Monday, April 29, 2013

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

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

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

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

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

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

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

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

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

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

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

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

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

Assured Pharmacy Shareholder Letter Outlines Potential

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

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

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

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

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

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

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

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

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

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

Quiet AntriaBio Could Quickly Start Making Some Noise

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

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

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

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

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

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

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

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

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

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

Sunshine's Dip Below Five Emphasizes Speculative Opportunity 

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

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

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

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

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

D-Day For Titan

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

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

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

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

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

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

Happy Trading!!!

Disclosure: Long APHY, SNWV, ANTB.

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SanuWave (SNWV) Patents Boost Long Term Potential

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

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

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

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

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

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

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

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

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

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

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

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

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

Happy Trading!!!

Disclosure: Long APHY, SNWV, ANTB.

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Wednesday, April 24, 2013

Assured Pharmacy: Industry Trends Lead Shift Towards Specialized Pain Management

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Disclosure:  Long APHY, SNWV, ANTB.

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Tuesday, April 16, 2013

Sunshine Heart (SSH): A 'Buy The Dips' Play That Could Pay Off Big

Investors of the developmental healthcare sector are well aware that cash raising events and dilutive financings are an established part of the process in bringing a new drug or medical device through the trial stages and to market.  While few investors look forward to these events with heavy anticipation, given the potential for a rally to be stalled or for a share price to drop to the level at which an offering was conducted, these events are wholly necessary, given the design of today's health care and financial systems.  That said, those who exercise patience and utilize an investing strategy that includes trading into the spikes and dips with a position of 'trading shares' - while also potentially building a core position with eyes towards the long term - could survive the tides largely unaffected, while potentially coming out on 'house money' by the time the developmental stage plays out.

Such a strategy also includes not going 'all in' on a particular stock when initiating a position for the first time.  Buying in with just a fraction of what one plans as a total investment amount allows for additional buys later on down the road should the targeted share price dip.  As noted above, stock offerings and other means of cash-raising for companies often contribute to share price slides, since the new shares are generally 'offered' as a discount to recent levels. 

Last week Sunshine Heart (NASDAQ: SSH) announced a public offering of common stock pursuant to a previously-filed shelf registration.  The pricing of the offering was $5.25, whereas company shares had been trading along steadily at roughly six bucks before the announcement.  In turn, SSH traded down late last week to price levels right in line with the offering.  Investors, after already having seen this stock trade from roughly the three dollar mark to nearly twenty over the past year, are left to decide whether or not the post-offering slide offers a decent accumulation point or whether there can be more pain in store as the company's technology edges its way through trials and - should encouraging results continue - ultimately to market.

While numerous risks still apply moving forward, as is always the case through the developmental stages (more on those risks below), there is reason to believe that Sunshine's latest dip could again have provided a nice accumulation point for investors looking to the play the end-result and the potential price catalysts that could be provided along the way.  Those catalysts all revolve the C-Pulse Heart Assist System, Sunshine's proprietary implantable medical device designed to treat Class III and ambulatory Class IV heart failure.  Studies completed thus far have demonstrated that this device may not only halt the progression of heart failure, but also reverse the effects of the disease, too.  Given the size of the target market and the distinct advantages that C-Pulse looks to have over the perceived competition, it's reasonable to believe that the SSH share price has ample room to appreciate in value, should the ongoing studies continue to produce positive results.

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

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

Considering those points, the high amount of speculative interest in this company is highly justified and European regulators may have already taken notice. 

Last year Sunshine Heart was granted a CE Mark approval in Europe for C-Pulse.  The announcement of that milestone event, in part, led to the aforementioned run towards twenty last year and invigorated interest in the US trial that is now underway.  Shares tapered back after the post-approval run, as investors and analysts largely consider FDA approvals as the 'holy grail' in the sector, with overseas approvals only garnering secondary attention.  A post-approval trial is underway in Europe, however, and any move towards commercialization could help to alleviate the potential of large-scale offerings in the future.  It should be noted, too, that last-week's offering was not of the 'over the top' type that would drive investors away in droves.  Comparatively speaking to the norms of the sector, an offering of 2.5 million shares is relatively modest and responsible and supports the end-goal, which is the funding trials and ultimately receiving an FDA approval.

That said, investors are rarely enthusiastic when it comes to hearing news of stock offerings, but, as discussed in the lead-in, such events are the standard for the developmental sector.  Sunshine has made no secret of its intentions to raise cash during the course of the current round of trials, so investors are not likely to be caught by surprise by last week's announcement.  Moreover, those investors that may be building longer-term positions with the intent of seeing this story play out - as well as traders looking to take advantage of any dips - may appreciate the pullback in price that has materialized as a result of the offering.  Sunshine has traded in a relatively stable range since its monumental run last year, and this offering may have just lowered the bottom end of the range a bit, but still provides a point where unfolding catalysts could return shares back to previously-traded levels, if news warrants.

Aside from the risks and share price reactions to these financing deals, some investors may also be concerned that the full results from the US trial are not expected for nearly another three years.  That leaves a lot of time for an investor's money to sit idle while awaiting the key milestones.  Even worse, investors could see their shares lose significant value, should Sunshine conduct additional offerings in the future.  After all, even with a European approval in the books there are no indications that the company will be able to fund their trials without raising cash at times.  Such concerns are justified and investors are correct to entertain all possibilities, hence the discussion during this article's open about not jumping 'all in' with initial investments and utilizing some 'trading shares' at opportune points in time while also potentially building a core position to play the longer-term catalysts.  Until significant revenue is realized, this one will continue to trade on speculation and news catalysts, but that doesn't mean things will be boring in the meantime.

Other events and potential milestones exist that investors can monitor along the way.  For one, it's likely that interim results could be discussed or released at certain progression points and one specific time period to keep an eye on is the mid-way point of the US trial.  Previous financing agreements have hinted that there may already exist significant partnership or buyout interest in the C-Pulse system and current financing agreements keep the company financed through the mid-way point.  With that in mind, it's worth speculating that C-Pulse could be shopped around at that time, assuming interim data looks solid. 

Another possibility would be to see a bigger player in the sector - who may express more confidence in C-Pulse with solid interim results - jump on board as a partner and at least help fund the remainder of the trial.  Such thoughts are purely speculation at this juncture, but are common to the sector and - just like the risk aspects - should also be entertained as possibilities.

As investors engage the possibilities of a device like C-Pulse on the market, there are some very optimistic estimates out there regarding Sunshine's future share price potential.  Such speculations may seem unrealistic at the current point in time, but as trials progress attention is likely to come back on this company by a wider range of media outlets and analysts.  For a while there last year it seemed as if everyone was covering Sunshine, small and large media alike, just based on the potential of C-Pulse alone.  By the time attention comes back, however, those investors already holding shares may find themselves in a prime position to take advantage of the volatile moves that often develop in this sector as trial results and key milestones unfold. 

While understanding the inherent risks of the sector - failure is always a possibility - and the overall potential of the C-Pulse in a multi-billion dollar market, Sunshine may be worth a look for a speculative investor with eyes towards the completion of the ongoing trials and an eventual date with the FDA.  Interim events may also influence trading along the way, making a plan of 'buying the dips' and trading some trading shares a potential winning strategy.  What will attract the longer term investors, however, is that a positive trial result, whether it still be years away or not, would likely send SSH shares higher by significant margins, given the still-rather-speculative market cap of the company - which at the current time either does not indicate investor confidence of trial success or is a reflection of the somewhat prolonged period of time until full trial results are expected. 

In today's investing environment the 'buy and hold' crowd has been brushed aside by the traders, where the quick buck wins in favor of a patiently-unfolding story.  In some instances, however, there is a case to be made for slowly accumulating a position of 'buy the dips' shares - while also playing the trading shares - in order to wait for the full story to evolve.  Given the potential of C-Pulse in its target market and the solid results already demonstrated in multiple studies, a case can be made that Sunshine Heart is one of those 'buy the dips' plays, and right now we're in a dip. 

Disclosure:  Long SSH.

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Stock Watch Thursday, 11 April 2013: SSH, INO, TTNP, APHY

Despite recent concerns that the record-setting market rally of 2013 was losing its steam, Wednesday saw another day of record highs as investors remained enthusiastic following encouraging comments from the Fed, while economic data overseas, specifically in China, represented a continued global recovery.  The record-setting day in the US sparked international rallies on Thursday, although early indications were that US markets may experience tempered trading, given existing concerns that each move higher could just create that much more of a dropoff, should a pullback materialize.  With earnings season underway, more and more attention will be paid to the 'hits' and 'misses' of the street, with ample consideration given to the fact that it's no secret company's have been under-guiding during the recovery period in order to look that much better if a stronger-than-expected report hits.  Guidance moving forward, however, has been tempered, meaning weak earnings reports during the current quarter could end up pushing the markets lower, as many pundits expect will be the case.

Although new highs are still being set, volatility has increased, an indication that skepticism remains as to whether or not the rally continued.  It also provides an indication that the traders may be taking hold of the market as the 'buy and hold' game may have been milked for all it's worth during the early-goings of 2013.  As mentioned earlier this week, profit-taking money could start pulling out of the broad market, should expectations of a downturn arise.  If that is the case, that money - along with any sideline cash that investors have been hording in case of a dip - is likely to find its way into individual stocks and stories that may have been trading below the radar as the big players in the markets rallied. 

We'll continue this week to follow a few of those that could attract some speculative money, given pending catalysts, recent developments and overall growth potential.

As the noted news items of the day develop and the earnings stories roll in, there are still plenty of individual stocks and stories to keep an eye on. Here are just a few of them for Thursday, 11 April 2013 ...

Sunshine Heart Announces Public Offering

Sunshine Heart (NASDAQ: SSH) announced on Wednesday that the company has initiated a public offering of common stock pursuant to a previously-filed shelf registration.  According to Wednesday's press release, the funds will be used for the cliche 'general corporate purposes,' but more importantly will also be used to fund the ongoing clinical trials, development and commercialization of the C-Pulse Heart Assist System.  C-Pulse, as previously described, is an implantable medical device designed to treat Class III and ambulatory Class IV heart failure.  Studies completed thus far have demonstrated that this device, which is implanted outside of the bloodstream, may not only halt the progression of heart failure, but also reverse the effects of the disease.  Sunshine has already received an approval in Europe for its flagship device and a post-approval trial is being conducted on that continent as another trial simultaneously gains traction in the United States.  The latest stock offering will help fund the progression of those trials.

Investors are rarely enthusiastic when it comes to hearing news of a company announcing a stock offering, but such events are the standard for the developmental sector.  Sunshine, as we have previously discussed, has also made no secret of its intentions to raise cash, so investors are not likely to be caught by surprise by Wednesday's announcement.  Moreover, those investors that may be building a longer term position to see this story play out - as well as traders looking to take advantage of any dips - may appreciate any pullback in price that materializes from the offering.  Sunshine has traded in a relative 'under the radar' range ever since a monumental price run last year pushed shares towards twenty when the likes of Reuters jumped on the story, and the stock is currently sitting at the lower end of its range.

Astute investors often utilize a strategy that includes flipping a handful of trading shares at opportune points that develop as a result of the volatile nature of this speculative sector, while also potentially building a core group of shares to see the story play out.  The trading shares can offer investors the chance to come out on 'house money' before the end-game is met, while the core shares still allow for one to remain invested, should unexpected news or developments hit the wire in the meantime.  The core also allows the potential to reap the rewards, should the goal of FDA approval and commercialization be met.  In the case of Sunshine, investors accumulating now are looking further down the road and gauging the potential market for C-Pulse.

According to statistics posted by the National Institutes of Health (NIH), heart failure is an all too common condition where the heart becomes unable to pump sufficient blood to meet the demands of one's body. The condition is progressive, effecting over five million people in the United States alone, and leads to over a quarter million deaths per year. Over 1.5 million of these cases fall into the category of Class III heart failure - more in the ambulatory Class IV category - where current treatments may temporarily relieve a patient's symptoms, but are not fully capable of controlling the effects or symptoms.  C-Pulse's potential to break into that market justifies a high amount of speculative interest in the company's stock, especially given the early results.

Some are concerned about the time left on the table to see the end-game play out.  Full results from the US trial are not expected for nearly another three years.  That leaves a lot of time for an investor's money to sit idle while awaiting the key milestones.  With that in mind, there are other avenues that investors can entertain to remain interested in the meantime.  For one, it's likely that at some point the company could entertain discussing interim results, which may be speculated to be compiled at the trial mid-point.  Previous financing agreements have hinted that there already exists significant partnership or buyout interest in regards to C-Pulse and current funding agreements keep the company financed through the mid-way point.  With that in mind, it's worth speculating that C-Pulse could be shopped around if interim mid-way data looks solid.

There are some very optimistic estimates out there regarding Sunshine's potential  and as the US trial progresses, attention is likely to come back on this company by a wider range of media outlets and analysts.  By that time those investors already in may find themselves in a prime position to play the volatile moves that develop in this sector leading into trial results and unfolding catalysts.  Although Sunshine has slipped below the radar for a bit, it's still one to keep an eye on.

Inovio Receives Boost From Federal Grant Money

As discussed on previous occasions, Inovio Pharmaceuticals (NYSEAMEX: INO), since it is known for developing a potential universal flu vaccine, is one of those companies out there that can move quickly when news circulates the wires in regards to a new flu outbreak.  It happened during the winter when an epidemic outbreak criss-crossed America and it's happening again as the bird flu hits China.  Although other factors have contributed to the rebound, it's likely that the newest flew outbreak helped Inovio shares shrug off disappointing results from a collaborative trial earlier this month, more on that later.  Aside from the attention brought to Inovio as a result of another flu outbreak, investors were encouraged by news this week that the company had received a $3.5 million grant from the National Institute of Allergy and Infectious Diseases (NIAID) to advance its SynCon platform technology and its preferred method of vaccine delivery, electroporation, specifically in the cause of allowing the warfighters to stave off the effects of potential biological warfare. 

SynCon is Inovio's proprietary technological platform from which numerous synthetic vaccines have been developed intended to treat a number of infectious diseases and cancer types.  Among those in development are a universal flu vaccine, which has already returned positive - although early - results, and a hep C vaccine, for which the company will initiate its own trials this year, given the failure of the above-mentioned collaborative effort.  It should be noted that Inovio's relationship to the failed trial revolved around the use of its electroporation technology and has no bearing on the development of its own SynCon-based vaccine development.  Digestion of that fact likely also assisted the stock's rebound from the post-news lows.

With SynCon and electroporation, too, Inovio has developed a nice one-two punch, given that it offers vaccine candidates and a potentially superior method of delivering them, too.  Electroporation, as described on Inovio's website, uses controlled, millisecond electrical pulses to create temporary pores in the cell membrane and allow dramatic cellular uptake of a synthetic DNA vaccine previously injected into muscle or skin. This method of delivery allows Inovio to more accurately and effectively direct its vaccine technology into the intended cells, while minimizing the risk of damaging surrounding cells and tissue.  Consider it like using the precision of a cruise missile to hit its target.  Thus far in development, electroporation has "demonstrated best-in-class immune responses" in relation to vaccine delivery.

The early successes of both the SynCon platform and the electroporation technology were the primary factor in attracting the NIAID grant money.  Although a relative insignificant amount in comparison to the costs associated with bringing one - let alone many - products to market, a multi-million dollar grant comes as a huge plus for a small and still-developmental company, and it should also be encouraging to investors that this is not the first federal money issued to Inovio.  Pending the results of the current collaboration, the money flow could continue at points in the future, as well, although investors should not assume that additional cash-raising will be needed over the course of pipeline development. 

Inovio has other funding help, too, aside from just the grant money.  Of the nine programs in development, six of those programs are being funded by third parties, a huge easing of the monetary burden moving forward.  Again, though, that's not to say the company will not have to raise cash at points in the future since the pipeline is still considered a 'Phase II' pipeline, for the most part.  More lucrative partnerships could materialize as the Phase III stages are reached.

With its SynCon and electroporation technologies attracting the interest of federal grant money and other intersted parties, Inovio remains one to keep an eye on.  Upcoming Phase II results could set the stage to play some Phase III catalysts, but recent trading history has also shown that the volatility with which Inovio trades makes it worth using the 'trading shares' strategy, while also potentially accumulating for the long term.

Assured Pharmacy Positioned To Capitalize On Industry Trends

Over the course of the past few weeks we've been hitting a lot on the topic of following shifting trends in the healthcare industry.  The booming nature of the diabetes epidemic, for instance, brought us to company's such as SanuWave Health (OTCBB: SNWV), AntriaBio, Inc. (OTCBB: ANTB), and MannKind Corporation (NASDAQ: MNKD).  Following the trends - or even better, attempting to identify them before they become trends - can turn into a lucrative business for investors looking for a place to ingest some speculative money. 

Another booming sector worth keeping an eye on is the chronic pain market.  It's tough to scroll through companies in the pharmaceutical or developmental health care sectors without coming across a company that is either marketing or developing some treatment or another for chronic pain.  BioDelivery Sciences (NASDAQ: BDSI), for instance, has developed a film that is placed inside a patient's cheek and delivers a steady supply of pain killer while Titan Pharmaceuticals (OTCBB: TTNP) is developing its subcutaneous treatment for opioid addiction, Probuphine, for use in the chronic pain market, too.  Using Titan as a transition point, that brings to light another trend in the industry worth monitoring - that of eliminating, as best as possible, the abuse and misuse of medications and prescriptions, which also falls in line with preventative medicine, since abuse just creates more long term problems and financial burdens on the industry.  Titan's ProNeura technology delivers a steady supply of buprenorphine to patients with a 'stick' inserted under the skin in order to control intake of the drug, and therefore eliminate the potential for abuse.

Assured Pharmacy (OTCPK: APHY), on the other hand, is taking a unique approach to attacking multiple of the industry trends listed above.  With a number of 'specialty' or 'boutique' pharmacies already opened in the United States which offer services for medical professionals and patients of the chronic pain sector, Assured monitors the prescription habits for physicians while also ensuring education, assistance and prescription services (including delivery)  for chronic pain patients in need of the more personalized care that large pharmacies such as Walgreen (NYSE: WAG) or Rite Aid (NYSE: RAD), for example, cannot provide.  This more personalized service allows Assured to tighten prescription controls and heavily eliminates the potential for misuse by patients.  Another benefit that fits the cost-effective trend is that the personalization helps to enable a patient to identify early on the medication most applicable to his or her condition.

Assured has four locations operating in relatively modest markets and those locations brought in just over $14 million dollars last year, according to the most recent annual report, which was down from the year prior.  With a foundation set, the company is next looking to move into major metropolitan areas where increased customer bases would help to boost revenue and potentially offset some of the losses that are still coming in.  The current market cap of the company may be an indication that investors have not yet bought into the belief that Assured's personalized prescription services could yet compete with the much larger and more established players in the sector, but expansion could be key, as can the above-mentioned shifts in the industry that are streamlining towards the more personalized and preventative options available for patients with Assured Pharmacy.

Still gaining traction in the market, Assured has tough, but manageable road ahead of it.  The chronic pain market is currently measured in the tens of billions of dollars in the United States alone and a move into the big cities could enable this company to better capitalize.  Additionally, the tight monitoring of prescriptions and decreased potential for abuse may set the standard for such services, which could make Assured more desirable an option for public and private health care professionals and/or relevant insurance companies. 

Another key point not to miss in terms of trends is the fact that we're currently operating in the "me" generation, where more than ever before people tend to put their own needs and desires ahead of those of society as a whole.  There's another area where Assured can capitalize, as this company's personalized service will not have patients feeling as if they are being herded like cattle in front of the pharmacy window at CVS only to be treated as another number and brushed away - there's a lot to be said for that in today's society.

When following the trends, Assured could be worth a look

Conclusion:  International markets traded modestly higher on Thursday and US markets were positioning to open on a similar note.  Investors are comfortable that the Fed won't be involved with stalling any rallies over the short term, but again - earnings season is key as indications earlier in the year were that there could be a slowdown in consumer spending and other economic indicators.  Everyone's favorite word of early 2013 - "sequestration" - also hasn't been heard from in a while, probably because the politicians told us how it would spell 'gloom and doom' if implemented, but budget discussions and governmental layoffs still hold the potential to impact markets.  Early headlines on Thursday morning discussed possibilities of tens of thousands of Department of Defense workers being dismissed - not just furloughed, but dismissed.  Similar cuts elsewhere could start to have an effect on the economy.  As mentioned above, the threat of a stall in the record-breaking rally has many investors - including this one - looking at speculative alternatives that could produce both short and long term gains with the profits taken from the broad rally.  In my opinion, these are the times when DD matters most and the trading game becomes the most fun.  There's a lot to keep an eye on these days.

Happy Trading!!!

Disclosure:  Long SNWV, APHY, ANTB.

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Sunday, April 14, 2013

FluoroPharma Medical (OTCBB: FPMI): A Rally Waiting To Happen?

FluoroPharma Medical (OTCBB: FPMI), as briefly described earlier last week, has recently seen a modest uptick in trading volume as some first look data from ongoing Phase II trials indicated that the company's positron emission tomography (PET) technology may already be proving superior to the current market standards.  Aside from a brief push towards the dollar mark during the opening days of the new year, shares have traded relatively un-moved and under the radar, even as February and March brought in enough trading volume to indicate that investors may be starting to take notice that FluoroPharma - with a pipeline of imaging agents that are potentially superior to what's already out there now - may be positioned to capitalize on shifting trends in the healthcare industry. 

With that in mind, it could be safe to assume that the modest - but still noticeable - jump in volume over the past couple of months could be an indication that accumulation is under way in anticipation of some milestone catalysts that are expected to unfold over the course of the year.  By comparison, shares of SanuWave Health (OTCBB: SNWV) traded in similar fashion, too, before that company's stock proved to be a 'volume before price' play and shares doubled in just a short period of time. 

While assuming the inherent risks of the sector, and also understanding the potential of FluoroPharma's PET technology to infiltrate a shifting market trend, there is reason to believe that FPMI could also be positioned to trade higher leading into the upcoming trial catalysts.  Furthermore, should those catalysts - largely based around interim and actual Phase II results - look positive, then there is reason to believe that shares could approach the price target set by Zacks not too long ago - a target that is roughly three times the current levels.  Initial indications support the Zacks target, as initial trial returns hint that FMPI's PET technology is superior to the current market standards.

With that technology, FluoroPharma has developed 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.   Both of its front-line products, CardioPET and BFPET, are currently engaged in Phase II trials as imaging agents for CAD and ischemic and infarcted tissue within the myocardium in chronic CAD patients, respectively.  Encouragingly, both have also already returned evidence of superior performance to the current standards, a key factor in speculating as to why shares look to have been under accumulation earlier in the year.  

Results from these trials are expected to start leaking out as soon as during the second half of 2013, positioning FluoroPharma to become a potential short term catalyst play, as well as a longer term growth story in anticipation of eventual regulatory approvals.

Industry trends also position this company for success, assuming approvals.  Ballooning costs in the global healthcare industry have led to a dramatic shift towards early detection and prevention, rather than just treatment. Treatment has been the 'money' place to be over the years because treating patients continuously brings in a whole lot more money than curing them would, but governments and insurance companies around the globe have finally had enough of it and the move towards prevention and early detection is well underway. 

Along with these noted shifts comes the search for more streamlined and cost-effective methods of detection, and FluoroPharma's PET technology - offering more clear, concise and definitive images than the current standards - fits right into that trend, too.  Another variable that has arisen from these shifts is that PET imaging agents, routinely used for the detection and identification of cancers, are more being used in the identification and assessment of CAD.  PET for use in that purpose is expected to grow into a billion dollar industry within just a couple of years, another reason why timing has FluoroPharma positioned to capitalized.

The market may continue to grow.  Heart disease, like diabetes, is growing at an alarming rate on a global scale and remains the number one killer in the United States.  Most of those with the disease either have - or will see their condition evolve into - CAD.  Assuming the current trends continue, PED identification of such conditions could grow into a multi-billion dollar business.  On the other hand, though, preventative medicine - which includes dieting and exercise - could catch up and slow the alarming growth rate of heart disease - but that would assume people are willing to get up off the couch and lay off the fast food for a while.

Although all developmental companies require financing at points during their developmental phases, the most recent quarterly and full year reports indicate that FluoroPharma has managed to keep their expenses under control and at respectable and sustainable levels.  Responsible management of finances is a key factor when investors gauge a speculative investment moving forward and FluoroPharma has thus far proven responsible enough.  Investors should always bear in mind that price fluctuations and dilutive financing are a name of the developmental game in this sector and the potential is always there for such an announcement to stall rallies, but those that emphasize a strategy of utilizing some trading shares while also potentially building a base of core shares for the long term can somewhat alleviate those risks by banking profits at opportune points in time before buying again on the dips and recycling the strategy.

For those looking to play the upcoming catalysts, the coming quarters will be key.  Solid follow-on data will now be somewhat expected after the initial salvos of quality trial returns, and if those trends continue into latter-stage results, then investors may begin to come on board with growing conviction.  Given that trading volume has already been on the increase over the past couple of months, indications are that some may be positioning now to play the results expected during the second half of the year, which sets this stock up as a potential 'volume before price' play. 

Another angle to consider is that profit-takers are starting to leave the broad markets after an early-year record-setting rally, which means money that was designated to the more stable, large cap stocks, could start flowing into the short term catalyst plays during the coming months.  In times of broad pullbacks and volatility, big money often looks for individual stocks and stories that can pay short term dividends.  Many of those such catalyst plays lie in the developmental healthcare sector, another reason to start taking a deeper look at the more speculative plays such as FluoroPharma.  The key is to look to already have a position in a stock before a rally materializes, which is why some investors play the 'volume before price' game.

As always, the potential for great rewards comes with great risks, too, so investors must weigh the odds, conduct his or her own DD and invest accordingly. 

Positive trial results this year, though, could put FluoroPharma on the map.

Happy Trading!!!

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