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Tuesday, August 31, 2010

Readers Respond: GNBT, Mannkind vs. Generex

From Anne-Marie regarding my last post on Generex:

What are your current thoughts on Mannkind vis-a-vis Generex? What do you think the probabilities are for each to be approved? What type of news are we waiting for in September from GNBT? Finally, do you think GNBT will have options at some point?


Anne-Marie

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VFC's Take: First, here's a couple of links to some of my posts regarding this topic:

MNKD Drops After the FDA Asks More Questions and TheStreet.com vs. Generex

In the first link I outline my opinions of Generex and Oral-lyn in comparison to Mannkind and Afrezza.  In short, I believe that Oral-lyn will end up being the oral spray of choice because of the fact that the insulin will be delivered through the inner lining of the cheek and not the lungs, as will be the case for Afrezza.  I don't necessarily think that the patients will be alarmed much by the difference in delivery system, but the Doctors may have enough concern about the long term effects on the lungs to prescribe Oral-lyn over Afrezza.  It seems that there is enough concern about the subject for the FDA to delay an approval decision and for questions to be made public. 

On that note, I think that the FDA fiasco brings up an interesting point that I believe is important to emphasize.  When MNKD's share price got smoked in response to the FDA delay, shares of GNBT remained stable in the immediate aftermath.  But then a funny thing happened; you had bloggers representing websites such as TheStreet.com coming out and slamming GNBT, not MNKD.  A swarm of Internet stock message board bashers were employed in full force to create a mood of fear, panic and discontent around GNBT in cyberspace.  Other self-professed journalists who had thought Oral-lyn was great during Phase I trails came out against the product in Phase III.  In a swift instant, the subject of Afrezza's cloudy future was ignored and the spotlight was put on Oral-lyn.  This was a prime example of the classic 'change the subject' routine often employed by the big boys when they want to manipulate the system.  I will say that these are my own opinions based on my own experience and perceptions, but when you see the same things happen with the same clowns involved more than a couple of times...let's just say that VFC is not a big believer in coincidence. 

It could be that many had hedged their bets on Afrezza, believing that the product would have ample time on the market during the pre-Oral-lyn era to build a solid sales lead, only to be blindsided by the FDA.  It could be that those same players attacked GNBT in order to knock the share price down to a more attractive entry point knowing that Oral-lyn, becoming a possible better and safer alternative to Afrezza, was actually the better bet. 

That said, it's also possible that the attacks that materialized on Generex were the result of a few bitter big boys and some biotech bloggers looking for hits to their websites at the height of a popular event.  What we do know is that some of that blogging was so irresponsible that TheStreet.com was hit with a $250 million dollar lawsuit and had to issue a retraction statement, however pathetic it was.  It's also worth noting that one of the items included in the retraction was an apology for mis-spelling 'Oral-lyn.'  I mention that point because I am inclined to believe that if Oral-lyn and its definciencies were intended to be the subject of a 'report,' then the correct spelling of the product would have been a priority while preparing the report.  The fact that it wasn't tells me that it was a hastily prepared hack job prepared for ulterior motives.  But hey, who the heck am I?  I'm just a guy with an opinion - and I've actually been very appreciative of being able to accummulate shares at levels that resulted from the suspected coordinated attack.

Now, should GNBT soar one day, and should Oral-lyn succeed - the same ones who bashed and attacked the stock will act like they were on board all along - just like Adam Feurstein, TheStreet.com's biotech blogger does with Dendreon.   As Hannibal Smith would say, "Slimeball."

I've said it before and I'll say it again - it's a heck of a lot easier to sit back and bash stocks that have already enjoyed a good run than it is to find hidden gems before they soar.  Especially in a sector where three out of ever four companies fail.  There's nothing to that, that's like looking at Pamela Anderson when she's 50 and saying she's just OK, when you've missed out on all the slow motion 'Baywatch' years.  Give me a good site with some good stock picks and suggestions and I'll take that any day over the guy that always advises to the negative because the odds show that he'll be right more often than wrong that way. 

The truth is, one speculative hit can make up for an entire portfolio of speculative stocks.  TTNP and DNDN were hits like that, and if GNBT becomes a hit as a result of Oral-lyn success, then the current trading levels will be looked back upon with disbelief that the shares were so cheap.

Back to Anne-Marie's questions:

I think that both will end up being approved.  I also think that the FDA delay was a gut shot to Mannkind's Afrezza for the long term because, if approved, the product will not have the same amount of time on the market to gain sales momentum without Oral-lyn competition as it will now.  Again, I emphasize that I believe Oral-lyn will be the insulin spray of choice, if approved and barring any Phase III setbacks or unforseen safety concerns.

There have been rumblings that we will see news in September, although I'm not convinced that that will be the case.  My experience in the market has taught me that news comes when it's expected about 50% of the time; and the 'September news' strikes me as more speculation than it does as fact anyway.  Hey, I want a positive update just as much as the next guy, but until I see it, it's a non-factor and I'm not going to lose any sleep thinking about it.

As for the question of options, it would make good sense to throw some options out there at some point, but I have no guesses as to when that would happen.

Disclosure:  Long GNBT.

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Sunday, August 29, 2010

Briefs: GNBT, DDSS, TTNP, BIEL, CELH

Some briefs heading into the new week; Stocks to Watch and/or accumulate:

GNBT:  It's always worth keeping an eye on Generex these days, if nothing else for the sheer 'Days of Our Lives' drama surrounding the company.  Management seems intent on pushing through a reverse split, although - as I've speculated before - it could stricly be posturing to keep the Nasdaq at bay since GNBT faces the possibility of delisting for not meeting the minimum trading criteria.

If that is the case and the push for the RS is just posturing, I imagine that the board at Generex is confident that there will be significant enough news released in the near term that could cause the price to rise in such a fashion that the Nasdaq minimum requirements would be met.  That news would have to be, in my opinion, a very positive Oral-lyn Phase III update or the announcement of a major partnership.

On the other hand, the possibility of a reverse split still does exist, so it's worth keeping that in mind if/while buying shares in the forty cent range, after the recent runup

For now I'm still a buyer in the mid thirties, but I'll hold what I've got at the current levels and see how the story plays out.

Generex has the cancer pipeline going for it in addition to the potential of Oral-lyn, but the immediate success or failure of this company and its stock depends on Oral-lyn.

Keep an eye on this developing story.

Disclosure:  Long GNBT.

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DDSS:  The recent Labopharm rebound stalled over the past couple of weeks, as no announcement hit the wires regarding Oleptro approval in Canada.  It was expected that the Canadian medical authorities would render a decision on August 4th. 

According to the most recent quarterly report, Labopharm has been notified by Health Canada that the approval decision was delayed due to backlog.  Labopharm expects the decision by year's end and is searching for a commercial partner for Canadian distribution in the meantime.

On this side of the border, the commercial launch of OLEPTRO in the United States is underway.  It could take a few quarters for sales to ramp up, but the fact is that the product is now on sale and investors can look towards growth.

DDSS has dropped roughly twenty cents since the beginning of the month, and with the general market taking a dive over the past few trading sessions (aside from Friday), many an opportunity has opened up to load up on bargains - and DDSS could be included in that group, in my opinion.

On the flip side of the positive, a further dip is always possible until sales numbers ramp up enough to justify a sustained higher price.

That said, within the next 52 weeks, I'm thinking that we'll at least see the high of the last 52 weeks - I liked these shares for just over a buck and I love them for just below.

Each investor should do his or her own DD and invest accordingly.

Disclosure:  Long DDSS.

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TTNP:  Another one hanging out at just below a buck is Titan Pharmaceuticals.  It wasn't too long ago that this stock traded for over twice its current price after rising from the penny level when Vanda Pharmaceuticals' Fanapt was approved - after having first been denied by the FDA.

Fanapt, of which Titan is due 8-10% in royalties, is currently in its second full quarter on the sales market.  Investors will be watching closely to see just how much sales growth will be demonstrated during the third quarter, as Vanda and licensing partner Novartis look to ramp up the pace of sales.

For Titan, however, there's quite a bit of potential beyond Fanapt royalties.  The currently enrolling confirmatory Phase III trial for Probuphine is recruiting ahead of schedule.  Additionally, the trial itself is in part funded by the National Institutes of Health (NIH), easing the financial burden of the company as it develops a product - and a delivery system - that could equal very significant revenues down the road.

Speculative stocks, especially those of biotechs and small pharmaceuticals, trade mainly on potential and not past financial results; with that said, TTNP - even after the massive rise from a penny - could still end up being a steal for a buck as the pipeline advances.  Especially if Fanapt sales pick up some steam. 

I still think that Titan will end up being bought out at some point, however, and I can't resist adding a few shares here and there.

Disclosure:  Long TTNP.
  
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BIEL:  Shares of BioElectronics dropped swiftly back down towards the once cent mark after being denied at two cents early last week.  It was expected by many that the recent run in share price would not hold unless some significant news or numbers could back it up - specifically, it's news on the FDA front that investors are waiting for. 

Growth on the international front has been encouraging, although not enough to satisfy most US-minded investors, so it should be expected that this volatility will continue until we hear one way or the other from the FDA. 

That makes BIEL a great trader's stock right now, although I always like to have a base position that is left long for the 'just in case' scenario that a big run is recognized in short time; for the most part, that's how these penny-play, speculative babies perform - a whole lot of waiting, just for a quick rise that almost doesn't justify the long wait. 

They used to say the same thing about Times Square before Giuliani cleaned it up.

The volatility and the temptation of pending news keeps BIEL at or near the top of my 'Stocks to Watch' list; a one-time pure penny play that has the potential to make a dent in the market as an alternative to Tylenol and Ibuprofen, although a positive response from the FDA is necessary for this one to reach its true potential.

Disclosure:  Long BIEL.



CELH:  Barring any significant mid-quarter news, it should be expected that shares of Celsius Holdings will hover in the mid to high dollar range, in my opinion.  Volume on this stock has been anemic, and it'll take some unexpected developments to bring attention to Celsius as investors await the next quarterly report.

Second quarter results most definitely demonstrated that the company is back on track, and I believe that the third quarter will bring results even more satisfying than last as distribution continues to grow, although that is purely my own opinion.

A couple of weeks ago I emphasized the company's expansion into the military exhange services (AAFES, NEX) and it's also become obvious during ordering that the various Celsius products are also available to Army and Fleet Post Office addresses overseas, which previously has not been the case. 

While growing distribution to the large US chains is highly encouraging, a move into the military market may be a significant play because that is one sector of the population that certainly doesn't spend half their time fighting their own bellies just to reach the refrigerator.  Celsius is a health-consious product that could fit well in with this health-consious population. 

While not the lifeline that will make or break this company, the move into the military exchanges should not be overlooked or underestimated.

Other positive developments include the new flavors hinted at in this month's edition of Celsius Bright Connections, the company's monthly newsletter. 

It looks like some buzz may be created around this stock again, and I think that this is a great opportunity to either average down or just plain accumulate.  It's been a long wait since the last spike, but I think that we'll be back to the previous highs in due time.

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

Disclosure:  Long CELH.

Thursday, August 26, 2010

GNBT: My Vote Against the Reverse Split

It's voting time for shareholders of Generex Biotechnology Corporation, as management yet again attempts to gain enough support to put a reverse split into effect for the GNBT stock.  It's still arguable whether the board is just posturing for time with the RS antics in order to ward off a Nasdaq delisting or if the members are truly intent on ramming this split through.

Regardless, VFC voted against the split as I think that it is in the best interest of shareholders, for the time being, to stand with the common stock at hand.  Pipeline news is way too close to be effecting reverse splits, in my opinion, and with that in mind, another Nasdaq extension can't be ruled out.

The right Oral-lyn trial update news could put the stock on a run towards a buck in a hurry, and that is a price that I believe we'll see before the release of the final results anyway. 

The potential of this company lies in the success of the pipeline, regardless of whehter a RS takes place or not.  However, a post-split drop in price should be expected if one does take place.  I'll most certainly be adding shares in that eventuality, barring the release of any bad news. 

If the RS does not take place and the stock remains on the Nasdaq, then I'll continue on with as much accumulation as I can for under fifty cents.  I'll also be adding shares again if we see the thirties before results of the vote are out.

If the RS does not take place and Generex moves to the OTCBB, I'll likewise continue accumulation as I'm not afraid of the bulletin boards because - again - it's the success or failure of Oral-lyn and the rest of the pipeline that will decide this company's fate, not the board that its stock trades on.

Right now I'm in a holding pattern waiting to see what happens next.

I did my part, I voted AGAINST the reverse split.

Disclosure:  Long GNBT.

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Wednesday, August 25, 2010

Briefs: AGEN, ACTC

AGEN:  Anitgenics announced on Wednesday that partner GlaxoSmithKline’s (GSK) has commenced a Phase III shingles-prevention trial for its herpes zoster vaccine candidate containing Antigenics' QS-21 Stimulon vaccine adjuvant.

This Phase III trial marks the fourth for product candidates containing QS-21, and is significant for Antigenics because the company will be due milestone and royalty payments on sales of those products that contain the adjuvant.  These payments would come at a relatively cost-free basis for the company, since there will be no expenses behind marketing and distributing the products; Antigenics will just sit back and collect the checks - about as close to free money as you can expect in this industry.

That said, it's the development of Oncophage that can drastically increase the value of the company and the stock.  Having been approved in Russia for the treatment of kidney cancer, the product had no such luck with the US and European medical authorities and investors now await the progression of the glioma trials.

I'm still a fan of Antigenics and have been accumulating shares for below a dollar based on the potential of Oncophage and QS-21, both of which could bring in significant revenue for the company over the long term.

I wouldn't add into Wednesday's spike, however, barring any follow-up significant news, this will trickle back down again for the time being. 

Disclosure:  Long AGEN.

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ACTC.ob:  A federal court ruling earlier this week temporarily blocked federal funding for embryonic stem cell research that involves the destruction of embryos.  This ruling will even effect some reasearch that was allowed under the Bush administration and could effect the advancement of the pipelines of stem cell companies such as GERN and STEM.

However, Advance Cell Tech could be immune to any negative effects resulting from this ruling, as last week the company announced that it is positioning to obtain patents relating to cellular reprogramming.

The 'reprogramming' includes technology that creates embryonic cells from adult cells, a process that could alter the shape of stem cell research and leave ACT open to receive government grants, even in light of the recent federal ruling.

It's yet to be seen whether these patents will be issued to ACT, but in light of recent events, this is a story worth watching.

Disclosure:  Long ACTC.

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Readers Respond: BIEL

Part II of Kevin's email; BioElectronics:

Hey VFC,


Thanks for doing your blog. I'm curious as to what you think about BMGP. Do you already know about this company and what do you think? The stock price has had a real run up of late but the products seem great.
I realize your plans can always change but at the moment do you have a total exit strategy for BIEL? I know you said you'd probably sell some at .10. Is there a point where you will likely sell all out? Or will you keep a certain amount of shares in case the sky is the limit? How many shares do you own?


Thanks,
Kevin

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VFC's Take:   Regarding exit strategies, I'll play with my trading and long term shares and use separate exit strategies;  the goal is to use the trading shares to try and come out on house money (or more) while leaving the long term shares alone in case the stock decides to unexpectedly run one day.

I believe it's been a while since I mentioned that ten cents was my 'sell some' mark, because right now I consider five cent to be the new ten cents for this stock, given that we've been able to accumulate for so long at around a penny.  The truth is, with all this accumulation, even the recent run to two cents gave investors a great opportunity to flip a few shares.

Until BIEL releases solid news, meaning FDA or big earnings, these volatile fluctuations are going to be the name of the game.

With five cents being the new ten cents for BIEL, I also consider .015 to be the new three cents.  Three cents was previously my 'load the boat' price, but with the stock hovering around a penny for so long, there's no reason to pick up shares for any higher than .015 right now.

My exit strategy with BIEL depends more on events than price; meaning I'm holding my long shares through the FDA developments and international growth.  My strategy for the trading shares is based on price, and I'd probably have them all sold by ten cents, unless it something happened that had us steamroll past that price.

As for how many shares I have?  I don't give out numbers, I've found that it pre-occupies this site.  The intent here is to discuss stock picks and strategies - but I will always admit that I am a small investor, just trying to pick up the crumbs that the big boys leave behind when they play their games.

With a little bit of patience and a lot of DD, the stock market can be very kind to the small investor whose expectations are reasonable.  One big speculative hit like DNDN, TTNP or CSUH can easily put the small investor on a European vacation while also filling a portfolio with house money.  The best part about it for the small investor is that investing can be treated as a hobby, not a living.  The big boys don't have that luxury - they'll soak their shirts with sweat day after day while releasing legions of bitter puppets to the message boards or to other stock investing web sites because this is survival for them - and greed consumes. 

For us, it's all about a Corona in Los Cabos or a Tinto con Limon in Andalucia, and having some extra to make the lives of our family members better and to have some left over to give to our favorite charity.

That's what it's all about.

But we must never get too greedy. Be happy with a little extra, but never be so naive to think that one or two trades is going make you a millionaire, although that's what people want these days - the easy million.  No longer is a hard day's work satisfying for too many, everyone's looking for handouts, lawsuits and quick riches.

Maybe when the dust settles from the economic meltdown - that was created by people with the 'get rich quick at the expense of others' mentality - then people will appreciate hard work and earning just a little extra in the market again. 

Or maybe now I'm the naive one.



Thanks for the comment, and good luck. 

Disclosure:  Long BIEL.

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Readers Respond: BMGP

From Kevin regarding BioMagnetics Diagnostics:

Hey VFC,

Thanks for doing your blog. I'm curious as to what you think about BMGP. Do you already know about this company and what do you think? The stock price has had a real run up of late but the products seem great.
I realize your plans can always change but at the moment do you have a total exit strategy for BIEL? I know you said you'd probably sell some at .10. Is there a point where you will likely sell all out? Or will you keep a certain amount of shares in case the ski is the limit? How many shares do you own?

Thanks,
Kevin

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VFC's Take:  Biomagnetics Diagnostics is medical device and biotechnology company developing a diagnostics system that will potentially detect the actual presence of the virus/ toxin/ disease itself, and not concentrate on the antibodies produced by the body's immune system which may take anywhere from weeks to months to appear.  If successful, this system will allow for much earlier detection and treatment of the diseases that it will diagnose, such as HIV, maleria, TB and others.

The company also has a licensing agreement with Los Alamos National Laboratory that gives the company access to the Triggered Optical Biosensor and Integrated Optical Biosensor System (IBOS) technology.

A few letters of intent have also been announced recently, as Biomagnetics is seemingly looking to acquire numerous Chinese companies to bring in instant revenues, revenues that could fund the advancement of the diagnostics system.

It all sounds great, doesn't it?  A revolutionary diagnostics system and a few acquisitions that will bring in millions to fund the trials. 

VFC's not buying it. 

My first red flag is the Chinese connection, I've always been sceptical of companies whose potential lies in the unregulated (or over regulated, depending on how you look at it) and very shady Chinese market.  The only information that comes out of that country is the information that they want you to see, meaning that there is no way to conduct valid DD to see if you're making a wise investment decision based on risk/rewards.  If you think playing the US pennies is a crapshoot, then imagine the crapshoot of a company whose potential lies in a market that you can't check up on.

This company is also looking towards conducting trials in Mexico, Kenya and India before considering trials in the US.  Were these trials intended to be conducted in conjunction with a US trial, then maybe I'd be more of a believer, but right now it looks like a bunch of pump and dump hype.  Reminds me a bit of HDTS.

Don't get me wrong, this stock has been a great trade for those that rode the run, but I'm hesitant to chase stocks as it is, let alone one that is as shady as this one.

I wouldn't completely discard this company, but I'd definitely tread cautiously.  A biotech company getting involved with Chinese biofuel contracts looks like a couple of goons with sunglasses plotting something around a poker table to me.

Good luck and congrats to those that played the trade.

Disclosure:  No position.

Healthcare Watchdog

Tuesday, August 24, 2010

Readers Respond: CTSO

From Oliver regarding Cytosorbents Corp.:

Hey Vinny,

Have you heard anything positive or negative about ctso.ob.. Seems like this stock is stuck in the mud, also what type of movement do you see near and long term.
Thanks
Oliver
 
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VFC's Take:   Aside from what been released publicly by the company and other media sources, I've got no more insight than anyone else out there.  I do know that I'm waiting - along with everyone else - to see how this European Cytosorb for sepsis trial plays out.  That's the focus right now.
 
According to the most recent reports, the trial is still on track to be completed either later this year or early next year.  I plan on continuing to accumulate shares for under ten cents before that time because I expect a significant runup if the results are positive because it looks as if the market is taking a sceptical approach when judging the possibilities of success.  There's no real and effective treatment for sepsis at this time, so a cautious approach should be expected.
 
At this time I consider Cytosorbents a 'one trick pony,' meaning that if Cytosorb fails, there's nothing behind it in the immediate pipeline to keep the share price from plummetting.  That could change in time, however, since there are plans to test the device in additional indications later on down the road, but right now all resources are being geared towards the sepsis trial.
 
Since there's been some dilution this year, I don't expect quite the runup that I did previously, but a positive trial should shoot the stock through past highs, although the exercising of options could keep it from realizing its full potential until revenues start rolling in.
 
I consider this an 'all or nothing' stock right now, well worth some night on the town money.
 
Disclosure:  Long CTSO.
 
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Readers Respond: Still GNBT

From Mona, in response to GNBT:  On The Rise:

You wrote: "if Oral-lyn turns out to be for real, then the current prices are going to end up looking like chump change within a year of approval"



What do you think the potential will be within a year of approval and also slightly longer than that? Do you see this going to $10 - $20 a couple of years out sans Antigen?


Thank you,


Mona










VFC's Take:  It's tough to look at price predictions without knowing whether we'll see a reverse split or not, and it's also wise to remember that the biotech sector has been very unpredictable over the past couple in years in terms of stocks trading contrary to news; meaning good news often results in prolonged slumps in share price until revenue starts rolling in.  The same thing could happen with GNBT.

However, I believe that Generex will roll out Oral-lyn fairly quickly if approved and the stock should see a billion dollar market cap within 18 months of approval, and then it could be off to the races after that.  I do believe that Oral-lyn will be in high demand as an alternative to needles, and once Oral-lyn can meet that demand, sales growth could come in swift fashion, a la Dendreon and Provenge.

Each investor should do his or her own DD and come to their own conclusions. 

Disclosure:  Long GNBT.




From Ilene:

Why does Generex combine a insulin sprayer AND a cancer company? How do they go together?



Ilene

VFC's Take:  An insulin sprayer and cancer treatment equals BIG BUCKS, if successful.  That's the most obvious link, in my opinion.

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Readers Respond: GNBT, The Delivery Technology Behind Oral-lyn

From Hilda, in response to my post GNBT:  On the Rise:

Something you may want to note the next time you write up GNBT is that it is a platform delivery technology. Once insulin is approved there are myriad additional applications, i.e. morphine and other oncology medications, and other injectable medications. Pharmacuetical companies with expiring patents can use the new delivery system to extend their drugs' life and the companies' profits. I see huge potential and eventually a buyout. Also, there is the cancer vaccine subsidiary of GNBT.


I love your blog and look forward to reading it. Too bad you don't have the time to write daily.

Kind regards,

Hilda



VFC's Take:   Thanks for the feedback, and you definitely bring up a valid and interesting point.  All the attention is on Oral-lyn right now, but the drug delivery technology itself - as a way to deliver drugs to patient via a spray to the inner lining of the mouth - holds worlds of potential. 

It is true that I have not highlighted the technology in my postings about Generex, but I have mentioned it on numerous occassions being a more preferable method of delivery than inhalers, such as Mannkind's, that use the lungs to deliver medication to the system. 

I also hold shares in a few other companies partly because of the potential of the delivery system, and not just because of the products currently being developed; namely Titan Pharmaceuticals (TTNP) and the ProNeura technology and BioDelivery Sciences (BDSI) and BEMA. 

Generex is definitely worth throwing into that 'delivery system group', based on the potential of the technology, although for the time being investors are looking at the short term and concentrating only on Oral-lyn.  The potential of the delivery system offers a longer term 'Plan B' should Oral-lyn not make it to market.

Thanks for highlighting these points, Hilda.

I'm glad you enjoy the blog.  I try to keep up with it as much as I can, but this is just a hobby that I've combined with my hobby of investing and I'm not able to keep up with either on a full time basis.  I do try, though, and I've enjoyed the interaction with like-minded investors out there. 

Disclosure:  Long GNBT.

Readers Respond: GNBT, Reverse Splits and Averaging Down

From Spry regarding my post yesterday on Generex:

Nice article, VFC. I sold some of my GNBT shares on the spike today, and am holding the rest for now in the hope of a further run-up. Management seems pretty intent on executing a reverse split. I don't particularly care for this tactic since shareholders such as myself voted against the previous attempt. I agree that this may be a pre-RS split run-up like what occurred with XOMA before their RS.



 
VFC's Take:  Thanks for the comment, Spry, good to hear from you again.  I'm always a supporter of grabbing some profit with trading shares such as you did during Monday's price spike, and if the reverse split does take place, then that move will most definitely look like a smart one as it can be expected that GNBT(D) will experience a drop after the split. 
 
For those new to reverse splits, most stocks drop after the split takes place.  A pre-split runup serves a few purposes, among them it allows the big boys who may go short on the back end of the split the opportunity to bank higher percentage gains on the drop. 
 
I also like the way Spry held onto some shares.  There's no telling, at least not for the small retail investor, whether managements rigid intent on conducting a RS is simply posturing to avoid a Nasdaq delisting or if the intent is real. 
 
Additionally, updates on the Oral-lyn trial could come as soon as September or some other news could hit the wires that may cause GNBT to run even higher.  The small investor has to be prepared for either eventuality.  In my experience, it's worse to be on the sidelines when your stock runs than it is to watch it drop.  A speculative stock with potential is a speculative stock with potential until that potential disappears; so if the potential is still there and the price drops, then VFC calls that a good time to average down and/or add shares. 
 
Again, this is based on my own experiences - and I've got more patience and tolerance than most out there - but I'd rather accumulate and hold on a dip (as long as the potential is still there) than sell out of fear and panic only to watch the stock skyrocket one day on the news that I was originally waiting for.  I've tried both, trust me, and the regret of selling out is far worse than the paybacks of a skyrocketing stock. 

Granted, sometimes the paybacks don't come because the potential disappears through a failed trial or whatnot.  At that point you've got to do what you've got to do.  On the other hand, one good hit on a speculative stock can have you playing on house money forever (see:  TTNP, from a penny to over two bucks, for example).  Each investor should find his or her own style based on their own tolerance for risk, patience and volatility.
 
Generex is one of those that could pay off big; and pretty soon if Oral-lyn is deemed successful and effective.  It seems contrary to the wishes of shareholders that management wants to push this reverse split through, but the real event for the near term lies with the Oral-lyn Phase III trial - and that's what investors are waiting for.
 
I've got the shares that I need, so I'm holding for the time being, but I'll add on any post split drop, as long as the potential doesn't change.
 
Thanks again for sharing, Spry.
 
Disclosure:  Long GNBT.
 

Monday, August 23, 2010

Briefs: JAZZ, MCLN

JAZZ:  It's been about a year since I mentioned Jazz Pharmaceuticals.  In that time the share price had just about doubled (after realizing even bigger gains before I tracked the stock) until Monday's nearly three dollar dip after an FDA advisory panel voted 20-2 to not recommend approval for JZP-6, Jazz's treatment for fibromyalgia.

The panel's concerns were that the product would be used and abused since it contains a form of gamma hydroxybutyrate (GHB), the commonly referred-to 'date rape' drug.

According to the panel, the outlined restrictions proposed by Jazz to restrict potential misuse were not enough to give the FDA a 'warm, fuzzy,' and therefore the members did not recommend approval.  However, the panel did encourage Jazz to continue working the product and left the door open for a change of heart later on down the road. 

The drop in price certainly makes a Jazz an appetizing long term pick once again, based on the potential sales growth of  Xyrem, a drug treatment for narcolepsy, although I'll be on the sidelines waiting to see if the stock drops further before buying in.  Any further drop would be unwarranted, in my opinion, since the company also has the antidepressant drug Luvox CR on the market in addition to Xyrem. 

Total revenue for Jazz in 2009 was $128 million and it's expected that 2010 will bring in significantly more, with or without JZP-6.

The FDA's final decision won't come until October, but the 20-2 advisory panel vote should translate into a solid 'No-Go,' so I wouldn't count heavily on a final decision in opposition to the panel vote.

That said, the dip makes Jazz an attractive long term growth pick.

Disclosure:  VFC has no position.

optionsXpress

MCLN.ob:  MedClean Technologies, Inc. announced results for the second quarter on Monday, and although the numbers were not up to the expectations of many investors, the potential for future revenue growth was evident in the $1.7 million backlog number, as well as in the profit margin number.

The company has continued to add distributors and partners over the first half of this year and is still a nice mid to long term growth pick, in my opinion.

Monday's trading saw the MCLN stock trade down towards a penny, and it's my opinion that sub-penny prices are inevitable in the near future, although I think that those prices will be an irresistible buy, if they aren't already.

Penny plays are always risky, but this is one that is primed for growth and success.  However, I also believe that the next couple of quarters will be crucial for keeping the long term shareholders interested.

I'll load the boat at a penny or below.

Disclosure:  Long MCLN.

B2C Jewels - Engagement Ring

GNBT: On the Rise

With an hour left of trading to go on Monday, shares of Generex had posted a solid 10% gain to open the week on volume nearly four times the daily average. 

The share price had traded down to the low thirties earlier this year on fears of a pending reverse split and some questionable blogging by suspect entities, but the recent rise in price has some speculating that September will bring positive updates regarding the Oral-lyn trials. 

Any additional updates or presentations of data would come on the heels of recently released, encouraging information put out by Generex last month in regards to the ongoing Phase III trial.  According to that release, Generex had already achieved 75% of the required number of per-protocol completers and the use of Oral-lyn would support a non-inferiority claim relative to the standard-of-care injectable insulin - if the interim trends continue through trial completion. 

Trial completion is expected early in 2011.

It's long been my expectation that GNBT would enjoy a runup in price - to a dollar or more - before the release of the final trial results, and I still expect that to be the case, unless a reverse split occurs in which case I'd expect a post-split dip, barring a very positive news released in conjunction that would cause the share price to remain inflated. 

Management seems intent on pushing through the reverse split, but it could just be posturing on their part to ward off an attempt by the Nasdaq to delist the stock from the exchange.

I'm in 'Hold Mode' right now with GNBT, waiting to see how the recent rise in price plays out, but I'll still add a few shares here and there if the stock remains around fifty cents because if Oral-lyn turns out to be for real, then the current prices are going to end up looking like chump change within a year of approval, if that turns out to be the case. 

There's too much market potential for an insulin spray, in my opinion, as an alternative for diabetics to injections to pass up the risk/reward profile of GNBT. 

When weighing the risk of Generex, keep in mind that this company has enemies - TheStreet.com being the most obvious, and probably some big boys that went short right around the time that TheStreet published their hack-job blog posting on GNBT.  The said post, while containing some accurate information, also contained enough suspect commentary that Generex felt inclined to file a $250 million dollar lawsuit against TheStreet, and even got a retraction on TS's biotech blog.

It doesn't come easy for Generex and shareholders of the company, but Monday's rise could be a sign that the stock has turned a corner and is heading for the run that many have predicted.  Let's also respect the position that this could be a pre-reverse split runup that will allow for a larger dip post-split; it's always a possibility, if management is truly intent on conducting this RS.

Keep an eye on GNBT, and keep in mind that the biggest benefits will come to the diabetics who - if Oral-lyn is approved - will no longer have to rely on needles to deliver their insulin.

Disclosure:  Long GNBT.

Covestor Investment Management

Stock Watch: BIEL, Denied at Two Cents

After realizing a rapid and impressive runup last week, shares of BioElectronics bounced off the two cent mark during the early trading hours on Monday.  Volume crossed four million at just below the opening price of the day as many short-term profit takers took advantage of the near double in just over a week.

It was my opinion last week - and still is this week - that barring any positive developments in sales and/or FDA applications, BIEL would most likely not have the momentum to sustain a higher share price and could easily trickle back down towards the one cent mark. 

Until significant news hits, and not just updates with "certain" predictions, BIEL will continue to be a trader's and accumulator's game, in my opinion, and both plays have the potential to pay off very significant returns.

Trading game or not, I'm of the opinion that when BIEL moves, it'll move quick - in the same fashion that it did during the run to twelve cents, and I'm playing the accumulation game in anticipation of such a move. 

However, any setbacks on the FDA front would kill the short term upward momentum, in my opinion, until international sales grow at a rate to support a quick and sustained rise. 

Keep in mind that many consider US over-the-counter approval as the holy grail for this stock and won't stick around long enough to wait for the international growth; that's just the nature of the beast.

A few consecutive closes above two cents would be a strong indicator, in my opinion, but we've got to break through that mark before we can consider holding it. 

For the time being, BIEL is quite the stock to watch - and to accumulate on any dips down towards a penny.

Disclosure:  Long BIEL. 

 

EPCT: Epicept Denied by FDA

Shares of Epicept were cut by over 40% during early trading on Monday after the company announced that it had received a 'refusal to file' letter from theU.S. Food and Drug Administration (FDA) regarding the New Drug Application (NDA) for Ceplene.

Ceplene, Epicept's therapeutic product used in conjunction with low-dose interleukin-2 for remission maintenance and relapse prevention for patients with acute myeloidleukemia (AML) in first remission, is already approved in the European Union and is being marketed with partner Meda AB.

In response to the FDA's refusal to file letter and suggestion that the company conduct an addtional trial, Epicept has requested to meet with members of the FDA as soon as possible.  While this action offers some investors hope that a reversal of decision is possible - along with a rebound in share price - I wouldn't hold my breath. 

'Tis true that the European medical authorities, after Epicept successfully argued its case, ultimately approved Ceplene without the additional trial that they had asked for, but believing that the US FDA would follow suit is akin to hoping for lightning to strike twice, in my opinion. 

Epicept is small beans in the big scheme of things, and it's far fetched to believe that the FDA would expend much energy considering the case of a small player like EPCT (see:  Encysive Pharmaceuticals (ENCY)), although the agency did reverse course with Vanda Pharmaceuticals last year when it decided to approve Fanapt after first issuing a decision of non-approvable.

Even as the hopes of a timely US approval look to have gone out the windowfor Epicept and Ceplene, and even as the stock has been on a steady decline since the reverse split, EPCT still holds enough potential to be considered a bargain for these prices, in my opinion. 

In turn, I've doubled my position in the stock during Monday's trading. 

Ceplene is making strides in Europe and the remaining pipeline holds significant potential with Crolibulin, a treatment for pateints with advanced solid tumors, and NP-1, a topical cream to treat pain.  Epicept also has a licensing agreement with Myriad Genetics for the development of Azixa to treat brain cancer. 

Barring any solid news that would spur a rapid rebound in price, EPCT may trend lower before rising again, especially if fears of dilution are raised but I do believe that we're getting a good deal with the stock right now,  Considering the potential sales growth of Ceplene in Europe and the advancement of the rest of the pipeline, this stock could easily trade up to previously traded levels - if not higher - with some positive news and demonstrated potential from the pipeline. 

That said, it's still too early to count on Ceplene to generate the revenue to fund research & development, so always keep dilution and survival on the risk side of the risk/reward scale when making a decision of whether or not to add shares.

It's been a volatile ride for this company and its stock over the past few years - and I'm still suspect of management - but the risk/reward at these levels is too tempting to pass up, at least for VFC.

I doubled up on Monday, but I'm willing to buy more if the price drops any lower so I'm keeping some money on the sidelines.

Disclosure:  Long EPCT 

optionsXpress

Wednesday, August 18, 2010

Briefs: BIEL's 25% Rise and CELH Green Tea a Finalist

BIEL.pk:  Shares of BioElectronics closed the trading day on Wednesday just over 25% to the upside with a trading volume number of nearly 13 million.  After hovering around the penny mark for too long, according to some, a spike like this one comes as a pleasant sight to long term investors who have been waiting for a turnaround. 

So is Wednesday's spike indicative of pending news or developments that could boost the sunken share price to previously traded levels?  Maybe.

With multiple applications currently in the hands of the FDA, it's certainly possible that news on that front could hit the wires at any time, especially with all of the recent positive speak coming from the company and its CEO.  That said, a one day rally is just that - a one day rally.  It's way too early to get excited about a possible shift in momentum and it's just as likely as not that Wednesday's move is just another head fake.

What the move does reinforce is that when BIEL moves to the upside, it moves quick; and spikes like this one do wonders to reminding long time shareholders of why they buy and hold this one, if only because all of the possibilities of news enter into the picture.

It's my opinion that unless something is pending regarding the FDA, BIEL may trickle down again, barring any other significant news (in terms of potential sales) that could support a prolonged bump.

Exciting yes, but BIEL is not into the clear just yet, not by any means.  But the potential is still there.

Disclosure:  VFC is long BIEL.



CELH:  Aside from quarterly reports, Celsius Holdings has not issued many press releases lately, but on Wedensday the company announced via PR that the Peach/Mango Green Tea flavor was nominated as a finalist of the "Best New Products" competition, held by Convenience Store Retailers (CSR) Information Group. 

The news didn't - and shouldn't - have any affect on the share price, but it's always good to see the CSR promote a product of a company that you invest in.

Celsius is still well into a growth stage at this point, and distribution is still growing, most recently entering with force into the military exchanges world-wide.  It's been arguably effective keying in on the housewife market, but I believe that the military families that will now be able to purchase the product could turn into a solid customer base.

I don't foresee much of a change in price or volatility over the next couplde of months, but I'm still open to picking up a few more shares here and there, especially if we see the mid one dollar range again.

Disclosure:  Long CELH.

CVM: Multikine Phase III On the Way

Cel Sci Corporation recently announced that the company has successfully produced the first lot of Multikine for the upcoming global Phase III trial in its brand new 'cold fill' manufacturing facility just outside of Baltimore, Maryland.  This is good, if not expected news, although the same press also announced that the trial would commence by year's end.  It had been previously announced that the trial was expected to start this summer.

News releases have been relatively few and far between for Cel Sci since the LEAPS for swine flu hype died down as the hysteria and fear of an epidemic also faded, but nothing has changed with the potential of Multikine, an immunotherapeutic treatment for cancer of the head and neck.

What I like most about the Multikine trial  is that finally we will get to see one of these immunotherapeutic cancer treatments at work before a patients immune system has been ravaged by radiation and chemotherapy treatments.  Common sense would indicate that an immunotherapeutic treatment would work best while a patient's immune system was still strong, and this trial could be a groundbreaking opportunity to test that theory.

Multikine should be the primary factor, in my opinion, when assessing a decision of whether to buy shares of Cel Sci or not, but there's always the chance that LEAPS news could pop up again, especially if a new strand of swine flu appears during the flu season.  I wouldn't hold my breath for that scenario, but I'd keep it on the back of my mind.  It's pretty apparent that for the time being all company resources are being directed towards Multikine and the Phase III trial.

I believe that the risk/reward profile of this stock is attractive right now, when measuring in the potential of Multikine if it proves to be a successful treatment for head and neck cancer.  If the product makes it to the later stages of Phase III and looks like it may pass muster with the FDA, then fifty cents should end up looking like a steal.

And there's always the wild-card that is LEAPS.  This treatment has been widely discussed and press released over the years only to fall off the map for a while, but it could be just a matter of time before something sticks.

Fifty cents?  Given the potential of Multikine, I think we're looking at a bargain here.  I'm buying; and there should be a few more months left to buy at these levels, barring any unexpected news.

Disclosure: VFC is long CVM.

Cheap Vegas Hotels Exp 12-1-10 (120x240)

ACTC: The Potential of Advanced Cell Technology is Still Growing



ACTC.ob:  Advanced Cell Technology, Inc. is still my personal favorite for speculative stem cell plays.  Although the company is still a long way from taking anything to market, this company is building a pipeline of patents and potential products that could pay off very well down the road. 

Among these potential pay-off products are the Myoblast program, a therapy intended to treat heart failure,  and the RPE program, which uses retinal pigment epithelium (RPE) cells to treat diseases of the eye.  ACT's Hemangioblast Cell Program is also in the early stages of development to treat cardiovascular disease, stroke, and cancer. 

In another positive development, it was announced earlier this week that ACT could be poised to obtain significant patents relating to cellular reprogramming and the generation of induced pluripotent stem (iPS) cells.  The iPS cells could become a huge asset to the company, if the patents are actually granted, because these cells are essentially embryonic stem cells, only they were 'reprogrammed' to that state from adult cells.  This technology could alter the landscape of stem cell research because the controversy of using embryoes would become irrelevant. 

However, it's apparent (at least to me it is) by reading the company's PR that there are other entities out there with similar technology, and I wouldn't be surprised to see a battle royale line up to control this, or similar technology. 

I think it's that big. 

If ACT does control these patents and the technology, then I think the stock becomes somewhat of a no-brainer at that point (in terms of risk/reward), but I'll believe the issuance of these patents when I see it.  For now I'm just concentrating on adding shares for the potential of the existing lines of treatment that the company is working on.

Stem cell therapy is still a new and evolving medical phenomena and ACT is just as positioned as any to benefit from the development of this new and profound type of treatment.  The partnerships may not be there (yet) and the potential may not be realized, but this is one of those stocks that could boom if the pipeline advances and the patents pay off.

However, it's worth weighing in the fact that the company will undoubtedly need to raise funds to advance the pipeline, unless a deep-pocketed partner were to materialize from the shadows.  That means that dilution could be in store down the road, although the company recently announced that certain of its stem cell lines are eligible for federal funding.  That offers the company at least one source of non-dilutive financing for the time being.

I'm still accumulating and I believe that ACTC is - at the very least - one to keep on the watch list.

Disclosure:  VFC is long ACTC.

Tuesday, August 17, 2010

Readers Respond: GETA(D)

An anonymous reader posts regarding Genta, Inc.:

Hi Vinny,

What are your thoughts about the recent slaughter of the pps of Genta. Except of the RS nothing has changed, so is this not a perfect entry point?

VFC's Take:  It's been a while since I last commented on this company, and even then it was in response to a reader's comment.  I'll begin by stating that I have never really been a fan of Genta, have never owned the stock and probably never will.  Granted, there have been some volatile price swings that gave traders some nice buying and selling opportunities, but the failures of Genasense have tainted this one.

The potential return-on-investment at this point lies with Tesataxel, although that product is still in Phase II and it's my opinion that Genta will need to run at least another round of financing before it's all said and done. 

The price has dipped (after spiking) following the recent one for one hundred reverse split.  It is true that aside from that reverse split, nothing much has changed, but I'm of the opinion that this company is too risky to consider as a long term investment, mostly due to the shady statements and activities surrounding the failed Genasense trials. 

It's true that the stock may be a good trade play, but I have zero confidence in the management team.

That said, each investor should do his or her own DD and if that DD supports a BUY at these levels, then fair enough.  I don't spend much time with this one and I believe that anyone buying GETA as an investment should also trade to volatility and attempt to end up on house money as soon as possible.

Thanks for the comment, I appreciate all feedback, questions and stock tips.

Disclosure:  No position.

Healthcare Watchdog

BIEL: The Quarterly Report

At the expense of becoming the "BIEL Board" for a couple of days, I thoughtit was worth commenting on the company's recently released quarterly report.

On Monday it was announced via 10-Q that revenue for the second quarter of2010 increased 49% over the same quarter from the previous year. Thosenumbers included an over 300% increase in international sales, but anoverall decrease in US sales while veterinary sales were virtuallynonexistent after having posted nearly $100,000 during the 2Q of 2009.

On the other side of the coin, expenses were up as well. The increase inexpenses could be attributed to an increase in international marketing anddistribution as well as to the fees associated with the recent auditing andSEC filing.

The report offered no surprises, in my opinion, as it should have beenexpected that international sales were picking up as the company gainedfootholds in the South and Latin American markets, as well as in someEuropean and Asian countries. It would be more of a surprise if theinternational market started looking sluggish, with all of the recentdistribution announcements. With Japan being a new target for distribution,and with existing DRTV efforts continuing, growth on the international frontshould continue.

Some may find it as a concern that domestic (US) sales declined, but we'vegot to look at this situation realistically. US distribution is essentiallya non-factor until the over-the-counter clearances are approved by the FDA.Currently, US sales are reliant on plastic surgery recovery. Let's behonest, plastic surgery (for the most part) is a luxury expense that mostwill forego while the economy is still struggling.

For instance, I'm convinced that the launch of the Silly Bandz craze is aresult of the excess silicone sitting around as 'enhancements' are put onthe backburner until a full economic recovery is realized.

It may be worth raising an eyebrow at the decline in domestic sales, butwhen making my investment decision regarding BIEL, I don't consider theBioElectronics products approved in the US until a re-classification isapproved along with the pending 501k applications. Until that time, anydomestic sales should be considered a bonus; it's the international salesgrowth that matters most until the FDA decides to act.

The veterinary decline was significant, however, although in the 10-K thecompany states that eMarkets - the exclusive distributor for the products inveterinary use - needs to work through inventory before placing additional orders.

I'm pretty certain that no one invests in BIEL for the veterinary potential.Any sales on that front should be considered a bonus, but the nearly$100,000 in sales in the 2Q of last year do show that there's some potentialin that market.

If expenses continue to increase at a higher clip than sales, then it'spossible that dilution could be a factor in the future. For now themajority of the company's financing has come on behalf of the CEO, friendsand associates.

In summary, there were no big surprises either way in the report.International sales are increasing and until the FDA acts, that's about allwe can expect to hear.

VFC is still buying BIEL, and loading up at these prices.

Disclosure: Long BIEL.

Monday, August 16, 2010

BIEL: Readers Respond

Some reader comments regarding BIEL, including a couple posted in response to my post this weekend about BioElectronics:

From an anonymous reader:

A lot of changes happening at biel.pk. I'm a long investor but am growing concerned. Joe Noel is no longer following the stock and the pps is plumetting. please comment or update us. Feels like biel is moving in the right direction but always has a roadblock in its way. Anything that happens even if positive is being viewed as a negative and nothing is helpig us.

VFC's Take:  The frustration is understandable, as it always is when a company with seemingly so much potential fails to 'deliver the goods' in a timely fashion, and the stock price suffers as a result.  It is important to note, however, that BIEL is still a highly speculative stock - potential considered or not - and so is the company.  The products look great and may end up being a popular alternative to Tylenol and Ibuprofen on a global scale, but we don't know that the products will actually catch on. 

That means an investment in this company comes with the inherent risk that a payoff may be a ways away, if one ever materializes.  Such is the game with speculative stock plays, especially ones that trade for a few pennies. 

However, the other side is that because there is so much speculative risk involved, BIEL could turn out to be a huge short, mid and long term bargain while trading for the current prices - and that's why investors with the stomach for risk and volatility love companies like this one. 

As the stock price remains stagnant, I understand that investors and traders alike will look for comforting opinions to maintain confidence in their pick, but I want to emphasize that one's own DD should be the determining factor when deciding whether to buy, sell or hold.  Stock message boards, articles or blogs can supplement individual DD, but not replace it. 

As such, VFC's Stock House is not therapy, it's a place where ideas can be shared and opinions from both sides of an argument can be expressed. 

The BIEL stock story looks shaky now, but that can change on a dime if global sales start picking up and the FDA makes a decision favorable to BIEL regarding the existing 501k applications.  It's all about risk/reward and each investor should judge his or her own tolerance for risk before investing.

As for Joe Noel, he may not be following BIEL on his website anymore (an email inquiry from myself to his site received no reply) but he is still heavily involved as the CEO of YesDTC, BioElectronics' exclusive distributor in Japan.  Japan could turn out to be a lucrative market for both companies.

I wouldn't make Joe Noel an issue until he becomes an issue.



From Frank:

Thanks for the update... have been getting a bit nervous watching biel dive. Have a ton of shares under two cents and now that I've read your update I'll be adding to my position in the morning. Really appreciate your site....Thanks...


VFC's Take:   I always appreciate feedback, but I want to emphasize againt to base BUY/SELL decisions on personal DD and not solely on mine or anyone else's recommendations.  That said, I do understand that taking in someone else's opinion can reinforce your own, but I always suggest buying or selling in a clear state of mind, not on emotion or the lagging effects of Grey Goose. 
 
Also keep in mind when reading my stuff that I have a very high tolerance for risk and volatility.  I've blown through so much cash over the years on living the good life that losing some 'night on the town' money is no big deal to me, especially when it saves a hangover or adds a couple of years on the liver.  I bought the heck out of the market during the crash in 2008-09 when most everyone I knew was listening to the likes of Jim Cramer and sold, so I'm not afraid to buy into the fear and despair that the big boys like to portray.  It's paid off for me (not always very quickly), but not everyone can invest like that.




 

From DDK:

Thanks for the update. I've been watching BIEL and thought last week was a possible decent entry point. To my surprise, TD Ameritrade does not allow new orders on that security.
 Disappointing, as BIEL started to make some gains this week. Anyways keep up the good work, love your site.


VFC's Take:   I think this is a great entry/accumulate point for BIEL.  As I've said before, I think that anything under three cents is a great place to load up and hold for the future, as long as each investor understands the risk involved with speculative stocks that trade for a couple of pennies.  I'm still adding here and I'd like to have the opportunity to add at these prices for a little while longer, if I'm to be honest.

It's a shame about TD Ameritrade.  For a while most of the big brokers weren't allowing BIEL buy orders, but I've never had any problems trading this stock with Zecco; in fact, I use Zecco almost exclusively now because of the attractive pricing per trade.

Zecco Holdings

From Tammy:

What are your price targets? Thank you.

Tammy

VFC's Take:  I'll start by saying that I'd be ecstatic with five cents, and I'll probably flip a few shares at that point.  Over the mid to long term, I think that BioElectronics will be like Dave Kingman, all or nothing.  Either the product catches on and becomes a global mainstay enough to support a market cap of ten to twenty times the current one or expenses will rise without enough sales support to sustain the company for the long term. 

I believe BIEL can survive without the help of the US FDA, but over-the-counter approval in the US is crucial long term health of the company and the stock, in my opinion.

If sales numbers continue to grow and if positive news comes from the FDA, then a five to ten cent share price wouldn't be out of the question, in my book, but it depends on developments.  Long term, the sky's the limit if the products catch on.

Disclosure:  Long BIEL.

Saturday, August 14, 2010

BIEL: Time for an Upswing?

It's been a little while since I last commented on BioElectronics Corp, but BIEL is definitely still a stock that I've got my eye on, and I expect a huge rebound in price if expected developments finally materialize for the company.

The biggest news that investors are waiting for is news that the FDA has granted over-the-counter (OTC) clearance for the company's products in the United States. Investors are also looking for sales numbers, since the ActiPatch and Allay products are already on sale in various markets around the globe, in addition to the ActiPatch being available to US consumers through Amazon.com.

However, as investors sit and wait for news and updates, the BIEL share price has continued its downward spiral towards a penny. While frightening for many investors who are averaged in at significantly higher prices, I'm still taking advantage of this price decline and I've nearly doubled my position over the past few trading sessions, with my lowest buy order being filled at .0105 earlier in the week.

Developments may be slow in coming, but I'm highly confident in the future of BioElectronics, barring any definitive negative action by the FDA regarding the broad approval of the submitted 501k applications. That said, it's important to note that the company needs decent international growth to stay afloat during the long wait, and dilution becomes a concern if the company needs to raise significant funds before sales numbers increase enough to offset costs.

One development on the product front that, curiously, has not been mentioned by BioElectronics is that the ActiPatch and Allay products have received a Class II designation in Japan. YesDTC, BIEL's exclusive distributor in Japan, has already issued a press release on this news, but BioElectronics has - to date - has had nothing to say. Regardless, the news is good for BIEL no matter how you look at it.

Although nothing has hit the wires in the form of a press release of late, aside from updates on the DRTV campaigns in England and Canada a couple of weeks ago, President Andrew Whelan has posted a letter to shareholders on the company's web site.

In that letter, the President speaks very confidently about the company's future and states that BioElectronics is "certain" that "FDA clearance is inevitable and close."
I'm wary when the President of a company speaking in such definitive terms, because nothing is certain in the medical device and biotech market, and if an outcome was so certain, I believe that we would have seen a news release as such. In my opinion, these words are either an act of desperation by Mr. Whelan as the share price of his company tanks or he knows something that he probably shouldn't indicate to us that he knows.

As always there are concerns with an investment in BIEL, but patient investors who still believe that the BioElectronics products have huge potential as alternatives to the associated health risks of Tylenol and Ibuprofen should be taking advantage of these share prices. I looked at anything below three cents as my "load up" price, and I'm loving the near-penny opportunity to buy. The drop has taken the better part of a year to take place, but a recovery can be instant - that's the nature of the game, and I plan on being fully vested if/when a recovery takes place.

On that note, however, I've also got a handful of trading shares that I'll play with on the less significant spikes and dips, because as we all know - nothing is "certain" in this market and we've got to protect our investments as we see fit.

On another note, stock promoter Joe Noel has discontinued coverage of the BIEL stock on his website, although he is still heavily connected to BioElectronics as the CEO of YesDTC.

The wait continues, but I'm still a big fan of the potential returns that can be realized from this stock; and I'm still buying.

Each investor should do his or her own DD and invest accordingly.

Disclosure: Long BIEL.

Friday, August 13, 2010

CELH: Celsius Holdings, Back on Track

Celsius Holdings, maker of the calorie-burning beverage of the same name, released numbers for the second quarter this week, as expected.

A couple of weeks ago I stated that I thought the second quarter was a pivotal one for the company, because even long term shareholders were becoming impatient after first quarter results that did not meet expectations.

Celsius came out of the "pivotal" second quarter in decent shape, in my opinion, as year-over-year sales increased an impressive 252%, while the quarter-over-quarter sales increased from $2.3 million to $4.1 million.

Celsius also reported a net loss of three million, bringing the totals for the first half of 2010 to nearly nine million in losses on revenues of $6.4 million.

Full year guidance from CEO Steve Haley has been reduced once again, this time to $15-$18 million in sales, a number that may be achievable given the trends in growth over the last quarter. That said, any sustained momentum in growth could put the numbers at the higher end of those estimates, although it would be an impressive, if not challenging feat to reach the $18 million mark.

I'm still confident that the product can and will catch on enough to make an investment in CELH well worth the patience. Given that the stock may trade back down to a few dimes under the two dollar mark, after a post-earnings dip, it might be worth picking up a few more shares. It's likely that we'll see relatively sideways trading until the next earnings report, unless other news hits the wires that could drive the price up. This should give investors ample time and opportunity to load up, add or accumulate.

On the distribution front, I've received word that Celsius has become embedded in the work out/weight loss sections of both the Army & Air Force Exchange Service (AAFES) and Navy Exchange Service (NEX) world-wide. From what I understand, Celsius has premium shelf space in many of those locations, located at eye-level and taking up multiple racks. In addition to the Green Tea and Sparkling Berry beverages, the new stick shaped on-the-go packets are also available for sale in these exchanges.
We've long heard that Celsius would move into the military exchanges, and this is an encouraging development, in my opinion.

The first quarter was a bit of a hiccup for Celsius, but these second quarter numbers are solid enough to keep investors interested moving forward. The growth in distribution continues, the sales numbers are moving in the right direction and I'm confident about the future of the company and the product to pick up some additional shares, although I'll wait and see where the share price settles over the next couple of weeks.

It's safe to say that this was a bounce-back quarter for Celsius, and things could be getting exciting again.

Also of note, it was announced that Chief Operating Officer Jeffrey Perlman is no longer employed by the company.

Disclosure: Long CELH.

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