of orders that cannot seem to keep up with the demand for the products. For that reason I can see Capstone as becoming an acquisition target by a larger company looking for new technology; or maybe a big player will just look to partner.

The global economic meltdown hasn't helped Capstone either. Not only have credit lines become harder to come by, but the money that may have flowed into clean energy solutions has also dried up - or just flowed right back into oil as a cheaper alternative than spending big bucks on converting infrastracture to solar, wind or low-emission microturbines.

CPST is still a speculative play, but it's one that I'm hanging on to for the long term as a 'green pick'. Once this financial pullback is in the rear view mirror, then the push towards building a 'greener' world will be back in full force and Capstone is one company that could benefit from that push.

For now, I'm happy adding for under a buck.

Disclosure: Long CPST.

MCLN: Still a Growth Story

Although the share price of MedClean Technologies has remained stuck in neutral for quite some time, the growth story of the company and its stock continues to unfold. Last week the company announced its fourth distributor contract in the past six months, this one with Gamma Healthcare, Inc./Danner Medical Waste Management Services. This most recent agreement significantly expands MedClean's medical waste technology into the midwestern region of the United States.

MedClean has also recently announced a deal with Ace Technologies, a push into the Canadian market, and with Bear Consulting, a push into the Veterans Administration's (VA) health care system.

Also of note, one of MedClean's existing partners, Barnett Medical Services, has created the Independent Medical Waste Transporters Association (IMWTA) - a vehicle that will provide national exposure and resources and enable smaller, independant companies to compete in the national contract bidding process. By providing a sponsorship and launching a website in its name, MedClean is fully on board with this initiative.

I do believe that the current prices will be looked back upon as a steal once the MCLN train leaves the station, and it's possible that this one - with a much smaller market cap - has more potential short to mid term upside than BIEL, although I believe that both stocks will ultimately realize very significant returns over the long run.

MedClean is definitely worth watching, and the patient investor has had quite the chance to load up for under two cents. I like.

Disclosure: Long MCLN.

GNBT: Encouraging Update From Generex Regarding the Oral-lyn Trial

Generex Biotechnology Corporation announced on Wednesday an encouraging update regarding the ongoing Phase III Oral-lyn trial that bodes well for shareholders and diabetic patients alike if the current trends continue.

According to the press release issued on Wednesday morning, Generex has achieved 75% of the required number of per-protocol completers, and the use of Oral-lyn will support a non-inferiority claim relative to the standard-of-care injectable insulin if the interim trends continue through trial completion.

The trial is expected to end in early 2011.

Oral-lyn, an oral spray that delivers insulin to diabetics through the inner lining of the cheeks, has already proven to have a superior Adverse Event profile compared to those patients receiving injectable insulin.

Shares of GNBT jumped to nearly forty cents on high volume during early trading on Wednesday, although the stock remains hovering around the mid-thirties as investors speculate about a possible reverse split and await the completion of this trial.

Although the share price is not in compliance with the listing rules of the NASDAQ, the company received notice a few weeks ago that the NASDAQ will allow Generex to trade on the exchange on an interim basis.

It's also worth noting that some misleading blog postings and misinformation posted on TheStreet.com's biotech blog may have contributed to GNBT's decline this year. Generex, in turn, filed a $250 million lawsuit against TheStreet and its biotech blogger.

Oral-lyn is not yet a shoo-in, but a spray form of insulin delivery would certainly make life easier for diabetics, providing a drastic quality of life improvement. This product could be a big winner if it were to make it to market. In turn, shareholders would also be rewarded if that were the case.

I still believe it's possible that a run in share price could come as soon as later this year, but I would definitely expect something to happen before the trial results come out early next year - barring any setbacks or bad news from Generex; and barring any more manipulative and misleading blogging from the general press.

I'm still accumulating GNBT with a mid term outlook (six months to two years is what I consider mid term) and Wednesday's press release, while not earth shattering, is highly encouraging.

Disclosure: Long GNBT.

AGEN: Antigenics Continues to Demonstrate Long Term Potential

Shares of Antigenics approached the one dollar mark during Tuesday's trading session after the company released a positive update regarding a Phase I trial for AG-707, a potential treatment for herpes simplex virus-2 (HSV-2), the virus that causes genital herpes. AG-707, if it works as advertised, is not a cure for the disease, but could help in treatment and prevention.

Phase I results come too soon in a pipeline to get really excited about when looking at the short to mid term, but the early success of this product only adds to the potentially bright future of Antigenics.

Antigenics, which already boasts the cancer vaccine Oncophage and adjuvant QS-21 Stimulon in its pipeline, now also has a product through Phase I that may be able to treat one of the most prevalent sexually transmitted diseases out there in genital herpes. According to published reports, the number of people in the United States infected with genital herpes tops the 50 million mark. Additionally, the potential is there for AG-707 to be used to treat other infectious diseases such as HIV and malaria. That opens up the market even more.

If this product were to make it to late stage development, or especially to a commercial launch, then long time AGEN shareholders could be in for a major treat, although I emphasize again that it's wise not to get too excited about Phase I trials and there is no telling how successful the product will be if sold commercially. We can only speculate at this point, but that's the fun of investing.

According to Tuesday's press release issued by the company, Antigenics will now seek a partner to continue the development of AG-707.

It's been a fairly volatile ride for AGEN since the price collapsed down to under a buck after the medical authorities in Europe decided not to approve Oncophage for the treatment of kidney cancer, but results from the ongoing glioma trials have been encouraging and long term analysis of the kidney cancer trials have also provided an encouraging outlook.

I've long liked AGEN as a speculative pick. Once the dust settled after the setback last fall, AGEN remained in a nice accumulation range for those willing to take a risk on the longer term potential of Oncophage, QS-21 and AG-707.

I don't see any huge jumps in the works over the short term, and I don't believe that Tuesday's spike will hold (unless the company has additional good news pending), but I do like accumulating this one for the future at prices of under a buck; preferably at between sixty to seventy cents. Since AGEN's 'get-bash crew' left the stock trading at those levels about six months ago, investors have been able to get in at those prices.

It's also worth noting that Antigenics will announce quarterly results on Thursday the 29th of July.

Disclosure: Long AGEN.

Stock Watch: SIGA

It could be worth keeping an eye on SIGA Technologies this week as a judge is set to rule on 22 July whether or not to dismiss a lawsuit brought to SIGA by PharmAthene, Inc. (PIP) over a licensing dispute between the two companies.

The dispute dates back to merger talks between the two companies that fell apart years ago, at a time when a licensing agreement for SIGA's smallpox vaccine was also on the table. PharmAthene essentially claims that SIGA prematurely bailed on the agreement.

SIGA's motion to dismiss the case has already been denied once, so chances are that this case is going to move forward. A surprise dismissal, however, could ease some investor concern and lead to a small pop in price, or it's also possible that the two sides will agree on a settlement after the judge rules.

There's a chance that any negative outcomes could lead to a decline in price, although I would have to look at that scenario as another buying opportunity in anticipation of a possible awarding of the BARDA contract that investors have long been awaiting.

The possibilities of SIGA making news this week certainly exist, but chances are the lawsuit update could be received by the market as a non-factor.

Regardless, SIGA could be one to watch - just in case.

Disclosure: Long SIGA call options.

DNDN: Now an Anonymous Email Comes to the Attack

First it was a curious error by CNBC that attacked the Dendreon share price, sending the stock down to well below the thirty dollar mark, and now an email sent by an anonymous individual - supposedly circulated only amongst investors - has been made public, thanks in part to the help of Forbes.com who posted the email on the website's health care blog.

Granted, the Forbes response leans towards defending the track record of Dendreon's Provenge, but the fact that Forbes decided to make the email public through mass distribution looks and smells a little fishy to me - especially because it's no secret that there is a large and powerful anti-DNDN crowd out there, willing to do all possible to damage the first company to successfully bring a cancer vaccine product through the FDA approval process and on the market.

It's possible that the 'damage' is more an attempt to bring down the DNDN share price enough to create a more attractive entry point for some significant buyers, but it's also possible that those who had bet against Provenge for so long are doing their very best to save face by constantly questioning the viability of Provenge as a valid treatment; remember, over the past few years some big players went out on a limb to 'bring down the house' with Dendreon.

For example, two Doctors who served on the FDA's own Provenge advisory panel came out against a possible Provenge approval, only later to be found out for having investments in competing companies. Talk about a conflict of interest, it doesn't get much more conflicting than that.

Another big player in the world of investment information, TheStreet.com (and that website's biotech blog), stood firmly against the chances of a Provenge approval for years and, funny enough, with Jim Cramer in house - there's a huge link to CNBC there. That said, TheStreet.com took the road of ignoring past publishings and just decided to act like they supported Provenge all along.

I've stated on this website many times before that there are essentially only two reasons why someone, or a group of someones, would spend so much time trying to bring down a company and its share price.

The first reason is obvious - financial gain. An extreme effort by a 'get bash crew' (similar to the ones playing with the CELH stock) could either be short and want to cover at a lower price, simply be looking for a more attractive entry price or a combination of both.

The second reason is a little more tricky - emotional gain. These could be former employees, competing companies or just those who were made to look the fool for something and walk around with a chip on their shoulders.

People in both of the above groups will use all their time and resources to try and damage the company that is the target of their attack.

Generally, these guys get away with their games for the short term, but over the long term, solid performance and solid news wins out - hence DNDN trading for thirty dollars when this stock's 'get bash crew' has been working overtime since the stock traded for four dollars.

So, it's comical (and suspect) to see a headline by Forbes.com - a respected source for financial information - that discusses an anonymous email. What's next?

Are the big boys that desperate to bring the DNDN share price down again? You've got to ask why that is, are they short? Do they know how much upside the DNDN share price holds and they want in for a lower price? Do they believe that the FDA is going to revoke approval based on an anonymous email, or do they know that patients will not pay for Provenge and the treatment will fail?

Whatever the goal, the volatility that results from these games offers the small investor the opportunity to pick up some crumbs along the way, and that's the name of the game.

The road to approval for Provenge has been marred by conflicts-of-interests, extreme bear raids, a 'get bash crew' that works overtime, suspect FDA advisory panels and now anonymous emails.

If nothing else, an investment in Dendreon is never lacking in excitement. Cancer immunotherapy treatments are still new to scene, relatively speaking, and there's no guarantee that Provenge will become the global success that many are predicting, but an investment here is an investment based on the blockbuster potential of the product that has yet to be realized.

Enjoy the games along the way, and make what you will of them, and I'll be taking well advantage of any dips back down to the mid-$20s.

Maybe next week Forbes or TheStreet.com will post comments from an anonymous vagrant on Fifth Avenue, a guy who might have bet against DNDN a few years ago and is bitter now that he called it wrong. Maybe this guy had an investment in CEGE and has a bone to pick - and just maybe a big time source for investment information will post that anonymous 'bone' on their website and try to influence the masses.

Hey, it's possible, nothing should surprise us any more.

Disclosure: Long DNDN.

BVTI: Now Trading on the OTCQB

Shares of Biovest International are now trading on the OTCQB boards, according to a press release issued on Monday.

The upgrade to the newly-launched QB market is the result of the company filing updated financials on the heels of recently having a Chapter 11 emergence plan approved.

BVTI has certainly been a success story over the past year or so, after having trading down to near nothing before rebounded to close to two dollars, but the long term viability of the company and stock lies with the success (or failure) of BiovaxID, an immunotherapeutic treatment for non-Hodgkin’s lymphoma.

It's still worth keeping an eye on this one, and although I haven't added recently, I'm still holding onto a handful of shares just in case this turns into another Dendreon story later on down the road.

Disclosure: Long BVTI.

Briefs: GNBT, CBAI, DNDN

GNBT: Generex announced on Tuesday that the company's wholly-owned subsidiary Antigen Express was granted a United States patent for its lead immunotherapeutic cancer vaccine, AE37.

The investigative product is currently being evaluated in a Phase II trial for breast cancer and earlier stage trials testing the vaccine in other indications are either currently ongoing or have already been completed.

The immediate future of Generex revolves around Oral-Lyn, an insulin spray for diabetics, but the development of AE37 is also worth taking note of, although still far away from market.

I would expect an Oral-Lyn update at some point over the next couple of quarters.

Disclosure: Long GNBT and adding.



CBAI: Cord Blood America announced on Wednesday that the company expects to close on an acquisition deal for the South American stem cell company, BioCells, Inc., by the end of the summer.

BioCells is already profitable, according to Wednesday's PR, and is another step in the growth and expansion targets for Cord Blood.

I'm still not sold on the viability of this company and its services over the long term, but I continue to believe that it may be worth holding and accumulating a few shares now because, who knows - maybe stem cell storage is a wave of the future that has Cord Blood America gaining a head start.

I definitely suggest trading this one with some trading shares, however, if the opportunity presents itself as it did in January when the stock nearly hit two cents.

Disclosure: Long CBAI.



DNDN: It certainly didn't take long for shares of Dendreon to rebound to the mid-$30s after dipping to the mid-$20s over the past few weeks, after a curious - but not surprising - reporting error by CNBC started a drop in price that led to some significant trading volatility in the DNDN share price.

There should be no doubt about the future potential of Dendreon and its prostate cancer immunotherapeutic vaccine, Provenge, but I couldn't help but take some twenty eight dollar shares off the table. The recent volatility and threat of another market downturn has me convinced that another swing to the mid-$20s is highly possible.

Over the long term, however, I believe DNDN will continue to reward investors and patients alike.

Disclosure: Long DNDN.

CELH: Back to Trading for Over Two Bucks

Shares of Celsius Holdings are once again trading for over two dollars after having been dropped to around $1.50 by some overly generous trading action. The slight rebound is nothing to get excited about as volume for this stock is still nearly non-existent, meaning that the manipulators who would manipulate can do so at will.

And there can be little doubt that the game-players are out there, judging by the fact that the various CELH stock message boards have a 24/7 watch section continuously posting misleading and/or irrelevant information in order to drive away serious investors who may be interested in purchasing shares of the company. Those that stand this watch have undoubtedly little invested outside of the cyber world, although must have a heck of a lot of dough riding on this stock.

A disappointing first quarter started the recent decline in the CELH share price, but it's likely that a rebound second quarter to boost the price back to respectable levels if the sales numbers look promising enough to approach the company's target of an $18-$22 million take for 2010.

The company also announced news that financier Carl DeSantis has approved for the company a line of credit for up to $3 million dollars to be used to expand the marketing effort.

It's yet to be seen whether the recent marketing push will improve the sales numbers to a significant agree, but I'm still of the belief that the Celsius has a unique product with the potential to catch on main-stream if consumers recognize the health-related benefits that this calorie-burning beverage provides.

It's hold time again, in my opinion, but I'll be taking advantage of any drops back down to the mid-$1 level.

Disclosure: Long CELH.

KERX: Shares Touch Four Dollars Again on Perifosine News

Keryx Biopharmaceuticals announced on Wednesday that the FDA has granted Orphan Drug status for perifosine in the treatment of neuroblastoma, a cancer of the nervous system mostly affecting children. There are currently no FDA approved thearpies for this condition, according to publicly available information.

Positive Phase I data for perifosine in the treatment of this indication was presented at this year's ASCO conference.

The Orphan Drug designation adds additional potential to the already promising future of perifosine, currently being evaluated in Phase III trials for refractory advanced colorectal cancer and multiple myeloma. Additional earlier stage trials are also ongoing.

KERX had recently dropped back into 'decent buy' territory (mid-$3 range) after a rise to six dollars on Phase III news earlier this year. Although Wednesday's price spike certainly made longs of the stock happy, I believe that there will be another pullback into the mid-$3 range offering additional opportunities to accumulate - so I'm not getting too excited just yet.

Phase I is a long way away from market - Orphan status or not - and there are still the ongoing Phase III trials to complete.

That said, I still like the potential of Keryx over the long haul, and this stock could really 'soar' on positive Phase III results and ultimate FDA approval further on downt he road.

Wednesday's headlines claimed that KERX had "soared" on the Orphan Drug news, but I would hardly call a 17% gain "soaring." The real moves have still yet to materialize, in my opinion, if the ongoing trials are successful.

Still a nice long term pick, But I prefer buying for closer to three bucks than four. I also like selling some 'trading shares' into any spike towards six again in order to bank some house money profits before the release of trial results, since there's no sure thing in the stock market, no matter how promising a pick looks.

Disclosure: Long KERX.

CVM: Readers Respond Regarding Cel Sci Corp

From Jim regarding Cel Sci Corp.:

Hi VFC,

Any update on CVM? Been awhile since you updated their status.

Thx
Jim

VFC's Take: I last discussed Cel Sci in June, and since that time there has been no significant news released that would change my opinion on its stock.

A late June press release once again highlighted the potential benefits of the LEAPS platform, but the potential of LEAPS is nothing new to established investors.

Unless the LEAPS for H1N1 story is reignited, a possibility this fall - but I am not holding my breath, then CVM is strictly a Multikine play, in my opinion. The fact that the swine flu hysteria dissipated just when Cel Sci looked to exploit the potential for the LEAPS treatment was a case of bad timing for the company, although you can't complain because it was good news for mankind that the outbreak was controlled.

The Phase III trial should start within the next few months and, depending on hype-factor and publicity, could offer a boost in share price. Since the commencement of a Phase III trial means that there is still a long ways to go before market, it's possible that CVM could continue to trade at the current levels a while longer, barring some unforeseen developments.

We do know that the comany's Baltimore-area Multikine manufacturing facility is complete, real and validated, and ready to produce enough Multikine for the upcoming trial - and commercialization, if the trial is successful.

Again, for a more detailed update see my post from last month.

Disclosure: VFC is still long and still accumulating.

BIEL: BioElectronics' Products Expand into Eastern Europe

Granted, the headline doesn't strike fear into the naysayers nor bring elation to the longs, but product expansion is still product expansion and leads to the possibilities of expedited sales growth.

In a Thursday morning press release, the company announced a move into four Eastern European countries - the Ukraine, Czech Republic, Poland and Hungary - due to an expansion of an existing distribution agreement with Unior Bionic d.o.o.

The product expansion means that the ActiPatch, Recovery Rx and Allay Menstrual Relief products will be on sale in those countries.

Not breath-taking news by any means, but it's a further demonstration that the BioElectronics sales and marketing force is continuing the ongoing effort to make a significant push into the international market while the company awaits news from the US FDA.

International growth alone could spark a run in the BIEL share price, in my opinion, once (if) the sales numbers are enough to be considered legitimate, though many investors are undoubtedly awaiting progression on the FDA front in the United States.

BioElectronics has been a slow-moving story over the past year, but one that continues to develop and it's only a matter of time before we will know if the patience on display by long term minded shareholders pays off.

For now, I continue to like purchasing shares of this stock with potential for two cents.

Disclosure: Long BIEL.

NEPH: Readers Respond to the FDA Denial

From HK regarding Nephros, Inc.:

Hey Vince,

How's it goin? Just a question or two regarding Nephros.

Q1. What's your take on the latest development with regards to Nephros. The FDA has given a formal response letter (after 1+ years) and say: "FDA could not reach a substantial equivalence determination" of Nephros HDF system.

Though it's not an outright rejection of the system, does this mean the FDA is looking for more info?????????

Q2. What's your next move? Sell-off? Accumulation? Hold / Wait and see?

Thanks

HK



VFC's Take: HK writes in response to the FDA's formal response announced after the market close on July 7th. The formal response came over a year after Nephors had filed a 510(k) with the FDA for the approval of a hemodiafiltration medical device for the treatment of dialysis patients. According to the company, there had been little or no communication from the FDA before the issuance of the approval rejection.

That brings us to HK's first question and my interpretation of the comments. It looks to me that it is perfectly clear that the FDA is not looking for additional information. The comment that the "FDA could not reach a substantial equivalence determination" reads like a statement from a hung jury, there's nothing there compelling enough to grant an approval.

The fact that the FDA did not raise the questions, concerns and/or issues with Nephros before issuing tells me that either the FDA wants this issue off of the already-overburdened work load or that the application was never strong enough to warrant in-depth consideration. Given the elapsed time before the response and the lack of consideration, I'm almost inclined to believe that the FDA simply lost this one in the pile. This response wouldn't fly with a big player like Bristol-Myers, but the small-gamed OTCBB Nephros has little recourse.

My personal next move is to wait and see. NEPH is tucked away in my IRA, so I'm not looking for a quick payday with this one and I'm tempted to buy into this sudden drop. The company still has the international market to look towards for the HDF therapy in addition to the possible water purification contraptions. That said, I wouldn't rule out a further drop in price unless encouraging news is released in the immediate future - an event that I don't see as likely.

To me that spells 'wait and see,' but I would understand a 'sell and move on' approach from those whose strategy in this stock revolved around this FDA response because it may be a while before NEPH rebounds - if it ever does.

For those looking to add on the drop, keep in mind that there's certainly going to be a financing deal coming up that- depending on the terms - might provide a better entry point.

All just my opinion.

Disclosure: VFC is long NEPH.

SIRI: Subscriptions On the Rebound, Will the Share Price Follow?

Shares of SiriusXM continue to hover right around the $1 level after it was reported that the SatRad company added a whopping 583,000 new subscribers in the second quarter of this year. That number not only exceeded the expectations of many analysts, but also - in just one quarter - outpaced the number of 500,000 that the company at one time estimated would be the gains number for the entire year.

The second quarter boost gives the combined SiriusXM a record number of subscribers (a record 19.5 million) while also reducing the churn rate at a time when a rebounding auto industry is supporting the increased demand for Satellite Radio.

Business is recovering and the health of the company seems to be improving - especially considering that SiriusXM was on the verge of bankruptcy early last year - and there's no doubt that SIRI has a lot of room to rebound if the pace of paying customers increases at the current rate.

However, the company and its stock is not entirely in the clear just yet.

There's a couple of issues - as I mentioned before - that could keep the stock at the current levels (or lower) for the time being.

Most immediately, there's the question of the over 220 million shares short that are sitting out there. The last time I discussed this stock it was my belief that those shares short could be used to drop the stock back down a couple of dimes (at least) especially if some negative news, such as missing subscription numbers, were to be released that could justify a drop.

The bad news portion of the short has been alleviated for now, but the question still remains of whether those short shares are going to covered at the current one dollar level where SIRI has been one of the most actively traded stocks on the Nasdaq, or whether the powers that be will attempt another 'panic dip' at some point, with the possible help of a shady analyst. It's been known to happen.

Regardless, the recent spurt in subscriber growth definitely makes things more difficult for the shorts.

Another subject that is sure to garner headlines in the near future is the Howard Stern contract. The recent spike in subscribers and the ongoing addition to new talent is a good indication that SiriusXM is a viable entertainment enterprise without the media giant himself, but speculation that many of his listeners will leave along with Howard (if he goes) cannot be ignored.

It's my opinion that any exodus of subscribers would only be a temporary glitch from witch the company could easily recover. More damaging, I might add, would be another half-a-billion-dollar contract for Stern. At the time of his original contract, it almost made sense to spend that kind of money on Howard (especially since the news ran the SIRI stock to nine bucks), but it's a different environment now and not only doesn't it make sense, Stern doesn't deserve it.

Also consider that the economy is not clear of trouble just yet. The volatility of the US and global markets, along with the continued demise of a few European economies cannot be hidden by the inconistencies of today's financial headlines. While CNBC, The Wall Street Journal and other financial sources on some days tell us that things are rosy - only to preach gloom and doom the next day - the truth is somewhere in between. We don't know whether there will be another down turn, and neither do the so-called experts - judging by the fact that they tell us something different every day.

That threatens the immediate rebound of SiriusXM because another downturn kills auto sales (again) and takes extra money out of the pockets of potential (and existing) subscribers who are looking to cut corners.

The recent rebound in the health of SiriusXM is highly encouraging, especially with some analyasts coming on board, but let's not believe that it's only smooth sailing from here.

Keep an objective perspective and, if it's your choice to do so, add on any dips.

Another quarter like Quarter Two could spell the end of $1 trading price, but there's always those short shares to worry about.

Disclosure: No position.

IMUC: Plenty of Long Term Potential

Here's my take on IMUC in response to a couple of emails/comments that I haven't yet responded to:

It's been a roller-coaster ride over the past few months for shares of ImmunoCellular Therapeutics, a ride that saw the stock trade as high as $2.44 before retreating back down to the one dollar range.

The pipeline of this company is still in the earlier stages of development, with nothing yet in Phase II, although a Phase II trial for ICT-107, a dendritic cell-based vaccine targeting multiple tumor associated antigens for glioblastoma, is planned for the second half of 2010.

The spike back in April followed a report that the University of Pennsylvania would support "process development and manufacturing" for the upcoming Phase II trial.

Shareholders who had been accumulating beforehand were offered a nice return on investment if they decided to play the trade, but were also offered a glimpse of how the stock can react to positive developments.

However, for the share price to maintain an increased price per share, it will need to be significant news on the effectiveness-of-treatment front in order to hold a high - not to mention the fact that future financing needs to look stable, which is rarely the case with OTC companies in the earlier stages of development.

In recent news, the company boosted its portfolio of intellectual property and patents in a licensing agreement with Targepeutics, Inc., for that company's early stage enhancement to brain cancer treatment.

I maintain my initial stance on this stock as a decent long term pick, although being that the products are still in such early stages of development, I'd take advantage of any price swings like we saw earlier this year and take some profit off the table when possible; I like being on house money with these types of speculative biotech stocks before critical news hits, but it's not always easy to do.

The initiation of the Phase II trial could spur another spike, but it's not one that will hold, in my opinion, so playing the trade may be a wise idea.

Keep an eye on this one with the goal of long term accumulation, in my opinion, because chances are that if the early stage products make it to late stage, the market cap could be significantly higher; that said, keep possible dilution in mind because the late stages are quite a ways away.

Also keep in mind that cancer immunotherapeutic treatments have a spotty past, with Dendreon's Provenge being the biggest success story, so no matter how good the prospects of success may look, nothing is ever a sure thing in the stock market. I do, however, believe that cancer immunotherapy is the next big thing in cancer treatments.

Any dip back down to the fifty or sixty cent range would be a screaming BUY, in my opinion.

Disclosure: No position.

Briefs: BIEL, DNDN, GNBT

BIEL.pk: Shares of BioElectronics Corp. continue to trade for the two cent level as growth on the international market continues.

Recent international developments had Health Canada approving the Allay patch for over-the-counter (OTC) clearance in that country while the South Korean version of the FDA approved the ActiPatch for the treatment of muscle pain.

Neither deal should be viewed as a 'breakthrough' deal on its own, but the developments are demonstrative of growth on the international market while the company awaits decisions by the FDA here in the United States.

I'll still add shares at the two cent level because I believe that the move to the upside will come quick once the right developments take place, if they ever do, such as audited financials demonstrating significant growth and/or positive developments from the USFDA.

With the entire market on the move to the downside, now's the time to load up on the long positions, in my opinion, and BIEL is as good a speculative play as any right now.

Disclosure: Long BIEL.



DNDN: When DNDN dipped to the mid thirty dollar level after a CNBC 'blunder' not too long ago, I mentioned that I would love a buy of the stock for under thirty dollars.

Here we are a few weeks later and DNDN finds itself trading for below that thirty dollar mark heading into the Fourth of July long weekend. With the DOW and the general market on the slide of late, I think it's time to add some shares of DNDN again - for the long term - as Provenge is estimated to become a big player on the cancer care market, although demand is likely to outpace supply for the immediate future.

Another development to watch is the ongoing Medicare investigation into whether or not to cover the treatment, which costs $93,000 per course.

In typical government fashion, MediCare expects to take up to a year to come to a decision.

Lower prices and volatility can be expected, in my opinion, as the general market slide could continue without a noticeable change of sentiment.

Let the bears play, I say, because we can buy at a discount at the end of the day.

Disclosure: Long DNDN.



GNBT: It's almost comical to see TheStreet.com's resident biotech blogger discuss the recent price decline of Generex and not add a disclosure regarding the $250 million lawsuit brought against him by the company for issuing false and misleading statements in his recent blog postings which preceded the price drop.

At the same time, however, would you expect anything different from an organization that touted Lenny Dykstra as an expert stock picker?

While not related to Generex, allegations have again resurfaced regarding Dykstra, Cramer and possible corruption at the TheStreet.com, according to recent press coverage. Surprise, surprise.

In other Generex news, the company just presented at the 70th American Diabetes Association Scientific Sessions in Florida.

Disclosure: Long GNBT.

Readers Respond: GNVC

Anonymous comments regarding GenVec, Inc.:

This is regarding GNVC, what is your thoughts on GNVC. Holding a loss in GNVC. Will it cross atleast .60.

Hi VFC,
Please help me understand this. what is going to happen for GNVC. heavy loss will it atleast buyout offer of .75 cents



VFC's Take: It's been a wild ride for GenVec, Inc. since I last responded to questions about this company, a ride that now has GenVec looking for 'strategic alternatives,' according to recent reports.

The downfall came for GenVec earlier this year after the company halted a Phase III TNFerade pancreatic cancer trial due to evidence that the trial would not meet its endpoints. After having to spiked to over three dollars in March, shares spiraled downward to under a buck after the trial halt, and GNVC closed the trading day Wednesday at forty six cents.

The rise to over three dollars and the volatility that ensued along the way offered a great example of why it's important to take some profits off the table on the way up - because if bad news is released, you won't be 100% invested and may have even already turned a profit or broke even, depending on how low you bought before the run.

That said, many are now trying to decide whether GNVC is an oversold stock with rebound potential or if it should be considered dead in the water.

Although the TNFerade trial was halted, the product may still have some potential in treating other indications and the company also has a partnership with Novartis to develop a treatment for hearing loss. At the same time, this potential should be considered a long way from market.

It's been my style, for the most part, that I don't mess with companies whose most immediate claim to fame is a "strategic alternative," and I maintain that stance with GNVC. Being that there's nothing close to market, I don't believe that there is any guarantee that a buyout or partnership would be on terms favorable enough to hold through another potential drop in price.

Shares of ENCY dropped on bad news, and then dropped again only to rebound very significantly on a buyout deal. ENCY had a product closer to market than GNVC does at this point, but it's still a relevant comparison when looking at potential 'buyout stocks.'

Sticking with GNVC now and moving forward would have to depend on each investor's entry/exit strategy, cost basis and tolerance for risk. Every situation is different, although I'd be inclined to close shop and move on for the time being.

I've never been a buyer of GNVC and most likely will not be unless the stock drops to lower levels, at which point I'd reconsider.

It's still not a great economy out there and I have to believe that any deal would come out more in favor of the bigger player than for GenVec and its common shareholders.

All just my opinion, each investor should do his or her own DD and invest accordingly.

Disclosure: No position.

Readers Respond: SSWC

From Shep regarding SpeechSwitch, Inc.:

Hello all. Two weeks ago I was touting SSWC as it made a nice run from .0004 to .0045. In that time it has consolidated and held pretty firm in the .002 area. There have been several developments since then indicating this could well become a going concern company. SSWC focuses on solar and wind technology as well as upcoming medical devices and other unique products. Nothing is certain of course but here's a bit of D/D:

*Reasonable share count for a penny w/ 10bil total, 7.2bil issued and only 1.5bil in float.
*Recently reduced debt load.
*Newly launched website w/ real products for sale: http://www.speechswitchusa.com/index.html
*CEO has around 150 patents some of which he will be releasing under this company banner. The first has already been launched (a solar powered Iphone/Ipad battery recharger).
*CEO claims financials will be audited starting in July.
*CEO is accessible, active and is keeping investors informed.

Cons:
*It is a sub-penny and thus totally dependent on retail investors and potentially highly volatile.
*CE designator on pink sheets (Caveat Emptor)--keep in mind financials will be audited soon hopefully.
*Much of what is attracting investors is hype and potential. Future company plans are just promises right now.

BIEL ran from sub-penny to .12 a year ago under similar circumstances, and I'm starting to think this could do the same or better. Do some D/D and see for yourself, but I believe this might be more than just your average pink. You have the potential right now to turn a few hundred dollars into 10's of thousands and that's why we're all here right? ;)

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VFC's Take: As discussed by Shep a couple of weeks ago, I agree that this is a sub penny stock that is worth taking a look at.

Of course, I like to keep a couple of things in mind with the sub pennies:

- venture with only 'night on the town' money until the company proves itself as a valid one,

- keep in mind the 'too good to be true' aspect of investing (there's usually plenty of bad to go with the good), and

- remember to primarily look at the investment as a trade play and not necessarily as a long term investment.

All just my opinion.

SpeechSwitch has launched a product sales website, as Shep mentioned, so the potential is there for this one to pay off as a nice trade once (if) the company get touted on some popular penny stock investing websites, although there also may be some longer term potential if sales are for real, the patents start paying off and the books become audited.

Thanks for keeping us informed with this one, Shep. Could be a winner.

Disclosure: No position.