Tuesday, June 23, 2009

Stock Briefs/Updates

MHAN.ob- Manhattan Pharmaceuticals issued a long overdue press release (PR) last week updating investors on the approval process for Hedrin, a non-pesticide head lice treatment, in the United States.

According to the release, the company, in a joint venture with Nordic Biotech, has requested a meeting with the FDA to confirm that a Phase III trial is necessary to garner Hedrin's approval.

While Manhattan is not known for stellar management or communication, which is part of the reason why the stock traded for a penny not too long ago, investors are sometimes left to read between the lines whenever a press release is issued.

The text of this most recent PR suggests that the company is expecting to have to conduct a Phase III trial in the United States. The timing of the PR, after a long bout of silence from the company, seemed to want to put a damper on the stock price of MHAN.ob which had multiplied significantly in the weeks prior. The tone suggests that the company is not sure whether it will even need to conduct a trial, adding fuel to the speculative fire.

Amid this speculation and judging by the significant trading volume of late, someone is accumulating shares of this company. The PR, which essentially called for patience, halted the price increase and allowed that someone to continue to accumulate below ten cents (although the stock traded slightly higher on Tuesday).

MHAN is great risk-reward play (an even better one while it traded below five cents) and if Hedrin gains early approval, MHAN will have become the next TTNP.

Regardless, shares for a dime are worth holding onto as we wait for additional news.

Disclosure: VFC is long MHAN.ob

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CEGE- Shares of Cell Genesys (CEGE) dropped on Tuesday after the company announced results of it's latest tender offer as it continued to "pursue strategic alternatives."

While the decreased stock price may make Cell Genesys an attractive candidate to an investor looking for a good rebound story, there are far better risk-reward plays out there than this one.

For all intents and purposes, Cell Genesys looks more like a company on the way out than one with any chance to rebound.

When clinical trial failures of the company's GVAX prostate cancer vaccine sent CEGE shares tumbling to below ten cents a while ago, that was the time to sell and, day trading aside, that was the time to stay away forever.

By comparison, Cel Sci (CVM) is trading for about the same price and is loaded with potential.

Leave this one for the day traders.

Disclosure: VFC has no position in CEGE

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INSM- Shares of Insmed have dropped this week to an attractive buying level for those who have missed out on the runup from sixty cents.

Two dollars could turn out to be a bargain price if the potential of the company's lead drug IPLEX lives up to it's hype.

IPLEX was already FDA approved to treat short stature in children and investors, as well as patients, are anxiously awaiting results from a recently completed Phase II trial that measured the drug's effectiveness in treating MMD.

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CPST- Shares of Capstone Turbine are back to trading for under a dollar as the company looks to demonstrate it's ability to turn it's low-emission microturbines into a profitable business.

The microturbines, according to recent company press releases (PRs), are gaining in popularity and demand around the globe and pending orders have the company 'enjoying' a healthy backlog of production, but investors are still waiting for potential to translate into profits.

Capstone is not a bad choice for a patient investor with a long term outlook searching for a 'green' stock to add to the portfolio.

Disclosure: VFC is long CPST

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5 comments:

  1. Hallo,
    Hedrin USA approvalcan be a real boost for the company. I am just wondering, why a company selling a product for 45 Mio in Europe is trading for 0.1 USD. Is there an explanation?

    jiri

    ReplyDelete
  2. One more question. Why do you think that someone is amassing the stock? Could not be the rise in stock value explained by many how want to buy a lottery ticket?

    ReplyDelete
  3. Hello VFC: I have been interested following your stock advice/tips. I picked up some TTNP and SIRI based in part on your research and findings. Thanks much. I'm curious if you've looked into or have an opinion on XDSL? I won't get into any detail here, but it's getting a buy recommendation from several sources. My only concern is the company has competition with deeper pockets. What do you think? Thanks again for your work.

    --Tom

    ReplyDelete
  4. Jiri,

    You were right. I was wondering the same question too! Why would a company with revenue of 45m in Europe and is trading a penny in US. VFC, what do you think about this?
    Thanks!

    ReplyDelete
  5. Jiri,

    To answer your question, Manhattan Pharmaceuticals only has North American rights to Hedrin, which they licensed from Thornton & Ross Ltd, a UK pharmaceutical firm that produces and markets the product in Europe. Manhattan has nothing to do with Hedrin in Europe and therefor the $45 million that you speak of does not go to MHAN's bottom line.

    The second question: I believe someone is accumulating the stock because for months MHAN traded on near zero volume, then all of a sudden a few weeks ago we began seeing a significant increase in trading volume. Either a whole bunch of investors coincidentally decided to start buying at the same time or we have a large player looking to get in and has started accumulating.

    Or it could be both!

    ReplyDelete

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