VFC's Stock House News, Notes and Weekly Stock Watch
(EMAILWIRE.COM, March 17, 2012 ) New York, NY -- AThis week, in honor of St. Patrick's Day (now known as "O'Green Day" in one Massachusetts school), we'll take a look at some hot-movers of the past week that added a fair amount of "green" to investors portfolios and may continue to do the same into the next trading week.
Another strong week for the markets is in the books, but many still predict that a correction is inevitable, adding to the already volatile nature of today's financial outlook. The prospects of a pullback also make it a trader's game, as many of one week's hot-runners can quickly turn into the next week's pullback stories as traders get in and out quicker than the Mets can add another bat to the disabled list.
Speaking of the Mets, the irony did not go unnoticed when the Mets and Marlins played last week that Jose Reyes was happy and healthy, while his replacement and former All-Star third base partner, David Wright, were both hurt. Curse of the Wilpons? I don't think we can deny it any more.
It's amazing how a political season in the United States (which lasts for about a year) completely dominates the media headlines and nullifies the significance of events in the rest of the world. This time last year the Arab Spring was the news of the day, but funny enough, the same stuff that was going on last year is still going on this year, but you're lucky to get a thirty second update about it before attention turns to how many wives Newt Gingrich had or how much money - or hair spray - Mitt Romney has in his reserves.
Syria is threatening to become another Bosnia - as a situation that the United Nations completely screws away - and explosions in Damascus over the past couple of days are reminiscent of the explosions that rocked Sarajevo during its five-year siege two decades ago, which also sparked only cursory international reaction during the initial stages.
The media used to care that Yemen, Bahrain and other nations associated with the Arab Spring still had people protesting, but not any more - because it's not the news of the day today. The big debate now is whether or not Snooki was out partying while she's pregnant.
The New York tabloids have made a sensation of the newly-exposed "Soccer Mom Madam" over the past week. Not a day goes by when we're not give an update on Anna Gristina, who allegedly ran a millionaires-only prostitution ring out of an apartment in New York.
The real question is - "Who Cares?"
There's bad guys looking to blow up the city and a there's budget deficit big enough that only Bloomberg's personal billions could fill, and taxpayers are paying for a five year investigation into how millionaires spend their off time?
Let the millionaire wives hire private investigators to find up what their husbands are up to, why is the taxpayer paying for this stuff?
In sports, Lin-sanity was threatening to come to a screeching halt last week when the Knicks head coach stepped aside and his replacement looked to the established stars to get the team back on track, potentially putting February's basketball sensation on the bench. But a two game win streak and an opportune injury has the Lin-Man back in the spotlight; although Carmelo Anthony doesn't seem too happy about that.
With all going on in the country and the world right now, it's good to see that Americans have their priorities straight. What's the most important factor in determining who will become the next President of the United States?
We're not doing too bad if that's all we have to worry about.
On to the stocks...
Prolor Biotech (PBTH): Prolor Biotech (PBTH) is a biotech stock to watch for the coming months, as multiple catalysts could materialize that may have very positive implications on this company's flagship product moving into a multibillion dollar market.
Prolor's most advanced product, hGH-CTP, is expected to enter into a Phase III trial in hormone-deficient adults later this year, but is also expected to launch into a Phase II trial in Europe for the same indication, only this time for testing in children. The approval to commence the trial by European medical regulators should not be taken lightly, given the stringent standards applied to pediatric testing in the Euro zone, and would also heavily corroborate the success of the previous studies, since the regulators would have had to review all previous trials as a part of Prolor's Paediatric Investigation Plan (PIP) to commence the trial in Europe.
What sets Prolor up for a potentially highly-successful future is its technology based on the naturally-occurring Carboxyl Terminal Peptide (CTP), for which the company holds world-wide rights in relation to all human therapeutics of natural or non-natural sequence, barring four fertility-related proteins whose rights are held by Merck (MRK).
CTPs can be attached to already-existing therapeutic proteins in order to slow the process by which the protein is removed from the human body, thereby creating an extended life span for an already-existing treatment. This, in turn, would significantly reduce the amount of injections or applications a patient would need to endure during the course of a given treatment - hence the huge potential in the hormone deficient market where seven needles a week could be turned into one for patients.
While the PBTH share price is still trading for well more than a dollar over where it opened the year, volume has slowed over the past few weeks, and with that, the share price has also declined a bit.
As the pending trial launches grow nearer, investors may again be attracted to the potential of the company, especially given the confidence in the technology that will be on display should the European regulators green-light the pediatric trial.
Prolor also has a notable relationship with Teva Pharmaceutical Industries (TEVA) - through Dr. Philip Frost - that will be worth monitoring, as the buyout rumors should remain perpetual.
Keep an eye on PBTH, as trial news could come at any time and make this company a big name in biotech.
Amarin Corporation (AMRN): About mid-week last week Amarain Corporation (AMRN) started making headlines, as volume picked up significantly and the share price quickly followed.
A couple of days of ten percent price hikes culminated on Friday with an 18% move into the close on volume roughly five times the daily norm.
Amarin had already been on a sea-saw ride over the past couple of weeks as patent issues with the US Patent and Trademark Office (USPTO) continued to play out in the headlines, and a pending approval decision by the FDA for AMR-101, a treatment for high triglycerides, has kept Amarin on top of many biotech stock watch lists.
No news was released last week that would explain the swift move in share price, but buyout talk, a resolution of the patent issues and game-playing by the big boys before options expiration have all been mentioned as possible causes for the run.
Nearly forty million shares traded hands during the last three trading days of the week last week, more than the whole month of March combined to that point, so AMRN is going to be a stock to watch during this coming week; and many investors will expect news on Monday.
Lpath, Inc. (LPTN.OB): Volume was twice the daily average for Lpath, Inc. (LPTN) on Friday, accompanied by a four percent price increase that will have the recognized leader of lipid-based therapeutics as a stock to watch for the coming week.
Shares of LPTN took a slide twice so far this year, once on the announcement of a trial halt that pulled shares back to just under the dollar mark, and then again when a financing agreement valued shares well below where they were trading on the open market.
It's quite possible, however, that the bad news is all out of the way and that the LPTN share price isgearing up for a recovery and a possible push back to the dollar mark.
The reason that the iSONEP trials were halted was related to the finish/fill contractor not adhering to some FDA 'good practices' and had nothing to do with the safety and efficacy of the treatment, for which Pfizer (PFI) has already come on board as a partner. A resolution to the finish/fill contractor issue has already been announced by Lpath, as a new contractor has been identified and the trials are now set to restart in August.
Friday's LPTN action justifies keeping this one on the watch list for the time being. As is always the case in the biotech sector, when stocks such as this one move, they move quick.
Celsius Holdings (CELH.PK): A Wednesday spike in share price was followed by a couple of days of increasing volume for this lightly-trading small cap stock to watch, and as signs of stability emerged for Celsius Holdings (CELH.PK) over the past few trading quarters, investors may again be gaining interest in the company's potential to gain momentum in the ever-competitive beverage industry.
The Celsius game plan originally had the product competing head to head with many of the big, already-established players in the energy drink and supplement markets, but a niche looks to have been found in the pre-workout beverage genre, and it is their that the company has pinned its short term hopes.
The new game plan may be paying off. Sales and revenue have been consistent for a few quarters now. Although demonstrations of significant growth have not yet materialized, the foundations for doing just that are again in place.
In two days to close last week, more shares traded hands than in the entire month of March before that point, a sign that some renewed investor interest could be coming the way of Celsius Holdings.
It will take more than two high-volumed days to predict a turnaround and a possible move back to the dollar mark - or beyond - but any time a small cap stock like this one starts attracting more interest and higher volume, the speculative investors and momentum traders might start taking that as hints of a run.
The turnaround is not yet in effect, but keep an eye out for one.
Keryx Biopharmaceuticals (KERX): Shares of both Keryx Biopharmaceuticals (KERX) and AEterna Zentaris (AEZS), from whom Keryx licensed Perifisone, were both flying higher on Friday in anticipation of trial results that has had shares of these companies on the radars of biotech investors since the beginning of the new year.
As is the case with many biotech stocks, they tend to run leading into the time frame of an expected FDA decision or completion of a critical trial, and KERX is no different. The pre-decision runup was given a significant boost when the headline wars started between two popular media outlets, and Friday's run reemphasized the interest that the company is attracting for its late-stage cancer drug.
Volume was also over five times the daily average.
Already having touched prices this month that are nearly double where the stock opened this year, KERX carries a bit more risk with it than it did while it was trading for under three, but those who are sticking to the long side of the story are confident that positive trial news will carry this one much higher.
The opinions are strong for both sides of the argument, so beware of volatility - and it's not likely that we've seen the end of the headline wars.
Given the already-significant price spike and near-certain volatile swings, the best strategy for this one may be to play the peaks and valleys while taking some profits off the table when the opportunities arise. It's also worth keeping in mind that positive results don't always equal immediate price spikes. In fact, over the past couple of years many positive developments for small companies in this sector resulted in immediate price drops, only to recover a short time later (see Avanir (AVNR) and BioDelivery Sciences (BDSI) for examples), so even if the trial news is good, it's possible that we won't have seen the last of the buying opportunities.
Advanced Cell Technology (ACTC.OB): Last week Advanced Cell technology (ACTC.OB) announced that it had filed a definitive proxy with the SEC containing a shareholder proposal to initiate a reverse stock split in anticipation of a desired move to a larger trading exchange.
Given the early successes of the stem-cell based retinal pigment epithelium (RPE) program that treats severe vision loss, both the company and its investors like the chances of the stock trading on a big board, and at prices that would attract the many large institutional and fund-based investors that otherwise cannot touch bulletin board or pink sheet stocks.
The shareholder vote on the reverse split is not set to take place until next month, but this event and a potential move to the Nasdaq are both developing stories to keep an eye on, as Advanced Cell Tech (ACT)may quickly land a developmental and commercial partner once these events take place.
Shares of ACTC have slipped back to the ten cent range, as many investors are aware that reverse stock splits are not too kind to longs immediately following the split, but since ACT is working of a position of strength with the demonstrated success of a potentially game-changing technology, any post-split price dip should not be as protracted as others.
Cytosorbents (CTSO.OB): Ctyosorbents (CTSO.OB) traded over four million shares between last Thursday and Friday, with the large bulk of that number coming on Friday. That's good reason to keep an eye on this stock moving into the coming trading week.
The press wires have been relatively silent for this company since last year's road show took effect, but 2012 could still turn into another milestone year for this company as CytoSorb, its treatment for severe sepsis and other indications where high cytokines are present, potentially gains market momentum in Europe.
Cytosorbents also has another blood purification technology, HemoDefend, that it is looking to sell or partner.
Last week's volume spike had shares nearly touching twenty cents again, not an insignificant feat since CTSO has been trading at or below fifteen cents for the better part of the year so far.
Any evidence of gaining sales momentum in Europe or the introduction of a new partner could quickly send shares to the north side of twenty cents again, so take notice of last week's volume.
Agenus, Inc. (AGEN): After running for days on news of an expanded partnership agreement with GlaxoSmith Kline (GSK) for the vaccine adjuvant QS-21, shares of Agenus (AGEN) settled over the five dollar mark to close last week.
The run is evidence that AGEN may be back on the map of investors looking for hot biotech stocks, but it's also a good idea, in my opinion, to take advantage of such runs and potentially land some profits with trading shares when these runs materialize.
Agenus has something going with QS-21 Stimulon, enough to warrant Glaxo wanting a 'first right of refusal' for the company and its properties should another partnership or buyout deal materialize, but it will take the success of Prophage, currently in Phase II glioma trials, to bring the company to the next level.
AGEN has been a hot mover for a couple weeks, so it's worth watching during the coming week to see if either a pullback takes effect, or the run continues.
It's a good sign if it can hold five for the time being.
FuelCell Energy, Inc. (FCEL): Shares of FuelCell Energy (FCEL) have been on fire since early-to-mid February as numerous items of positive news have hit the wires.
The company received a capital infusion to the tune of $30 million from Korea's Posco, with whom FCEL also has a contracting agreement, and the company then signed a Memorandum of Understanding (MOU) with Air Products (APD) to market tri-generation stationary fuel cell power plants, ensuring FuelCell a place in next-generation energy production.
FCEL generally trades between a buck or two, depending on the sentiment of the day, which makes for some nice trading opportunities, so keep in mind that a pullback may be in effect once the hype dies down a bit.
These news items are for real, however, and this company could be primed to eventually be bought out.
Capstone Turbine (CPST): Like FuelCell, Capstone Turbine (CPST) has its peaks and valleys between a buck or two, and right now may be buy-time with shares trading for just over a buck.
Capstone is also securing its place in the future of green energy production, and has its own high profile partnership with General Electric (GE) to boast as well.
What has troubled this company's share price is the slow move towards profitability.
Orders for Capstone's low-emission microturbines continue to fill an already-plentiful backlog of orders, but profit margins are only recently improving at more significant rates and investors are still looking for signs that this company's money-losing operations are a thing of the past.
Historically the dollar mark has been a good time to load up with CPST, the price where shares are now trading.
Also Noteworthy: Sirius XM (SIRI) slipping from the $2.30s, Cel-Sci Corp (CVM) over forty cents, Dendreon (DNDN) holding ten bucks, Human Genome Sciences (HGSI) doing nothing, Galena Biopharma (GALE) rising, McDonald's (MCD) still under one hundred, Immunocellular Therapeutics (IMUC.OB) up five percent, OncoVista Innovative Therapeutics (OVIT.OB) holding fifty cents, and some ready to write off Google (GOOG) now that Facebook (FB) is making a move into prime time.
Disclosure: Long HGSI, MCD, IMUC, OVIT, ACTC, CTSO, LPTN, CELH.
VFC's Stock House offers research-based investment opinions, insights and ideas on a variety of different companies in numerous sectors, with a focus on biotech stocks and healthcare.
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