Thursday, March 14, 2013

Mannkind, SanuWave and AntriaBio: Investing In The Next Generation Of Diabetes Treatment

A large part of investing in the speculative sector involves staying one step ahead of the game - finding the next big thing - the latest fad, brightest technology or newest bull market - before the other guy does.

For instance, those who dabbled in the 3D printing market before the hype hit the market hard could have made huge gains by jumping into 3D Systems Corp (DDD) before it tripled from its lows and - taking the healthcare spin - Organovo Holdings (ONVO.PK), which also posted a triple at point leading up to the bubble. Although the bubble burst and those companies have now seen their share prices retreat rather significantly, the point was made that 3D printing is here to stay and the strength of the sector should be taken seriously. Those who figured that out before the market made bank.

In the healthcare and biotech sectors, staying one step ahead of the game may be a bit tougher, as an epidemic of any type could hit at any given time with little or no notice.
That said, finding next-generation drugs while they are still in development can pay off handsomely for those with the patience to wait the story out, while maybe trading a few shares here and there to make sure at least some profits are had along the way. Dendreon's (DNDN) Provenge can be viewed as just such a present-day, but next-generation product, as it targeted an existing disease, prostate cancer, and then effectively ushered in the next generation of the cancer immunotherapy treatment. The DNDN share price, as a result, jumped from roughly three bucks to well over forty at one point along the way.

Searching for the newest trends can help investors, who need to have a little time on their hands, find the next bullish market before those markets hit overdrive. The sub-sector of diabetes treatment is one such market that looks like it could be lining up for take off, given the trends we will discuss below, although it's arguable that this sector has been heating up for years now, as more and more humans survive on fast food, sugary drinks and exercise that only includes couches, office chairs and golf carts.

Below we'll take a look at a disease that is quickly becoming one of the greatest burdens on the global health care system and a few companies that could play a large role in the sector for years to come, but may still be trading relatively below the radar.

Diabetes Is A Growing Burden On The Global Health Care System

Investors of the healthcare sector should take note of the magnitude with which diabetes treatment is burdening the global healthcare industry.
One of the fastest-growing diseases in the world, diabetes is becoming such a huge burden that, in fact, some of the most recent statistics indicate that it is a dilemma that can only be measured in the hundreds of millions of dollars. Twenty-two million people in the United States alone have been diagnosed with diabetes and it is speculated that millions more have it and are yet-to-be diagnosed. The diagnosed global numbers are much more severe, yet also much more undiagnosed. The burdens placed on national and private health care systems are obvious, especially in a time when governments around the globe are streamlining costs and looking for more efficient and less-intrusive ways to treat common diseases and ailments.

While there are many established players already out there and still evolving their own respective treatments, there are a few lesser-known players developing technologies or treatments that could play a large role in future treatment.

Here are just a few of them to keep on the radar...

AntriaBio Positioning For Launch Of Human Trials

Earlier this month we introduced readers and investors to AntriaBio, Inc. (ANTB.OB), an emerging company that could be ready to make a splash in the healthcare sector of diabetic treatment.

Specifically, AntriaBio is prepared to advance to the clinical stage a once-weekly basal insulin shot, known as AB-101, that could replace the current standard-of-care treatment, which includes a once-daily shot. The improved quality of life of such an advancement, should it eventually make market, is undeniable and the targeted sector is valued in the billions of dollars annually.

Having pulled back from recent highs of over two dollars on relatively light volume, ANTB could be positioning and consolidating before multiple catalysts unfold during the remainder of the year. Those catalysts include the initiation of human trials in Russia, the expected release of some of that human data by the end of the year, and the search for potential partners, whether they be regional or international. According to a presentation posted on the company's website, the goal is to find already-established regional partners in targeted areas.

In addition to the above-mentioned catalyst events, FDA milestones could be forthcoming, as well, as the company plans to proceed with the IND process in the US while simultaneously conducting trials overseas. Emphasis has been put on the overseas trials first, however, due to significant costs benefits of conducting trials elsewhere, while patient recruitment is often easier, too. Once some human data is established, then it makes the FDA process at home a little bit easier.

When the planned trials are initiated and (if) positive data starts rolling in, ANTB's relatively modest market cap - in terms of speculative potential - could start inching higher. Catalyst traders could also jump on board in anticipation of milestone events and potentially add volatility - and trading opportunities - to the mix, too.

The time to build a trading and/or accumulation base, however, may be when the company is still hovering below the radar, as it may be right now, although some increased attention has been noted and there may be more to come as the above-mentioned developments unfold.

Beyond AB101, AntriaBio is also establishing a secondary pipeline product, which helps a company still establishing itself to keep from being considered a 'one trick pony.' As Keryx Biopharmaceuticals (KERX) demonstrated last year, and AEterna Zentaris (AEZS) just about last night, a company almost has to have a backup plan in the event 'Plan A' hits a snag or outright fails.

AntriaBio's secondary product is AB-201, a long-acting Glucagon-like peptide-1 that is approaching the pre-clinical stages and will be tested as a once-monthly replacement for the current standard of care. While the bulk of attention is destined to be paid to AB101 over the coming months, the potential of AB-201 should not be ignored, in regards to potential valuation over the mid to long haul. That said, this product candidate will likely gain more credence once it is established in the clinical stage.

MannKind's Inhaled Insulin Could Provide A Non-Needle Alternative

Of the companies discussed in this write-up, MannKind Corporation (MNKD) is undoubtedly the best known, but may have just as much a chance at upside as the others, if not more - even after another five percent price spike on Tuesday. That rise followed numerous days of notable upticks since the opening bell of the week prior.

Although MannKind is still considered a speculative play because the Phase III inhaled insulin product Afrezza has already been brought before the FDA and denied, the current trials have been designed in a manner that has the company and investors enthusiastic about its prospects for success. The problem with the trial from a couple of years ago, for example, was not related to the effectiveness of the treatment, rather it was the fact that the company utilized one inhaler for the trial, while intending to market Afrezza with the next-generation device. The FDA requested the additional trials to confirm efficacy with the next-generation device and that is what the company is now doing.

With trial results slated for release over the course of the coming quarters and an NDA filing also expected this year, MNKD has plenty on tap to keep investors interested. Financing is no longer a major concern thanks to a deal struck last fall, so these upcoming milestone events have the potential to allow the MNKD share price to appreciate in value unabated, aside from the expected routine volatility, profit taking and consolidation of the sector. It also helps the financing cause that company CEO and founder Alfred Mann has put his money where his mouth is and invested over a billion dollars of his own personal fortune into the development of Afrezza.

Another aspect that may be a driving force behind the company's fifty percent gain since the post-financing lows is the ongoing speculation of a buyout or partnership. Such discussions could add instant fuel to the fire, as we saw last week, and may become even more heated later in the year around the time results are expected to be released, especially if those results are positive. Big pharma is well aware of the growing need for new and innovative treatments for diabetes, noting the epidemic discussed in the open, and Afrezza could potentially be considered a billion dollar product in itself, if it ever garners approval, based on the size of the target market - that could be enough to attract a buyout offer or two.

Just recently, volume rolled in at roughly five times the trading norm as partnership rumors made their rounds, although the consummation of any deal is unlikely to come before results are slated for release.

That said, there are still quite a few hurdles that Mannkind has to negotiate before investors again become true believers. Not only does Afrezza have to prove it can make it through trials, it then has to prove it can make it through the FDA, and that's been tried twice before. They say the 'third time is a charm,' although a skeptical investing crowd out there feels like it has seen this story before. The recent trading action could be an indication that investors are starting to accumulate positions again, but it's also likely that investors buying in at these levels would be inclined to bank some profits into any major bump higher, which would invite volatility over the coming weeks and months - but that's nothing new to the sector.

Headlines have speculated that MNKD could become one of the better plays of 2013 and there is a good chance that could be the case if the trial results are positive enough to attract big pharma interest. Either way, a pre-results runup is likely, but expect some skepticism to prevail, given the drama surrounding Afrezza's development thus far.

SanuWave Health Preparing For Late Stage Trial In Highly Lucrative Market

In assessing the market size of diabetic treatment as a whole and the potential of an investment in the sector, it's important to emphasize that there are many other aspects to diabetes treatment than just insulin delivery that add zeroes to left side of the decimal point - there are numerous conditions that result from diabetes itself that exponentially expand the market.
That's where another still-developmental company called SanuWave Health (SNWV.OB) comes into play.

SanuWave has developed a technology that could greatly alter the standard-of-care for one such diabetic foot ulcers, a major complication of diabetes mellitus that - if left untreated - could lead to severe infection and even amputation. Through its Pulsed Acoustic Cellular Expression (PACE), SanuWave has developed a portfolio of shockwave therapies intended to treat a variety of chronic wounds and plans to initiate a Phase III trial in the foot ulcer indication in the near-term future.

The company's Shockwave therapy encompasses sending 'shockwaves' through damaged cells, an action that stimulates them to heal themselves - not unlike the process in which muscle tissue heals itself and recuperates after being beaten down during workout session with weights. The most advanced of these shockwave therapies is dermaPACE in the treatment of the aforementioned chronic foot ulcers. Beyond this indication, however, the company plans to expand further into the chronic wound market, adding significantly more long term potential to the story.

Patient recruitment for the upcoming foot ulcer trial is expected to commence within the current quarter and the trial itself was designed in conjunction with the FDA, since an earlier trial proved successful, but did not quite meet its targeted endpoint. Although the overall endpoint was eventually met, it was not achieved in as timely a fashion as expected, potentially due to inconsistencies resulting from patient availability for the desired treatment. With that in mind, discussions with FDA led to an agreement that some of the data from the previous trial could be used to support data from the upcoming trial, too, and that patients will be administered treatment in a more consistent and effective manner than previously. That fact may significantly help to streamline the results and hasten the expected duration of the trial while also conserving finances and resources along the way, always an important factor for still-developing companies.

With the advancement of the new trial, SanuWave made some changes on the business front, too. Joseph Chiarelli was announced last week as the new CEO. Mr. Chiarelli is a noted industry veteran with a pronounced history of developing emerging companies, such as SNWV, and will usher in the new era of dermaPACE and its sister therapies. The cash burn rate under the previous CEO was such that operations were hardly sustainable, especially when confronted with the depths of the recession that dried up funding for developmental companies, so investors will look for more responsible spending with the new administration in place.

The reinvigorated development at SanuWave and the potential of dermaPACE in the treatment of foot ulcers and other chronic wounds has slowly started to attract the interest of the investment community. Zack's covered the SNWV developments last week and a recent spurt in volume also indicates growing investor attention. That said, volume is still not rolling in at the pace that would indicate mass awareness, but that could change as the upcoming catalysts unfold.

Given the changes made to the trial design based on the lessons learned from before, chances are rather decent that this trial could return the desired results. That said, investors should always be aware of the potential risks of the sector. As most recently demonstrated by AEterna Zentaris, unwelcome news can hit at any time, which is important to keep in mind when devising entry and exit strategies. As we've discussed before, it's always wise, in my opinion, to utilize a handful of trading shares to augment a core position of long shares in order to bank at least some profits when the opportunities present themselves in the form of catalyst and/or milestone-based spikes. This allows investors to potentially come out ahead of the game, or on 'house money,' well before the story plays out in full.

That said, those with the inherent nature to accept risk and who also have the ability to sleep easy while understanding the volatile nature of the sector can do pretty good over the long run. All it really takes is one winner out of a couple hand-fulls of picks to come out ahead for good - if the sell orders are utilized at the opportune times. SanuWave's current market cap is a testament to the highly speculative and 'under the radar' nature of the stock right now, but also proves that the potential for significant upside exists.

Roundup: As noted in the open, the diabetes epidemic is growing at an alarming rate, especially when considering the health of humankind along with the fiscal implications on the global health care system. Whether the epidemic is due to poor diet, excessive consumption of fast food or the lack of exercise - or a combination of all three - the need for new and more effective treatments is not debatable. With that known, investors looking to take advantage of emerging treatments and therapies while they are still in the developmental phases could potentially reap significant rewards, aside from knowing that novel new technologies are hitting the market.

AntriaBio, as discussed above, could greatly enhance the currently delivery methods of basal insulin while SanuWave may eventually take its technology into the full spectrum of treating chronic wounds. MannKind is banking on its third try to finally receive the nod from the FDA.

All three companies come with risk, but also come with great potential - and best of all, all three have multiple catalysts pending over the coming quarters.

Happy Trading!!!

Disclosure: Long SNWV, MNKD, ANTB.

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Stock Watch Wednesday, 13 March 2013: BA, SPPI, SNWV, IMSC

Although the DOW closed modestly higher on Tuesday, the trend was lower for much of the day and the other major indices finished in the red.  Headlines swirling Tuesday evening and Wednesday morning hinted that the record-setting rally of 2013 may be losing some steam, but the question is whether that means a plateau was hit and we're in for a period of sideways trading or whether concerns of sequestration and a still-sluggish global economy will push the markets lower again.  World stocks indicated on Wednesday that the latter may be modestly true, but as we've discussed before, US markets don't typically follow trends, they set them - barring unforeseen developments from overseas that could heavily impact global markets.

Should investors go looking for reasons to support the argument that the rally has lost steam, discussions of Europe's hardly-recovering economy and the potential impacts of sequestration could lead the charge.  Europe's continued woes have been largely ignored during the early-year rally, but could quickly become a factor over the near term, while sequestration may become a non-factor if Washington finally rallies itself and comes to an agreement.  There's little doubt that voters are tired of the inaction and recent polls indicate that no side of the fence is immune to criticism over the current stalemate - and that might be enough to nudge these guys in the right direction, if they feel that their own political fate or the fate of their party is on the line. 

So far, Washington in 2013 has been about as productive as A-Rod's playoff bat.  So far that fact hasn't effected the markets at all, but another 'missed deadline' for a budget deal combined with massive cuts could set us down a notch or two.

As the major stories play out there are still plenty of individual stocks and stories to keep an eye on. Here are just a few of them for Wednesday, 13 March 2013 ...


Boeing Scores Big Win With Battery Fix And New Contract

The Boeing Company (BA) was creating a bit of buzz during the early hours on Wednesday after the FAA gave the go-ahead on Tuesday for the company to start testing its redesigned battery in the 787 Dreamliner.  As previously noted, multiple Dreamliners experienced fires and other safety-related issues that resulted in emergency landings and the battery was found to be the likely culprit.  The FAA approval to test the 'fix' is a bright sign for investors, the company and new and existing customers that the 787 could soon be airborne again.  Although shares were initially hit when news of the Dreamliner woes circulated earlier in the year, the broad market rally lifted BA, too, as investors shrugged off the bad press as just growing pains for a next-generation aircraft.  In fact, Boeing's stock has set new 52-week highs recently, even in light of the 787 grounding. 

Also supporting the recent share price run was news that the company was close to signing a deal with Europe's Ryanair for up to $15 billion worth of its 737 aircraft.  This deal not only adds to the company's bottom line, but it also reminds investors who may have shied away from the Boeing stock after the 787 dilemma that Boeing remains a global juggernaut - and there are little signs that this will change anytime soon.

Given the good news regarding the battery fix, it could be assumed that there is room for more upside over the near term, but as discussed during yesterday's write-up, it's not always a good idea to chase a stock higher.  Day after day evidence presents itself that we may be at or approaching the peak of the 2013 rally and a pullback period of consolidation could be in store if the Street feels that we've hit a plateau.  At some points investors will pull some profit from the table, especially given the uncertainty still existing in the global market.  That could hurt - even if only temporarily - many of the companies whose share prices have recently approached or set new 52-week highs along the way. 

The Boeing story is still a decent one to track for those entertaining the long term or retirement portfolio, but now may not be the time to go 'all in.'  Funny enough, with the good news hitting the wires, investors should consider that some may play the 'sell the news' game and create a bit of short term volatility.  That volatility, or an overall market pullback, may provide investors the chance to jump in at lower prices than the near 52-week-high levels that shares are currently trading. 

It's good news that the battery woes look to be coming to an end, although it should always have been expected that a fix was forthcoming, and BA will be a hot story to watch moving forward.

Healthcare, Biotech, Pharmaceutical:

Spectrum Share Price In Line For A Haircut With Revised Guidance

Shares of Spectrum Pharmaceuticals (SPPI) were hammered during after hours trading on Tuesday and it's a near certainty that Wednesday's open will follow suit, given revised guidance from the company indicating a very sharp drop-off in Fusilev sales for the coming months and quarters.  Although Fusilev sales had demonstrated robust growth during the past year or so due to the short supply of the generic competition, many predicted that generic competition would eventually eat away at the product's new found market share once supply caught up with demand.  Fusilev revenue had leveled-off during the most recently reported,  but company officials at the time still predicted overall growth for 2013, but did not specify where that growth would come from.

As per comments released on Tuesday evening via press release, no longer do company officials believe that any growth will come from Fusilev.  In fact, revised guidance states that investors should expect a rough fifty to sixty percent cut in revenue, noting recent conversations with customers and other relevant parties.  This guidance is a far cry from what investors heard merely weeks ago and vindicates the very heavy short interest that SPPI shares have carried for the better part of the last eighteen months.

Some investors may have seen this one coming ,as SPPI's share price dropped quickly after the last earnings release, most likely due to the lack of product-specific guidance through the year.  Shares did rebound, however, and closed the day Tuesday at well over twelve bucks before collapsing after hours.  The drastically-lowered guidance is going to draw huge criticism from investors who may feel betrayed by management and it's also very likely that the sharks will start circling and numerous law firms will issue press releases in search of a class action case against the company. 

Such activity is routine, although most as these cases are fruitless, given investors should be well aware of the inherent risks of the sector and assume that bad news could hit the wire at any given time.  That's why, in my opinion, investors should protect against such events by utilizing those trading shares along the way in order to bank at least some profits and turn out on house money - or better - in case things go sour.  There will also be quite a bit of elation on the part of the shorts for the remainder of the week, which is fine - everyone enjoys patting themselves on the back once in a while.  This has been a long time coming for them as Fusilev defied the odds, quarter after quarter, until now. 

The bad press, a still-very-high short interest and possible lawsuit-related headlines will make SPPI a rough one to stomach over the short term, but at the end of the day the company has multiple revenue-generating products and a deep developmental pipeline, making it worth a look as a potential long term growth play after the dust from this latest drama settles - and once the share price receives its cut, the risk involved in an investment of SSPI will also decrease substantially.

Will trade with high volatility for a bit, but for now this is a hot story to watch for Wednesday.

SanuWave Ready To Roll With Full Trial Approval

SanuWave Health (SNWV) released news early on Wednesday morning that goes a long way to validating the company's comeback story while also emphasizing the potential of its shockwave therapies to play a significant role in the future treatment of chronic wounds.  According to the above-linked press release, SanuWave has received full approval from the FDA to move forward with a Phase III trial measuring the effectiveness of its dermaPACE technology in the treatment of diabetic foot ulcers.  As described earlier this month, dermaPACE operates utizling the company's Pulsed Acoustic Cellular Expression (PACE) technology, which treats damaged cells by sending 'shockwaves' their way and spurring them to heal and recovery themselves.  This process is not unlike the process in which muscle tissue heals itself and recuperates after being beaten down during workout session with weights.  Earlier trial results testing this 'shockwave therapy' in the treatment of diabetic foot ulcers were successful - in the eventual outcome - but did not meet the desired endpoint. 

That is where the significance of Wedensday's announcement comes in.  SanuWave worked with the FDA to appropriately design a new trial, and as stated by CEO Mr. Joseph Chiarelli, the new study was designed based on the successful portions of the last trial, which greatly enhances the chances for endpoint success this time around.  Other key points regarding the design are highlighted in the pre-market release, and underscore the potential for success.  Also of note, the fact that the FDA has granted approval of the Company's Investigational Device Exemption (IDE) Supplement to use the dermaPACE device during the upcoming trial helps to support a potential expedited review as the results roll in.

The contracted trial sites are also already in place and the first patient is expected to be enrolled within the coming quarter.  The diabetes market is growing exponentially, as we've discussed before, and that could be a key reason why SanuWave decided to target the foot ulcer indication first, before looking to infiltrate the chronic wound market as a whole.

A new CEO is in place and a new trial is set to get underway, that makes SNWV as one to keep on the radar over the coming quarters.  With the recovery story in place, investors may start paying attention again and volume has already increased enough to notice that a 'volume before price' play could be materializing.  That said, there is still a ways to go before the light at the end of the tunnel approaches.  One trial not meeting its endpoint will keep some investors skeptical until they see new and encouraging results and the standard concerns of the sector, of course, still apply here. 

As Spectrum demonstrated above, it's a volatile sector, but often times investors who are not afraid to trade while also riding out the story for the long term could do very well.  Given the momentum that may be built by Wednesday's news release, this is a story to watch over the coming months.

Explosive Trace Detection (ETD) / Global Defense:

Implant's Exposure In Global Security News Highlights Potential

The recent Implant Sciences (IMSC) share price pullback has made this company a stock to watch as its technology is positioned to enter the very lucrative and rapidly-growing ETD and global defense markets.  As discussed earlier in the week, the pullback may have created another opportunity for investors to either enter into or accumulate a position in the stock in anticipation of future growth that could stem from the TSA approval of Quantum Sniffer B220 explosive trace detector for use in air cargo screening earlier this year.  Recent news regarding the extension of a financing agreement with DMRJ Group lays a firmer foundation moving forward, too.

With the approval in place and the financing settled for now, the company and its investors will now be concentrating on the growth strategy.  Noting the potential of the Quantum Sniffer technology, the latest edition of 'Government Security News (GSN)' features Implant Sciences as one of its cover stories.  As mentioned in the associated press release, and true by all standards, "GSN is considered the authoritative publication in the government security marketplace."  It's reach stretches from various levels of government and civilian enterprise embedded in the sector and the exposure given to Implant's TSA approval could augment the already-available public information.

It is still early in the post-approval phase, but Implant has made some key strides in ensuring it could be a big player in the future of explosive trace detection, air cargo screening and global defense for years to come.  The GSN mention bumped volume slightly higher than the modest norm we've been accustomed to over the short term, but it's still not to the consistent point that would indicate mass awareness.  A few notable orders resulting from the approval could easily change that.

With exposure growing and finances settled for the remainder of the year, IMSC is still one to keep on the radar.

Roundup:  Global shares traded mostly in the red on Wednesday and early indications were that US markets would open modestly lower, too.  Wednesday could be a key day in assessing whether investors are in for a period of sideways trading over the coming days and weeks, or whether the sluggish global economy and threats of sequestration are going to come into play and hamper the markets.  Washington has already implemented many cutbacks and 'holds' on cash flows due to the uncertainty of this budget impasse, so the effects on the economy may already be felt, but won't be fully known until the numbers are tallied.  Remember, a cutback in defense during the fourth calendar quarter hurt GDP numbers and many of the cutbacks agreed-to in DC in regards to sequestration also trim the defense budget - that's not to say that enough private growth can't offset that trend, but it is something to consider moving into the next fiscal quarter come April. 

There's also the earnings warning from Wal-Mart (WMT) last month that investors may have forgotten about, but should still keep fresh on the back-burner.  It's easy to become complacent when record highs are being set day after day, but it's best to entertain all angles of a story and invest (or sit on the sidelines) accordingly. 

On a brighter note, Hostess found a buyer for its Twinkies and other brands, so everyone's favorite diabetes bombs will be back on shelves by the summer, according to the latest reports.  Hopefully all of those who stockpiled these products when bankruptcy was announced either sold high or had a good Twinkie party or two.  It was only a matter of time before we saw the Twinkie again.

Happy Trading!!!

Disclosure: Long IMSC, SNWV.

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Tuesday, March 12, 2013

Weekly Stock Watch, Week Of 11 March 2013: BBRY, AAPL, GOOG, MCD, MNKD, SNWV, AMRN

Record high after record high is what we saw from the DOW last week and investors will look this week to see if the momentum can carry over after a strong jobs report on Friday dropped the US unemployment rate to 7.7%.  236,000 jobs were added in February, well above previous estimates, and many see this as a positive sign that the economy continues to gain strength and is well on the road to a full recovery.  Since the markets generally look ahead by a couple of quarters, the record highs could be justified, but the question is whether or not they can be sustained over the short term without any volatility entering the picture.

That question holds extra weight right now as the true effects of sequestration, which are still set to come into play in April, are still unknown.  A harsh round of budget cuts and pullbacks could knock down the merry market mood just a notch, as ancillary evidence still exists - jobs numbers aside - that the economy is not yet healthy enough to grow substantially - if at all - without the help of the Fed's stimulus measures that have been in place since the depths of the recession.  Look to 2012's fourth calendar quarter as evidence of such, when a pullback in defense spending caused GDP to roll flat for the quarter, only after being revised higher.

Although Fed Chairman Ben Bernanke last week indicated that there were no immediate plans in place to lighten up on the stimulus measures that have been in place since the depths of the recession, Friday's enthusiastic jobs report has refueled talk from many analysts and pundits that it makes little sense to keep these measures in place while the economy looks to be gaining strength on its own accord, while February's jobs numbers speak for themselves.  A reversal from the Fed that indicates stimulus might be lightened could temper the market's early-year rally.

This week will be a light earnings week, with only a few major holdovers left to report.  Attention will be strictly paid to the debate that will likely rage over how much of an impact the pending sequestration will have on the new record highs. 

It's been a definitive year of rebound thus far, and many would agree that - in retrospect - the markets are flowing on a stronger foundation now than they were when the old record highs were set just before the crash, but we've likely not yet approached the light at the end of the tunnel.  Caution against going 'all in' at this point may still be advised, as any economic news that again creates uncertainty could quickly have an impact on the upwards momentum, as evidenced by the election news in Italy a few weeks ago that led to a DOW drop of more than two hundred points.

Enjoy the ride while it lasts.  As always, there will be plenty of individual stocks and stories to keep an eye on while the major news plays out. Here are just a few of them for the week of 11 March, 2013...

March A Pivotal Month For BlackBerry With US Release On Tap

The next few weeks could prove pivotal for BlackBerry (BBRY) and its share price.  The first wave of sales numbers associated with the international release of the BlackBerry 10 platform could become more transparent over the coming weeks, while the much-anticipated US launch may also provide a potential trading catalyst.  Multiple reports regarding early sales numbers from overseas have been encouraging, but the numbers have not yet been definitive enough to keep a couple of analysts turning negative and issuing downgrades over the past few weeks.  The most recently-revised analyst price targets have identified BBRY shares as heading lower towards the ten dollar mark, citing slow shipments and large inventories left over from initial orders, but it could still be a bit premature - being still only weeks-old - to call this launch a failure. 

In fact, the first wave of the Z10 launch - which left out the American market - may have been more intended to create hype leading into the US launch, much as some major movies are being released on international markets these days to create buzz before the US open.  With the US launch pending, the level of media attention received by the new products could significantly increase during the coming weeks, especially since consumers have had ample time to test drive the new devices.  A notable boost in coverage and reviews could eventually lead to the frenzy that the company was trying to create with its overseas 'tease' launches, geared - of course - towards recapturing some of the lost market share stolen by Apple's (AAPL) iPhone and Google's (GOOG) Android over recent years. 

The next installment of the BB10 platform will be forthcoming in May with the launch of the Q10, a throwback to the BlackBerry of past, that has a full 'QWERTY' keyboard - with real buttons - installed below a bigger and improved-resolution screen.  It's likely that the Q10 could attract those customers looking to come back 'home' after playing around with the competition for a few years running, but BBRY still has its work cut out for it in pulling the lost customer base back in.

For one, it's hard to compete with the App stores available for the iPhone and Android.  As described in a recent write-up by a popular business news outlet, most companies do not regard it as a profitable endeavor to create apps for any other platform than the big two listed above.  That poses a problem in itself for those looking at BBRY stealing back market share as many consumers will take into account the loss of access to their favorite apps when considering which phone to purchase - Instagram, for instance.  Through default, such apps not available on the BlackBerry are exclusive to the competitors, and that's no small point to miss. 

BlackBerry, to combat that trend, may have to foot the bill itself to develop some of the more popular apps for the BB10 platform, as they have with Facebook, or come up with competing apps of their own.  Neither scenario is out of the question, given the nature of the consumer who will jump to whatever's popular at the moment, and BlackBerry's cash on hand, which places its book value at significantly higher than the current market cap.  If the hype surrounding the Z10 and Q10 can return some decent sales numbers, then the big players in the app industry may be inclined to return to BBRY on their own anyway.

It's yet to be seen whether BB10 is the revival that BlackBerry has long hoped for, but the coming weeks could be telling.  The growing short interest of the stock - which sits at more than 20% of the float - indicates that the market is currently betting against a comeback, but it makes for an intriguing short squeeze play, should the right news, sales and developments hit all at once.  

BBRY is one of the hotter stories to watch right now, as the retreating sales price may create an opportunity for those wanting in before the US launch, which is slated to begin as soon as the end of this week.  Still a speculative recovery story, but also one that looks a lot better right now trading closer to ten bucks than it did trading closer to twenty not too long ago.

Food / Beverage:

McDonald's (MCD) shares jumped by nearly another two percent on Friday and remains one to keep an eye on for the long term and/or retirement portfolio as the company's share price treks towards the one hundred dollar mark.  MCD is currently trading on the strength of February sales numbers that came in better than expected, but it's also highly relevant that UBS initiated coverage of the company with a "Buy" rating and a price target of $100 earlier in the year.  That rating coincided with enthusiastic sales trends and is quickly turning into an accurate estimate by UBS.

As previously discussed, McDonald's perch on the fast food throne is based on the company's ability to remain one step ahead of the competitors when it comes to menu pricing and variety.  Recent moves by the company to introduce new products while weeding out those that hurt margins more than help them, especially at a time when rising taxes and increased labor costs may be coming into play, is another demonstration of the company being quick to act.

In terms of the rising share price, however, there are some items to consider.  While the company continues to demonstrate its dominance of the low-cost fast food sector, growth in the sector is still sluggish, even given the above-mentioned February sales report that beat expectations.  The recent market rally to new record highs has helped to support a MCD move to a hundred, but if sequestration and other factors - such as rising taxes or gas prices - start to weight on the market as a whole, then MCD could slip a bit, too.  With that in mind, it's not entirely out of the question that investors who accumulated heavily in the mid-eighty dollar range late last year would treat the current run as a trading opportunity and bank some profits as the opportunity presents itself. 

Even in the long term and retirement portfolios made up mostly of stable, large-cap players, there's plenty of room to take profits at opportune points with the intention of jumping back in at lower prices, should they materialize. 

As mentioned in the open, the market generally looks a couple of quarters ahead and that could be a major reason why the DOW is setting record highs and MCD is marching back towards a hundred bucks.  With that in mind, it could be assumed that investors consider MCD a solid play moving forward in line with the overall recovery, even considering the currently sluggish growth in the sector.

If the green we've seen for the past couple of weeks continues into the new trading week, MCD could be a bet to see a hundred again.  One to keep an eye on. 

Healthcare, Biotech, Pharmaceutical:

MannKind Pushes Through Three With Numerous Milestones Pending

MannKind Corporation (MNKD), a still-speculative healthcare play that is more apt to trade on catalysts and milestone events than on broad market movement, took advantage of the green pouring from Wall Street last week and jumped over the three dollar mark again while setting a new 52-week high in the process.  Volume rolled in at roughly five times the trading norm as partnership rumors made rounds while the potential impact of the company's inhaled insulin product, Afrezza, also grabbed headlines.

The push through three makes MNKD a winner for investors by returning more than a 50% gain since the post-financing lows of late last year.  Given the potential for Afrezza to infiltrate the insulin delivery market, should it ultimately receive FDA approval, it's safe to assume that even higher could be reached as the latest round of trials evolve.  Afrezza failed to receive approval a couple of years ago because the company used a different model of inhaler during the trials than what it intended to use during the commercial phase.  With that detail sorted out for the current trial, investors are looking for a positive outcome this time, as is company founder and CEO Al Mann who has personally invested over a billion dollars into the product.

With trial results slated for release over the course of the coming quarters and an NDA filing also expected this year, MNKD has plenty on tap to keep investors interested.  Financing is no longer a concern that will weigh down the stock this year as it did last year, so these upcoming milestone events have the potential to provide substantial price catalysts.  Discussions of potential partnerships, as we saw last week, may only add fuel to the fire, but because many are still skeptical that Afrezza will reach open market, however, and also because similar high-profile products failed commercially in the past, any swift spikes are likely to be followed by some profit taking and consolidation, which could lead to volatility.

Not only does Afrezza have to prove it can make it through the FDA, but it also has to win over a skeptical crowd that feels it has seen this story before.  Last week's move provides an indication that some believers may be jumping on board, while the pending milestones should keep it interesting for the coming months.

SanuWave Health Preparing New Trial

In keeping with the theme of diabetic treatment and the billions that the sub-sector rakes in annually, SanuWave Health (SNWV) is another 'Phase III company' in the developing a treatment for diabetic-related indications that will be worth keeping an eye on during the coming weeks as a new trial is slated for initiation.  Through the development of its Pulsed Acoustic Cellular Expression (PACE) technology, SanuWave has developed multiple shockwave therapies for the treatment of chronic wounds.  The most advanced of these therapies, dermaPACE in the treatment of diabetic foot ulcers, was already brought through Phase III trials once, but - although demonstrating significant potential and success - the trial failed to meet its endpoint due to certain trial limitations that have been modified, in conjunction with the FDA, during preparations for the upcoming trial. 

As described on the company's website, the new trial - slated to begin recruiting patients within the coming quarter - will more vigorously monitor patient progress and better ensure consistent treatment, a variable missed during the last trial.  It's also been agreed-upon with the FDA that some data from the previous trial can be used to support the data from the upcoming trial, too, which could help to streamline results and expedite the expected time allotted for the current trial.  As recently outlined by another Seeking Alpha contributor, the current trial design could also cut back on costs over the short term.

In terms of financing, SanuWave last week also announced the appointment of a new CEO in conjunction with a bridge financing deal that put two million dollars towards the coming trial.  The new CEO, Joseph Chiarelli, is an industry veteran with a history of developing emerging companies while the two million dollars is more than the intended value of the cash raise, according to the above-linked PR.  While that fact indicates interest in the reinvigorated trials, it should always be expected that cash-raising events could come at any point during the course of development for emerging companies.  Given the recent churn of events, other investment information outlets - such as Zack's - have started covering these developments.

With new trials slated to begin over the coming quarter, this could be a potential turnaround story to watch.  Volume has picked up a bit lately as time draws nearer to the expected launch and speculative investors looking for 'volume before price' may be attracted to such a move, while the current market cap also indicates that this company may either be forgotten about or not found yet.  Standard risks of investing in the speculative health care sector apply and investors may still be wise to utilize a group of trading shares to play into any potential price spikes, while potentially holding a core group of shares for the long term, to see the story out.

NCE On Tap Again For Amarin

Is it ever a 'Weekly Stock Watch' in this sector without interest in Amarin Corporation (AMRN)?  Once again AMRN will be a stock to watch because investors anticipate that the FDA's Orange Book will be updated within the week.  This is a hot item to watch because it could (or not) reveal Vascepa's designation as a New Chemical Entity (NCE).  As previously discussed, the holdup in the NCE status could have also held up any potential partnership or buyout deals that were being discussed before the company decided to launch on its own because a true valuation of the product's potential may not have been easy to ascertain, given the uncertainty regarding protection.

In regards to protection, however, Amarin announced another patent covering ANCHOR last week, and it's been argued by company officials during conference calls before that the patent protection renders NCE relatively irrelevant, anyway.  Judging by the lack of any partnership deals materializing when they were most expected, others may not agree, but it's certainly a significant piece of the puzzle to continue to monitor.

AMRN quickly rebounded from the lows hit after the most recent earnings report and closed the week closer to nine dollars than eight - still right within the trading range established since the beginning of the year.  NCE is still one of the hotter potential catalysts to watch and this could finally be the week where the FDA decision is revealed.  A positive outcome could push shares higher towards ten again, as it could renew the recently-depressed buyout rumors, while another delay would likely be disregarded as a non-factor again, since most investors are now immune to this event.

On another note, the recent discussions surrounding Amarin has emphasized how much of a big player in the investing community Seeking Alpha has become in a just a few short years.  Many popular financial media outlets are spending more and more time commenting on the opinions and analysis of SA authors, and less on their own analysis and coverage of particular stories.  Score that a big win for the Seeking Alpha team and its contributors.

As usual, AMRN is a hot one to watch this week for the possible NCE revelations.

Roundup:  International stocks carried the momentum of last-week's record setting pace early on Monday, but settled down later in the day and traded mixed during the afternoon hours.  As discussed earlier in the month, US markets generally set the trading tone, not follow it - aside from instances where significant overseas news hits the wires - so investors on this side of the pond will be watching as to whether the momentum built on last week's jobs report can carry into Monday's open.  Early indications point to a lower open, possibly an indication that worries over sequestration - that have been thrust aside for weeks - may start to have an impact.  Rumblings from Washington, however, are starting to indicate that politicians on both sides of the fence are wondering how much political capital they want to spend in standing firm and continuing to do nothing - especially since the doomsday scenario come 1 March has not played out, as many predicted it would.  That said, it could again come down to crunch time as March progresses and politicians negotiate yet another deal to delay yet another deadline.  It's like 'Deja Vu' all over again, as the great Yankee once said.  Plenty to keep on tap for the week. 

Happy Trading!!!

Disclosure:  Long AMRN, MCD, SNWV.

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Sunday, March 10, 2013

Stock Watch: AntriaBio (ANTB) Volume Boost Indicates Growing Interest

AntriaBio, Inc. (ANTB) remains a stock to watch this week, as outlined in this week's 'Weekly Stock Watch,' due to a notable increase in trading volume over the past couple of the weeks and the advancement to human trials of a once-weekly basal insulin shot that has the potential to eventually replace the current standards of care, which includes once-or-twice daily shots.  Having fallen off the recent highs set at $2.50, investors may be taking advantage of the current pullback as volume has notiecably increased over the past week.  On Monday, in fact, ANTB shares registered their second-highest trading day of the year and were not too far off from seeing the most shares traded in one day since the symbol began trading in mid-January.  Investors taking note of potential 'volume precedes price' action may anticipate an eventual move higher based on the recent volume and interest paid to this stock.

Over the long term, AntriaBio has the potential to enter a multi-billion dollar industry with a next-generation product that could drastically increase the quality of life for diabetic patients needing daily basal insulin shots as a sustained treatment option.  Aside from this week's 'Weekly Stock Watch' report linked above, below is our original write-up on AntriaBio.

ANTB trades in a highly volatile sector, so there are key points to consider, as outlined below, but this is an emerging story to monitor these days.

Stay tuned...

AntriaBio Potentially Positioned For Both Long And Short Term Gains

AntriaBio, Inc. (ANTB) is an emerging story in the developmental biopharmaceutical sector that may be worth keeping on the radar as volume has been picking up of late and the company's potential to alter the scope of the future insulin delivery market by creating a once-weekly injection of insulin to replace a once-or-twice daily version is starting to gain increased exposure from popular financial media outlets and from the investing community as a whole.  Relatively new to the trading scene, AntriaBio became public through a reverse merger earlier this year after having first purchased the assets of PR Pharmaceuticals from bankruptcy court.  PR Pharma had already invested tens of millions of dollars into the preclinical development of the above-mentioned once-weekly basal insulin shot, now known as AB101, but was unable to see its development through to fruition as the depths of the economic crisis dried up funding for many developmental biopharmas. 

Now controlling the AB101 assets, AntriaBio has positioned itself, pending successful trials, to eventually enter the multi-billion dollar market of basal insulin delivery that is now dominated by Sanofi-Aventis' Lantus and Novo Nordisk's (NVO) Levenir, each of which requires patients to receive at least one shot daily.  Those two products alone pull in over eight billion dollars annually, highlighting the potential of AB101 to to steal quick market share, should it reach the point of commercialization.  Emphasizing that once-weekly advantage, it's understandable why AB101 would be attracting the increased attention that it is right now, as some investors may consider this a ground floor opportunity of a potential next-generation technology.

There will be some investors that are skeptical about buying into companies that have only recently become public via means of a reverse merger, but such methods are becoming more and more common, given the current economic climate where cost-cutting and efficiency is key.  Reverse mergers, after all, provide a much cheaper path to becoming publicly traded than going through the expensive IPO process.  Not all reverse mergers are created equally, however - neither are IPOs - but AntriaBio could be worth a look because of the potential of its newly-established pipeline, which could be set to meet major milestones throughout the year.

According to a presentation posted to the AntriaBio website, pre-clinical animal studies have already been completed for AB101 and the intention is to have the first wave of human data available by the end of the year.  AntriaBio, according to the above-linked presentation, will initiate the human 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.  The company does plan, however, to move forward with the FDA IND process while development in Russia continues, and having the early human data available from its Russian trials could help to expedite the initial IND process in the United States.  Once the early data is established, AntriaBio will look to land regional and/or multi-national partners, according to recent company presentations.  Once a partner is on board, investor concerns of dilutive financing deals that often accompany the pipeline progression of developmental companies will somewhat subside.

The related catalysts to watch for this year are discussions of the preclinical data, the initiation of the Russian trials and comments referring to the initiation of the IND process in the United States.  Beyond that, it is also expected that some human data will be presented before the end of the year, too.

Beyond AB101, AntriaBio is also establishing a secondary pipeline product.  A long-acting Glucagon-like peptide-1, also known as AB201, is approaching the pre-clinical stages and will be tested as a once-monthly replacement for the current standard of care.  While the bulk of attention is slated to be paid to AB101 moving forward, a secondary pipeline product always eases investor nerves who would otherwise feel a company could be viewed as a 'one trick pony.'

Another item of interest for investors is the management team team that has been put in place since AntriaBio's inception.  Numerous industry veterans have been brought on board who have an established history of bringing small biopharmaceutical start-ups through the point of commercialization and/or - maybe most notably for those looking for a shorter-term return - to the point of mergers and acquisitions.  Although speculation about potential buyouts often accompany the development of high-profile products with potential through development, having a management team in place with an established record of consummating deals attracts even more interest to the discussion.

For an example of another company brought to life through a reverse merger which has also garnered its fair share of merger and acquisition talk, look no further than Organovo Holdings (ONVO).  Organovo, quickly becoming a recognized leader in the field of 3D 'bioprinting', saw its share price nearly triple in quick fashion after its reverse merger about a year ago.  Since then, bouts of volatility have led to many more trading opportunities, offering opportunity and profits for both traders and investors who may be accumulating for the long term.  As always, such action emphasizes the ideal that it is always wise to utilize a handful of trading shares to bank at least some profits when available, even while potentially using the dips to accumulate a group of core shares to see the story out over the long term.

With ANTB's trading volume picking up as it has over the last week, it could be worth noting that opportune points to buy, sell and accumulate could be forthcoming, as the old adage goes that volume precedes price movement.

Shares initially spiked by twenty five percent on Monday morning before pulling back and closing the day flat, offering investors and/or traders a potential opportune point to monitor the stock.  AB101 could be a game-changer if it makes through the point of development and it's highly likely that the release of human data as early as later this year could bring the company and the product to a grander stage.  At that point the share price may be positioned to experience gains in line with Organovo's recent moves higher, especially if the partnership or buyout talk picks up, too, but those taking a look now may be taking advantage of a ground floor opportunity before the story plays out and attracts the volume and attention that could drive the share price higher.

One to keep an eye on right now as the stock - being newly traded - and the technology is just now starting to get noticed.  A potential 'buy or accumulate the dips' play.
Disclosure:  Long ANTB.

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Stock Watch Wednesday, 6 March 2013: IMSC, BBRY, AEZS, KERX

A new DOW record is in the books and world stocks were moving higher on Wednesday as a result.  As mentioned earlier this week, we're at a serious pivot point now as to whether the markets can sustain these or whether a pullback will materialize based on the developments of other general conditions and geopolitical events.  A positive private jobs report on Wednesday AM was key in determining the strength of the new record over the short term, but investors will now look towards the effects of sequestration and how budget cuts can have an impact over the coming weeks. 

Most of the expected cuts that were regarded as a doomsday scenario by many politicians leading into the March 1 deadline, however, are not due to be implemented until the April time frame, according to the most recent reports from Washington.  That allows more time for our elected officials to come up with something solid in terms of a budget for the first time in years, but it also leaves us in a position where investors could feel complacent with the bullish momentum just before the real impact could be seen.  Many government programs are slated to lose at least portions of their funding and - maybe even more important for the already sluggish recovery - federally paid workers could be in for a slate of pay cuts and furloughs.  Those cuts could offer the markets a look at the potential impacts of having an increasing portion of the population relying on government money, whether it be through government jobs or handouts. 

For the time being, investors are satisfied enough with what Fed Chairman Ben Bernanke had to say last week to keep the markets elevated, but now is also not the time for complacency.  With the uncertainty regarding budget cuts and federal furloughs, investors should prepare for multiple eventualities, which includes positioning for a pullback, should one - no matter how modest it may be - materialize.

Over the short term, the job numbers are the key indicator to watch, but in the absence of a budget deal - and the politicians don't look to be in a rush to push one through - watch for signs of how sequestration could impact consumer spending, consumer sentiment and overall growth.

As always, there will be plenty of individual stocks and stories to keep an eye on while the major news plays out. Here are just a few of them for Wednesday, 6 March 2013...

Explosive Trace Detection (ETD) / Global Defense:

Implant Could Potentially Be Impacted By DC's Stalled Budget Talks

In discussing the potential effects of sequestration and Washington's stalled budget talks, it may be worthwhile to consider the potential Impacts that these issues could have on Implant Sciences (IMSC) and other companies that may be looking towards government money to fuel growth.  In the case of Implant, investors had speculated that recent TSA approval of its Quantum Sniffer B220 explosive trace detector would result in the landing of some key deals potentially associated with Washington's anti-terrorism efforts in relation to air cargo and overall aircraft and airline security.  While the potential remains for Implant to land deals in the private sector for air cargo providers, the company's potential to enter into the government sector could be stalled by the budget woes in Washington, and investors should take note of that fact. 

As news trickles out from DC regarding spending cuts and furloughs, one item mentioned is that Washington is in a period now where money already obligated to existing contracts will not be effected, but any new contracts or requests for fiscal obligations will be just as stalled as an elected official's 'to do' list once they arrive for work post-election.  That could impact the type of new money that would be necessary for Implant to secure the government contracts - that's another aspect to consider in the patience game.

Such a scenario could lead to a period where investors may grow anxious at a point when large government-related deals were anticipated, but those looking towards the long term may appreciate the recent price pullback as an opportune time to add or continue with accumulation.  As previously discussed, the advantages of Implant's ETD technology over the competition are distinct, and that underlies the potential for the company to play a large role in the growing homeland defense market.  For that to occur, though, homeland defense needs to be funded and as we all know, the Mets might win the 'outfield of the year' award before a budget gets passed in DC.

A slowdown in domestic growth does not mean that the company can't come through on the international market, as has been noted in the past.  On Tuesday, too, Implant noted that an existing aviation security customer in Africa had purchased three QS-H150 handheld units as part of a follow-on order.  Having demonstrated a significant amount of overseas growth over the past year, including a multi-million dollar order to India, this company is not overly-reliant on the US market right now - but a budget resolution could help, as it'll free up new money for contracts again.

Also take note of the credit extension with DMRJ that places the company on stable financial grounding, at least for the next year.


BlackBerry Sinks As Market Soars

Global markets may be setting multi-year highs these days, but shares of BlackBerry (BBRY) have retreated off their recent highs and were down another near-two percent on Tuesday.  Speculation is still rampant about just how successful the launch of the new BlackBerry 10 platform is going, but most are reserving judgement until the full US launch is underway.  Many consumer reviews have been positive thus far and the instant overseas statistics are encouraging, although there is some concern that abundant inventories and pricing promotions - both of which could lead to revenue reductions - may eat into margins. 

The recent decline in the BBRY share price should not be attributed fully to expectations of a weak launch.  As the market has inched higher just about every day over the past couple of weeks - culminating in Tuesday's triple-digit rally to break the record high - many investors have been concentrating their cash towards the hot DOW players and other market movers to enjoy the bull ride.  As they say, everyone makes money in the bull market, so many investors tend to concentrate cash into those more stable investments that are likely to ride the broad-market wave.  BlackBerry, still being highly speculative until those de-facto sales numbers start rolling in, doesn't quite fit that bill as it's still a potential rebound and recovery story, not necessarily a 'trade in-line with the market' play.

That could change if the BB10 platform proves to be a hit, or at least proves capable at stealing back some market share from its competitors.

If the market stabilizes where it is or starts to pull back, then investors are likely to start taking some profits from the table and that's when money could start flowing back into the more speculative stocks.  At that point, BBRY may be the target of some of that money and start to inch higher again.  Conveniently enough, that may coincide with the release of valid sales data from around the globe and propel shares higher towards their recent highs, assuming those numbers are positive or in line with general expectations.

It hasn't helped shares lately either that a couple of analysts have issued downgrades over the past few weeks and predict that the BBRY share price will not settle until it hits prices of at or just below the ten dollar mark.  The respective analyst reports cite slow sales and shipments, but some may judge them as premature, given that the full global launch is not quite in full throttle and hype is not yet at its peak.

The recent pullback makes BlackBerry a much more attractive speculative play now than what it was when shares were sitting near twenty bucks.  The overall potential recovery will still depend on sales numbers later on down the road, but as investors start taking profits from this easy-money bull run, then some cash could start slipping back into the speculative plays that have the potential to go up when/if the market comes back down.

Healthcare, Biotech, Pharmaceutical:

AEterna Zentaris Could Rise Even In Market Pulls Back

AEterna Zentaris (AEZS) is another more speculative play that has slipped lower recently but could rise even if the market decides to pull back from its record highs, mainly due to catalysts that are still to unfold over the coming weeks and months.  Another reason that AEZS could trade independently of the broad market action, if news and developments warrant, is for the same reasons discussed in the BlackBerry discussion above.  As investors pull profits from the highs of this record-setting rally, then money could flow back into those investments more speculative in nature that have the potential to spike - even in a down market - based on unfolding catalysts.

As previously identified, one potential near-term catalyst for AEterna is the expected NDA filing for AEZS-130 as a diagnostic test for Adult Growth Hormone Deficiency.  This product candidate is not quite expected to become a huge money maker, if only because of the relative size of the intended market, but AEterna maintains world-wide rights to and - if approved - could provide a future revenue stream to assist in funding other pipeline products.

Also watch for developments on the AEZS-108 front.  AEterna recently announced that the first patient had been treated in a Phase II trial testing AEZS-108 in the treatment of triple-negative breast cancer, but Phase II studies also continue for AEZS-108  the treatment of prostate and bladder cancers.  Interim results from these trials are expected at various points throughout 2013. AEZS-108 is also being prepared for a near-term launch of a Phase III trial in the indication of endometrial cancer, according to the latest information published to the company's website, after already having established a proven record of success in other early to mid-stage trials.  Investors looking for a place to insert some speculative money following the broad-market run, may like what the see on the AEZS catalyst plate.

Another key milestone to watch relates to Perifisone, a product whose potential may not be valued into the AEZS share price any more due to its Phase III failure in treating colon cancer.  AEterna, however, retained full rights to Perifisone when then-partner Keryx Biopharmacueticals (KERX) pulled out and a Phase III trial continues in the treatment of multiple myeloma.  An independent monitoring committee is slated to analyze interim results from this trial within the current quarter and if the committee recommends that the trial continue, investors still skeptical after the colon cancer outcome may be reassured to take another chance on the product's future, which provides yet another near-term catalyst.

The immediate market rally looks as if it will continue for now, but look for investors to start taking advantage of potential catalyst plays as profits start coming off the table and cash enters the speculative market again.  AEZS could benefit at that time.

Roundup:  Judging by international market action and Wednesday's encouraging private jobs data, we're likely to see new record highs during the course of the day.  As mentioned above, though, it's not the time to get complacent as the global recovery is hardly set in stone and there are still many speed bumps that can materialize along the way, especially in the absence of resolution in Washington.  While enjoying the broad market run that has filled up those 401Ks again, now's the time to start looking for the individual stocks and stories that have the potential to move higher based on catalysts and development, even if a pullback occurs.

Happy Trading!!!

Disclosure:  Long IMSC, AEZS.

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Wednesday, March 6, 2013

Weekly Stock Watch, Week Of 4 March: DIS, AMRN, AZN, TEV, GSK, IMSC, KERX, ANTB, NVO, FPMI, MCD,

This week could be a pivotal one.  Record market highs are well within sight and investors will look for evidence that last week's bullish momentum can continue into the new trading week, even as the effects of sequestration set in.  Comments before Congress last week by Fed Chairman Ben Bernanke helped to reverse Monday's notable pullback and spark an overall move higher through the remainder of the week.  All the while our politicians in Washington failed - yet again - to reach a budget deal that would stave off a harsh round of budget cuts that will end up slashing tens of billions of dollars from the federal budget over the coming quarters. 

With the weekend under the belt and a few days for investors to digest the news and potential impacts of sequestration, we'll know fairly soon what the market makes of it all.  Significant cuts in defense spending, as we've noted before, led to a retraction in GDP numbers for the fourth calendar quarter of 2012, although those numbers were recently revised higher to demonstrate stagnant growth. 

The point was made, however, that the US economy is still hovering in a state that is heavily reliant on government spending - that's why at least some investors will consider the looming sequestration as dangerous for the short term, although many will also argue that drastic cuts are needed in federal spending for a healthy long term outlook.  Many would expect that those cuts would come responsibly, though, and not at the behest of another fiscal deadline imposed by the bureaucrats in DC who time and again prove the futility of their attempts to get the job done. 

The finger pointing is rampant in our great capital, but unfortunately no one has yet been brave enough to point a finger at his or her self to accept at least a portion of the blame for the continued inaction.  Both sides, instead, retreat to the media looking to create a new battleground, one outside of the offices where the battles should be fought and the compromises made.

In the absence of leadership and action - and that's where we are right now - volatility in the market is likely to prevail over stability, making it a trader's game moving forward as the short term bulls and bears fight it out.  A continued push towards the record highs could unfold this week, but general conditions do not point to a scenario where they would be sustained - if they are even met - unless some sort of a lasting budget deal can be reached.  That looks a little far-fetched right now.

Amid the political chaos, there will still be some key indicators to watch.  Friday's job numbers could add to the bullish sentiment that grew last week, but those numbers may still be overshadowed by debates over sequestration.  For weeks leading into the 1 March deadline we heard about the devastating impacts on society that governmental furloughs and budget cuts would have on society, but to this point no specific or all-encompassing plans were released to the public of what this all means, so investors will be watching with a heavy eye this week for details.  One things for certain, these budget talks are as much of a mess right now as the Mets' outfield situation.

As always, there will be plenty of individual stocks and stories to keep an eye on while the major news plays out. Here are just a few of them for the week of 4 March, 2013...



Disney's Agenda Includes Shareholder Meeting And 'Oz' Remake

As Disney (DIS) hovers just below its recently-set 52-week high, a couple of key events mark the upcoming week.  On Wednesday the company will  host its annual shareholders meeting, which takes place on the heels of a robust earnings report that included encouraging guidance moving forward and positioned the company to prove immune to sequestration and the volatility that could dominate trading as the markets react to a barrage of news regarding cutbacks.  Issues of executive compensation are likely to come up at the meeting, too, but investors are also likely to hear additional details and plans relating to the high-profile acquisition of LucasFilm's 'Star Wars' franchise, from which a plethora of new movie ideas are being spawned.  With a slew of new additions from Marvel Studios, too, Disney's movie business looks to continue moving strong while maintaining the enthusiasm around the company resulting from a flying-higher share price.  Also this week on the movie front, Disney is planning to release a 'remake' of the timeless classic, 'The Wizard of Oz.'  'Oz the Great and Powerful' debuts on Friday and many view it as a gamble, but one that could pay off in a big way.   

If the market fluctuates in a notable way with all the drama surrounding sequestration, opportunities and pullbacks may arise in stocks of all market types and categories.  Investors looking for stable, long term holds for a retirement portfolio or other put-away plans, any dips in DIS could turn into a nice add.  Still holding some of the most popular brands in TV, movies and theme parks, this behemoth looks to be entering another strong phase of growth. 

Shareholders will be able to tune in to the annual meeting on Wednesday via webcast.


Amarin's Earnings Spark Share Price Dive

Amarin Corporation's (AMRN) issued its much-anticipated earnings report last week, followed by an earnings call that investors hoped would provide some insight or guidance into Vascepa sales expectations moving forward.  The earnings portion of the Amarin report had little to do with Vascepa itself, as it was not yet commercialized during the last quarter, although one encouraging note was that the company had enough cash on hand to last "at least" the next twelve months, according to statements made by company officials during the call.  That time period could allow sales to grow to the point where they could support continued operations on their own.  In terms of guidance to that effect, however, the company did not offer any indications or numbers in relation to the ongoing Vascepa launch, with company CEO Joe Zakrzewski only noting that "we're pleased to-date with the progress that our sales representatives are making out in the field."

To the defense of the company and to temper the expectations of those investors who view the market as a scheme to bank a quick buck, the month or so that Vascepa has been on the market is not nearly enough to judge whether a launch has been successful or not - especially when, in the case of Amarin, full approval will not be considered until the FDA's decision on the Anchor indication.  That said, it's also not too far-fetched for investors to expect at least some form of guidance in the form of sales and prescriptions.  Many companies at least release prescription growth, because early-on that is the best indicator - not sales - to just how popular a drug is becoming, since revenue numbers can be skewed by early promotions, rebates and coupon offerings.  The fact that Amarin released little of either will enable the bears to fuel their case a little bit more.

Moving forward, there may not be enough on the horizon to halt a continued downward trend in share price, barring an announcement regarding Vascepa's New Chemical Entity (NCE) status that could renew some buyout talk.  Although shorts will downplay the prospects of a buyout and longs may be losing hope, the fact is that not too long ago Amarin was one of the more talked about potential buyout stories - with Teva Pharmaceuticals (TEV) and AstraZeneca (AZN) often being named in such talk - until continued NCE delays put a damper on the hype.  In this volatile market, and especially in this volatile sector, such talk could be renewed in an instant and return quick results to patient investors. 

We've used this example before, but Human Genome Sciences was another once-hot-runner that was beaten down when the buyout hype faded, but after setting lows and diminishing the hopes of long-time investors, GlaxoSmithKline (GSK) finally came through with the long-rumored buyout deal investors were waiting for.  The deal, of course, was for a far lower valuation than investors had initially speculated, but it still came in for double the price where shares were trading, making a winner out of those who either bought into the drop or played the 'average down' game. 

It's important to continue to entertain both sides of the story, and while the AMRN share price dips in the absence of encouraging sales numbers, the prospects for an eventual rebound are real.  Catalysts to watch for start with NCE, next quarter's sales numbers - the company won't be able to hide at the point - and for an eventual Anchor approval.  Although the potential still remains for a quick turnaround on the right news, as described above, AMRN may be more of a mid term play these days - one that could pay off with a little patience.  Until that time, Amarin's stock symbol will continue to be bombarded with headlines containing a pun on the words "fishy" or "fishier," just as New York sports writers take liberties with puns on David Wright's name on an all-too-common basis.

Explosive Trace Detection (ETD) / Global Defense:

Implant's Credit Extension Marks Potential Pivot Point

With the announcement last weak of Implant Sciences' (IMSC) deal to extend the terms of a debt agreement with its primary creditor - DMRJ Group - for a full year, investors and company officials can concentrate fully on the building of sales, revenue and - with a recent TSA approval in the bag - the path towards becoming a dominant player in the ETD and homeland defense markets.  Implant had last year already extended this agreement through the current month.  In retrospect, this move looked to be a temporary fix in order to allow for the TSA approval to come to fruition, but the year-long extension allows ample time for the business to grow and the for the company to gain the means and resources to pay the portion of its debt that has not been converted into the convertible notes outlined in the press releases associated with the said credit agreements. 

In noting the recent IMSC share price dip, short term credit concerns and uncertainty may have prevailed and curtailed enough investor interest to cause the drop.  The relatively light volume, however, also indicates that many investors continue to hold to see this story - which is still in its early chapters - play out. 

As noted last month when Implant released its most recent earnings report, an uptrend in revenue has already emphasized the potential of the company's Quantum Sniffer ETD technology to infiltrate numerous global defense-related markets, including the air cargo screening market for which the QS-B220 was recently approved.  The TSA approval, in its own right, lays the foundation for more significant and relevant deals to materialize over the coming months and quarters. 

There will be concerns that sequestration could hamper the short term consummation of any government-related deals, but it's unlikely that Congress - or anyone else in Washington - would pull money from terrorism-related defenses when it's all said and done.  It could take time to weed out some of the pork from budget allocations, though, which may delay the process somewhat.  When considering the sequestration cutbacks, we should bear in mind that it looks like the Department of Defense will be hit the hardest - not homeland security - so the threat of an impact to Implant may be minimal, unless the guys or gals looking to finalize such deals on the government end find themselves furloughed along the way.

In the meantime, Implant has also demonstrated the ability to grow its business in other high-threat markets, which provides enough growth potential outside of the domestic circuit to keep investors interested. 

Some are concerned that no major deals relating to the TSA approval have yet to be announced, but Implant routinely announces deals after they are finalized, shipped and the money banked, so that's  a point to consider.  Also consider that the high profile failures of companies receiving government bail out money through the recovery periods have led to a higher level of scrutiny of companies doing business with federal agencies, which includes concerns about the credit worthiness and viability of such companies.  The newest agreement with DMRJ, however, takes any short term speculative nature out of the equation for Implant Sciences, and that fact alone can seal the deal.

As the only US company ready to hit the homeland defense market with a non-radioactive ETD device, and with a credit line now extended long enough to allow for significant growth, IMSC remains a company to watch in a hot - and still growing - sector.  This most recent DMRJ deal emphasizes the cooperative working relationship that these two entities have forged over the years and allows for concentration to be paid on growing sales.

Worth watching.

Healthcare, Biotech, Pharmaceutical:

FluoroPharma (FPMI), a company developing a pipeline positron emission tomography (PET) imaging agents for the efficient detection and assessment of various forms of coronary artery disease (CAD) and certain types of cancer, is one to keep an eye on during the coming week and for the duration of 2013 as numerous potential catalysts are coming due.  The first such catalyst was touched on last week when the company announced initial positive feedback from a recently-launched Phase II trial testing one of its most-advanced product candidates, CardioPET, as an imaging agent for CAD.  The images released in association to the ongoing trial look to confirm the earlier successes of a Phase I trial and could be enough to garner increased investor interest as full results from the trial are expected for later this year.  In a sign of increasing investor interest, two-day volume was at its highest point of the year following Thursday's announcement, although it is till not quite to the point that would indicate widespread investor interest. 

FluoroPharma is developing another Phase II product candidate that could provide potential price catalysts as trials evolve.  BFPET, like CardioPET, has already successfully returned positive Phase I results and initial images from the ongoing Phase II test - which is measuring its effectiveness as a blood flow imaging agent for the detection of ischemic and infarcted tissue within the myocardium in chronic CAD patients - have also proven positive.

These results have attracted the interest of Zacks, which issued a rating of 'outperform' on the company with a price target of more than double where shares currently trade.  Given the fact that FPMI's imaging agents are entering a market that is valued at more than ten billion dollars, according to statements contained within a recent company presentation, the continued success of BFPET, CardioPET and other pre-clinical products may start to attract additional analyst coverage, if not attention from bigger players in the sector - a stark possibility since early indications state that FluoroPharma's technology provides superior results to the current diagnostic standards for the targeted indications. 

While these early indications are encouraging, the products are still just in the early stages of Phase II testing, so there is a long ways to go before any of these pipeline products could reach market.  Along the way with such companies, there are risks of trial failures and dilutive cash-raising events.  Generally, when investors look at companies at this level of development they are doing so with the intent of potentially building a core position of shares that are slowly accumulated on the dips to hold through the long term, while simultaneously building a position of trading shares with which to play the potential price catalysts along the way. 

In today's volatile market environment, however, more investors tend to play the short term trades rather than fully hold for the long term, so bear that in mind when assessing whether or not a stock that is still speculative in nature can sustain spikes attained after milestone news events are released.  With last weeks initial results garnering a boost in trading volume and attracting a Zack's report, FPMI may be one for the watch list moving forward.

Buyout Talk Fuels Keryx Run

Keryx BioPharmaceuticals (KERX) on Friday offered investors a demonstration of just how quickly buyout rumors, no matter how obscure they may be, could fuel a share price run.  KERX closed twelve percent higher - after having traded even higher throughout the day - on rumors that GlaxoSmithKline was entering the picture as a potential suitor for Kerxy and its recently-approved kidney failure drug, Zerenex.  Given the renewed buyout speculation and the luster with which shares closed last week - volume rolled in at nearly double the daily norm - this will be a hot story to watch during the coming days.  That said, and as demonstrated by Amarin over the course of months, it's not too often that buyouts occur immediately following the disseminating of a new rumor, so volatility to the up and downside should be more expected than a straight move higher.

As previously discussed, Zerenex is not expected to turn into a blockbuster, due to the overall size of the targeted market, but could provide a decent revenue stream for an acquiring company looking to fill product portfolios that have been depleted by the rash of drugs coming off patent over the past few years.  Zerenex was approved for end-stage renal disease and may also hold a superior safety profile to the current standard of care on the market, which at this time is Sanofi's Renagel, the recognized leader in the field.  Renagel, however, comes with some associated side effects that, comparatively speaking, have not been seen in Zerenex treatment.

These side effects include nausea, vomiting, and other intestinal maladies, which could be enough - when combined with other factors yet to be discussed - to spur Doctors and patients to give Zerenex a go.  Another check in the "plus" box for Zerenex is that it is phosphate binder that is iron based, which therefore may enable patients to retain iron more efficiently than the competition currently on the market. This could play be key, as many patients on dialysis in end stage renal disease are anemic and are stuck on IV treatment - along with everything else - in order to maintain iron levels. 

It's possible that Zerenex could alleviate the need for the IV and end up being considered 'one stop shopping'; a package deal that could provide enough of a pricing and logistical boost to make it the preferable treatment of choice.  The same cannot be said, at least for the time being, for the competition, generic or not.

Given those advantages, it may be concluded that Zerenex is positioned to not only heavily compete with the competition currently on the market, but it might also have enough behind it to potentially become the market leader.  That could be enough to attract the interest of a large player, such as GSK, and Friday's rumor and price run are a testament to that fact.  Again, it's rare that rumors turn into deals right away, more often than not they are planted by one organization or another to create interest and frenzy, but this will be a key story to watch in the sector moving forward.

Volume Indicates Interest In AntriaBio

Trading volume has been on the uptick for AntriaBio, Inc. (ANTB) and this could be a story to watch entering the new week, as often time investors look for indications of a 'volume preceding' price scenario.  The boost in volume could be indicative that investors are taking notice of the potential of the company's once-weekly basal insulin injection, AB101, to eventually infiltrate the diabetic treatment market which - at least in terms of basal insulin delivery - is currently dominated by Sanofi-Aventis' Lantus and Novo Nordisk's (NVO) Levenir - each of which includes an at least once-daily injection, and both of which combine to bring in over eight billions dollars annually. 

Numerous catalysts are planned for the duration of 2013 for investors to keep an eye on.  According to a presentation posted to the AntriaBio website, pre-clinical animal studies have already been completed for AB101 and the intention is to have the first wave of human data available by the end of the year.  AntriaBio plans to initiate the human 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. 

The company does plan, however, to move forward with the FDA IND process while development in Russia continues, and having the early human data available from its Russian trials could help to expedite the initial IND process in the United States.  Once the early data is established, AntriaBio will look to land regional and/or multi-national partners to advance the product towards the commercial stages.

While the potential of a once-weekly basal insulin injection is obvious, the standard concerns of investing in or trading developmental stage companies of the sector still exist.  These concerns include, but are not limited to, the potential for dilutive financing to take place at various points through in the developmental process and the prospects that a pipeline product may fail altogether through the course of trials.  With that said, it's often a wise move in this sector to build a cadre of both trading and long shares, should one want to take advantage of price and milestone catalysts along the way while also potentially holding a core group of shares for the long term to see a story through.  This strategy can often put an investor on 'house money' well before it's all said and done. 

In the case of AntriaBio, this story is relatively just beginning, so there's still a long way to go, but recent trading volume could be an indication that investors are starting to pay attention.  Worth watching.


McDonald's May Be Immune To Market Pullback

Like Disney, mentioned above under 'Newsmakers,' McDonald's (MCD) has found its share price on the move higher over the past weeks and is one to keep an eye on as a potential stable addition to the long term or retirement portfolio if a broad pullback should materialize.  Given the company's low-cost food options, it's likely that MCD could withstand a large-scale pullback, too, since its restaurants are some of the cheaper options out there and people are always going to eat.  Some causes for concern that have been addressed of late, however, revolve around a potential hike in the minimum wage that could eat into MCD's profits and margins as labor costs would undoubtedly increase.  As previously discussed, such a move may not effect the bottom line too drastically as companies often reduce or streamline their work force to keep margins consistent, or just pass the labor increase onto consumers.  The latter option has the potential to hurt business in the sense that customers could shy away from higher prices, but that's when the company would then streamline its product offerings and keep the money-makers in place.

A few moves announced last week could be a sign that the company is doing just that.  In addition to dropping chicken fingers and a less-popular salad from the menu, McDonald's is considering dropping its Angus burger, too, and is experimenting with new offerings that could both attract business away from competitors and streamline margins and costs.  While there is nothing significant to note about a business implementing a plan of profit-protecting and innovation to stay ahead of the game, it is important to emphasize that this has been a consistent strength demonstrated by McDonald's over the years that has enabled to maintain its position as the most recognizable global fast food brand.

With new 52-week highs well within reach after a recent analyst upgrade, MCD remains one to keep an eye on for the long term portfolio as the company again positions itself to remain a step or two ahead of its competitors.

Roundup:  Most international markets traded in the red during the day Monday, but last week proved that US markets don't always follow suit with their international counterparts.  Early signs are, however, that this time they will.  European concerns have surfaced again during Monday's early hours, another indication that the bears may be ready to roll in.  Aside from the events overseas, the primary focus this week will be the effects of sequestration and how they could potentially impact the market and the already-sluggish economic recovery.  Few would disagree that Washington has long-needed to implement cuts, so over the long run sequestration is probably a good thing - especially if it forces federal agencies to exercise fiscal prudence in carrying out its day-to-day operations.  The irresponsible nature in which these cuts are being implemented, however, could threaten the markets over the short term, and it doesn't help that the New York Times issued an early-hours report stating that sequestration could cost roughly 700,000 US jobs.  The tone of the headlines may be evidence we're in for a manic Monday.  As always, any market pullback just creates opportunities for those paying attention and looking to play the dips on some of those 'watch list' stocks.  This could be a week where some of those opportunities materialize.

Happy Trading!!!

Disclosure:  Long AMRN, ANTB, IMSC, FPMI, MCD, DIS.

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