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Monday, February 28, 2011

Epicept's Fourth Quarter Results, Showing the Potential?

Epicept Corporation announced fourth quarter and full year 2010 results last week, but the report read more as a "Hey, how you doin'?" update than anything else.

Nothing significant came from the report, other than the confirmation that the company has enough cash to last through the third quarter of this year, meaning we could see another dilutive cash-raising event at some point during the middle quarters of 2011, barring the company signs a partnership for NP-1 that brings in an up-front cash infusion.

It has been reported that Epicept is looking to partner NP-1 before commencing Phase III trials for the product.

The only other option for quick cash would be a Myrexis milestone payment for first enrollment in a Phase III trial, although that's not going to happen this year.

Ceplene sales were dismal, although marketing partner Meda is on the job attempting to push into various European markets.  The company did note in the quarterly report that 2012 is when sales of Ceplene will be significant enough to garner attention, but we should still see some modest increases through the year.

All in all, EPCT is still a nice mid to long term pick, in my opinion, just keep in mind that dilution will be factor this year when devising an entry or add strategy.

Disclosure: Long EPCT.

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TTNP: Titan Closes Week on a High Note

From VFC's News, Notes & Weekly Stock Watch at VFC's NEW Stock House.

TTNP:  Titan Pharmaceuticals closed last week on a high note, trading up by a dime on Friday to finish the day at $1.58.  TTNP had slid back to a lows in the $1.30s, after realizing a January run to over $1.80.

With an update or trial results for the latest Phase III Probuphine confirmatory trial due at any time, and add ot that the speculation of a Titan being involved in a merger or acquisition deal, any positive move in the TTNP share price will attract more eyes than usual.

It's not expected that Titan will report earnings until the latter part of the month, and we already know where the Fanapt numbers fell for the previous quarter, so Friday's move is either indicative of nothing, or maybe there's positive news pending for the current week.

Could be regarding Probuphine.

Regardless, Titan is still one to watch.

Disclosure:  Long TTNP.

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Stock Watch: HGSI

From VFC's News, Notes & Weekly Stock Watch at VFC's NEW Stock Watch:

HGSI:  Human Genome should be on all biotech watch lists for the duration of the month, as the FDA is expected to announce a final decision on Benlysta, HGSI's lupus drug that had its decision date pushed to March from December, 2010.

It's been over a half-century since the FDA has approved a drug treating lupus, so this decision is sure to attract more interest than your average drug approval.

Human Genome reported earnings last week, but increased losses are not what matters right now - what matters is where Benlysta stands in terms of approval.

Keep an eye on this story for the month of March.

Disclosure:  No position.

DNDN: Dendreon Set to Present Earnings

From VFC's News, Notes & Weekly Stock Watch at VFC's NEW Stock House.

DNDN:  Dendreon has scheduled a conference call for 4:30PM on Tuesday, March 1st to discuss results for the fourth quarter of 2010. 

The company looks to build on $20 million of Provenge sales for the third quarter, although it's still probable that the hurdles of meeting demand will be just as prevalent for the most recently completed quarter as they were in the third, as the new manufacturing facilities have yet to fully come on line.

As of November of last year, the Morris Plains, New Jersey plant was operating at only 25% capacity.

It's not expected that the upcoming earnings release will have much more of an impact on the DNDN share price than the general everyday volatility does, but you never know when one source or another will come out with some questionable reporting in an attempt to spin an otherwise uneventful story to the negative side. Keeping that potential in mind, any dip to back below thirty bucks would come as a welcome buying opportunity, assuming nothing changes with the glowing outlook of Provenge sales in the United States, and eventually - around the globe.

Provenge, the world's first cancer immunotherapy vaccine to make it to market for prostate cancer, is still slated with the 'blockbuster' tag, and Dendreon has provided guidance that 2011 will see sales of the product reach as high as $400 million.  It's expected that the largest chunk of that amount will be realized in the last half of 2011 as the manufacturing capacity continues to come on line.

Beyond 2012, however, estimates have it that Provenge will become a billion dollar baby on an annual basis.

Another ongoing issue for Dendreon and Provenge that we may hear updates about on Tuesday is the plan for Medicare/Medicaid reimbursement, and that issue should be finalized in March.  It's expected that the Center for Medicare and Medicaid Services (CMS) will issue a final decision on coverage at some point during the month.

It was reported in November that an advisory panel had rendered a positive review, so it may be safe to assume that the final decision will be just a formality, confirming what is already a widely accepted decision.

With the future of Provenge still as bright as it ever was, there's still room for significant growth in the DNDN market cap as the full  potential of the Provenge manufacturing capacity comes on line and the rest of the pipeline - including Neuvenge - develops.

That also assumes a significant push onto the international scene.

The DNDN bargains (shares and options), however, will never be as good as they were a few years ago when Dendreon was just another speculative biotech with aspirations of taking its product past the FDA.

Keep an eye on the DNDN earnings report, as recent volatility makes a push down to thirty a possibility. 

The real news, however, may come later this year when production picks up at the new and existing Provenge production plants and demand is met in a more efficient manner.

Disclosure:  No position.


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PLX: Shares Plunge on Friday

From VFC's News, Notes and Weekly Stock Watch at VFC's NEW Stock House.

PLX:  Keep an eye on shares of Protalix this week.

The FDA requested additional information from already-concluded trials before rendering a decision on the company's drug for Gaucher disease, taliglucerase.

The delay sent shares of PLX tumbling by 20%, although the stock's late recovery on Friday erased even steeper post-news declines.

Since the FDA did not request additional trials, the sharp decline on Friday may have been a bit overdone, but that's not to say approval will be a slam-dunk as well.

Protalix has a big time partner for this product in Pfizer, so you can bet that there are ample resources focused on achieving approval.

Any prolonged dip in price might be a good time to add some speculative shares, for those still positive on an eventual approval.

Dislcosure:  No position.

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Sunday, February 27, 2011

Celsius Earnings, Monday

From VFC's News, Notes & Weekly Stock Watch at VFC's NEW Stock House.

CELH:  The management team at Celsius Holdings will look to turn the company - or more accurately its stock - around in 2011, and Monday's expected earnings announcement will be key to judging whether or not a turnaround is in the realm of possibility. 

2010 saw the CELH share price decline in dramatic fashion as sales expectations came in far below the expected mark, while celebrity spokesperson Mario Lopez was unable to spur sales as well as the company would have liked.

It also didn't help that the company had its very own 'get bash crew' that spent thousands of hours over the past year on stock message boards spreading fear, doubt and falsehoods about Celsius Holdings.

2011 is a new year, and if Monday's earnings release is anywhere close to previous company sales projections for the fourth quarter, then it could ignite a rebound and set forth a path for success in the new year. 

Another disappointment, however, could send any remaining investors flocking for the doors.

The recent dip to a quarter provided the speculative investor an attractive entry/add point for those willing to entertain the possibility of a turnaround, as CELH has already touched the forty cent mark during the past trading week.

Still highly risky, but a favorable risk/reward profile has returned.

Disclosure:  Long CELH.

Wednesday, February 23, 2011

SIGA Spikes On Contract Possibilities, Accentia Raising Money, Apricus On The Move, Clinical Data - A Deal That Only Forest Labs Loves



SIGA spiked by twenty percent on Tuesday when news hit the wires that the Biomedical Advanced Research and Development Authority (BARDA) had commenced a new procurement request for a smallpox vaccine to fill government stockpiles, a contract awarded to Siga last year.

The contract was derailed, however, when rival Chimerix filed a complaint stating that Siga did not meet the 'small business' requirements of the contract.

Chimerix essentially won the appeal, but after receiving government money to advance its own vaccine, it looks like this new procurement request by BARDA will all but guarantee Siga receives the first portion of the contract, which will be for 1.2 million doses of the vaccine.

If the Chimerix vaccine is ready by the time the contract moves into the next stage, which calls for up to 12 million doses, then it's possible that BARDA may award some of the contract to Chimerix.

SIGA's spike on Tuesday shows that the market believes that the contract is coming Siga's way, but although there could be some additional significant upside if Siga gets the bulk of the entire contract, a buy here looks a little too much like a 'chase' play for me.

Still plenty of long term potential, however, so a pullback would be opportune.

Disclosure:  No position.




ABPI:  Accentia Biopharmaceuticals, whose majority-owned subsidiary Biovest International is devloping the cancer vaccine BiovaxID, announced plans on Tuesday to raise up to five million dollars through a registered direct offering.

The Accentia stock price dropped by over ten percent on the news.

The money raised will go towards creating working capital, general corporate purposes - which usually means business lunches at Hooters, and to pay down debt.

Generally I consider Biovest the better buy between these two, but with Accentia now beaten down to a market cap of less than half that of Biovest's, ABPI is actually looking like the buy with the more upside right now.  Being the majority owner, Accentia will stand to benefit from BiovaxID and Revimmune as well, if either product ever goes anywhere, where Biovest is relying on Biovax at the current time. 

The market cap says it all, for the time being, I'd take a look at ABPI as well as BVTI as a BiovaxID play.

Keep in mind, both of these companies are highly risky, and Biovest has been regurgitating results of the same Phase III trial for years now.

Disclosure:  No positions.

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APRI:  Apricus Biosciences continued on its run to open the shortened trading week, with shares touching as high as $5.39 on Tuesday before settling just below the five dollar mark at the close.

Volume was up by more than five times the daily average, and it looks like this company with a plethora of potential in its pipeline may be getting noticed by the big players, who should still consider the current market cap as well worthy of significant upside.

Increased volume and increased price could lead to some increased good times in the future for shareholders.

The days that this company slips below the radar are limited.

Disclosure:  Long APRI. 

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CLDA:  Clinical Data moved in the opposite direction of Apricus on Tuesday, closing down over a couple of bucks after a buyout was announced that made only Forest Laboratories happy.

After numerous big pharma player were discussed as possible acquiring companies when rumors of a Clinical Data buyout were swirling, it turned out being Clinical Data that won the prize, and for a discounted price, to boot.

Generally, buyouts come at a premium; it's rare that you see one come for a discount to where the stock of the acquired company is trading, which is why this particular purchase has raised some suspicious eyebrows.

Does somebody know something that we don't?

For VFC's full response to the buyout, CLICK HERE

Dislcosure:  No position.

vfc@vfcsstockhouse.com

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BMOD: Biomoda Pops on Patient Enrollment

Biomoda, a cancer diagnostics company developing diagnostic tests for the early detection of cancer announced on Tuesday that it had "completed patient enrollment and sample collection for the pilot study to determine the clinical sensitivity and specificity of its CyPath diagnostic assay for the early detection of lung cancer," according to the press release.

Shares spiked by forty percent on the news, with significant volume, considering BMOD is generally a lightly traded stock.

Top-line results from the study are due to be released by the end of March, also according to the press release, giving the company and the stock a potential short term catalyst. 

Dilution and fund raising events will always be a concern for this company, however, so it's worth taking note of that fact.

A highly speculative company, but if it starts looking like CyPath could be for real, then this will be one that everyone should have on their radars.

Worth watching, especially towards the end of the first quarter when results are due.

Disclosure:  No positon. 


Readers Respond: Short Term Prospects for Cytosorbents, Clinical Data's Buyout

"Readers Respond" is a forum where VFC interacts with the readers of VFC's Stock House.  Readers can leave comments on posted material at either of the blog sites, through Seeking Alpha or via email, vfc@vfcsstockhouse.com.  All stock opinions, tips and questions are welcomed, whether agreeable with VFC's opinions or not.  Thanks for the comments, because without interaction - this wouldn't be fun.

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A comment from relikwie in response my Cytosorbents Stockpiling Cash post:

Keeping the lights on at HQ for some more months isn't ambitious. Personally I do think they've a lot up their sleeves.
Furthermore, Chan seems extremely busy lately.

Oh, and "trial making excellent progress" doesn't tell anything on the success of the trial.
It is IMO "We're finishing trial" in cryptic words.


VFC's Take:  I partly agree with the above statements.  Let me start by saying that I am a long time investor in this company and have enjoyed adding shares each time the price dropped to six cents, and enjoyed even more the run to over forty cents when the stock still traded as MSBT. 

That said, the only thing certain in the biotech investing world is that nothing is certain, so I believe it's wise and imperative to respect both sides of the story.  It is possible to believe that a company has "a lot up their sleeves," as you state, and still believe that maybe they don't.

If the trial is a failure and CytoSorb does not work, there's no immediate fallback option, as the remainder of the Cytosorbents pipeline has been on hold.  With that in mind, for the company to move forward - and by "keep the lights on" I mean maintain operations and restart clinical trials - that would be an ambitious task, because the company would be essentially starting from scratch, with a share price that would most likely be in the toilet.

You've got to have ambition to get up again after being knocked down, and it's entirely possible that this could occur with Cytosorbents.

Additionally, Chan being extremely busy doesn't give us a clue as to why he is busy.  He could be busy lining up alternative options if the CytoSorb trial fails; he could be making the rounds looking for more financing, or he could be buying early Mother's Day cards. 

Lastly, "cryptic" comments in PRs from speculative companies should not be interpreted as positive.  Companies will spin PRs to their liking, and the goal of "cryptic" comments in company releases is to cover their behinds in case things go south and lawsuits start flying, not to give investors a hint as to what they really mean.

I say this because the company's job is to look after THEM first, not you.

I think that we both agree that we hope the trial is winding down, will be successful and that the share price will appreciate in significant fashion.

That said, hope is not a strategy, so I'm entertaining both potential outcomes.  The comments and recent activities can be spun to the positive or negative, so it's still a waiting game until we see the facts and we no longer have to speculate.

Thanks for the comment.

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A comment posted in regards to the same article:

Vinny,

What type of timeline are you thinking in terms of months, when you mention your short term & long term price expectations in regards to ctso?

I am curious as to what your gut is telling you about this stock?

As well as what do you think would be a good entry point into ctso at this time?


VFC's Take:  In general, I consider 'short term' to be 0-6 months, 'mid term' to be 6-24 months, and 'long term' to be beyond two years.  That's only my personal standard, not by any means should that be considered the accepted opinion.

I'll be honest - my gut was telling me good things about the stock before, but I always get cautious when a company starts issuing press releases that are not pertinent to the big news that everyone is expecting.  Biovest International did just that before announcing 'luke warm' trial results that really indicated a failed trial, and Celsius Holdings did it last year, having investors concentrate on new products before issuing terrible quarterly results. 

I also assumed that Cytosorbents would wait until after announcing positive results - if the results were positive - before raising cash, because they could do so at a higher price, so the fact that they did it now does make my Spidey Sense tingle, although not much because they'll still need to raise funds on the back end of the results.

I've already made quite a few bucks on this one - and realized it by selling shares into previous spikes - so I'm holding through news.  I'm still positive on CTSO for its risk/reward profile, but as should be the case with all investments, I'm not sold on the fact that it's going to work out as planned.

Unfortunately, to answer the question, is my gut is telling me that the results are not going to be positive enough to warrant approval, but will be spun in a way that the door is open for approval once certain criteria are met. 

I hope I'm wrong, but that's what the gut is saying.

Don't interpret that fact as me bailing out, because I'm still holding long. 

Entry point - if you're looking for pure speculation on the upcoming news, then I'd say buying a few shares at the current prices would get you in, and then pick up a few more on any dips - but expect to lose it if the trial goes south.

I picked up just a few shares at around fifteen cents recently, but like I said - I'm well on house money here now, so I'm just playing it as a hold.

Consider it 'night on the town' money if you're getting in now; enough to make some money if it pans out, but not enough to lose sleep that night if it doesn't. 

Thanks for the comment.

Disclosure:  Long CTSO.

Wiser Advisor

From Michael, in an email to my Seeking Alpha page:

Who will buy CLDA? Any ideas?

VFC's Take:  Looks like we got this question answered before I had a chance to respond.  I will say, that I'd heard Pfizer and Merck rumored to be involved, but I would not have guessed Forest Labs.  It makes perfect sense for them, however, especially since they bought for a discount, not a premium as is usually the case in this sector.

Read my full response HERE.

Disclosure:  No position.

vfc@vfcsstockhouse.com


Tuesday, February 22, 2011

CTSO: Cytosorbents Stockpiling Cash

Just last week Cytosorbents announced that it had expanded its patent portfolio with the awarding of two new patents, and this week the news is that the company is stockpiling cash.  It's been no secret that Cytosorbents would need cash come the second quarter, and the latest convertible note (CN) cash raise puts another $1.25 million in the bank for the company, and closes the note that began selling last year.

Cytosorbents also announced that it had received the last of the grant money awarded from the Qualifying Therapeutic Discovery Project program, which amounted in total to nearly half a million dollars, and yet another $59,000 was added to the coffers from the University of Pittsburgh Medical Center,'s NIH-funded sepsis grant.

When it rains money, it pours money, because in all, this is not an insignificant amount of cash for a small, speculative medical device company like Cytosorbents.

On the other hand, it should be assumed that additional cash will still be needed to fund the approval and commercialization of CytoSorb, if the European trial ends up being a success.

Now that Cytosorbents has taken care of the short term money problem, speculation will begin as to why the recent stockpiling of cash.  The no-brainer aspect of filling the war chest now is that the company was almost out of money. 

The speculative aspect of announcing the cash raising now is what makes it an interesting event, and therefore worth talking about.

Some believe that the company is preparing for CE Mark approval in Europe because the trial will be a success, while the opposing argument to that would be that raising cash now is necessary because if the trial is deemed a failure, then the company will need money in the bank to kick start the rest of the pipeline, which has been idle as CytoSorb has been the focus of all company resources.

It's my opinion that both sides of that argument should be respected.

Should the trial succeed, and the company moves forward with approval, then there will be ample opportunity to raise the additional funds that will be needed through an offering at a significantly higher price. 

Should it fail, however, that two million in the bank right now is not going to go very far, and the next cash raising event will not be pretty for Cytosorbents; but at least the two mil will let them tread water while they figure out the next course of action.

Aside from the cash raising, however, here's the comment from Tuesday's press release that is drawing the most attention:

"Our European Sepsis Trial is making excellent progress and the strengthening of our balance sheet with these additional funds will help support our ambitious near-term goals."

It's news of full trial enrollment that is dominating the recent speculation regarding Cytosorbents, and the fact is, "excellent progress" doesn't tell us that the trial is fully enrolled or completed - but it also doesn't tell us that it's not.

Such is the ambiguous nature of press releases in the biotech sector, sometimes they read more like an 'As the World Turns' plot line than that of definitive company progress.

"Ambitious near-term goals" is equally vague.  If the trial looks like it's going to be as success, then "ambitious" means commercialization of CytoSorb.  If the trial looks to be a failure, then "ambitious" means keeping the lights on in the HQ office.

The fact is, the only thing we know today that we didn't know yesterday is that Cytosorbents has more money.

We're still waiting on the trial update news.

This PR was more relevant than the patent PR last week, because we now know that the company can get by for a little while longer, but it's still a waiting game for investors.

The resulting dip on the financing deal was not significant enough to load the boat, in my opinion, but a few shares picked up at fifteen cents will go a long way if the trial news is positive, but again - with all the reward that this stock offers, the risk is that it goes to pennies if the trial fails.

If you believe in the law of threes, then the next PR should be a whopper.

Disclosure:  Long CTSO.

vfc@vfcsstockhouse.com


Earnings Alert: Generex

With Generex Biotechnology set to report earnings and host a quarterly conference call within just a couple of weeks, expectations will be high as investors are awaiting updates on several fronts from this company.

For one, Generex is still without a permanent CEO.

Former CEO and co-founder of the company, Anna Gluskin, was removed from her position last fall, replaced by then Executive Vice President Mark Fletcher.  Gluskin remained with the company in a diminished capacity, until she left for good earlier this year.

Fletcher's appointment to the position was intended to be a temporary one, but there's been no developments regarding a permanent replacement, aside from a brief comment from the company that the search is ongoing.

While it's safe to assume that the intent is to advance the pipeline in an efficient manner no matter who is at the helm, without a standing CEO, there is no gauging the current 'mission statement' of the company. This becomes especially important when considering the prospects for partnerships.

The announcement of the intended majority acquisition of Global Medical Direct (GMD), also last fall, has fueled speculation that Generex may attempt to 'go it alone' with Oral-lyn, should the product make it to market. GMD would also offer the company another outlet to market its over-the-counter products, such as Crave-Nx and BaBoom.

However, without a CEO in place, there's no certainty on which direction this company will go.

Already the proposed GMD deal has been pushed back to June, although that probably has more to do with the failed reverse stock split than the lack of a CEO.

Investors will also be expecting to hear an update regarding Oral-lyn. Much has been made about the progress and potential of the product, which would be the first approved oral insulin spray where the insulin is absorbed through the inner lining of the cheek and not the lungs, but the general lack of relevant updates and focus on AE-37 has many wondering what is really going on with the Phase III trial.

Additionally, the product has been approved and commercialized in multiple countries for quite a few quarters now, but according to the most recent financial statements from Generex, it has yet to record any sales.

Oral-lyn is the short term backbone of this company, and a valid update is crucial to retaining investor interest moving forward.

There have been quite a few updates on the progress of AE-37 of late. It has been announced that new patents have been awarded for the product, and the amount of patients enrolled for the ongoing Phase II trial has been increased.

Additionally, an independent valuation firm specializing in pharmaceuticals has placed a $300 million value on AE-37, according to a recent Generex press release, well before the expected conclusion of the ongoing trial. Whether the valuation was an attempt to boost the interest of potential partners or an attempt to boost the share price is left to individual speculation, but it has raised some eyebrows that so much focus is being directed at AE-37 right now, and not Oral-lyn.

Is Generex looking to partner AE-37 to bring in enough up-front cash to fund the final stages of Oral-lyn's development, or will it ultimately be Oral-lyn that is partnered?

These are questions for which investors will be looking for answers, but they may not be able to be answered until a new CEO is in place.

Keep an eye and ear out for this conference call. With Mannkind now out of the picture for the short term, Generex has a chance to play catch-up, and should Oral-lyn pan out sooner rather than later, GNBT could become a game changer for 2011.

Disclosure:  Long GNBT, Long MNKD Options.

vfc@vfcsstockhouse.com

Posted earlier at VFC's NEW Stock House.

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Earnings Watch: Epicept (EPCT)

Epicept Corporation is due to announce earnings on Thursday morning, with a press release expected to be followed by a conference call.  This announcement will cover full year and fourth quarter 2010 results.

After nearly having been written off for dead during the depths of the global recession, Epicept has popped back to life with updates on NP-1Crolibulin, and Ceplene all hitting the wires over the past couple of months.

With most of the pipeline already having been updated, it will be the European sales numbers for Ceplene that will garner investor attention during the earnings announcement.  It's been a long and slow road to market for that product, and it's imperative that signs of growth can be seen to ward off any speculation of additional dilutive funding.

Earlier this month an announcement of a stock offering stalled what was otherwise a decent recovery in the EPCT share price.

Any updates on Azixa will also be welcome, as that product, licensed to Myrexis, may be offer more long term value than anything else in the pipeline.

Disclosure:  Long EPCT.

vfc@vfcsstockhouse.com

MCLN: Earnings Alert

MCLN: Shares of MedClean Technologies may have entered back into buy territory last week, down below .004, after running up in prime fashion to open the new year.

MedClean offers long term potential with its green technology for medical waste disposal, but with a nice runup both in December and January, it's become quite the intriguing short term trade play as well.

The company has been silent since announcing a new agreement in December, and with fourth quarter results expected to be announced soon - it may be worth reloading some shares into this latest decline in price.

An intriguing pick, and worth keeping an eye on.

Any surprise in results or announcement of significant distribution in services, then a significant move could be in play.

Disclosure: Long MCLN.

vfc@vfcsstockhouse.com

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Stock Watch: Apricus Biosciences

APRI: Here's another stock on the move from last week, as shares of Apricus Biosciences closed Friday five percent to upside. The positive beat surrounding this company resulted from a Thursday release announcing that Apricus and the FDA were in discussions to bring the liver cancer treatment PrevOnco to Phase III.

With Vitaros already on the market in Canada for the treatment of erectile dysfunction, Apricus has numerous products in the pipeline that offer investors serious short and long term potential.

With last week's positive week already in the books, it's worth keeping an eye on this one as any pullback could offer an opportune time to pick up a few shares.

Disclosure: Long APRI.

vfc@vfcsstockhouse.com

BIEL: Update on Advertising Campaigns


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One thing that the team at BioElectronics has done with consistency lately is update investors in regular fashion on the company's website.  Not a bad idea, in my opinion, as it's cheaper than sending out PRs on developments that may not be significant enough to warrant a PR, but it also lets investors know that management is not asleep at the wheel.

On the other hand, in staying tuned to the bi-weekly updates, investors cannot expect too much because anything really that significant would still be announced via PR.

Last week's investor update concentrated on the advertising campaign in Canada.

New ads have appeared in all media markets, including Internet banner ads, print and televisions, and the company states that the television ads in particular have led to an increase in sales during the first quarter.

The print ads also seem to be doing very well, if you're to believe the investor update.

That said, the updates about increased sales are vague, and since we still don't know what the fourth quarter numbers hold, it's tough to gauge just how well the ads are working.

There's been no movement on the FDA front, so investors are left to digest news from Canada and the UK.

One item that may be worthy of an update - be it on the website or in a PR - is news of a move to the OTCBB from the pinks.  That's been a company teaser for over a year now, and the move still has not taken place.  Such an event would most likely not lead to a swift increase in share price, but the BB does add a bit more legitimacy to a company than the pinks do. 

Something to watch for.

Next on the BIEL watch, increased sales during the fourth quarter. 

Disclosure:  Long BIEL.

vfc@vfcsstockhouse.com

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Monday, February 21, 2011

Stock Watch: NeoPharm

From News, Notes & Weekly Stock Watch at VFC's NEW Stock House.

NEOL: Shares of NeoPharm have been trading with volatility of late, bouncing between a recent high of thirty eight cents an intra-day low of twenty three cents last week, before ultimately settling down by twenty six percent on Friday.

Increased volume has accompanied the volatility, although no news was released to support either the dip or the spike.

Like Immunotherapeutics, NoePharm - actually known now as Insys Therapeutics as the result of a reverse merger last year - has an earlier-stage pipeline with nothing yet in Phase III.

Two products, however, LEP-ETU and LE-DT are both in Phase II for the treatment of metastatic breast cancer and metastatic solid cancer, respectively.

While trading for a market cap of roughly eight million, there's a good chance that a big move would be in effect if either of these trials were proven successful, but keep in mind that dilution is most likely going to be a factor with this company as the pipeline develops.

For those with an eye towards the long term, picking up a few shares towards the low end of the current trading range could turn out to be nice play.

The recent volatility makes this one a stock to watch this week.

Disclosure: No position.

vfc@vfcsstockhouse.com

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Sunday, February 20, 2011

CVM: Not Slipping That 14A Past This Guy

From VFC's News, Notes & Weekly Stock Watch at VFC's NEW Stock House:

CVM: The company filed a schedule 14A last week outlining an upcoming shareholder meeting that will sort out compensation packages for senior management and directors.

Yes, this is the same team that partied it up in Prague a couple of months ago, announced the commencement of the global Phase III trial for Multikine, but has yet to announce that one patient has enrolled in the trial.

This company holds boatloads of potential should Multikine be proven a success during the upcoming trial, but for a company that has announced just about every single site approval, I'm starting to wonder why there has not been a patient enrolled just yet.

It's been a tough couple of years for the company, in terms of staying afloat while the Multikine production facility was constructed near Baltimore, Maryland, but it's not going to sit well with shareholders to see significant compensation packages voted on before a patient is enrolled in this trial.

I'll chalk up the Czech Pilsner as a cost of operations, but let's see some developments now before discussing the compensation.

Everything but the kitchen sink - and first enrollment - has been announced via PR over the past few months, but it looks the company tried to slip this 14A past the shareholders on a Friday.

Keep an eye on Cel-Sci, loads of potential, but where's that first patient?

Disclosure: Long CVM.

vfc@vfcsstockhouse.com

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IMUC: Worth Buying on the Retreat?

IMUC: Immunocellular Therapeutics has traded significantly higher to open the new year of 2011, touching an intra-day high of $2.29 before retreating back down to under the $2 mark, where it closed last week at $1.92.

This is a company whose stock has long been on my radar as a potential 'next Dendreon' play, but I haven't yet bought in because of the relatively early stages of the Immunocellular pipeline.

Every few months, however, I'll receive an email or a reader comment regarding the company, and I offer the same opinion each time - loaded with potential, but the products are still a long way off from seeing the light of market, let alone a review by the FDA.

The most advanced product in the pipeline, ICT-107, has just entered the Phase II trial stage (for the treatment of glioblastoma multiforme (GBM), while everything else is still in very early stages of trial or still preclinical. For that reason, Immunotherapeutics is still a highly speculative and very unproven company.

Thanks to Dendreon (DNDN) we are all aware of the skyrocketing share price of companies who announced positive news or trial results regarding cancer immunotherapy treatments, but it's still far too early to compare this company to Dendreon.

Additionally, because of the early stages of development, the prospect of dilution is going to loom as an all-too-real eventuality, unless a deep-pocketed partner comes on board to fund the advancement of the pipeline.

Being that the company had roughly five million dollars on hand at the conclusion of 2010, my bet would be on dilution later this year.

If IMUC is on your watch list, then that might be the time to buy.

If your game is long term accumulation in anticipation of mid to late stage trial results, then there's no reason to not add a few shares here and there along the way, but I'm always a big fan of taking some money off the table into significant price runs.

That being said, I think that the run to over $2.20 was a significant enough one to sell a few shares into - and with that, I believe we'll see the low $1 range again before this retracement is settled.

Now on the back side of a nice run, IMUC is one to watch right now, because the 'buy back in' time may be quickly approaching.

Keep in mind that this is a stock with a long term outlook - there may be some spikes and dives over the next couple of years, but the Phase II for ICT-107 has only just begun.

If that trial is positive, however, then IMUC should see a nice spike before the Phase III.

Disclosure: No position.

vfc@vfcsstockhouse.com

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News & Notes for the Week - Who is Really Hijacking the Revolution? Wisconsin Rallies, But For What?

As reported in News, Notes & Weekly Stock Watch at VFC's NEW Stock House.

Talk about "hijacking a revolution".

That's been the fear as countries throughout the Middle East revolt and overthrow long standing dictatorships; that a far more radical form of government will move in setting those countries back another fifteen or twenty years, instead of move them forward towards freedom and democracy. 

The true hijacking, however, is being conducted by the media.  You see, since the Egypt story arrived so quickly, and came to a conclusion just nearly as quick, the media is looking to take full advantage of the internal strife of other countries since they missed the boat in Cairo.

The television reporters are constantly on the air almost begging for some other country to fall further into chaos so that they can report on it - and hope to make names for themselves, and what is being sacrificed is honesty, objectiveness and the truth.

Actually, what's really missing, is news reporting.

Which brings us to the larger question, do reporters really report the news anymore, or do they tell you what to think about subjects that it's all too painfully obvious they know little about themselves?

The over-embellishment of events is evident by multiple global media outlets (especially in the US) of some of the most recently "reported" news events from overseas.  Truth, fairness and accuracy has been replaced by flair and drama.  Sadly enough, it's actually the reporters themselves who look to be flaming the bloodshed on, waiting for people to die so that the situation falls into pure chaos, and they just might get their big break as a result. 

It's disgusting.

As usual, the European broadcasts are winning the war of accuracy-in-reporting, although a few of them are also letting their standards slip.   The good ones give you the facts, show you pictures - real pictures - not the same thirty second clip in loop-play for a three minute segment, and report it like it is - and it's few and far between that you see that anymore.  

With declining sales of newspapers and the disappearance of legitimate media outlets, broadcasters are relying on the tricks of dramatic production to get people to watch - and as a result, it's only by coincidence will you get an accurate account of what's really going on.

Embellish a little here, exagerate, there, and lie just a tad here, and what do you get?  The perfect news report for the 21st century.

Again, The New York Times set the standard for sub-standard journalism, thanks to Nicolas Kristof, who seems to know as much about Bahrain, for instance, as a two year old kid who hasn't yet learned how to use Google. 

This guy ought to call Inspector Gadget and stay off the Twitter, because he hasn't a clue.

Today's newsman has become yesterday's lawyer - a piranha, or a vulture, circling its prey, waiting to swoop in and strike at just the opportune time - and then make a name for himself at the behest of someone else's suffering, with little regard to the consequences of his actions.

They would have you believe, this generation of reporters would, that it's their voices that are bringing these current events to fruition, that it's the freedom of the press that the people of the Arab nations are rallying behind, but let's not kid ourselves - there's been free press in the world for decades.

What's making the difference today is advancement of social media.  It has nothing to do with CNN. 

Time to take a back seat, news guy, you've been rendered irrelevant, and proven ignorant.  You missed out on Egypt, and you'd love nothing more than to do all that you can do to make another situation worse, even if it means lowering the ethical standards just a tad bit.

How about you sit back, do some research about what's really going on and then REPORT.  Every segment doesn't need to be OpEd. 

Each Arab country is unique unto itself and is dealing with its own issue.  Egypt is not Libya, which is not Tunisia, which is not Bahrain - you get the picture.  But the media hasn't figured that out yet - and that's why they've all been so desperately wrong when telling the viewer what to think these past few weeks.

Across the pond now, where in the United States, citizens are jumping on the wave of protest as well.  Thousands in Wisconsin are kicking off over budget cuts and the proposed weakening of the unions - the same unions whose tactics are bankrupting state after state, and who won't be touched by a politician (until now) because of their political lobbying power.

These protests are a far cry from the Middle East, however.

On one side of the world people are protesting over wages of two dollars A DAY, while on the other side of the world people (making a hundred thousand a year in favorable cost-of-living conditions) are protesting having to pay a 12% health care premium instead of six percent.


Let's put this straight - Wisconsin is broke.  That state has a budget gap approaching four BILLION dollars over the next two years, not an insignificant number considering Wisconsin's modest size.

It's been said that greed blinds those who are greedy.

Remember that thing a couple of years ago that they called the worst recession since the Great Depression?

It started just like this - people spending more than they should and thinking that just adding more credit would solve their budget deficits.  You're broke, Wisconsonites.  You can't afford anything and everyone's feeling the pain.

Go home and come up with a reasonable budget and get your state in order before you become California. 

And then cry me a river, if you're not willing to do what it takes to head towards a balanced budget.

Speaking of quality of reporting, it's debatable whether AOL's recent alignment with the Huffington Post will pay off in the long run.  "Reporting" like THIS reminds us that news in America these days has been transformed into basic blog reporting and childish bickering.

Hey, if that's where you want to go, AOL.

Funny enough, in some discussions I had as a result of the AOL purchase of the Huffington Post, I found out that there was actually someone still paying for email services from AOL. 

I still get a chuckle out of that one - with all the free services, someone's still paying sixteen bucks a month for email? 

Last one out, shut the door and turn off the lights. I think that guy saw the light and quit just the other day. 

Welcome to the modern age of email.

I've got the perfect solution for the Mets this year, on how to compete in the NL East with the Phillies in possession of maybe history's best rotation - I'll just put Halladay, Oswalt, Hamels and Lee all on my fantasy team.  That way it can be assured that one will have an off year, two will spend significant time on the DL and the other will give up about 50 home runs for the first time in his career.

On the subject of sports, with Fanball.com going out of business, anyone have any suggestions for an alternative to the Diamond Challenge?

vfc@vfcsstockhouse.com

Prosper

Friday, February 18, 2011

Readers Respond: Apricus (APRI) - Topped Out?

"Readers Respond" is a forum where VFC interacts with the readers of VFC's Stock House.  Readers can leave comments on posted material at either of the blog sites, through Seeking Alpha or via email, vfc@vfcsstockhouse.com.  All stock opinions, tips and questions are welcomed, whether agreeable with VFC's opinions or not.  Thanks for the comments, because without interaction - this wouldn't be fun.

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An email to the VFC's Stock House page on Seeking Alpha:

HI VFC.....Is APRI TOPPED OUT HERE?


THANKS


BILLYQ

VFC's Take:  Apricus Biosciences is the recently renamed NexMed, which traded under the symbol NEXM.  It's been about ten months since this company was mentioned on VFC's Stock House, and at that time I stated that I was not a buyer because I didn't like the karma of investing in companies that treat erectile dysfunction (ED).

If karma turns out to bite me in the butt, then it'll be a double whammy since not only have I picked up a few shares of NovaDel - also working on an erectile dysfunction product - but I've added some shares of APRI to the portfolio as well.

Apricus has in its portfolio a valuable drug delivery technology in NexACT, for which the company could use with numerous drugs coming off patent over the next couple of years. 

Its treatment for ED, Vitaros, is already approved in Canada and the company will file for approval in the United States early this year.  Applications for approval in Europe and the Middle East are also expected during the current year.

Beyond Vitaros, Apricus has quite a few developmental pipeline products that add potential value to the company.

FemProx, a treatment for female sexual arousal disorder, is another Phase III product that Apricus looks to bring to market in Canada before long.

The oncology products are still in their infancy, for the most part, but PrevOnco for liver cancer is past Phase II and ready for Phase III.

MycoVa, a treatment for Onychomycosis, and RayVa for Raynaud’s Syndrome are also gearing up for Phase III.

There's yet more in the pipeline at various stages of development.

So, there's no doubt that the full pipeline is an attractive lure for investors. 

On the financial front, a recent company presentation states that the cash reserves are enough to last into early next year, and Apricus expects to be cash flow positive by the end of 2011.

Not bad for a company trading for a market cap of just over fifty million.

I'll make this one easy by saying that I think APRI is still a good buy for these prices.  The potential of the pipeline far outweighs the modes market  cap and there is significant room for this stock to move higher during the course of 2011, whether it be the result of speculation or significant announcements.

Vitaros in Italy is also an intriguing development; Silvio Berlusconi alone could alone probably support Apricus with funds for a full year, with the way that guy carries on.

I like this one, and any dips should be taken advantage of, in my opinion.

Disclosure:  Long APRI.

vfc@vfcsstockhouse.com

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Readers Respond: Cytosorbents, Price Target, Insider Holdings

"Readers Respond" is a forum where VFC interacts with the readers of VFC's Stock House.  Readers can leave comments on posted material at either of the blog sites, through Seeking Alpha or via email, vfc@vfcsstockhouse.com.  All stock opinions, tips and questions are welcomed, whether agreeable with VFC's opinions or not.  Thanks for the comments, because without interaction - this wouldn't be fun.

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A comment from Fransisco in response to my most recent post regarding Cytosorbents:

Hey Vinny,


Where do you see the share price of ctso heading upon trial completion and no negative news? Do you still see the price around $1?

Thanks

Francisco

VFC's Take:  There's a few more shares out there than when I initially called for a price spike to over a dollar on positive trial results, but I still think that there's a good chance that CTSO could become an instant four or five bagger on the news, bringing the price close to a buck.

Realistically speaking, I think we'll see at least fifty to seventy five cents, with the potential to move even higher once/if an approval in Europe is announced.

That said, because there is not effective treatment for sepsis currently on the market, positive trial results could draw significant interest which certainly could push the share price to over a dollar in a short period of time.

Another consideration, however, is that the company needs to raise cash soon, so I'm assuming that dilution will be in the works shortly after any spike in price occurs.

Long term, if CytoSorb works, then CTSO should become an easy ten bagger from these prices as the European commercial launch gains steam and the company files for approval with the US FDA.





Another comment from the same article:

Hi Vinny,


Regarding CTSO, ive talked about it a couple of times, but i was wondering, this looks good and everything but why hasn't management bought any shares?


Much appreciated

VFC's Take:  I can't answer that question.  It's generally a good sign when management is willing to pick up shares on the open market, and there are a few insiders holding shares and/or warrants and preferred stock, but I cannot attest as to why they are not purchasing at this time.

Some may consider the lack of recent buying as a sign that management is not too confident about trial success, but I'm not putting too much weight into the lack of buys.

Disclosure:  Long CTSO.

Buy.com

Thursday, February 17, 2011

CTSO: Patents Approved, Trial Results Next?

Any news posted to the wires from Cytosorbents Corporation is going to draw increased attention these days with news of full enrollment and/or results from the European CytoSorb sepsis trial expected at any time. 

The company provided a teaser for investors monitoring the CTSO headlines Thursday morning, when a report announcing the awarding of two additional patents popped up in the wires.

The announcement does little to quench the thirst of anxious investors awaiting the meat and potatoes, which is the trial news, although the expansion of the patent portfolio stregnthens the company for the long term, and adds credibility to ongoing events.

The only concern, however, with these types of PRs so close to the relevant news is that it may raise some fears of the companying trying to prod investors to follow the 'bright, shiny object', rather than concentrating on what's really important.  Company's expecting bad news will sometimes use that strategy to keep investors interested even when events go south - so the investors will hang in in hopes of having the company's 'Plan B' pan out.

What's really important right now is the CytoSorb trial, not the patents.

In this particular instance, I'm not guessing that Cytosorbents is using this tactic on investors, but nothing is a sure thing in the market, so it's always important to voice every concern.

The fact is, as one reader of VFC's Stock House recently suggested, this company could have something huge going on - right around the corner.

The real news is getting closer by the day.

Disclosure:  Long CTSO.

vfc@vfcsstockhouse.com

BDSI: BioDelivery Updates BEMA Buprenorphine Trial

An early morning press release from BioDelivery Sciences announced that the ongoing BEMA Buprenorphine Phase III trial is more than 50% enrolled and is expected to be completed on schedule.

The trial, measuring BEMA Bup for effectiveness in treating chronic pain, began in December of last year and is scheduled to wrap-up later this year, with an expected NDA filing to take place during the first half of 2011.

BioDelivery also has Onsolis on the market in both the US and Canadian markets for the treatment of breakthrough cancer pain.  Onsolis sales have currently been hindered by an ongoing REMS issue, but both BDSI and partner Meda have been making headway in discussions with the FDA and it's expected that the ordeal will draw to a close later this year.

With a novel drug delivery system and multiple products in the pipeline, BioDelivery is still one with significant growth potential over the long term. 

Looks like the low-$3 range is the time to add shares.

Disclosure:  Long BDSI.

vfc@vfcsstockhouse.com



SIGA's Contract, Still A Go? A Quick SIRI Rebound, ONTY Trades Higher

SIGA:  The Small Business Administration (SBA) Office of Hearings and Appeals validated the appeal of a SIGA rival that the company was, in fact, NOT a small business at the time the federal government awarded SIGA a huge contract to supply the country with a reserve of smallpox vaccine in the event of a bioterror attack.

News of the contract award sent SIGA shares rising higher, but the price has steadily retreated since the small business appeal came to light, and a breach of contract lawsuit filed by ParmaThene may have hurt the share price as well. 

The ParmaThene factor should be viewed as a non-factor in terms of receiving the BARDA award, but the appeal was a roadblock that needed to be overcome in order to move forward.

SIGA's CEO, Dr. Eric A. Rose stated, according to Siga's press release regarding these events, "We are disappointed by the SBA ruling, but we intend to respect its decision. SIGA remains ready to offer ST-246, its smallpox antiviral candidate, to BARDA under an appropriate contracting mechanism, and we understand that the Government remains committed to acquiring a smallpox antiviral."

The key takeaway there is that "the Government remains committed to acquiring a smallpox antiviral."

It was reported back in December that BARDA was conducting a review to determine whether small businesses, minus Siga, had the capacity to supply the amount of vaccines necessary to fulfill the contract using the small business set-aside.

Because there was relatively little competition for the award in the first place, it's pretty safe to assume that the answer to that question is going to be a resounding, "No."

With that in mind, speculation now has it that the feds will find a way to award Siga this contract - once and for all - even if it means utilizing an alternative contract mechanism.

However, another piece of Wednesday-released news may be related to the Siga-Barda saga.

Chimerix, the company that filed the small business appeal in the first place, just announced a contract award from BARDA to fund the development of its own smallpox vaccine that approaches $100 million.  Small beans when compared to the potential $2 billion value of the Siga deal, but it could be an indication the BARDA intends to give both companies a piece of the pie.

The Chimerix product, however, still needs additional testing, so Siga will definitely be the first to the table, regardless of whether they have to share their load of the apples or not. 

It's relatively safe to assume that Washington will not stand by looking at a depleted reserve of smallpox vaccines only to give Chimerix time to develop its product, when Siga is ready to go.  That said, we've seen worse from DC before, so nothing is a 'gimme' in that town.

With the awarding of the Chimerix contract, it's tough to imagine that the two companies are not going to end up sharing the final contract. Especially when BARDA Director Dr. Robin Robinson is making statements like this:

“A critical component of the U.S. strategy for protecting the public against intentional or unintentional release of the smallpox virus is having two smallpox antiviral drugs.

Funny how that bit of his statement, regarding the two drugs, was left out of the Chimerix release.  The Chimerix PR only quoted the next portion of the Robinson statement:

“In the event of a smallpox outbreak, a smallpox antiviral could augment our plans to use a vaccine because an antiviral medication can treat people who get the vaccine too late for the vaccine to be effective. An antiviral can save lives.”

Propaganda at work there, Chimerix PR guy?  I think so.

We're likely to see additional updates regarding Siga's portion of the contract - if Siga still has a portion of it - very soon.

That said, because Siga is ready to roll now and Chimerix is still developing its product, I think Siga still wins big from this contract.

BARDA just needs to work through the legalities.

For Chimerix, you can't blame a company for wanting to see its science advance, but don't you feel like right now that they're acting like that annoying Chihuahua that keeps biting at your ankles but isn't really doing anything productive?

Disclosure:  No Positions.

Prosper Refinance Debt Loans

SIRI:  Shares of SiriusXM rebounded slightly on Wednesday after having dropped to as low as $1.68 following the fourth quarter earnings report issued on Tuesday.

Volatility may continue, but the increased earnings and revenue have the company looking again like a good long term pick. 

Karmazin's decision to pay down the debt makes it a stronger company, in both the long and short run, and that should be the plan of action through this year, in my opinion, regardless of the negative spin in the headlines because paying down debt makes the quarter look like a 'loss'. 

Once there's a handle on the debt, and cash flow increases a bit more, then look for some acquisitions.

Disclosure:  No Position.

vfc@vfcsstockhouse.com

SIRIUS|XM Radio

ONTY:  Oncothyreon shares jumped up by just about a quarter on Wednesday, a relatively modest amount in terms of percentage gains, but the move was worth notice since the stock had been hovering right around three dollars for a few weeks.

Stimuvax for lung cancer is the most advanced of the pipeline products, and after a bump in the road last year led to a temporary halt in the trials, Oncothyreon is back in business, with a pipeline of multiple candidates in earlier stages of development in tact.

Thanks to a newly initiated loan facility with GE Capital, Oncothyreon expects to be funded into the second half of 2012, eliminated any immediate concerns of dilutive financing.

Still trading for a relatively modes market cap considering the potential of a late stage approved cancer immunotherapy treatment for lung cancer, ONTY is worth a look.

Disclosure: Long ONTY.

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Wednesday, February 16, 2011

Mannkind Rebounds, Somewhat

Ignore the headlines that claim "Mannkind Soars," because when a stock is trading for just a few bucks, a ten percent rise is far from a "soar". 

When TTNP flies from a penny to two bucks, that is what I'd call a "soar".

I'll even call a 15% rise in a thirty dollar stock a "soar", but not a 10% rise on MNKD on Tuesday.

That said, shares of Mannkind were on the modest rebound Tuesday, closing 10% higher after having taken a beating following Friday's earnings report where it was announced that the company would slash its work force by over forty percent.

It was also reported during the conference call that Alfred Mann - the founder and CEO of Mannkind who has already dumped nearly a billion dollars into the company and its lead product Afrezza - would make no further commitments to funding the pipeline following the FDA's second denial of approval for Afrezza.

I mentioned a couple of days ago that I thought it might be worth looking at picking up a few beaten-down shares of MNKD, and I continue to maintain that position, although I still believe that we've yet to see the lowest of the lows that will result from the earnings report and FDA denial.

That said, I found it in my interest to pick up a few long options on Monday, and depending on the developments regarding the FDA-requested Phase III trials, which will compare the next-generation inhaler to the one used for the latest trial, I may end up picking up a few more.

Ultimately, it's Generex's Oral-lyn - being that the insulin is absorbed via the inner lining of the cheek - that I believe will surpass Afrezza as the insulin spray of choice, since Afrezza is actually inhaled into the lungs, fueling some concerns of long term side effects.

MNKD's Tuesday rebound made Monday's decline a wash, but the stock is still down significantly off its pre-decision highs.

Disclosure:  Long MNKD call options.Prosper Vacation Loans

Prosper Loans (Male)

Tuesday, February 15, 2011

CLDA On The Rise, Buyout Talk?

Shares of Clinical Data were on the surge during Tuesday's trading, flying higher by over 15% with three times the daily average having traded before 3 PM EST.

Speculation of a buyout has been in the air ever since the FDA approved CLDA's antidepressant drug Vilibryd last month, and it could be that word of an imminent announcement has leaked. 

It's also possible that Tuesday's action is the product of large scale short covering.

This stock has been on the significant rise since the Vilibryd approval, and hasn't looked back at all, aside from a slight pause at the thirty dollar mark.

The stock broke through that level with force today, and if a buyout is being worked behind the scenes right now, it begs to question - just how high is this one going to go?

Excpectations are high, but with the market cap now over a billion dollars, will Vilibryd be worth that so quick?

Someone thinks so.

Keep an eye on this one, but again - I'm not a fan of chasing.  Congrats to those who rode this up, but we could be pretty close to the highs right now.

Disclosure:  No position




NVDL: NovaDel Announces Financing, Time to Jump In?

NovaDel Pharma Inc. announced on Tuesday a purchase agreement of preferred tock and warrants that will raise over $1.5 million for the company. 

The funds raised will be used to advance Duromist, a spray treatment for erectile dysfunction, through the pipeline.

Shares of NovaDel dropped by over 50% on the news, although somewhat recovered as the trading day progressed to settle in the twelve cent range.

The threat of imminent dilution kept investors away from the stock, even with the recent commercial launch of the sleep aid spray Zolpimist, but the one and a half million dollar cash raise does little to quell investor fears that additional funds will be needed over the short to mid term.

The relatively modest cash raise has me believing that the company is predicting immediate help from Zolpimist sales, or a higher share price sometime soon (at which point we could see another round of dilution). 

A mil and a half doesn't go very far in the world of speculative biotechs.

I've stated before that I find it to be bad karma to invest in companies that treat erectile dysfunction, but I jumped into the initial dip of NVDL on Tuesday and I'll most likely hold through at least the commercial launch of Duromist.

With Zolpimist on the market, Nitromist pretty close, and Duromist in the works, it looks like NovaDel has risen from its deathbed and is offering a glimmer of hope moving forward.

I had written this one off quite a while ago, but the return to sub-dime prices brought me back in.

I'm not convinced that the cash raising events are over, but with products on the market this year, the immediate need for additional funds may be averted for the time being.

Disclosure:  Long NVDL.

SNSS: Sunesis Completes Reverse Stock Split

Shares of Sunesis began trading as SNSSD on Tuesday, as the company exercised a reverse stock split, reducing the share count by a sixth.

According to the press release that announced the RS, Sunesis took this action to "better enable Sunesis to meet and maintain the $1.00 minimum bid price required for continued listing on the NASDAQ Capital Market and attract additional shareholder interest."

After twenty days trading under the symbol SNSSD, Sunesis will resume trading under the standard SNSS ticker.

Generally, reverse stock splits are exercised by companies in unhealthy financial positions or are struggling to maintain minimum listing prices.  While all speculative biotechs could be considered in unhealthy positions because of the constant threat of dilution to fund the pipelines, nothing has changed regarding the potential of Sunesis, although it was becoming apparently clear that it would be a working effort to prop the SNSS share price back up to above the $1 mark without effecting an RS.

The action may meet the objectives that the company had in mind by maintaining the NASDAQ's minimum price of $1 and attracting new and less-speculative investors to the company, but it's a general rule of thumb that shares decline after reverse splits are conducted, and it should be assumed that Sunesis will fall victim to that phenomenon as well.

That said, nothing has changed with the potential of the pipeline, which includes Vosaroxin for the treatment of  relapsed/refractory acute myeloid leukemia (AML), for which a Phase III trial is underway; Vosaroxin for the treatment of platinum resistant ovarian cancer, for which Phase II trials have been completed, and SNS-314, a treatment for advanced solid tumors.

If the stock does, in fact, take a dive - significant or not - then investors may have themselves a nice buying opportunity to accumulate shares while waiting for the outcome of the Vosaroxin Phase III.

Sunesis is currently sitting on over fifty million dollars in cash and investments, so there is no immediate threat of dilution, but Geron showed us that it's wise to expect a cash raising event at any time in the biotech sector, it's just the nature of the game. 


Keep an eye on SNSSD.  Any post-split slide will present the time to buy, if you want to take a chance on Vosaroxin.

Disclosure:  No position.

vfc@vfcsstockhouse.com

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