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Monday, January 21, 2013

Implant Sciences (IMSC): Potential For Huge Growth Lies Ahead

Implant Sciences (IMSC) may have just announced the most significant and potentially market-moving news in company history on Wednesday when it was revealed in a spontaneous conference call that the United States Transportation Security Administration (TSA) had approved Implant's Quantum Sniffer (QS)-B220 explosive trace detector for use in air cargo screening. This ruling could be considered the 'holy grail' of the validation process for Implant Sciences as it allows the QS technology to be listed in the next edition of the 'Air Cargo Screening Technology List' and opens up a new - and potentially very lucrative - avenue for revenue. It also offers a huge round of validation for the technology, as many government agencies - both in the US and around the globe - follow TSA validation guidelines in regards to their purchases. It's quite possible that now, with TSA approval in the bag, orders from these countries and agencies will start flowing in, providing a significant boost to the company's revenue stream and sparking a rally in the IMSC share price.

Already shares closed twenty three percent higher on Wednesday and - with volume well more than ten times the daily average - may be positioning to move even higher during the coming days and weeks. It was noted during Wednesday's call that the company expected to beat the revenue numbers of the latest guidance, which were in the range of seven million dollars, moving forward from this point. The TSA approval opens the path for government contracts to start rolling in, which often times come with bulk orders, and help the company meet the revised expectations. Of relevance the TSA has mandated that - as of 3 December - all cargo in-bound to the US on passenger aircraft will be screened for explosives. This is a market that Implant Sciences intends to exploit and given the benefits that the QS technology holds over the competitive standard currently on the market, there is reason to believe that market penetration could materialize quickly.

Contracts awarded to other firms in this arena have been valued in the tens of millions of dollars, and only one such contract for IMSC would likely lead to a swift move to a market cap to the north side of one hundred million for IMSC, with the possibility of a quick push even higher if a steady stream of orders starts flowing in from customers who may have been awaiting this milestone news before placing orders.

As noted by company officials during Wedensday's call, the QS-B220 can now be sold to "everyone, everywhere," with this approval, "and that wasn't the case before." With that being said, speculation alone may push the share price towards - or even higher than - the two dollar mark, as Implant could now be considered a major player in the homeland defense and air security markets. It is also safe to assume, judging from statements made on Wednesday in that call, that the company expects to shortly be able to bank ten million dollars-plus per quarter. Such a scenario, that comes along with increasing revenue on a quarter-over-quarter basis, will have investors looking back at the current share prices as a steal, even after Wednesday's jump.

Another item that investors will key on, and came up in Wednesday's call during the questions and answers session, is the nearly thirty million dollars in debt that Implant carries forward. The company came to an agreement with its primary secured lender, DMRJ Group LLC, late last year to extended much of that debt until the end of March of this year. The extension at the time provided the company a full two quarters of development and progress before Implant had to worry about any of it coming due - and maybe most importantly, allowed for time for the TSA to finalize its validation process.

Since the approval puts the company on much more solid footing today than it was when the deal was extended, it's hard to believe that DMRJ would not continue to work with Implant to structure the debt repayment in a manner that benefits both parties. Much like SiriusXM (SIRI), another still-growing company who a couple of years ago had loads of debt coming due, expect Implant to push a significant amount of its revenue growth towards debt repayment when the opportunities arise. Cash will also be pushed towards meeting product demand, research and development and even towards a listing on a major exchange, as it was noted in the call that a ticker on the Nasdaq is the ultimate goal.

With a cooperative lender in place and a TSA approval on the books, Implant can concentrate its resources on expanding its presence in a market that is growing by the billions of dollars. The competitive benefits of the Quantum Sniffer technology could attract quick global attention from those players who may have been sitting on the sidelines awaiting TSA approval.

Possibly the most significant advantage is that the ionization process used to detect explosives - and/or narcotics - contains no radioactive particles. That not only eliminates any safety concerns for personnel using or being inspected by Sniffer technology, but it also eliminates the added layers of licensing and regulatory concerns that would be included in any implementation plans.

Just as significant a benefit is the quick "clear down" process for the QS. "Clear down" is the amount of time needed for a system to 'reset' itself after use before it is available for another round of inspection and detection. Implant's Sniffers can complete this process within seconds, while the standard for the competition is minutes. That's huge, when considering the need for speed and efficiency in meeting today's high demand for bulk cargo inspections, let alone the demands implemented the TSA's air cargo mandate.
Implant can also be considered a 'patriotic play,' as it is the only American company to have passed the rugged TSA validation process in this arena. In a time when American companies and the US government are looking for internal options, Implant stands to make a competitive play in the homeland defense and air security markets.

Additional advantages, as outlined on Implant's website, are very high ratings for accuracy - especially when compared to x-ray - and extremely low 'false positive' rates. In noting these distinct advantages, there's reason to believe that Implant is positioned to make a jump to the big leagues and mainstream of global defense, and compete head-to-head with the likes of the UK's Smith's Detection (SMGZY.PK).
Such a jump may be swift, as this company has been laying a foundation for some time. Some key additions to the management team have been added over the past year or so and not only added an extra layer of credibility to the still-growing company, but provided an 'in' with relevant entities in the homeland defense arena and ensured that the right personnel were in place to complete the mission of growth, once/if full TSA validation became a reality.

Dr. Bill McGann, for example, a pioneer of trace detection technology was appointed just months ago as the Chief Operating Officer and was added as a member of the company's Board. Dr. McGann co-founded Ion Track Instruments, the first ETD provider to receive TSA certification, and subsequently sold that company to General Electric (GE) for nearly $200 million before becoming the Chief Technology Officer for GE Security.

Implant also added Dr. Darryl Jones as the VP of Sales and Marketing. Dr. Jones was another addition also heavily-embedded in the homeland security market and is also a veteran of GE Security. He also has a tour under his belt of leading sales and marketing for Safran's Morpho Detection.

The pieces had already been falling into place in terms of revenue growth lately, as numerous orders have been announced over the past months with increasing lot sizes, and there's reason to believe that the pace of new orders will pick up even more rapidly now, with TSA approval in the bag.

It may also be worth entertaining the possibilities of a buyout. The TSA approval is a noted milestone and other big players in the sector may see it more beneficial to throw an offer to Implant while it trades on the relative cheap, rather than face stiff competition on the open market.

Implant Sciences has just entered the mainstream and judging by the huge bump in volume and share price, the company's stock could be positioning for a move to the upside over the coming weeks and quarters. Some periods of pullback and consolidation may take place, as IMSC is likely to trade in similar fashion to a developing drug company who just received FDA approval. The difference being, a drug company usually has some time to wait before it can launch its product post-approval.
Implant is ready to go now.

As the company is positioned to start realizing significant growth, shares could trade with significant volatility until investors can gauge more accurately how quickly orders will flow in and boost the revenue stream. There will also likely be quite a bit of consolidation moving forward over the short term, which should open up numerous trading and accumulation opportunities for both short and long term investors.
With a potentially ground-breaking product approved to enter a multi-billion dollar market, Implant Sciences is a hot one to consider moving forward.

Disclosure:  Long IMSC, GE.

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Friday, January 18, 2013

Stock Watch Wednesday, 16 January: FB, GOOG, BA, JAL, ANA, GS, JPM, WFC, IRWD, FRX , ONVO, SSYS, DDD, AAPL

Markets traded modestly higher for the Day on Tuesday as retail sales numbers came in better than expected for the month of December, easing worries created late last year of a slowdown in consumer spending.  While the numbers beat the street, per say, they weren't strong enough to spark a widespread rally as investors are still waiting on the earnings reports of the big banks to better gauge the overall health of the recovery.  Additionally, reports also started to swirl late Tuesday that any delay in a debt ceiling agreement in Washington could lead to a US credit rating downgrade, a move that would likely lead to a market decline.  Should an agreement not be reached, it would be a given that the US rating would be downgraded, but the Fitch warning also indicates that Washington's strategy of slowly running the budget tap just enough to keep the government running, without devising a de-facto solution, is finally starting to wear thin on all accounts.

Earnings picks up in earnest on Wednesday as hit the heart of the trading week and there could be plenty of catalysts still to come from the banks, US economic data and from Chinese data later in the week.  Here are a few stocks and stories to keep an eye on for Wednesday, 16 January, 2013...

Newsmakers:

Market Says Facebook News Not Worth The Hype

In what may be considered a scenario where investors played the 'sell the news' game, Facebook (FB) shares retreated by nearly three percent on well more than double the normal trading average after the company announced at its much-anticipated media event that it would implement a 'Graph Search' to lead the way into the next stages of growth.  As FB shares rolled through the thirty dollar mark with ease leading into this event, investors speculated on the possibilities of a Facebook phone entering the market.  Initial indications following the announcement, however, are that investors are either outright unimpressed with the Graph Search announcement or are prepared to take a 'wait-and-see' approach to its impact on future earnings.  A three percent drop does not indicate overall disappointment in the new search strategy, especially not after FB shares have risen swiftly from the twenty dollar mark without much of a pullback period on profit-taking, so investors may digest the news over the coming trading days, assess what it all means, and then trade accordingly. 

Although the Graph Search does not go head-to-head with Google's (GOOG) search engine strategy, it does give Facebook a foothold in the market and will likely chip away at GOOG's market share in search, especially since users will not have to leave the Facebook site to find answers or recommendations from those most relevant to them - friends and family.  Underlining that strategy is maybe the most important implication from this whole deal - that users will remain on the Facebook site longer to potentially click on ads; which means they won't be on Google, and that's good for business.  It's likely investors recognize those aspects and why Tuesday's drop was barely negligible in the grand scheme of things, and more an indication of the simple 'sell the news' investing strategy.

The Graph Search is not the earth-shattering news that investors expected and was probably not worth such a hyped-up press event, but it should pay off well for Facebook over the long term - as long as users remain interested and loyal to the core business - which is social networking.

Boeing Dips On Continued Dreamliner Woes

Shares of The Boeing Company (BA), which had recovered slightly from a dip created by mechanical worries of the 787 Dreamliner earlier in the month, are dropping again during the pre-market hours on Wednesday as it was announced that two of Japan's main airlines, Japan Airlines (JAL) and All Nippon Airways (ANA), had grounded their respective Dreamliner fleets after an emergency landing earlier in the day sparked growing concerns of the safety of the aircraft.  The slew of troubles has grown into a trend that has the headlines rolling and investors nervous about the future of the next-generation aircraft that was expected to fuel the next growth phase of the company.  As argued previously, however, investigations are likely to narrow down any 'weak link' in the parts process fairly quickly - as it looks like there are issues specifically related to the aircraft battery - and a remedy is likely to be introduced just as quickly, barring any major structural flaws, which doesn't look to be the case.  Assuming the faulty parts are fixed in quick time, any dips created by the much-hyped Dreamliner news should be looked back upon as solid accumulation points.  Additionally, any fixes in the operational fleet will also be made to those aircraft still in production, alleviating future problems.  Still a story to watch, as Boeing is going to be in prime focus until these problems are solved.

Earnings:

The Heart Of The Earnings Week Begins

Wednesday marks the start of the 'heart' of the earnings week as Goldman Sachs (GS) and JP Morgan (JPM) are both slated to report.  As mentioned above, the retail sales numbers for December looked encouraging, but not encouraging enough to move the markets one way or another.  The big banks may be able to incite some movement, based on the strength of their respective reports.  Although Wells Fargo and Company (WFC) impressed last week in terms of profits, investors were not so impressed with a slowdown in mortgages dished out.  Those investors will be looking for insight into that trend as other big banks report for the duration of the week, beginning on Wednesday.  Indicators are that the economic recovery is still healthy, making any dip in the banking sector a potential buy. 

Ironwood Pharmaceuticals (IRWD) and Forest Laboratories (FRX) reported earnings in-line with expectations on Tuesday following the launch of Ironwood's Linzess for the treatment of chronic constipation during the fourth quarter of last year.  Forest, as expected, took a hit related to the recent expiration of key patents and pushed money towards the launches of new products looking replace some of its now-off-patent pipeline, while Ironwood reported twenty million dollars of Linzess sales in an abbreviated first quarter on the market.  The two will split revenue for the product, but neither is likely - even with an IRWD analyst upgrade on Tuesday - to see its trading patterns effected until/if sales pick up significantly over the coming months and indicate a hot launch.  Linzess is expected to launch in Europe early this year under the name 'Constella.'

Healthcare, Biotech, Pharmaceutical:

Organovo's Price Run Regains Momentum On Tuesday

Organovo Holdings (ONVO.PK) regained its upward momentum on Tuesday with a seven percent spike after having retreated somewhat over the past week when the day, momentum and swing traders banked profits and moved on.  Organovo's spike has not just resulted solely from the advancement of its own technology, which could help shape the future of 'bioprinting' in relation to medical research, discovery and treatment, but the move was also traded in-line with the trading of the 3D-printing sector as a whole.  2012 has proven to be a pivotal year for the technology and ONVO's move follows those of other leading companies in the sector, such as 3D Systems Corp (DDD) and Stratasys (SSYS), who were consistently setting new 52-week highs as the year progressed.  ONVO's arrival to the sector-wide trend hit the market with just as much strength, as the stock has returned nearly a double in just a couple of months, and could be considered a major player now with the support of some high-profile collaborative efforts based on the advancement of the company's NovoGen MMX Bioprinter, which  uses live human cell samples to generate 3D "bioprints" of human tissue. Once the tissue is generated, these 3D prints can be used as disease model  that enable therapeutic drug discovery and development and later on down the road could potentially be used to generate - or 'print' - organs for patients awaiting transplants.  Tuesday indicated that ONVO's run may not be done, so it remains a hot story to watch - and the technology could be one to keep an eye on for years to come.

Roundup:  Global markets were down on Wednesday and futures indicated that the same could be in store for US markets, at least at the onset.  Apple (AAPL) continues to drag down the tech sector while a slowdown in European care sales added to renewed worries concerning the health of any economic recovery across the pond.  It also didn't help that the World Bank revised its economic forecasts to the downside while Japan's markets dropped more pronounced than most others.  Rather than following the trend, however, the US markets tend to set the tone, so any encouraging earnings notes that fuel the already-encouraging economic data releases in America could quickly turn the markets green.  On the other hand, any bickering in Washington that hints at a deadlock over the debt ceiling would fuel a downturn, as noted by the Fitch credit warning, but any significant downturn these days should be viewed as a solid 'play the dips' opportunity.  As all the big news plays out, there are still plenty of individual stories to keep us interested. 

Happy Trading!!!

Disclosure: No positions.

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Wednesday, January 16, 2013

Weekly Stock Watch, Week of 14 January: AA, WFC, BAC, C, GS, JPM, MS, CS, XLF, RIMM, AAPL, TROV, DNDN, AET, MDVN, SNY, JNJ, ONVO, PFE, UTHR, INO, DDD, AMRN, FB, FCEL, TTNP

At the conclusion of each week, VFC's Stock House examines some news items, stocks and stories that made headlines during the previous trading week, but may also make headlines or influence trends during the upcoming week as well.

The trading year of 2013 kicks off in a big way this week.  Although the markets rallied for the first couple of weeks of the year, the noted price and mood fluctuations were based mainly on political factors, rather than on factors inherent to the markets themselves.  For example, a resolution to the fiscal cliff mess sparked more certainty than we'd seen for quite some time, while pessimism over the pending expiration of the US debt ceiling set in quickly and stalled the early-year run.  Renewed headlines of Europe's economic woes and expectations of another lackluster earnings season also didn't help keep the rally going, but with a slew of economic data due this week and with earnings entering the 'full swing' phase after a couple of 'teaser' reports last week by Alcoa (AA) and Wells Fargo and Company (WFC).  One way or another, things ought to get pretty exciting this week.

To gauge the health of the recovery, investors can digest this week retail sales numbers, housing starts data and consumer sentiment, in addition to some manufacturing data.  Earnings are likely to steal the overall spotlight, but any improvements - or not - in these data over the previous month or quarter can move the markets, too, especially if the data supports any trend set by the earnings reports. 

One item that can be put to rest is the silly talk surrounding this trillion-dollar coin that was so talked about over the last couple of weeks.  The amount of attention paid that coin served as a steady sideshow to real news, and was a testament to the lack of any relevant discussion going on in the meantime.  That will all change this week.

Plenty of action this week expected, but there's still always room for a few individual stocks and stories to keep an eye on...here are just a few of them...

Earnings: 

Big Bank Reports Will Dominate

Alcoa kicked off the season last week on a high note, as previously discussed, and Wells Fargo followed with a worthy follow-up.  Wells reported record profits, although some were concerned that the bank wrote fewer mortgages than it did during the previous quarter.  Shares traded relatively flat following the report, closing down by less than a percentage point on Friday, but provided a solid introduction to a banking-heavy week with giants such as Bank of America (BAC), Citigroup (C), Goldman Sachs (GS) and JP Morgan (JPM) all slated to report.  Those looking for early-year trends to assess the health of the banking industry at the offset of 2013 will find themselves with ample data and earnings to pore through this week, and any encouraging trend in the sector could spark a broad-based rally, especially if other reports from the likes of General Electric (GE), Intel (INTC) and eBay (EBAY) make positive waves themselves and validate a healthy rebound based on growing consumer demand.  Bear in mind that profits is not enough to spark general excitement, as evidenced by the Wells report and the subsequent lull in share price movement; it's evidence of a healthy overall economy that investors are watching for, so it may be worth looking deeper than the headlines.

Banking:

Cutbacks And A Downgrade Thrust Earnings Into Spotlight

A couple of items from last week could temper the mood surrounding the banking industry leading into the new trading week.  Morgan Stanley (MS) announced last week that it expected to initiate another round of cost-cutting measures, which would include the laying off 1600 personnel from its securities unit. The move is a sign of the times that large businesses, banks and corporations may not be finished with the restructuring that has been underway since the economic collapse of 2008-09.  That said, investors should not panic looking ahead as many other big players in the industry, including Citigroup, Bank of America and Credit Suisse Group (CS) all undertook similar measures.    Also last week - and potentially playing a factor this week - Credit Suisse downgraded Bank of America from 'Outperform' to 'Neutral' and sparked a five percent price dive for BAC.  These situations always make me laugh, as if there is no conflict of interest when one big bank covers another and sends shares either spiking or diving.  The timing of the downgrade comes curious, too, just before earnings, making the BAC report one to watch.

Investors playing the longer term potential of the sector may enjoy short term dips that materialize from any negative news developments, such as the BAC downgrade, and more of the story will be told with the flurry of banking reports this week.  Again, for those looking to play the overall sector, the Financial Sector SPDR ETF (XLF), or other electronically-traded funds, offer investors that opportunity.

Newsmakers:

Anticipation Of BlackBerry 10 Drives RIMM Shares Higher

Shares of Research In Motion (RIMM) were on the fly this past Friday - jumping by nearly fourteen percent - and should be another hot one to watch this week, too, as investors anticipate the pending launch of the BlackBerry 10 platform later this month.  RIMM shares have been highly volatile of late leading into the launch period and have more than doubled off their 52-week lows as investors speculate on a turnaround.  Because it can - and has - been argued that consumers may have reached the point of saturation with Apple's (AAPL) iPhone, the avenue may be clear for RIM to start gaining back some of the market share lost with the rise of the iPhone, Galaxy and other recent innovators of the sector.  Some popular financial media outlets have also covered the RIMM story as a potential bullish mover, which could help fuel a continued move higher after last week's run.  It's been a period of consolidation for this stock after its quick double a few months ago and the company could turn into one of 2013's solid turnaround stories - assuming a successful BlackBerry 10 launch, of course.

TrovaGene Jumps Through Eight Bucks

We've followed the TrovaGene Inc (TROV) story as shares returned more than a triple since the summer months and another milestone was met last week as a significant boost in volume pushed TROV through the eight dollar mark while also setting a new 52-week high.  Volume on Friday registered at more than five times the daily average and the price jump made the stock well more than a quadruple off its 2-week lows.   Fuelling this company's price run has been the pending commercialization of some of the company's numerous diagnostic tests that can detect various cancer indications through a simple urine sample.  The first such test is slated to hit the market later this month and will be able to detect KRAS mutations through urine samples, with others expected to follow in achieving this significant milestone.  Aside from the pipeline developments alone, TrovaGene also received attention from some high-profile collaborative efforts and was also highlighted in a recent analyst report when Aegis Capital jumped on board and initiated coverage of the company with a rating of 'Buy.'  Continuing a swift move higher, TROV will again be a stock to watch this week.  Only twice in 2012 did trading volume hit as high as it did on Friday, a potential sign that more serious investors are moving in.  Bear in mind that quick-movers such as this one - which have returned huge gains over a short period of time - are also to be watched for pullback periods of consolidation.  TROV has already seen a couple of these on the way up, but pending developments - thus far - have been able to fuel a higher run.  It also helps that TrovaGene is capitalizing on the growing healthcare trend of exploiting less-invasive and less-expensive means of identifying and treating various cancers and disease types.  Another hot one to watch this week.

Dendreon Spikes Twenty Percent

Dendreon (DNDN) was another of Friday's hot movers, with shares spiking by over a dollar on a twenty percent rise.  Having already been identified as a potential rebound play for 2013 due to a reversal in trend for Provenge sales, partly the result of expanded insurance coverage by players such as Aetna (AET), Dendreon then received a boost last week from a Bernstein analyst who upgraded the DNDN stock to 'Outperform' while also upping the price target to $10 from $7.  According to reports, the upgrade was based on feedback from urologists, but the company itself may also be benefiting from the implementation of numerous rounds of cost-cutting measures that have helped to sure-up the bottom line as the sales and management team worked to reverse what was - for at least a quarter - slowing Provenge sales.  Provenge could continue to grow support from doctors and insurers if data continues to prove its worth in combination with other drugs and therapies, such as Medivation's (MDVN) Xtandi, Sanofi's (SNY) Jevtana, and Johnson & Johnson's (JNJ) Zytiga, for example, which are for the time being solely looked at as competition.  Given Friday's boost on huge volume - five times above the daily norm - DNDN will be a hot one to watch again.  Analsyts jumping on board the DNDN turnaround train validates what many longs have predicted for some time.

Healthcare, Biotech, Pharmaceutical:

Organovo Holdings Pushes The Four Dollar Mark

Organovo Holdings (ONVO) is another one that we've followed as its shares have returned a quick double in just a couple of months time.  Fueling this price run may have been the increasing amount of attention paid to the 3D printing sector, but Organovo has also landed some high-profile partnerships for its own version of the technology that has added a large amount of validation to the company's future.  Organovo has applied the 3D printing concept to the field of healthcare and biotechnology by developing the NovoGen MMX Bioprinter, which uses live human cell samples to generate 3D "bioprints" of human tissue that can then be used as disease models and enhance therapeutic drug discovery and development.  The potential of this technology over the short to mid term is significant, as mentioned above, in the realm of therapeutic research and development, but looking further on down the road Organovo could potentially put this technology to use in generating organs for patients awaiting transplants, as previously discussed.  That specific potential was highlighted by The Economist magazine a couple of years ago while other high-profile coverage from CNBC validated ONVO's potential more recently.  In regards to partnerships, Organovo already has standing deals with Pfizer (PFE) and United Therapeutics (UTHR) and just recently agreed to a deal with Autodesk Inc (ADSK) to develop 3D bioprinting software. 

After pushing to just below the four dollar mark on huge volume last week, shares looked to have again consolidated in the low threes.  Given the potential of the 3D printing sector to usher in the next generation of printing technologies - and specifically the potential Organovo to play a huge role in the bioprinting arena - ONVO remains a hot one to watch.  As previously described when 3D Systems Corp (DDD) was moving big, ONVO is an example of how speculative investors can benefit from holding onto a smaller, lesser-known company when the sector itself is starting to run - potential aside. 

Volume Spike Draws Eyes To Inovio

Inovio Pharmaceuticals (INO) shares have been in the spotlight during the early-goings of 2013 and are positioned to remain there as America's flu season continues to make headlines.  This year's flu outbreak has already hit well more than the majority of all fifty states and is expected to get worse as the season progresses.  As discussed earlier in the year, this development is likely to draw attention to companies with flu vaccines in development and Inovio has already gained early acclaim for its clinical-stage universal flu vaccine technology.  When such flu outbreaks occur - remember the swine flu - it's not unusual to see the share prices of these developmental flu vaccine companies run, based not only on the potential that the vaccine holds in itself, but because the government also steps in with grant money to hasten the development of a potential vaccine.  Investing in a company based on the potential for a short term trade to materialize on such developments is highly speculative, but the percentage gains that can be had with such moves are often significant.  Another benefit, though, is that attention can be drawn to pipelines that may otherwise be flying below the radar.  Inovio may be benefiting from both scenarios right now.     Already this year INO has traded for prices roughly twenty five percent higher then where they began the year as volume moved in heavy last week to support the move.  This trading action will again have the stock as a hot one to watch moving into the new trading week.

Inovio's pipeline, including the universal flu vaccine, is based on its proprietary SynCon technology.  SynCon is a platform from which the company has developed numerous synthetic vaccines intended to treat numerous infectious diseases and cancer types and Inovio has already successfully attracted a few collaborative efforts, as six of these programs in development are funded by third parties.  Three are in the Phase II stages of development.  Inovio may benefit this year from its evolution from a 'Phase II' play to a pure late-stage developmental play, as the three pipeline programs in Phase II will reach the latter stages of that milestone mark as the year progresses.  Investors often take note that Phase II pipelines are still considered years away from market, but some of the most impressive investment gains in the biotech/small pharma sector are had when successful Phase II and/or Phase III trials are announced.  Even considering the recent run, INO is still trading at relatively speculative levels and could attract the interest of those looking to play future catalysts or simply hold for the future as this deep pipeline develops.

Still one to keep an eye on.

Briefly:

Amarin Corporation (AMRN):  Hardly a week will go by without AMRN making the list of hot stocks to watch, especially with the launch of Vascepa pending for the very near term, as confirmed by a company presentation at last week's JP Morgan Healthcare conference in San Franciso.  Although some of the AMRN trading action may have indicated that the shorts have started to cover during the opening days of 2013, the stock still carries a heavy short interest - which indicates that there is still an ample supply of non-believers, but it could also lead to a more protracted spike, should any positive news develop.  As has been the case for months, investors are still waiting for news on Vascepa's New Chemical Entity (NCE) status.  A decision from the FDA in that regards will likely provide a catalyst - either up or down, depending on the outcome - for the AMRN and may also be the precursor needed to finalize any potential buyout or partnership offers that may have been previously entertained. 

Of note on the news front last week, the company announced the issuance of another MARINE-related patent, which led to a modest three percent share price gain.  Still one to watch with the Vascepa launch pending, as a hot start on the market will be crucial for those looking to hold off the short interest.

Facebook (FB):  With a push to over thirty bucks achieved last week, Facebook is once again in the good graces of investors.  Late-year expirations of share lock-ups did little to spark the rounds of selling seen in such scenarios earlier in the year, as indications are that investors are holding on to those shares in anticipation of future earnings.  Facebook's last report noted some positive trends in mobile growth for the company and investors will be keeping a keen eye for a continuation of that trend with this quarter's report.  The move to thirty again serves as a nice milestone to open the new year, but the pending quarterly report will provide the near-term catalyst, one way or another.  It's also worth considering that although those holding the locked-up shares did not sell at lower levels last year, that's not to say that they won't at higher prices this year. 

FuelCell Energy (FCEL):  FCEL shares jumped another three percent on Friday on high volume, continuing a run that has returned more than a thirty percent gain in just the opening weeks of the new year.  No news was released in conjunction with last week's move, but investors have been encouraged by recent developments on the business front - notably the deal with Dominion Resources (D) to develop the largest fuel cell power project in North America - and by a modest insider buy last week.  The recent move higher on large volume, the significant short interest and the company's positioning for the future will keep this stock as one to watch for the week.

Titan Pharmaceuticals (TTNP):  After hovering for the better part of a year at levels nearly a third of the current share price, Titan started making noise late last year when the company landed a partner for Probuphine, a subcutaneous treatment for opioid addiction that is also being investigated for use in treating chronic pain.  In December it was noted that a push towards two bucks may materialize as we awaiting an approval decision for Probuphine, especially with partnership news in the rear view mirror, and that move has taken shape during the opening week of 2013 as Titan closed Friday at $1.73.  Apple Tree Partners, with whom Titan partnered, has a history in the sector of developing and then selling developmental companies such as TTNP, adding to the speculation that 2013 could turn into a pivotal year validation for the small company.  The quick gains returned to TTNP investors over the past couple of months are minimal when compared to the run from a penny to over two dollars of a couple of years ago, but a clean triple is nothing to complain about.  Titan's push higher last week and the pending FDA decision still has this one as a story to watch.

Roundup:  Some less-than-appealing economic news from Europe did little to keep investors at bay on Monday as world markets pushed higher, positioning US markets to follow suit, barring any negative developments before the market open.  Investors may also enjoy the encouraging forecasts regarding the US economy over the next couple of years that were making headlines during the morning hours, but it won't be long before earnings numbers and new data start trumping all else on the market wires.  It should be an exciting week ahead for investors and traders alike - and we can all be thankful that talk of the trillion dollar coin has finally been put to rest.  That plan had as much chance of coming to fruition as RG III's knee has at ever lasting a full season again.

Happy Trading!!!

At the conclusion of each week, VFC's Stock House examines some news items, stocks and stories that made headlines during the previous trading week, but may also make headlines or influence trends during the upcoming week as well.

The trading year of 2013 kicks off in a big way this week.  Although the markets rallied for the first couple of weeks of the year, the noted price and mood fluctuations were based mainly on political factors, rather than on factors inherent to the markets themselves.  For example, a resolution to the fiscal cliff mess sparked more certainty than we'd seen for quite some time, while pessimism over the pending expiration of the US debt ceiling set in quickly and stalled the early-year run.  Renewed headlines of Europe's economic woes and expectations of another lackluster earnings season also didn't help keep the rally going, but with a slew of economic data due this week and with earnings entering the 'full swing' phase after a couple of 'teaser' reports last week by Alcoa (AA) and Wells Fargo and Company (WFC).  One way or another, things ought to get pretty exciting this week.

To gauge the health of the recovery, investors can digest this week retail sales numbers, housing starts data and consumer sentiment, in addition to some manufacturing data.  Earnings are likely to steal the overall spotlight, but any improvements - or not - in these data over the previous month or quarter can move the markets, too, especially if the data supports any trend set by the earnings reports. 

One item that can be put to rest is the silly talk surrounding this trillion-dollar coin that was so talked about over the last couple of weeks.  The amount of attention paid that coin served as a steady sideshow to real news, and was a testament to the lack of any relevant discussion going on in the meantime.  That will all change this week.

Plenty of action this week expected, but there's still always room for a few individual stocks and stories to keep an eye on...here are just a few of them...

Earnings: 

Big Bank Reports Will Dominate

Alcoa kicked off the season last week on a high note, as previously discussed, and Wells Fargo followed with a worthy follow-up.  Wells reported record profits, although some were concerned that the bank wrote fewer mortgages than it did during the previous quarter.  Shares traded relatively flat following the report, closing down by less than a percentage point on Friday, but provided a solid introduction to a banking-heavy week with giants such as Bank of America (BAC), Citigroup (C), Goldman Sachs (GS) and JP Morgan (JPM) all slated to report.  Those looking for early-year trends to assess the health of the banking industry at the offset of 2013 will find themselves with ample data and earnings to pore through this week, and any encouraging trend in the sector could spark a broad-based rally, especially if other reports from the likes of General Electric (GE), Intel (INTC) and eBay (EBAY) make positive waves themselves and validate a healthy rebound based on growing consumer demand.  Bear in mind that profits is not enough to spark general excitement, as evidenced by the Wells report and the subsequent lull in share price movement; it's evidence of a healthy overall economy that investors are watching for, so it may be worth looking deeper than the headlines.

Banking:

Cutbacks And A Downgrade Thrust Earnings Into Spotlight

A couple of items from last week could temper the mood surrounding the banking industry leading into the new trading week.  Morgan Stanley (MS) announced last week that it expected to initiate another round of cost-cutting measures, which would include the laying off 1600 personnel from its securities unit. The move is a sign of the times that large businesses, banks and corporations may not be finished with the restructuring that has been underway since the economic collapse of 2008-09.  That said, investors should not panic looking ahead as many other big players in the industry, including Citigroup, Bank of America and Credit Suisse Group (CS) all undertook similar measures.    Also last week - and potentially playing a factor this week - Credit Suisse downgraded Bank of America from 'Outperform' to 'Neutral' and sparked a five percent price dive for BAC.  These situations always make me laugh, as if there is no conflict of interest when one big bank covers another and sends shares either spiking or diving.  The timing of the downgrade comes curious, too, just before earnings, making the BAC report one to watch.

Investors playing the longer term potential of the sector may enjoy short term dips that materialize from any negative news developments, such as the BAC downgrade, and more of the story will be told with the flurry of banking reports this week.  Again, for those looking to play the overall sector, the Financial Sector SPDR ETF (XLF), or other electronically-traded funds, offer investors that opportunity.

Newsmakers:

Anticipation Of BlackBerry 10 Drives RIMM Shares Higher

Shares of Research In Motion (RIMM) were on the fly this past Friday - jumping by nearly fourteen percent - and should be another hot one to watch this week, too, as investors anticipate the pending launch of the BlackBerry 10 platform later this month.  RIMM shares have been highly volatile of late leading into the launch period and have more than doubled off their 52-week lows as investors speculate on a turnaround.  Because it can - and has - been argued that consumers may have reached the point of saturation with Apple's (AAPL) iPhone, the avenue may be clear for RIM to start gaining back some of the market share lost with the rise of the iPhone, Galaxy and other recent innovators of the sector.  Some popular financial media outlets have also covered the RIMM story as a potential bullish mover, which could help fuel a continued move higher after last week's run.  It's been a period of consolidation for this stock after its quick double a few months ago and the company could turn into one of 2013's solid turnaround stories - assuming a successful BlackBerry 10 launch, of course.

TrovaGene Jumps Through Eight Bucks

We've followed the TrovaGene Inc (TROV) story as shares returned more than a triple since the summer months and another milestone was met last week as a significant boost in volume pushed TROV through the eight dollar mark while also setting a new 52-week high.  Volume on Friday registered at more than five times the daily average and the price jump made the stock well more than a quadruple off its 2-week lows.   Fuelling this company's price run has been the pending commercialization of some of the company's numerous diagnostic tests that can detect various cancer indications through a simple urine sample.  The first such test is slated to hit the market later this month and will be able to detect KRAS mutations through urine samples, with others expected to follow in achieving this significant milestone.  Aside from the pipeline developments alone, TrovaGene also received attention from some high-profile collaborative efforts and was also highlighted in a recent analyst report when Aegis Capital jumped on board and initiated coverage of the company with a rating of 'Buy.'  Continuing a swift move higher, TROV will again be a stock to watch this week.  Only twice in 2012 did trading volume hit as high as it did on Friday, a potential sign that more serious investors are moving in.  Bear in mind that quick-movers such as this one - which have returned huge gains over a short period of time - are also to be watched for pullback periods of consolidation.  TROV has already seen a couple of these on the way up, but pending developments - thus far - have been able to fuel a higher run.  It also helps that TrovaGene is capitalizing on the growing healthcare trend of exploiting less-invasive and less-expensive means of identifying and treating various cancers and disease types.  Another hot one to watch this week.

Dendreon Spikes Twenty Percent

Dendreon (DNDN) was another of Friday's hot movers, with shares spiking by over a dollar on a twenty percent rise.  Having already been identified as a potential rebound play for 2013 due to a reversal in trend for Provenge sales, partly the result of expanded insurance coverage by players such as Aetna (AET), Dendreon then received a boost last week from a Bernstein analyst who upgraded the DNDN stock to 'Outperform' while also upping the price target to $10 from $7.  According to reports, the upgrade was based on feedback from urologists, but the company itself may also be benefiting from the implementation of numerous rounds of cost-cutting measures that have helped to sure-up the bottom line as the sales and management team worked to reverse what was - for at least a quarter - slowing Provenge sales.  Provenge could continue to grow support from doctors and insurers if data continues to prove its worth in combination with other drugs and therapies, such as Medivation's (MDVN) Xtandi, Sanofi's (SNY) Jevtana, and Johnson & Johnson's (JNJ) Zytiga, for example, which are for the time being solely looked at as competition.  Given Friday's boost on huge volume - five times above the daily norm - DNDN will be a hot one to watch again.  Analsyts jumping on board the DNDN turnaround train validates what many longs have predicted for some time.

Healthcare, Biotech, Pharmaceutical:

Organovo Holdings Pushes The Four Dollar Mark

Organovo Holdings (ONVO) is another one that we've followed as its shares have returned a quick double in just a couple of months time.  Fueling this price run may have been the increasing amount of attention paid to the 3D printing sector, but Organovo has also landed some high-profile partnerships for its own version of the technology that has added a large amount of validation to the company's future.  Organovo has applied the 3D printing concept to the field of healthcare and biotechnology by developing the NovoGen MMX Bioprinter, which uses live human cell samples to generate 3D "bioprints" of human tissue that can then be used as disease models and enhance therapeutic drug discovery and development.  The potential of this technology over the short to mid term is significant, as mentioned above, in the realm of therapeutic research and development, but looking further on down the road Organovo could potentially put this technology to use in generating organs for patients awaiting transplants, as previously discussed.  That specific potential was highlighted by The Economist magazine a couple of years ago while other high-profile coverage from CNBC validated ONVO's potential more recently.  In regards to partnerships, Organovo already has standing deals with Pfizer (PFE) and United Therapeutics (UTHR) and just recently agreed to a deal with Autodesk Inc (ADSK) to develop 3D bioprinting software. 

After pushing to just below the four dollar mark on huge volume last week, shares looked to have again consolidated in the low threes.  Given the potential of the 3D printing sector to usher in the next generation of printing technologies - and specifically the potential Organovo to play a huge role in the bioprinting arena - ONVO remains a hot one to watch.  As previously described when 3D Systems Corp (DDD) was moving big, ONVO is an example of how speculative investors can benefit from holding onto a smaller, lesser-known company when the sector itself is starting to run - potential aside. 

Volume Spike Draws Eyes To Inovio

Inovio Pharmaceuticals (INO) shares have been in the spotlight during the early-goings of 2013 and are positioned to remain there as America's flu season continues to make headlines.  This year's flu outbreak has already hit well more than the majority of all fifty states and is expected to get worse as the season progresses.  As discussed earlier in the year, this development is likely to draw attention to companies with flu vaccines in development and Inovio has already gained early acclaim for its clinical-stage universal flu vaccine technology.  When such flu outbreaks occur - remember the swine flu - it's not unusual to see the share prices of these developmental flu vaccine companies run, based not only on the potential that the vaccine holds in itself, but because the government also steps in with grant money to hasten the development of a potential vaccine.  Investing in a company based on the potential for a short term trade to materialize on such developments is highly speculative, but the percentage gains that can be had with such moves are often significant.  Another benefit, though, is that attention can be drawn to pipelines that may otherwise be flying below the radar.  Inovio may be benefiting from both scenarios right now.     Already this year INO has traded for prices roughly twenty five percent higher then where they began the year as volume moved in heavy last week to support the move.  This trading action will again have the stock as a hot one to watch moving into the new trading week.

Inovio's pipeline, including the universal flu vaccine, is based on its proprietary SynCon technology.  SynCon is a platform from which the company has developed numerous synthetic vaccines intended to treat numerous infectious diseases and cancer types and Inovio has already successfully attracted a few collaborative efforts, as six of these programs in development are funded by third parties.  Three are in the Phase II stages of development.  Inovio may benefit this year from its evolution from a 'Phase II' play to a pure late-stage developmental play, as the three pipeline programs in Phase II will reach the latter stages of that milestone mark as the year progresses.  Investors often take note that Phase II pipelines are still considered years away from market, but some of the most impressive investment gains in the biotech/small pharma sector are had when successful Phase II and/or Phase III trials are announced.  Even considering the recent run, INO is still trading at relatively speculative levels and could attract the interest of those looking to play future catalysts or simply hold for the future as this deep pipeline develops.

Still one to keep an eye on.

Briefly:

Amarin Corporation (AMRN):  Hardly a week will go by without AMRN making the list of hot stocks to watch, especially with the launch of Vascepa pending for the very near term, as confirmed by a company presentation at last week's JP Morgan Healthcare conference in San Franciso.  Although some of the AMRN trading action may have indicated that the shorts have started to cover during the opening days of 2013, the stock still carries a heavy short interest - which indicates that there is still an ample supply of non-believers, but it could also lead to a more protracted spike, should any positive news develop.  As has been the case for months, investors are still waiting for news on Vascepa's New Chemical Entity (NCE) status.  A decision from the FDA in that regards will likely provide a catalyst - either up or down, depending on the outcome - for the AMRN and may also be the precursor needed to finalize any potential buyout or partnership offers that may have been previously entertained. 

Of note on the news front last week, the company announced the issuance of another MARINE-related patent, which led to a modest three percent share price gain.  Still one to watch with the Vascepa launch pending, as a hot start on the market will be crucial for those looking to hold off the short interest.

Facebook (FB):  With a push to over thirty bucks achieved last week, Facebook is once again in the good graces of investors.  Late-year expirations of share lock-ups did little to spark the rounds of selling seen in such scenarios earlier in the year, as indications are that investors are holding on to those shares in anticipation of future earnings.  Facebook's last report noted some positive trends in mobile growth for the company and investors will be keeping a keen eye for a continuation of that trend with this quarter's report.  The move to thirty again serves as a nice milestone to open the new year, but the pending quarterly report will provide the near-term catalyst, one way or another.  It's also worth considering that although those holding the locked-up shares did not sell at lower levels last year, that's not to say that they won't at higher prices this year. 

FuelCell Energy (FCEL):  FCEL shares jumped another three percent on Friday on high volume, continuing a run that has returned more than a thirty percent gain in just the opening weeks of the new year.  No news was released in conjunction with last week's move, but investors have been encouraged by recent developments on the business front - notably the deal with Dominion Resources (D) to develop the largest fuel cell power project in North America - and by a modest insider buy last week.  The recent move higher on large volume, the significant short interest and the company's positioning for the future will keep this stock as one to watch for the week.

Titan Pharmaceuticals (TTNP):  After hovering for the better part of a year at levels nearly a third of the current share price, Titan started making noise late last year when the company landed a partner for Probuphine, a subcutaneous treatment for opioid addiction that is also being investigated for use in treating chronic pain.  In December it was noted that a push towards two bucks may materialize as we awaiting an approval decision for Probuphine, especially with partnership news in the rear view mirror, and that move has taken shape during the opening week of 2013 as Titan closed Friday at $1.73.  Apple Tree Partners, with whom Titan partnered, has a history in the sector of developing and then selling developmental companies such as TTNP, adding to the speculation that 2013 could turn into a pivotal year validation for the small company.  The quick gains returned to TTNP investors over the past couple of months are minimal when compared to the run from a penny to over two dollars of a couple of years ago, but a clean triple is nothing to complain about.  Titan's push higher last week and the pending FDA decision still has this one as a story to watch.

Roundup:  Some less-than-appealing economic news from Europe did little to keep investors at bay on Monday as world markets pushed higher, positioning US markets to follow suit, barring any negative developments before the market open.  Investors may also enjoy the encouraging forecasts regarding the US economy over the next couple of years that were making headlines during the morning hours, but it won't be long before earnings numbers and new data start trumping all else on the market wires.  It should be an exciting week ahead for investors and traders alike - and we can all be thankful that talk of the trillion dollar coin has finally been put to rest.  That plan had as much chance of coming to fruition as RG III's knee has at ever lasting a full season again.

Happy Trading!!!

Disclosure: Long FCEL, INO, AMRN, GE.

Originally published at: http://vfcsstockhouse.com

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Tuesday, January 15, 2013

Stock Watch Wednesday, 9 January: AA, BA, FCEL, D, INO, DNDN, PBTH, TEVA, MRIC

Alcoa (AA) kicked off the earnings season on a positive note on Tuesday and global stock markets rallied on Wednesday as a result.  The upbeat Alcoa report helped to offset reports earlier on Tuesday that the Euro Zone (EZ) unemployment rate is still inching higher, bringing to light again previous worries that Europe is still far behind the United States along the road to recovery.  That report from Europe led to a drop in oil prices, but did little to quell the overall upbeat mood in the markets.  On Tuesday, before the Alcoa report was out, US markets closed down, but some of that could be attributed to continued profit taking after the post-fiscal cliff rally last week.  While few expect this earnings season to provide anything more than the occasional modestly-surprising report, Wednesday could turn into a nice up day thanks to Alcoa.  Overall enthusiasm may be tempered, however, especially with the debt ceiling negotiations still set to kick off over the near term while also considering the fact that one positive earnings report does not yet indicate a trend.

With that said, there's always a few stocks and stories to keep an eye on as the major news of the day dominates the headlines ... here are a few for Wednesday, 9 January, 2013...

Earnings:

Alcoa Kicks Off The Earnings Season On A High Note

As mentioned in the open, Alcoa on Tuesday released an encouraging earnings report that sent global markets higher and reversed what had been a couple of down days.  It wasn't just the numbers from the reported quarter that set the tone, although revenue slightly beat the street and earnings were generally in-line with analyst estimates of six cents per share, rather it was the outlook for 2013 that had investors giddy.  Representatives of Alcoa, which is the largest aluminum provider in the United States, predicted that demand for the metal would grow by seven percent this year - slightly above last year's rate - providing validation that the global recovery is picking up steam.  One positive report will not set a trend for the season, though, so investors will likely temper expectations moving forward and take an "I'll see it when I believe it" approach towards the remainder of the quarter, but the Alcoa news certainly helped to offset reports from Europe that unemployment was still on the rise in the EZ.  A nice start to the season as indications are that the global recovery will continue into 2013 and also a sign that AA could continue to benefit throughout the year.

Newsmakers:

Boeing Drops On Dreamliner Woes

Shares of The Boeing Company (BA) dropped by over two percent on Tuesday as reports of more problems with the Dreamliner became widespread news throughout the day.  With Boeing having so much invested in the Dreamliner and with over 800 orders left unfilled, any bad press will make investors nervous and lead to declines such as what we saw on Tuesday.  That said, a two percent drop doesn't indicate all-out fear on the part of investors and the truth is that all aircraft - not just Dreamliners - experience incidents such as these presented by the media from time to time - even new aircraft - it's just that the Dreamliner is very high-profile right now and since the media loves to play with high-profile stories, every incident is making the news.  BA shares should only be modestly and temporarily effected by such reports, unless a major structural flaw is found or something else of similar scope materializes, otherwise investors may look at these dips as ample accumulation points.  More relevant to investors may be the share price drops of suppliers of the defective parts that led to these incidents, such as the battery maker whose battery caused the reported fire, which in this case was Japan's GS Yuasa Corp.  Yuasa dropped for a second straight day on Tuesday.

Industry, Clean Energy:

FuelCell Energy Off To A Strong Start

Shares of FuelCell Energy (FCEL) jumped by five percent on Tuesday and have risen by over fifteen percent already on the year.  No significant news was released in conjunction with the five percent, high-volumed spike, although a company insider was noted to have made a modest share purchase.  The quick start this year could be a precursor for what's to come as the company announced numerous solid developments last year that have it positioned for success and growth in 2013.  The most significant of the most recent developments may have been the news FuelCell - in collaboration with Dominion Resources (D) - would develop the largest fuel cell power project in North America.  This deal, according to Bloomberg reporting, increased the company's backlog of orders to over $125 million and provided a testament to FCEL's ability to supply power independent of the national or regional grids - a big deal in the aftermath of Hurricane Sandy.  Also in 2012 FuelCell secured a deal with South Korea's POSCO Energy, a deal that brought with it $30 million of up-front financing and laid the groundwork for future - and potentially more lucrative - collaborative efforts. 

With a quick start to the year underway, FCEL will be a hot story to watch moving forward.  Add in a fairly significant amount of short interest and things could get exciting quick, should those shorts look to cover as developments continue to unfold on a positive note.  What has held this company back thus far is the slow trek towards profitability, but as investors become convinced that profitability is on the horizon, volume may start to trickle in at a higher rate and the share price could follow.  Until profitability is met, however, the threat of a stock offering does exist - one such deal was struck last year around the time of the Posco announcement - but the company has also demonstrated its ability to raise funds through partnerships and other collaborative efforts. 

Healthcare, Biotech, Pharmaceutical:

Inovio To Initiate New Clinical Trial

Inovio Pharmaceuticals (INO) is another company that has gotten off to a hot start in 2013 and remains one to keep an eye on as numerous interim and actual trial catalysts could unfold this year.  One such catalyst materialized during the early hours on Wednesday morning as the company announced its intention to bring to the clinical stages its hepatitis C (HCV) DNA therapeutic vaccine, which is based on the company's proprietary SynCon synthetic vaccine platform.  With the SynCon technology, Inovio has produced numerous synthetic vaccines intended to treat or prevent various infectious diseases and cancer types.  Three of these pipeline vaccines are moving through the Phase II stage of development and six of the company's programs are being funded by third parties.  The addition of a hepatitis C vaccine to the clinical stages of development adds to the already deep potential of Inovio's pipeline to infiltrate numerous very lucrative markets with its synthetic vaccines.  Volume has been relatively enormous for INO this week so far and this announcement could keep the ball rolling.  Shares have jumped by roughly twenty five percent so far this year with attention being brought to the company's pipeline and technology, so the threat of a pullback exists, but there are enough developments unfolding and pending to keep attention on the company, even when focus on the sector cedes as numerous healthcare and biotech conferences wrap up later this week.  Inovio may also be receiving a boost from the flu outbreak that is gripping America this winter.  As mentioned earlier in the week, companies developing flu vaccines - especially the universal types - typically garner more media attention than normal and INO's universal flu vaccine technology has already demonstrated early success.  Definitely one to keep an eye on these days.

Dendreon Drops Six Percent

As mentioned on Tuesday, Dendreon (DNDN) released interim fourth quarter results that indicated a reversal in the downward trend of Provenge sales.  One quarter will not mark a true reversal of trend, but it starts the year on a positive note for the company and lays the foundation for the 2013 rebound predicted by numerous financial media sites.  With the news on the street, DNDN shares have dropped rapidly from the six dollar mark and closed Tuesday down another six percent on volume nearly double the daily average, but within the norm for the first trading week of the new year.  The current drop may provide investors looking to play DNDN as a rebound story to accumulate shares with an eye towards the mid term, especially if the drop continues as attention rolls off the sector later this month.  Expanded coverage by insurance companies and cost-cutting measures implemented last year by the company should help boost the Provenge sales numbers and firm up the bottom line.  Given the volatility displayed thus far in 2013, DNDN remains one to keep an eye on as both a trade and potential accumulation play.

Prolor Secures New Patent

Shares of Prolor Biotech (initiated a Phase II pediatric trial in Europe early last year.  The pediatric trial came as a huge sign of validation to the early results of the product, given that European regulators need to be essentially overwhelmed by trial data in adults before approving a trial in children.  Data from these trials could start rolling in this year and given the multi-billion dollar growth hormone deficiency market, the Prolor share price could appreciate very significantly if these trials prove successful. 

Although relatively quiet on the news front of late, Prolor announced earlier this week that it had received a notice of allowance from the US Patent and Trademark Office covering a patent application relating to the manufacturing methods of its CTP technology.  This news may not look significant in itself to investors, but a company stands on stronger proprietary footing as its patent portfolio expands and these are developments worth monitoring.  Should a company NOT receive allowance for a requested patent, then that gets interesting, being as it is a rare event.

With the market potential of hGH-CTP, Prolor is still one to keep an eye on.  Should trial data start flowing in looking positive, then PBTH would be in a position to move higher fairly quickly.  In the meantime, shares have remained stable in a range around the five dollar mark over the past few months, a level where those looking to play the pending trial catalysts feel comfortable adding.   It's also worth noting that Teva's (TEVA) Dr. Phillip Frost is already heavily invested in PBTH and that connection is intriguing because, which is already linked to other buyout rumors, could also be considered as a potential buyer of Prolor.

Briefly:

MRI Interventions (MRIC) is slated to present on Wednesday at the Biotech Showcase in San Francisco.  This presentation could receive its fair share of investor interest, given that 2013 is projected to become a year of significant growth after the boosting of the sales force late last year and the already-impressive gains noted over the previous quarters.  MRI, which also moved into the European market last year, has developed the ClearPoint and ClearTrace MRI-enhancing systems that provide real-time imagery during complicated procedures on the brain and heart, respectively.  The company not only registers sales on a sold unit, but also receives regular revenue from the "disposable items" related to individual procedures.  It is revenue from those items that has fueled the recent growth.  One to keep an eye on, as MRIC has also proven to return decent trades from its current trading levels.
 
Roundup:  International markets enjoyed a nice up day on Wednesday and the stage was set for US markets to do the same.  Profit taking following the early-year run looks to be complete, freeing stocks to trade in line with earnings.  As mentioned, the Alcoa report has investors in an up-beat mood, but that mood could shift quickly if the expected sub-par numbers start rolling in when the season picks up full steam.  There could be some distractions in store for Wednesday as well, with early headlines throwing the debt ceiling negotiations (or lack thereof) into the spotlight and others keying in on the Dreamliner fuel leaks and low-priced iPhones.  Could be an interesting day.

Happy Trading!!!

Disclosure:  Long FCEL, INO.

Contact VFC's Stock House: vfc@vfcsstockhouse.com

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