Thursday, May 16, 2013

•Price Consolidation Positions SanuWave Health (OTC: SNWV) For Catalyst-Based Rebound

Shares of SanuWave Health (OTCBB: SNWV) swiftly achieved a near double in price earlier this year as investor anticipation grew in regards to the initiation of a new Phase III trial testing the company's dermaPACE shockwave therapy in the treatment of diabetic foot ulcers.  A new trial design and an agreement with the FDA to utilize some previous Phase III data added to the enthusiasm and hinted that SNWV shares had the potential to approach price levels seen during the last Phase III trial.  That trial, as previously discussed, ended without the endpoint being met, although the results were convincing enough that success could be easily achieved after the new trial designs were implemented.

Since the quick spike in price, however, SanuWave shares have retreated again after many of the short-term minded day, swing and momentum likely took some profits and moved on in search of another quick winner - although you can never blame anyone for taking some profit from the table - but the result of such action could potentially be another buying opportunity for investors who may have missed out on the last quick run.  Given the encouraging prospects for the upcoming trial and the numerous catalysts that will be slated to unfold - in terms of interim and actual results - once the trial gains momentum, SanuWave shares could quickly rebound once the current phase of consolidation is complete.

On Monday of this week the company announced that it had concluded an "investigator meeting" with 75 representatives from 18 clinical trial sites.  During the meeting, the 75 reps were provided training on the prospective use of the dermaPACE therapy during the trial, while also emphasizing the newly-implemented design protocol that is expected to maximize patient enrollment and follow-up.  Unforeseen variables surrounding patient follow-up during the first Phase III go-round were assessed to have altered the end results, so company officials are taking out all the stops to ensure a smooth and more-regulated operation this time.

With the investigator meeting wrapped up and the clinical sites prepared to start enrolling patients, SnauWave remains on track to get this trial underway within the current quarter.  The latest retreat in share price, as mentioned above, may provide a nice period of consolidation for those looking to play the future catalysts and milestones - and for those looking to accumulate a position with eyes towards the end game.

It's the potential of that end game that could attract the longer-term speculative investors.  While SanuWave eventually plans to target a broad portion of the chronic wound market, its first US-based indication of diabetic foot ulcers provides the company a booming market into which to enter.  Even gaining just a small foothold could return significant share price and market cap gains, given the alarming rate at which cases of diabetes are growing.

Over Twenty-three million people in the United States have been diagnosed with diabetes and it is speculated that millions more have it, but are yet-to-be diagnosed. It is also assessed that fifty seven million people in the US are pre-diabetic, according to statistics posted by the American Diabetes Association. Globally, the diagnosed numbers are much more severe and it's also estimated that a higher percentage of cases go undiagnosed. The burdens placed on the healthcare industry as a result of this growth is obvious.
In relation to SanuWave's initial application of dermaPACE in America, fifteen percent of diabetics will acquire "non-healing" ulcers in their lifetime, including the indication of diabetic foot ulcers. According to the above-linked statistics, this market is quickly approaching two billion dollars annually, which - as mentioned above - positions this company nicely to take advantage of the rapidly-growing numbers.

SanuWave also recently received a patent covering the use of its shockwave therapy for purposes of blood purification.  Although treatment of this indication is still in the very early stages of development, the patent enhances the future prospects of the company and also adds inherent value to the technology.

An investment here is not without risk - such is the case for any still-speculative investment - but the risk/reward profile continues to look more in favor of the potential rewards with each downtick in the share price.  Shares traded significantly higher during the last Phase III and any hints at success this time could quickly rebound shares to those levels.  The technology was already granted approval in Europe and acceptance is likely to grow if the shockwave therapy - which encompasses sending pulsed 'shockwaves' into damaged tissue to spark the regeneration of cells - continues to perform as advertised. 

SNWV is already a proven winner of the early portion of 2013 thus far, but the latest share price dip has positioned the company to potentially repeat its early successes.  Volume has tapered off a bit, too, an indication that the traders may be out for the time being, but with trial catalysts still pending, volume could come back in a hurry on the right news and spark another rally.

Still a story to watch.

Disclosure:  Long SNWV.

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Monday, May 13, 2013

Weekly Stock Watch, Week Of 13 May 2013: APHY, TROV, ANTB, KERX, AMRN, SNWV

Many market analysts and economic pundits have predicted over the past few months that the record-setting highs - although nice while they lasted - would only be short-lived and a pullback or outright market correction was in store.  Stocks proved overly resilient, though, and despite some questionable economic news at times to go along with gloomy predictions from many financial media outlets, new records have continuously been set, defying the negative forecasts and making winners out of many green portfolios and IRA accounts.  The continuous uptrend may have made believers out of many, but some skepticism still prevails as we head into a new trading week, leaving the door open for investors to take advantage of the individual stocks and stories that may not be gaining much mainstream attention.

Here's a few to keep an eye on for the week of 13 May, 2013...

Assured Pharmacy Announces New Store Openings

Shares of Assured Pharmacy (OTCBB: APHY) have been steadily gaining investor attention over the past weeks, if trading volume is to be an indication, and recent announcement just days ago of multiple new store openings over the near term may not only explain the uptick in volume, but also provide assurances that the company's potential to significantly grow its revenue stream over the coming quarters is leaning more towards the likelihood of being a probability, rather than just a possibility. 

A letter to shareholders last month set the stage for what's to come over the coming year, but last week's definitive announcement of major store openings within months confirms the previous promises and speculation.  According to the news, two new stores - in Denver and Boston - are slated to open this summer in what Assured officials are labeling a "major expansion strategy." 

As previously mentioned, the new openings will essentially mimic the operation of Assured's most successful store to date, its Kansas location, and open with the support of local physician groups.  The Kansas store was also the first Assured location to move beyond treating only the indication of chronic pain, as target business is now geared towards the prescription and distribution of all "chronic controlled medications."

Such revisions in the business strategy have Assured officials believing that overall revenue can be doubled within the next two years.  Already the company has realized revenue numbers of well over ten million dollars on an annual basis, indicating that the APHY share price may have significant room to grow over the coming quarters if the new revenue projections can be matched, especially in consideration to the currently-speculative market cap.

In addition to the imminent Boston and Denver grand openings, Assured has identified four other locations where new stores may be slated for operation.  As it now stands, a total of twelve locations can be opened without blowing the corporate structure, supporting company promises of gaining a national footprint over the near to mid term.

Although still a speculative stock selection, this could be a pivotal year in Assured's progression as plans for rapid expansion support an aggressive growth strategy.  It also helps that industry trends favor Assured's business plan of providing strict regulation of controlled medications while also offering personalized pharmacy service, making this company a hot one to watch over the coming weeks and quarters.

As volume picks up, so, too, can the share price - especially if the new locations can replicate the success of the Kansas store.

TrovaGene Successes Highlighted By Analyst Coverage

Shares of TrovaGene Inc (NASDAQ: TROV) have roughly quadrupled in price at times over the past couple of quarters based on the rapid development of the company's pipeline of urine-based diagnostics that are designed to detect and identify various cancers and infectious disease types.  The convincing price action was based on the anticipation of a series of pending product launches, including the launch in March of a diagnostic that could detect human papillomavirus (HPV) by means of a simple urine sample.  While already a hugely successful story for the year, evidence indicates that TrovaGene may still only be in the early stages of growth and a price target issued last week by Highline Research Advisors could confirm that fact.

According to Highline, which initiated coverage through Empire Asset Management Company, a FINRA member, TROV shares could hit a high of $17 over the course of the next twelve months.  The enthusiastic price target, naturally, was accompanied with a rating of 'Buy.'  Recent developments have supported the speculative rise in the TrovaGene share price, but growing collaboration and additional product launches may indicate that the Highline price target - which is nearly triple the current levels - could easily meet fruition. 

In maybe the biggest collaboration news to date, TROV announced last month a partnership with  PerkinElmer Health Sciences Inc (NYSE: PKI) in which the two entities will design an assay to determine the risk for developing hepatocellular carcinoma.  A deal such as this one with a highly-established player in the sector comes as a huge sign of validation for TrovaGene and the news may have placed its technology on the map for a good few investors, judging by the volume and price action following the announcement.  These collaborative efforts, which include another high-profile deal with the Texas MD Anderson Cancer Center, also lay the groundwork for significant royalty-based revenue later on down the road.

In addition to the partnership possibilities emphasized by the Highline rating, the price target also likely bears in mind the numerous catalysts that are expected to unfold during the coming months, which include at least one new commercial launch of a urine-based diagnostic during each quarter for the remainder of the year, according to a recent company presentation.  Those product launches, in combination with expansion on the partnership front, build a solid foundation for the company moving forward and could justify the near-triple in price expected by Highline. 

Still a developing story to keep an eye on for the upcoming week - and then for the remainder of the year.

AntriaBio Opportunity Widens As Shares Slip And Volume Picks Up

Although some early-year interest propelled AntriaBio, Inc. (OTCBB: ANTB) shares to well over double their current trading levels, investor interest on the surging broad markets may be allowing this story to slip below the radar again.  AntriaBio, as outlined on previous occasions, is well-positioned to take advantage of shifting trends in the healthcare sector with AB101, a once-weekly injection of basal insulin that will look to replace the current standards of at least once-daily injections.  The company has been relatively quiet of late, but volume has been on the rise and investor interest could grow as some key catalysts play out over the duration of the year. 

According to a presentation posted to the AntriaBio website, ANTB is slated to build on the foundation set by preclinical studies and initiate human trials later this year.  Data from those trials are expected by year-end, at which point AntriaBio could look to partner with a larger company to help fund further development - assuming successful results.  Considering the multi-billion dollar industry into which AB101 may be positioning to enter, the interest of big pharma could come quick - should results look solid - as recently outlined by Another Seeking Alpha author. 

A noticeable spike in volume through the month of April could be an indication that shares are consolidating ahead of the expected key trial catalysts.  Those who keep an eye out for 'volume before price' plays may take note of the recent volume spike with enthusiasm, especially as this company's story looks to be sliding below the radar as the broad markets continuously set new record highs. 

In an effort to control costs, human trials will be conducted in Russia first, where costs are significantly lower and where patient recruitment is known to be up to ten times higher than in the US and Europe.  In the meantime, the AntriaBio team will will move forward with the FDA IND process in order to set the stage for US trials, too.  Positive data from Russian could expedite that process and - as mentioned above - potentially attract partnership interest. 

Beyond AB101, AntriaBio is also establishing a secondary pipeline product, AB201, a long-acting Glucagon-like peptide-1.  This product is quickly approaching the pre-clinical stages and will be tested as a once-monthly replacement for the current standard of care.  While still early in development, a secondary pipeline product allows investors to consider AntriaBio as not a 'one trick pony.'  Keryx Biopharmaceuticals (NASDAQ: KERX), for instance, has recently emphasized the necessity of a company to have a back-up plan, should its lead product fail.  That back-up plan helps to alleviate future risk to investors, too.

For the time being, however, all attention is on AB101 and it should only be a matter of time before the expected catalysts start to hit the wires.  In the meantime, a boost in volume may offer an indication that interest in the story is growing and shares are consolidating.  The speculative sector often takes a hit when there is a widespread market rally as there has been thus far this year, but sometimes those 'under the radar' stories can bounce back fairly quickly once the rally sputters.  The likes of AntriaBio could stand to benefit.

Worth watching. 

Amarin's Volatility Growing In Line With Vascepa Prescriptions

It's been a see-saw battle for shares of Amarin Corporation (NASDAQ: AMRN) while this stock's trading range has consistently bounced from the sixes to the sevens and then back to the sixes again.  The volatility is directly related to the continued long and short-sided battles that are played out in the headlines on a near-daily basis by numerous popular financial media outlets, although due respect also goes to the catalyst events (or lack thereof) that are keeping Amarin at or near the top of the list for the most-watched of the sector.  The company released its latest earlnings report on Thursday of last week, an event that led to a six percent price spike on Friday. 

An enthusiastic case was made on the solid growth in prescription numbers for Vascepa, but overall revenue still came in at modest enough numbers to keep skepticism alive - especially when considering that many expect Vascepa to quickly approach blockbuster status in quick time.  That said, the expanded approvals for which the company has already applied would provide a significant boost to those expectations. 

Moving into the new week, however, not much should be expected to change in terms of AMRN's trading action.  In the absence of news - which includes the absence of certainty surrounding Vascepa's New Chemical Entity (NCE) status - the registered trading range of the recent past will be expected to continue into the future, too, at least for the short term.  That said, a definitive decision on NCE by the FDA could reinvigorate the buyout and/or partnership rumours that surrounded this stock before the company decided to launch Vascepa on its own.  Such an event could quickly push the share price back to the ten dollar mark quick, fast and in a hurry.

Any potential suitors may also be encouraged by the swift growth in prescription numbers that Vascepa has registered through the last quarter, while also considering the fact that the revenue numbers are somewhat skewed by discounting and other product-pushing bargains for consumers.  While proven to be a solid trading candidate over recent months, the long case still exists.  Vascepa is demonstrating growth while the stock action continues to look similar to that of Human Genome Sciences shares before that company was bought out by GlaxoSmithKline (NYSE: GSK) about a year ago.

Another factor contributing to Amarin's volatile trading patterns of late could be the wide circulation last week of a study in Italy indicating that fish oil doesn't work in reducing triglyceride levels as much as expected.  The naysayers will make the case that Vascepa will ultimately fail, thanks to the results of that revealing study.  To make that conclusion, however, could only be considered weak.  Vascepa blew away trials in the much more regulated US with the ANCHOR and MARINE trials, and the Italian study is merely propaganda at this point, and nothing else.  To make "news" out of anything going on in Italy aside from Silvio Berlusconi's bunga-bunga parties is merely a distraction.  For all we know, this study could have been conducted at one of those parties.

The economy over there is on the brink, but a largely unregulated "study" is getting all the press?  C'mon now.  Let's keep it a bit more real.  Next we'll hear that Luca Brasi is actually sleeping with the fish oil, not the fishes.  Weak. 

As usual, AMRN will be a hot one to watch this week, especially after Friday's six percent rebound.

SanuWave Retraces, But Unfolding Catalysts Could Spark Rebound

Similar to the AntriaBio story mentioned above, it's easy for the market to ignore still-developing or speculative growth stories while the broad markets are rising fast and keeping investor portfolios well in the green, even without the under the radar winners that are often sought out in stable or declining markets.  What SanuWave does have to offer, however, is a late-stage product-based therapy that could transform its target market over the short term.  When considering the current market cap, though, investors may be disregarding the opportunity that SanuWave's 'shock therapy' has to offer.

In imminent time, SanuWave is set to reinvigorate the Phase III development of dermaPACE in the treatment of diabetic foot ulcers.  A previous trial proved that SanuWave's 'shockwave therapy' works, although the primary endpoints of the trial were not met.  A new trial design, however, and expectations of more regimented patient participation during this go-around may be the key to fulfilling the positive predictions of the past.  Enthusiasm is high, with the FDA having assisted the company in developing the new trial design.  The FDA also agreed to consider the previous Phase III data along with the new data that will be compiled during the upcoming trial.

With cases of diabetes growing at an alarming rate on a global scale, SanuWave may have done its technology justice in targeting the cases of diabetic foot ulcers first.  Over Twenty-three million people in the United States have been diagnosed with diabetes and it is speculated that millions more have it, but are yet-to-be diagnosed. It is also assessed that fifty seven million people in the US are pre-diabetic, according to statistics posted by the American Diabetes Association. Globally, the diagnosed numbers are much more severe and it's also estimated that a higher percentage of cases go undiagnosed.  In relation to SanuWave's initial application of dermaPACE, fifteen percent of diabetics will acquire "non-healing" ulcers in their lifetime, including the target indication of diabetic foot ulcers. According to the above-linked statistics, this market is quickly approaching two billion dollars annually, which solidly positions this company to take advantage of a swiftly-growing market. 

The burdens placed on the healthcare industry as a result of the growth of diabetic growth is obvious and SanuWave, which traded multiple times higher during the last Phase III trial, could stand to gain and rebound as the new trial progresses and investors absorb market potential of the technology.  A recent decline in share price could be attributed to a bout of profit taking after the swift spike in share price, but may also be related to the overall market rally, which often takes attention away from the more speculative plays such as SNWV.

As the upcoming trial progresses, look for attention on the company to become more intense, especially if actual or interim data hints at success.  SanuWave has been relatively silent on the news front of late, although a new appointment to the medical team was announced earlier in the month in a move that strengthened the FDA approval team.

It's already been a successful - and pivotal - year for SanuWave, but the upcoming trial could hold the key to the near and mid term catalysts.  Any hints at success could launch shares back to the levels seen during the previous trial.

Roundup:  Attention is still on the broad market rally, but investors should still keep an eye on those speculative stories that may still pay off later on down the road.  Earnings season is in full flux this week, too, but reports thus far have not had too much of an effect on the overall market action.  That said, this will be a retailer-heavy week, which means any disappointments would confirm first quarter warnings that consumer spending is on the decline.  Regardless of the overall market action, however, investors looking to take a flyer on the more speculative side are going to be looking for bargains with their early-year profits.  While caution should always be exercised with the more speculative picks - as with all in the stock market - significant gains could be had while finding a few before the rest of the market catches on.  Above we've mentioned just a few of tomorrow's potential winners.

As always, each investor should conduct his or her own DD and devise entry and exit strategies respective to each investor's tolerance for risk.  Always expect volatility, potential lossses and sporadic fund-raising events in line with the speculative sector.  With that in mind, investors utilizing a strategy that includes trading the 'trading shares' into price catalysts could find themselves on 'house money' by the time the full story plays out, even while also compiling a core base of shares with eyes towards the long term story playing out. 

It's an exciting market all around these days.  Enjoy it.

Happy Trading!!!

Disclosure: Long ANTB, APHY, AMRN.

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Saturday, May 4, 2013

Assured Pharmacy (OTC: APHY): Aggressive Expansion Could Lead To Explosive Growth

Through the course of its early development and growth stages, Assured Pharmacy (OTCBB: APHY) has admittedly faced challenges not uncommon to other niche start-ups in a tough economic climate, but with trends shifting in the company's favor and its newest store also its most profitable, this company could be on the verge of a breakout with significant expansion coming.  Assured Pharmacy is a unique, personalized pharmacy that caters specifically to the prescription needs of its customers while also heavily scrutinizing the distribution and use of heavily-regulated prescription medications for both doctors and patients in order to ensure strict compliance with federal regulations.  Assured has targeted the chronic pain market for its services, given the high rate of abuse and misuse in the sector, which has highlighted the need for specialized pharmacies.  Its customer base of both doctors utilizing its services and patients receiving their personalized care has grown and is currently in a backlog, according to statements made in a recent letter to shareholders

As additional funds can support, Assured will be able to take on additional customers, which could quickly double the current patient base - again according to recent communications by the company.

Four stores are currently in operation in relatively modest markets, but - as mentioned above - the Kansas store is the most recent to open and has quickly become the largest and most profitable of the four.  Based on the Kansas model, Assured looks to significantly expand its presence on a national scale through the coming months, with six locations expected to open in 2013.  A grand opening in Colorado is imminent, according to the latest financial report, and more highly-populated areas are being targeted in order to quickly expand its presence and patient base.

Given the growth expected in the existing stores, should funding allow, and the targeted expansion into densely-populated regions this year, Assured could be at a pivot point in becoming a mainstream destination for patients of chronic pain looking for the personalized services being highlighted by shifting industry trends.

The company is also enhancing its already-stringent distribution methods to further cement its reputation for quality, efficient and safe pharmaceutical services as the new locations are opened.  This is a key component of the company's future growth strategy, as its strict compliance with regulations has the potential to position the company as an industry leader, which could then attract the interest of a broader base of doctors and patients and fuel future growth while also attracting the preferences of those national and private insurance and regulatory agencies who tend to shy away from sub par services. 

These prospects and strategies could be bearing fruit just at a the right time, as many of the already-established big players in the sector, such as Walgreen (NYSE: WAG), Rite Aid (NYSE: RAD), CVS (NYSE: CVS), and Wal-Mart (NYSE: WMT) (whose business strategies rely more on selling copies of US Weekly magazine and discount Halloween toys) often come under fire for unprofessional and imperfect regulatory compliance.  Through its initial operations, Assured has built itself a crisp and clean reputation thus far and the company is nicely positioned to capitalize, especially considering the amount of planned expansion over the coming quarters.

Along with the noted progress made on the business front, Assured has taken measurable steps forward on the investor relations front, too.  Company shares were recently uplisted to the OTCQB from the pink sheets, a move which will inherently attract a new investor base as generally only the most speculative investors play on the pinks, while an uplisting the AMEX or NASDAQ has also been discussed, should APHY meet the respective listing requirements of those big boards.  A move to one of those platforms would lend even more credibility to the company and would likely attract the investor base desired by the company, assuming the growth strategies implemented beforehand bear fruition and potential.  The latest shareholder letter also noted the fact that Assured is planning a more aggressive investor relation campaign as the new locations are open, too, a factor that could potentially weigh heavily on trading over the next few quarters, if the 'road show' is successful.

What APHY needs first, though, is a steady influx of trading volume.  Although modestly on the rise over recent weeks, volume is still at levels that would label this company as one with 'under the radar potential.'  The still-speculative level of the market cap, too, would validate that theory, but both factors are indicative that potential investors may be taking a 'wait and see' approach before dabbling into APHY.  In the speculative world, however, finding the undiscovered companies before they become discovered could return huge gains to investors willing to jump in early and who may also be willing to absorb the significant risk that comes along with jumping into the speculative sector.  As previously emphasized, a strategy that includes slow accumulation geared towards the long term - with the utilization of trading shares to play the catalysts along the way - could help to alleviate the risks (although you can never eliminate them) and allow investors to potentially come out on house money before the full story plays out.

Hints at profitability exist when looking through Assured's publicly available information, especially in terms of the Kansas store, and company officials are looking to duplicate that early success with the slew of new grand openings planned for the coming months.  Industry trends are heading towards reliability and accountability, a factor that heavily increases the odds that Assured can make a dent in the market, and the rampant abuse and misuse of pain medications in today's society also heavily favors the shift towards this company's niche services.  It's been proven during the early-going that Assured's stringent methods of compliance drastically reduce the threat of abuse.

This could quickly turn into a pivotal year for Assured Pharmacy - one that should keep investors satisfied with a steady flow of news.  Should the company start receiving more mainstream attention as growth is realized and new locations are open, a more consistent volume and trading base could be formed, which may also include a speculative share price boost, too.

A nice one to keep an eye on over the coming months.

Disclosure: Long APHY.

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TrovaGene (NASDAQ: TROV) 'Ups The Ante' With PerkinElmer Collaboration

The imminent expectation of multiple product launches during the course of the coming year and the further development of a pipeline full of urine-based diagnostics designed to detect various cancers and infectious diseases placed TrovaGene Inc (NASDAQ: TROV) on the map during the closing half of 2012, especially when shares nearly quadrupled in value in anticipation of the many milestone catalyst events that were due to unfold throughout 2013.  The first of those catalysts came to fruition in late March when TrovaGene announced that it had commercially launched a urine-based human papillomavirus (HPV) diagnostic test, the first of numerous elements of its pipeline expected to hit market this year and a move into a very lucrative market, as six million new cases of HPV are diagnosed in the United States each year, according to the Centers for Disease Control and Prevention. 

TrovaGene's technology utilizes transrenal DNA and RNA from simple urine samples to detect genetic abnormalities that may result from cell deaths and/or disease progression.  Any diagnostic test resulting from the advancement of this technology follows the current healthcare industry trends of emphasizing early detection through less-invasive (and less costly) means and launching its first test onto the market is a huge validation to the company and its future prospects.  That said, the development and commercialization of such next-generation technology may not be enough alone to convince investors looking at the near term that the medical community is ready to fully embrace such a drastic shift in early-detection methods, but investors could quickly become convinced if much larger and more relevant parties from the industry come into play to support future development.

Just such an instance was reported earlier this year when TrovaGene announced a collaborative effort with the University of Texas MD Anderson Cancer Center to detect transrenal BRAF mutations in the urine of patients with advanced or metastatic cancers provided.  At the time this deal provided TROV a significant boost in validation, given the Anderson Center's stature in the arena of cancer care, and led to a bounce in the share price.  Another deal, however, announced last week in an SEC filing may hold even more collaborative relevance and may have made believers out of some of the remaining skeptics that may doubt TrovaGene's potential to take its technology mainstream.

In a Friday 8-k filing, TrovaGene revealed that it had entered into a collaborative agreement with PerkinElmer Health Sciences Inc (NYSE: PKI) in which the two entities will design an assay to determine the risk for developing hepatocellular carcinoma.  The two companies will jointly validate the assay while also exploring the possibilities of combining PerkinElmer's technology for the automation of nucleic acid isolation with TrovaGene's TrNA technology.  The deal, should the combined effort develop into any diagnostics, could return TrovaGene notable milestone payments and - later on down the road - royalties on future sales.  Investors were keen on the significance of this announcement, as TROV shares jumped by ten percent on nearly triple the average volume. 

Monday's trading session also saw volume roll in at levels above the norm, although price levels remained relatively flat. 

In addition to the noted developmental guidelines, the two entities also outlined the potential for future licensing agreements to be negotiated, too, pending further collaboration.  Such forward-looking talk indicates that a long-term partnership may be materializing between the two companies, which could be considered a boon for a TrovaGene as it enters the late developmental and early commercial stages.  It also lays the groundwork for future merger and acquisition speculation, as TrovaGene's growing portfolio of patents alone could be worth a significant bundle later on down the road if the technology is consistently proven to work is embraced by medical professionals.

With industry trends shifting, the market may be ready for this next-generation technology.  As outlined above, the target market for the recently-launched HPV is very significant and medical professionals may be quickly-convinced that its urine-based diagnostic may eventually negate the much more intrusive methods of detection that are the current standards of care.  The same can be said for the potential results of the PKI collaboration. 

Hepatocellular carcinoma has been identified as the third leading cause of cancer deaths worldwide and treatment - including early detection - involves numerous MRIs, ultrasounds and/or CT-scans of the abdominal section, all more intrusive - and much more costly - options than what could potentially be provided by a urine-based diagnostic.  With that in mind, the PKI collaborative effort has the potential to turn into a very lucrative endeavor for both companies involved.

Furthermore, incidences of hepatocellular carcinoma are especially prevalent in Asia and Africa, according to the above-linked information portal, and as outlined in a Seeking Alpha report last week, PerkinElmer already holds a significant presence in Asia through past merger and acquisition deals.  This fact could significantly underlie the intentions of PKI to quickly bring any diagnostic developed in conjunction with TrovaGene's technology to market in an environment where demand is intense.  Not only does the PKI agreement come with collaborative development, the sharing of technology and future milestones and royalty payments, but it also comes with a global reach already in tact. 

That's not a small point to miss.

Over the coming quarters, investors will look to monitor the PKI collaboration, as this agreement could later on down the road prove as one of the most significant milestones undertaken by the company.  It'll also be worth identifying the commercial progress of the HPV test, as only modest market penetration could justify significantly higher share prices for TROV, according to numbers posted in the most recent company presentation.  The potential over the longer term, however, is even more significant as the early detection and identification of cancer is a multi-billion dollar business.  Should the medical profession embrace the shifting industry trends with TrovaGene's urine-based methods of detection, then exponential gains are possible for shareholders as the company capitalizes on its position in the industry. 

Those prospects and possibilities continue to make TrovaGene one of the more intriguing speculative picks out there right now, especially with quite a few more commercial launches slated for the coming quarters.

As per the latest financial report issued earlier this month, TROV had just over ten million dollars of cash on hand at the end of the reporting period.  The company conducted an offering of stock and warrants in early 2012 which raised nine million dollars and a private placement during the fourth quarter, which raised more than four million dollars.  While the PKI agreement indicates that milestone payments and future royalties are likely if the collaboration is a success, the details are still unknown and there are no indications that TrovaGene will bring in enough revenue over the short term to alleviate the need to raise money again at some point in the coming quarters. 

With numerous milestones still expected throughout the course of the year, however, potential price catalysts still exist and investors with eyes on the short term stand to benefit, as do those who are looking to put some 'trading shares' to use while potentially holding on for the long term to see this story out.  TrovaGene has gained increased attention over recent months from multiple popular financial media outlets, a good indication that the market is starting to take notice of the potential of the company's technology.

Although  volume has spiked in conjunction with key news events over the past months, it's still not yet rolling in at a point that indicates a widespread belief of future success.  Should the recent momentum carry over into the coming months, and should the commercialized diagnostics start gaining a share of their respective markets, then volume could flow in at an increased rate, which would likely lead to a price boost, too.

If nothing else, this company should provide investors with enough news this year to keep investors interested.  By announcing the collaboration with as big a player as PerkinElmer, however, TrovaGene has 'upped the ante' just a little bit.

Still a story to keep an eye on.

Disclosure: No positions.

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Monday, April 29, 2013

Don't Let These Five Speculative Plays Slip Below The Radar: FPMI, APHY, ANTB, SSH, TTNP

On numerous occasions during the record-breaking rally of 2013 we've pointed out the fact that the more speculative and 'under the radar' sectors of the investing world are often ignored and disregarded when everyone is making 'easy money' while the markets are setting record highs on a seemingly day-by-day basis.  At some point, however, we also argued that profits would be taken and - since most investors and traders don't like to see their money sitting idle - would possibly be transferred into those more speculative companies and sectors that hold the potential to return catalyst-based gains over the coming months and quarters.  The recent volatility experienced by stocks - with highs and lows of the day in the DOW, for instance, trading in a range of well over a hundred points - could be an indication that profits are being taken and the traders are taking over.  It could be an opportune time to concentrate more on where the money is going next.  That's where industry trends and pending catalysts come into play, as those companies that have been trading under the radar for a while could start to come to the forefront of their respective sectors. 

With that in mind, we'll take a look at a few companies with catalysts pending that could offer investors an opportunity to capitalize in the near and long term futures...

FluoroPharma:  Volume First, Exposure Next - Share Price And Results To Follow?

Trading volume for FluoroPharma Medical (OTCBB: FPMI) has continued on a relative uptick during the early portion of 2013 thus far, based chiefly on the encouraging initial results returned from ongoing Phase II trials involving the company's positron emission tomography (PET) technology that may already be proving superior to the current market standards.  As volume has increased, however, the share price has not, which could be an indicator of accumulation ahead of expected catalysts. 

With its PET technology, FluoroPharma has developed a pipeline of imaging agents designed for the efficient detection and assessment of various forms of coronary artery disease (CAD) and certain types of cancer.  Shifting industry trends towards prevention and early detection - from the current standards of emphasizing treatment - favor FluoroPharma's entrance into this market, and even more so when considering that early detection of CAD utilizing PET technology is also a growing trend.  Both of FluoroPharma's front-line agents, CardioPET and BFPET, are currently engaged in Phase II trials as imaging agents for CAD and ischemic and infarcted tissue within the myocardium in chronic CAD patients, respectively. Encouragingly, both have also already returned evidence of superior performance to the current standards, a key factor in speculating as to why shares look to have been under accumulation during the latter portion of the first quarter this year.

Results from these trials are expected to start leaking out as soon as during the second half of 2013, another factor in considering as FluoroPharma as a potential short term catalyst play, while also entertaining its prospects as a long term accumulation play. 

As volume increased when the already-realized trial updates became publicly available, increased exposure from the investing community has started to follow, too, and it looks like more of that exposure can be expected over the coming months.  Zacks issued an assessment on the company earlier this year that was accompanied by a price target of roughly three times the current FPMI trading levels.  Another sign that FluoroPharma is ready for an exposure spike came last week when it was announced that the company's President & CEO would present at the 10th Annual Small Cap Equity Conference in early May in New York City.

A volume boost has already set the stage for FluoroPharma as a potential 'volume before price play' and exposure is often the next step in the process.  Assuming that FPMI does pan out into a 'volume before price' story, then it could also be expected that the share price will follow, especially if additional trial updates warrant the increased attention and market cap boost.  Therefore, it's worth keeping an eye on this company and it's stock over the near term while the longer term catalysts play out.

Over the long term, continued positive results indicating that FluoroPharma's PET images provide a more clear and concise analysis of a patient's condition could place the company on the map in this category and return investors very significant rewards.  FluoroPharma's current market cap - while justified in terms of its speculative nature - may hardly be justified in terms of overall market potential.  Already the PET imaging market is measured in the billions of dollars, while PET for use in detecting CAD - the current focus of the company's development - is turning into a billion dollar market in itself.  Needless to say, with this company's market cap barely a fraction of its overall market potential, assuming continued positive results, then the potential for swift and significant price gains are possible, possibly in line with the Zacks recommendation.

As is always the case with developmental picks such as this one, investors will identify the potential for cash raising events to stall any rally that materializes around catalyst-based events or price spikes.  Such considerations should always be noted and are a large reason why utilizing a strategy that includes 'trading shares' - which allow an investor to trade the volatility around catalyst events - while also building a long term position, for those who wish to see the full story play out.  Such a strategy often allows an investor to come out ahead - or on house money - by the time the end-game is near.

In the case of FPMI, the company should have enough cash on hand to last through another trial update, but bear in mind that developmental companies can be expected to raise funds at any point they see fit, which often comes at the risk of dilution to shareholders - hence the strategy of putting 'trading shares' to work along the way.

With volume on the rise and exposure expected to also increase as the ongoing Phase II trials continue to unfold, it's worth keeping FluoroPharma on the radar.

Assured Pharmacy Shareholder Letter Outlines Potential

Although to a more modest degree than the above-mentioned FluoroPharma, Assured Pharmacy (OTCBB: APHY) has also experienced an uptick in its trading volume and - based on industry trends and expansion plans - holds significant potential to appreciate in value over the coming months and quarters.  With the abuse and misuse of prescription medications rampant in today's society, Assured is quickly setting the standard in the growing genre of personalized pharmaceutical services, which - through more stringent regulation of medications and prescriptions - will help to alleviate the risks of abuse.  Assured also works closely with doctors and gears its services towards the early identification of what works best for a particular patient, in a manner more personalized than current standards - and in a manner that alleviates the threat of another Lindsay Lohan riding the train of prescription drug abuse pain.

Thus far, the company has built a foundation of four 'boutique' pharmacies geared towards the treatment of patients suffering from chronic pain and a shareholder letter issued this week highlights the booming growth of its targeted industry and plans for expansion that could place Assured's services into the mainstream of shifting trends, while making its name known on a national level by year-end 2013.

While the early successes of Assured's existing locations provides a solid foundation from which to move forward, the company expects even more growth during the course of the year with an additional six locations slated for grand openings.  A store in Colorodo is expected to open next month, according to the latest financial report.  In order to ensure a business model that can replicate the success of the Kansas location, in particular, company officials are already networking with local physician groups in the new prospective locations to ensure an early patient base - and hopefully profitability - from the start.  Additionally, the company is enhancing its already-stringent distribution methods to further cement its reputation for quality, efficient and safe pharmaceutical services as the new locations are opened.

Although the potential is there for Assured to eventually set the standard for personalized pharmaceutical care, investors should still understand the competition that exists from existing big players in the market, such as Walgreen (NYSE: WAG), Rite Aid (NYSE: RAD), CVS (NYSE: CVS), and even Wal-Mart (NYSE: WMT).  The primary difference, however, is that these names emphasize convenience over service, whereas today's patient base is following the trends of the healthcare sector as a whole, which is emphasizing efficiency and safety.  That's where Assured could be set to capitalize heavily.  While patients are herded through isles of candies, cards, magazines and snacks (and even beer for the big game in many states), which encompass the majority of the floor space at the above-mentioned pharmacies, Assured can quickly gain market share with the help of those doctors and patients looking for quality.

Another key item that investors should note from the shareholder letter is mention of the difficulties that Assured has had in securing financing for its early endeavors.  The past few years have not exactly provided the best environment for developmental or still-emerging companies to thrive, but Assured has managed to survive thus far and - as mentioned above - plans significant expansion through the course of the year and also claims an excessive backlog of patients, for which the company will need to raise cash in order to treat.

While additional means of funding should be expected as the expansion picks up steam, however, Assured has taken some measures that could help to alleviate the stresses behind attracting investments.  The first major item to note is that the company now trades on the OTCQB, an uplisting from the pinks and a platform to which a new investor base could be attracted.  Additionally, an uplisting the AMEX or NASDAQ is also on the "near-term" horizon, according to the shareholder letter, another eventuality that could attract yet more committed investor interest. 

To achieve listing on those big boards, however, the company may need to meet higher share price and/or market cap levels, which puts a huge emphasis on the growth expected to be achieved with the upcoming expansion. 

In the case of speculative investments, investors are forced to entertain the risks and rewards associated with such investments.  As noted above, utilizing a 'trading' strategy with a handful of trading shares with which to play catalysts while potentially building a position for the long term, too, could help to alleviate the risks, but not eliminate them.  Still considered a new start-up, there is no guarantee that patients and doctors will jump on the industry trends and choose efficiency and safety over convenience, while securing funds may continue to be a challenge.  Although hints at profitability exist, the company is still returning losses.  That said - and with the risks entertained - the best bargains in the speculative market are often found before the story becomes one of noted success; henceforth, the rewards are the greatest when a story is found before the majority of the investing community finds it. 

As industry trends shift in its favor, Assured Pharmacy and its investors could be positioned to capitalize on upcoming catalysts and milestone events that could place the company on the national stage.

Like FluoroPharma, APHY could be an 'under the radar' play positioning as a nice speculative story for the year 2013.

Quiet AntriaBio Could Quickly Start Making Some Noise

AntriaBio, Inc. (OTCBB: ANTB) made some noise earlier this year when news circulated that the company's once-a-week basal insulin shot, AB101, could eventually replace the current standard of care - currently comprising of daily shots - in a market measured by the billions of dollars and currently dominated by Sanofi-Aventis' Lantus and Novo Nordisk's (NYSE: NVO) Levenir.  AB101 was acquired by AntriaBio in bankruptcy court - after millions had already been put into its development - and news that human trials were imminent resulted in a price spike that returned more than a double in price.  As the broad markets rallied, however, and interest on the speculative sectors remained low, ANTB shares have drifted back towards their fifty-two week lows and may have presented investors with another solid speculative opportunity, considering the trial catalysts still pending. 

AB101 looks to capitalize on one of the fastest-growing trends in the healthcare sector, namely the boom in diabetic care.  Other companies, such as SanuWave Health (OTCBB: SNWV) and Mannkind Corporation (NASDAQ: MNKD) have also enjoyed share price success this year based on their own unique approaches to the booming industry, but AntriBio's once-daily injection could turn into the holy grail for patients who have been subjected to daily injections for years, hence the interest on the upcoming human trials, which can return results as soon as later this year.  Given that the above-mentioned once-daily (at least) industry standards, Lantus and Levenir, pull in over eight billion dollars annually (combined) the potential for swift appreciation of the ANTB share price is possible, assuming successful trials.  Should AB101 reach the later stages of development, then those in at the very early stages could be returned very notable gains, but it's still early for many investors - even the more speculative ones - to look that far ahead. 

Concentration now is on the most imminent milestone events, although due attention could be given to the long term story in the peripheral vision.

Of the imminent milestones, AB101 is expected to hit the clinical stage over the near-term, following a successful round of pre-clinical development, according to a recent presentation posted to the AntriaBio website.  The company will initiate trials in Russia first, where the costs of conducting such trials are significantly lower and where patient recruitment is known to be up to ten times higher than in the US and Europe.  In the meantime, however, AntriaBio will move forward with the FDA IND process while development in Russia continues.  With early human data available from the Russian trial available, it's possible that the data could help to expedite the initial IND process in the United States,too.  At which point AntriaBio plans to follow the course set by many other developmental companies and look for regional and/or multi-national partners that could potentially help fund development, according to recent company presentations.  Such a strategy could help to alleviate investor concerns of excessive rounds of dilutive financing deals that often accompany the pipeline progression of early-stage companies.

That said, the threat of such cash-raising events always exists in this sector, hence the benefits of entertaining the combined trading and accumulation strategy mentioned above.

As the clinical stage positions at the starting block, the catalysts to expect this year include the initiation of the Russian trials, interim and/or actual results and comments referring to the initiation of the IND process in the United States.  Company and investor presentations could also include discussions of the pre-clinical data and the potential impact that AB101's once-daily advantages could have on the multi-billion dollar market which it targets.  If clinical data starts to return success and as the speculative investing community digests AntriaBio's potential, then volume could pour in to levels that would justify share price increases that could approach the 52-week high levels seen earlier this year. 

In building a pipeline of potential - so as not to be known as a 'one trick pony' - AntriaBio is also establishing a long-acting Glucagon-like peptide-1, known as AB201, which is approaching the pre-clinical stages.  AB201 would also present a major upgrade as the current standard of care as a once-monthly replacement for what is already on the market. 

Numerous industry veterans have been brought on board to helm the developmental stages of AntriaBio's pipeline, all of whom have an established history of bringing small biopharmaceutical start-ups through the point of commercialization.  Additionally, multiple members of the management team have histories which involve bringing developmental start-ups to the point of mergers and acquisitions, a point not likely to go un-noticed by those speculative investors looking more towards the near-term catalyst potential.  Given recent comments regarding using human data to land regional partners, M&A may be the course of action expected by investors moving forward.

AntriaBio's pipeline is still in the very early stages, but as mentioned at points above, those that find their way into a story early have the potential to reap the biggest rewards over the long run, and ANTB could offer ground-floor potential that could shape the future of basal insulin delivery.  As always, the risks should be entertained, including the above-mentioned financing risks, while concerns of trial failures always dominate the sector.

With numerous catalysts pending over the course of the year and with a product that could change the face of a multi-billion dollar industry, it may be worth not letting this story slip too far below the radar, whether it be for purposes of a short term trade or a long term hold - or potentially both.

Sunshine's Dip Below Five Emphasizes Speculative Opportunity 

As recently discussed, Sunshine Heart (NASDAQ: SSH) may be positioned to evolve into one of the better 'but the dips' plays of the year.  A recent stock offering dropped shares from over the six dollar mark to below five, but the current stages of development of the company's C-Pulse Heart Assist system, designed to treat Class III and ambulatory Class IV heart failure - and market potential of the product - defy SSH's still-highly-speculative market cap.  Even more so when considering that the European medical authorities have already granted the device a CE Mark approval, too, and the company could start receiving revenue from sales and/or reimbursement over the near-term. 

The pricing of the offering was $5.25, above the levels where shares currently trade.

As a brief recap for those that may be taking their first look at the company, let's take a quick snapshot of the target market:  According to statistics posted by the National Institutes of Health (NIH), heart failure is an all too common condition where the heart becomes unable to pump a sufficient supply of blood to meet the demands of the body.  The condition is progressive, effecting over five million people in the United States alone, and leads to over a quarter million deaths per year.  Over 1.5 million of these cases fall into the category of Class III heart failure - the ambulatory Class IV category adds even more to that total - where current treatments may temporarily relieve a patient's symptoms, but are not fully capable of controlling the effects or symptoms, or of even halting the progression of the condition.

Completed studies to date have indicated that implantation with the C-Pulse could provide superior results to the standards already on the market, leaving Sunshine with an ample opportunity to steal significant share of this multi-billion dollar industry, should C-Pulse advance to the commercialization points.  In addition to potentially superior results in treating heart failure, C-Pulse also holds the advantage over competitors that its device is implanted outside of a patient's blood stream, unlike devices by firms such as Heartware International (NASDAQ: HTWR) and Thoratec (NASDAQ: THOR), for example.  Devices implanted within the blood stream increase the risk of contamination, while the procedures behind their implantation - since they 'touch the blood' - are also considered much more highly-intrusive than that of the C-Pulse.  Another key benefit to being implanted outside of the bloodstream is that it allows for more quality-of-life conveniences, such as the ability to disconnect the device when needed or necessary, during showering, for example.

Although this company has already received its share of attention, especially when shares touched highs near the twenty dollar mark last year, Sunshine may have again slipped below the radar as the broad markets sit at or near their record highs.  While slipping even lower than the price of the recent offering, yet continuously returning milestone events that hint at eventual success, SSH is another one to keep on the speculative map.  The recent offering dropped the share price down another notch, but all things considered, the company is sitting on a healthy cash pile and could quickly become a buyout/partnership story if the US trial resembles the encouraging results already realized.

D-Day For Titan

Titan Pharmaceuticals (OTCBB: TTNP) may represent one of the most successful speculative stories of all time.  During the course of its pipeline development (including periods where it traded on the AMEX as TTP) the spikes and dips continuously returned double, triples - and even more at times - before the failure of one its lead pipeline candidates failed dropped shares to a penny a handful of years ago.  A rejuvenated pipeline based on the prospects of Probuphine and the subcutaneous, controlled-release ProNeura technology, however, has revitalized the company and its share price, while returning investors huge rewards along the way.  Shares currently sit at levels of a near-triple, too, in just over a few months time.

A new chapter in this company's development has emerged, though, which could prove to be the most significant milestone reached by the company ever.  The FDA is slated to decide within days the fate of Titan's approval application for Probuphine in the treatment of opioid addiction.  Multiple trials have proven the treatment effective and an FDA advisory committee recommended its approval in a recent vote.  All indications point to approval.

Some speculate, however, that concerns over REMS for Probuphine may delay approval, while others speculate that the FDA may request additional data in regards to dosing before granting the green light for commercialization.  Few believe that Probuphine will be denied approval.  Those playing this imminent catalyst may take up a couple of strategies, the first being accumulating before the catalyst in order to bank the expected approval gains.  Others believe that REMS may delay - not deny - the vote, in which case investors may expect a temporary pullback into which to buy for the next D-day that would then be presented by the FDA. 

Regardless of the outcome of this month's decision, an eventual approval is likely.  For the record, Titan is one of my personal bests over the years and am sitting this decision out, but will buy back in, should the decision be to delay approval and the share price drops a bit as a result.

While attention is paid to the broad market highs, however, don't forget about those companies with imminent catalyst getting read to unfold, such as those mentioned above, including Titan Pharmaceuticals.

Should Titan receive the nod, the company will be a demonstration of how years and years of patience, trials and tribulations could finally pay off for a company, its investors, and those that will benefit from a new product or treatment hitting market.

Happy Trading!!!

Disclosure: Long APHY, SNWV, ANTB.

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SanuWave (SNWV) Patents Boost Long Term Potential

SanuWave Health (OTCBB: SNWV), with trial catalysts pending over the near term, has received its fair share of attention during the course of 2013 thus far, but the company's potential value over the long term may have received a significant boost earlier this month with the issuance of a patent covering the company's shockwave technology for use in blood purification.  Although not yet in development for that indication, SanuWave projects that its shockwave technology could disrupt "the outer membrane of bacteria and viruses which," according to a company press release on the topic, would result in the death of such pathogens.  For SanuWave, this patent also represents the first for the company outside of those obtained for its initial methods-of-use - which include wound care and regenerative medicine - and provides another solid starting point from which the company can grow. 

In today's day and age a solid baseline of intellectual property (IP) is invaluable for a company.  Patent wars are seemingly popping up on a near-daily basis in numerous sectors and solid patent protection alone could be worth tens of millions of dollars - at least - to companies looking to protect their respective technologies in settlements.  Additionally, patents could also bring in new revenue streams for companies utilizing similar technologies, as was demonstrated by the signing of a licensing agreement between Synergy Pharmaceuticals (NASDAQ: SGYP) and Ironwood Pharmaceuticals (NASDAQ: IRWD) last year, as each company's respective drug used a similar mechanism of action.  Amarin Corporation (NASDAQ: AMRN), too, is a company whose patents are day-by-day being tallied by at investors at home, given the continued uncertainty surrounding Vascepa's New Chemical Entity (NCE) status. 

In terms of potential mergers and acquisitions, patents are factored into deals just as much as developmental pipelines and some deals are actually consummated on the basis of patents alone.  Needless to say, patents may be more valuable now than at any time before - and maybe event to the point of becoming a detriment to progress and innovation.  That said, a company has to have them to succeed.

So although the more short-term minded investors may disregard news items relating to the issuance of patents - since they are not often accompanied by trials (at the time) or immediate price catalysts - investors looking towards future value can start to factor in the impact that a patent issuance can have on a particular company's future value.

In determining the potential value of SanuWave putting its technology to use in newly-covered indications, let's take a look at the trends.  We've concentrated a lot of time and print these days into identifying growing trends in the healthcare sector and then identifying companies who could be primed to capitalize.  For instance, SanuWave itself is already positioning itself to take advantage of the growing boom in the diabetic care market, given the pending diabetic foot ulcer trial, and other companies such as AntriaBio, Inc. (OTCBB: ANTB) and MannKind Corporation (NASDAQ: MNKD) are also looking to capitalize on the growth of that sector.  Similarly, Titan Pharmaceuticals (OTCBB: TTNP) and Assured Pharmacy (PINK: APHY) are soundly-positioned in trends relating to the reduction of pharmaceutical abuses and investors who likewise jumped in early were handsomely rewarded.

The next trend into which SanuWave is preparing to enter, according to the issued patent, is the blood purification market.  Partly as a result of the already-discussed diabetes epidemic, this market is also moving forward at exponential speeds, leaving in its wake a global shortage of a safe blood supply with which to respond to natural disasters and routine medical procedures.

According to statistics discussed by entities already fully engaged in developing next-generation technology, the blood purification market in the US and Europe alone is can be measured in the tens of billions of dollars, while the market is also growing at exponential rates in other major economies around the globe.  Such statistics offer companies looking to gain early footholds - and investors also looking to capitalize - the opportunity to stand ready, positioned and prepared when the growing trends become more mainstream.  So although investors are always wise to play the volatility of the still-developmental sector and put some trading shares to use while also potentially building a core position for the long term, news of patent protection should not be taken lightly and could also be used as an insight into a company's strategy moving forward.

For SanuWave, all attention at the current time relates to the diabetic foot ulcer trial, but sometimes those just looking at the tree may miss the forest that could be building out there.  Intentions to develop the shockwave technology in the treatment of various indications outside of those already discuss provides the company with numerous avenues for potential success - and a 'Plan B' that longer-term investors like to see before committing for the duration. 

It shouldn't be assumed, however, that the only way SanuWave - or any company for that matter - can capitalize on patent protection relates to the initiation of new trials.  It's likely that the company could look to develop its own clinical path to infiltrate the blood purification market later on down the road, but another option is to out-license the now-protected technology to another player in the sector who may be willing to fund development itself, in turn for an agreement that may include milestone payments and future royalties.  This possibility was briefly discussed in this article's open in relation to Synergy and Ironwood and is not an uncommon scenario in the developmental sector.  It may be more realistic, however, to expect such an event after the technology demonstrates more late-stage success in other indications.

It's evident that the long term business plan may be expanding as the short term developments unfold, and while it's always worth looking long term, too, it's the short term catalysts for SNWV that have the potential to move the share price.  In that light, all attention is still on the dermaPACE diabetic foot ulcer trial that is expected to begin enrolling patients within the current quarter.  If successful, dermaPACE would be positioned to enter into a multi-billion dollar - and still growing - market, therefore investor anticipation of this trial has been heavy and led to a swift increase in the SNWV share price.  Positive results, whether they be interim or actual, could lead to further gains and put this company on the map for its potential to enter the next-generation wound care and foot ulcer markets.

Confidence for success regarding the upcoming trial is growing, given previous clinical results and a new trial design.  Some investors, however, remain skeptical over the results from the past trial because although it returned encouraging results, the endpoint was not met.  This skepticism is likely a large part of the reason why the SNWV market cap remains at still-speculative levels, considering the overall market potential and cap levels achieved during the last trial.  Only positive results can combat that skepticism at this point, hence the high amount of interest this company has been garnering and the volatility experienced over the past weeks - both of which indicate both short term and long term investors may be taking up positions ahead of the upcoming catalysts.

As always in the developmental sector, the inherent risks should be noted.  Financing is always a concern during the developmental stages and even with SanuWave bringing in revenue in Europe, as discussed in a previous write-up, it cannot yet offset the losses still being realized by the costs of development.  There's no guarantee that this company will not at some point need to raise additional cash to fund development, but SanuWave management has undertaken some responsible measures to help offset investor concerns, including basing the latest CEO agreement on goal-oriented milestones (see the above-linked report).  International growth is expected during the current year, too, as approvals in Australia and New Zealand can help to augment European sales, although even the most enthusiastic of investors should expect overall losses to continue.  The trend, however, has been to see the losses shrink, according to most recent financial reports, while indications also have it that the gross profit numbers behind treatments are also growing, to levels as high as seventy one percent.

Risk still exists, but given recent developments, pending catalysts and an expanding base of IP, SanuWave still looks like a solid rebound story for 2013. 

Happy Trading!!!

Disclosure: Long APHY, SNWV, ANTB.

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Wednesday, April 24, 2013

Assured Pharmacy: Industry Trends Lead Shift Towards Specialized Pain Management

Discovering industry trends early and then establishing positions in companies who may benefit from those trends ahead of the general market could quickly turn into a successful trading strategy.  For a prime example of such, look no further than 3D Systems Corp (NYSE: DDD) and Organovo Holdings (PINK: ONVO).  Shares of both companies traded along relatively under the radar until investors caught onto the fact that 3D printing was advancing quickly enough that the next generation of the technology was quickly becoming considered the 'now' generation.  Shares of 3D tripled in quick time, as did the more speculative Organovo Holdings, whose technology could eventually be used to 'print' organs for transplant patients, and investors who caught the trend early were very handsomely rewarded.

Over the course of the past few weeks we've also discussed heavy trend shifts towards diabetes treatment, since that industry is growing at alarming rates.  Companies such as SanuWave Health (OTCBB: SNWV), AntriaBio, Inc. (OTCBB: ANTB), and MannKind Corporation (NASDAQ: MNKD) have already seen their respective share prices rise over early-year levels as key upcoming catalysts and more cost-effective and less-intrusive technologies could quickly thrust each company to the forefront of the booming multi-billion dollar industry. 
Another sector trend worth identifying now is shifts within the chronic pain market.  Treatment of chronic pain conditions remains stable at $20 billion-plus in the US on an annual basis - $50 billion globally - and numerous companies whose share prices could stand to appreciate in value, pending developing catalysts, are lining to take advantage of the next generation of this robust sector.  When assessing the trends inside this portion of the industry, it's important to bear in mind that for years this subsector has been run with the cowboy flair of the 'anything goes' lifestlye - hence some of Hollywood's greatest stars becoming living train wrecks and a significant amount of those treated for chronic pain becoming addicted to their medications. 
To combat those facts, the new wave of health care treatment revolves around preventative medicine, while also emphasizing less-intrusive and more cost-effective processes and products.

The US may be a little behind the curve in this sense, as emphasis for decades has been on treatment - not curing - because there is no money in a cure like there is in treatment.

Some examples of companies jumping head-first into the new shift in strategy can be identified by BioDelivery Sciences (NASDAQ: BDSI) and Titan Pharmaceuticals (OTCBB: TTNP).  BioDelivery, for example, has received multiple approvals for Onsolis, a treatment for chronic pain caused by cancer.  Onsolis involves placing a strip of film to the inner lining of a patient's cheek, a method intended to control delivery and mitigate the risks of addiction.  Titan, on the other hand, has developed the ProNeura technology, which is a subcutaneous 'stick' implanted in a patient's armpit and - like BioDelivery's strip - allows for controlled release and drastically reduces a patient's risk of addiction.  In fact, the first indication for which ProNeura has been designed to treat is opioid addiction - a treatment known as Probuphine - often for patients who have already become addicted to other pain medications. 

In identifying the benefits offered by these two companies and their respective technologies early, investors were rewarded with quick share price triples.  In fact, Titan traded for a penny at one point as a result to failures of another product in its pipeline unrelated to Probuphine.  Those that saw potential in Probuphine, which is also being developed for the treatment of chronic pain and not just addiction, and identified early shifts in the market were rewarded.

Although the above-mentioned companies address ongoing shifts in the sector, leading to more controlled and responsible use of drugs and treatments in the industry, they still don't key directly on the preventative side of the house - for that we can look directly to the controlled distribution points of today's most common drugs and treatments, the pharmacies.  Any consumer will find one location of any of the biggest market players - be it a Walgreen (NYSE: WAG), Rite Aid (NYSE: RAD) or CVS (NYSE: CVS) - on just about evey street corner or within every strip mall in America.  Patients filling and refilling prescriptions at these locations has turned into an industry registered in the hundreds of billions of dollars.  It's such a lucrative business that even the likes of Wal-Mart (NYSE: WMT) jumped in with a pharmacy of its own. 

Although the industry is booming, the idea of treating patients may have been lost in the quest to pull in the big bucks.  Like cattle, patients are herded through isle after isle of candies, cards, magazines and food items before lining up to receive a prescription in the back of the store.  Pharmacies are not pharmacies any more - if they ever were - they are merely miniature versions of your favorite supermarket.  In some states, one can even pick up a few beers and a bottle of wine for the big game while filling a prescription, hardly an experience centered on the patient.  Let's face it, in the world of big business, money wins and personalization loses - that's just the nature of the beast.

With that in mind, there may be another industry shift underway that encompasses all of the items discussed above - the shift towards personalized and preventative patient care in the prescription market. 

Assured Pharmacy (PINK: APHY) may be one such up-and-comer that is positioned to take advantage of these trends.  As a personalized - or 'boutique' - pharmacy with multiple locations already in operation, Assured has jumped into the chronic pain market and is consistently setting the standard for personalized and professional patient care in the pain prescription market.  In concentrating the first phase of its development in four smaller markets, Assured raked in fourteen million dollars in revenue last year and has eyes towards significant expansion over the coming years.  Since the precedent has already been set that the business model can work, much larger markets are now being targeted, with a location in Denver, CO slated to open next, according to the latest financial report.  Encouragingly enough, and again according to the company's above-linked financials, it takes roughly $350,000 to open a new location - a relatively modest amount, given the financial girth of the industry.

It should also be noted that although the initial revenue streams look encouraging for future growth prospects, the latest report also indicates that the company is still registering losses, too.  Expansion into much larger target markets should help alleviate the losses, as the customer base could potentially grow exponentially on a per-capita basis, especially if Assured can capitalize on the personalized services that are being sought after by the "me" generation.  After all, in the absence of the daily threat of a global nuclear war breaking out, the population is in tune with the 'it's all about me' mantra more now than ever before.  That fact paves the way for boutique pharmacies such as Assured to thrive.

Established pharmacies are still going to pose a major threat to Assured gaining market share, regardless of the benefits provided, but the road ahead looks manageable.  Aside from just offering personalized services that cater to an individual patient's need, Assured can also benefit from its more stringent and tight monitoring of prescriptions and decreased potential for abuse that result from its business model, which could make the company a more desirable option for public and private health care professionals and/or relevant insurance companies.  Additional benefits exist in terms of cost-efficiency since the personalized model better enables doctors and patients to identify early on the medication most applicable to his or her condition.  The popular culture of 'try this and see what happens' may be going the way of the 8-track.

Although risks still exist in regards to the business model moving forward, the company's current market cap and lack of viable trading volume indicates that investors are not yet sold on Assured's potential to thrive, or even its ability to carve out a niche market within the tens of billions brought in by pharmacies for pain medications yearly.  As discussed in the above paragraphs, the risks are still notable for the company, but as also discussed, identifying early trends and sticking with them can enable investors to reap rewards by already being 'in' before the broad investing base jumps on board.  Very modest volume has already enabled shares to more than double since the year's open, but a fair amount of speculative interest could push shares higher still.  It'll be worth monitoring those numbers.

Health care in general is likely to garner an increased amount of attention again this year as Obamacare hits full stride, and companies that succeed in preventative and personalized care stand to prosper.  Titan and BioDelivery, for example, could lead the way through the transition period of these trends while the boutique pharmacies - like Assured - could gain a foothold now while sitting on the cutting edge of the next generation of pharmacy care. 

As always, investors should always conduct his or her own DD and invest accordingly, while entertainging risks and losses as well as future growth potential.  In the case of Assured Pharmacy and some of the other companies listed above, the prospects of capitalizing on shifting healthcare trends exists and could be worth a look for the more speculative portfolio.

Disclosure:  Long APHY, SNWV, ANTB.

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