By VFC's Stock House
At the conclusion of each week, VFC's Stock House examines some news items, stocks and stories that made headlines during the previous trading week, but may also make headlines or influence trends during the upcoming week as well. Although focusing intently on the biotech and healthcare sectors, due attention is also given to potential market-moving or game-changing companies in a broad variety of markets and industries. The 'Weekly Stock Watch' will also introduce new companies for coverage and identify some stocks that may have entered 'buy territory'.
The first trading week of the new quarter is in the books, and while the DOW stood firm above the 13,000 mark last week, a quick scan of the headlines shows us that sentiment has quickly turned towards expectations of a broad market downturn.
Now that Mitt Romney has all but wrapped-up his candidacy for the Republican nominee for President, any numbers thrown on the street are going to be played out and warped by both parties to serve their own respective political purposes. That factor alone should keep traders on edge and lead to a volatile few months ahead.
It also doesn't help that Iran is not toning down its hostile rhetoric — which may lead to sustained higher oil prices, another factor that could potentially pull money out of the market and serve as a detriment to any potential market increases.
Additionally, attention is again on the European debt crisis, with Spain being labeled as the 'new Greece'. Any discouraging news from across the pond also doesn't serve well in the US markets.
The jobs report issued last Friday failed to inspire confidence in many media outlets, given that the number of jobs added in March fell short of expectations. Markets were closed on Friday, however, so any reaction by investors will be seen this week.
The report was not quite sombering, but anyone predicting a market downswing could use it to support their theory of demise, so watch the headlines as the drama plays out…Mitt Romney and Barack Obama already got a head start on the propaganda games.
Eyes will also be on earnings this week, with powerhouses like Google (NASDAQ:GOOG), JPMorgan Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC) all set to release numbers, and any disappointments there would just add to any existing negative sentiment.
Consensus has it, though, that earnings for these big players will be in-line with expectations.
Some established big players that have experienced nice price runs during the first quarter could also see a slight pullback if the profit-takers decide to sell and load up with some sideline cash in preparation for a market correction. It's also not uncommon to see money flee the speculative markets in such scenarios, as investors feel that they could then use that speculative money to play safer bets that may be trading for discounts — which would then offer more solid, and stress-free chances of seeing returns.
Speculative money also tends to flee the markets when investors start getting nervous at the unexpected; and although the signs are there that the US recovery is gaining solid momentum, we're not out of the woods yet and any hiccups cold compel some swift selling, especially with the melodramatic and ratings-seeking media hyping up every report as it could be the last one before doomsday strikes.
Already Mitt and Barack are squabbling in the headlines revving up for what should be a bitter campaign season; the Iran story and prospects of a blockade of the Straits of Hormuz is still gaining headlines; Europe is still battling heavy debt and the threat of bailouts for its more debt-laden economies; and the highs of the first quarter have many inclined to believe that it's time for a market stall – so there's reason to believe that the best strategy right now is to fill up the cash reserves and jump in on any dips when – and if – they occur.
After all, we've got to play the game – we can't all be Matt Lauer who can sit on $25 million per year for doing relatively nothing, and even getting the network to pay his travel expenses to and from the Hamptons on those four days a week that he does "work." Must be tough to afford those tolls on twenty five mill.
Makes you wonder, though…if the guy's worth twenty five mill per year, then why does NBC pull Sarah Palin when they really need to pull ratings?
Let's see what's up in the stock market…
Ampio Pharmaceuticals, Inc. (NASDAQ:AMPE): Positive updates from all aspects of the Ampio Pharmaceuticals (AMPE) pipeline over the past few months ran shares towards the four dollar mark earlier this year, but had since retreated when news last week that the company was moving forward to seek an approval for Zertane in Australia drew harsh criticism from the author of a popular biotech blog.
The argument was that companies seeking approvals for products in overseas markets do so in order to boost share prices back in the US markets, since any product strong enough to garner an approval would be brought to market in the US first.
What wasn't mentioned on the subject, however, was that the company has stated many times previously that the idea to seek regional overseas partners for Zertane rather than concentrate on the US market is because the FDA does not recognize premature ejaculation (PE) as a medical need, therefore seeking approval in the US for PE is not an option.
Shares dropped a modest five percent on the negative opinion piece, although on light volume, an indication that investors paid little notice to the blogger.
Later this year it is expected that trials will commence for Ampio's two other primary pipeline products, Optina and Ampion, which will be geared towards the approval requirements of the US FDA.
AMPE has traded with extreme volatility over the past year, hitting as high as near ten dollars, with lows of under three.
While trading towards the lower end of that spectrum, it could be worth taking a look at this company as the pipeline story continues to play out.
Prolor Biotech (PBTH): Volume lightened up late last week and the Prolor Biotech (PBTH) share price experienced a slight decline, but the company's pipeline potential and buyout candidacy remains strong.
The buyout mention comes as the result of an already-significant position in the company by Dr. Philip Frost of Teva Pharmaceutical Industries Ltd (NASDAQ:TEVA). Should Prolor's Carboxyl Terminal Peptide (CTP) technology continue to demonstrate solid pipeline success, it could be speculated that TEVA would look to make an all-out purchase of the company.
CTP essentially extends the life time of existing therapeutic protiens and reduces the amount of injections a patient would need to maintain treatment.
As applied to hGH-CTP, Prolor's most advanced pipeline product, patients can replace their once-daily injections of growth hormone with once-weekly injections while maintaining the same efficacy of treatment, according to studies conducted thus far.
Needless to say, that's a huge quality-of-life benefit, especially for children.
The company initiated a Phase II trial in Europe last month for hGH-CTP in children, no small feat, given the stringent standards of meeting the requirements to conduct pediatric trials in the EU.
It's also expected that an adult Phase III trial will commence later this year.
Volume has picked up this year for PBTH, and give the potential of the CTP technology in infiltrate a billion dollar-plus market, this could be one to watch in any market pullbacks.
ImmunoCellular Therapeutics, Ltd. (OTC:IMUC): A late volume spike on Thursday resulted in ImmunoCellular shares closing up three percent on the day, at just under the three dollar mark.
This company's share price has been on the run for the better part of 2012 thus far after having secured funding while attracting new institutional interest, acquired new technology to boost the pipeline, and prepared to move to a larger trading exchange, said to be the AMEX.
ImmunoCellular announced last week the completion of a technology transfer to a second manufacturing site that will allow for an increase in manufacturing and production of the company's immunotherapeutic cancer treatment ICT-107, currently being tested in Phase II trials for glioblastoma.
This has already proven to be a successful year for Immunocellular and continues to be a company to watch in the growing cancer immunotherapy sector.
Although Thursday's spike was carried by little volume, it'll be worth keeping an eye on this one during the coming trading week.
NovaBay Pharmaceuticals (NYSEAMEX:NBY): NovaBay (NBY) has traded relatively flat for the duration of 2012, but this is a company to keep an eye on as its technology could potentially enter the very lucrative anti-infective market as a possible replacement for antibiotics of today that are quickly being rendered ineffective, due to growing resistance and over-prescription.
Given NovaBay's technology that mimics the processes of a body's white blood cells without causing resistance, it's possible that the company is humming along going unnoticed and undervalued, based on potential.
NeutroPhase is being positioned for a commercial launch this year as an anti-wound agent in both the hospital and personal care markets, which would mark the company's first-approved product and validate the technology moving forward.
The company also plans to speak more directly to a broader base of investors through a new CEO blog, which was introduced last week as part of the growing social media revolution that engulfs business entities of all sizes these days. While companies will always still rely on press releases to spread news, more and more are turning towards social media outlets to reach the social media-addicted society of today.
While other trial catalysts are expected during the course of the new year, look for news of additional NeutroPhase partnerships to compliment the one signed for marketing in China earlier this year, most notably of which would be a US partner.
Nuvo Research (PINK:NRIFF): Nuvo also trades on the Toronto Stock Exchange as (TSX:NRI) and it's been a while since VFC's Stock House has discussed the company in any great length.
The above-mentioned NovaBay has landed a partnership with Galderma to advance NVC-422 to market as a treatment for Impetigo, a highly contagious skin infection. Galderma's specialty is dermatology and has a reputation as a global leader in the field.
Galderma also has a strong relationship with Nuvo Research, from whom the company licensed worldwide marketing rights for Pliaglis, a topical local anesthetic cream that has already been approved by the FDA for use in "superficial dermatological procedures."
Due to some manufacturing issues with Galderma's third-party contractor, the already-approved Pliaglis was voluntarily removed from the U.S. market in 2008. Those issues have since been solved and the product is again before the FDA for approval, with a decision expected on April 16. Sentiment has it that the upcoming approval will be a no-brainer, since it was already approved once, and if that turns out to be the case, then Galderma plans to launch the marketing and sale of Pliaglis in the U.S. in the second half of 2012.
Approval and launches in the European Union are also expected to take place during the second half of the year.
Given the upcoming FDA catalyst, the NRIFF share price has been on the move over the past few months, more than doubling since early in the year. With so many shares outstanding, however, the upside will be limited, in my opinion, although it is possible that the highs of a few years ago after the company – in conjunction with partner Covidien - received approval for Pennsaid.
Because of the perennial threat of a reverse split and the humongous share count, this looks like it may be best played as an FDA trade, rather than a 'hold through the news' kind of play.
Keep an eye on it at least until the news hits. There have been some high-volume days over the past month, so a pretty significant percentage move could be in the works.
Coronado Biosciences, Inc. (NASDAQ:CNDO): Volume has picked up substantially for Coronado Biosciences (CNDO) over the past few months, and with it the share price has followed. As discussed last week, Coronado took a very low-profile approach to becoming a publicly-traded company, but since then shares have been gaining traction and momentum in the marketplace due to the growing awareness of the company's two distinct pipelines.
CNDO-109 is being developed as a biologic agent against multiple cancer types, starting with acute myeloid leukemia, and CNDO-201 has been highly successful thus far in trials using ova from the porcine whipworm as a treatment for Crohn's Disease. The successes of the Crohn's applications has led Coronado to advance plans to use CNDO-201 in other indications, as well, including Multiple Sclerosis and Ulcerative Colitis.
Coronado shares traded with some volatility last week, with about a $1.50 differential between the highs and lows, and more of that pattern could be expected as the pipeline story gets out and investors look to take up positions.
Interim Crohn's data is due this quarter, while another trial is also expected to be initiated within months. Both events could provide news and exposure catalysts for the company.
With volatility and volume increasing, CNDO will be one to keep an eye on this week. Shares were up by roughly three percent on Friday.
Also Watch:
Siga Technologies, Inc. (NASDAQ:SIGA): Barring any news catalysts, Siga Technologies (SIGA) could dip along with the broad market if a correction materializes, and the recent trading patterns indicate that any dips into the twos can turn into a worthy buy for investors, as twice this year already SIGA has jumped from sub-$3 prices to north of the $3.50 mark.
Shares dipped last week, but because of the propensity of this stock to run on the drop of a dime, it should remain on investors' radar screens.
Implant Sciences Corporation (PINK:IMSC): Implant Sciences closed last week with a bang as investors are taking the recent announcements of new hirings as a sign that an increase in production is looming, which hints towards the potential signing of a significant contract or two for the company's explosives and narcotics detection devices.
This company's products fit right into the needs of today's global security environment and many have seen it as just a matter of time before the products became noticed on a large scale.
The recent hirings have only led to speculation – no news has been released that these actions are more than a 'just in case' move by management – but Friday's trading action certainly boosted the interest of casual observers.
Keep an eye on this one during the coming trading week.
Yahoo! Inc. (NASDAQ:YHOO): Once having ushered in the dawn of a new age in cyber-land, Yahoo continues to falter at regaining traction and/or a competitive edge in the realm of cyberspace. Rebuked mergers and board shufflings and reshufflings have demanded more headline attention than anything relevant to the company's business business model of late, and now it's patent disputes with Facebook (FB) that are ruling the day.
The one-time giant could eventually rebound, but it's this guy's opinion that Yahoo! will eventually have to quit fighting and merge with another big player to become wholly relevant again.
People love Yahoo! Finance, but the juggernaut can't live on just with that.
Noteworthy action…
Facebook (FB) chooses the Nasdaq as its trading platform…Investors of Sirius XM Radio (NASDAQ:SIRI) charge forward unafraid as new car sales and a rebounding economy offset any concerns of a pending market correction…Cel-Sci Corp (NYSEAMEX:CVM) bore the brunt of an attack by a popular biotech blogger last week, but investors barely noticed as CVM didn't even drop a full penny. This is another one that has inspired debate on the long/short trail and will be worth watching this week…The dominance of Apple (NASDAQ:AAPL) steams on. Talk and speculation of the new iTV platform – or whatever platform it becomes if it's cash stockpiles cannot buy the iTV name from an English company – has fueled continued share price appreciation. Speculation of "What's coming next" should be able to support a continued speculative rise, but some downside could be in store should a broad market correction take place…Agenus Inc.(NASDAQ:AGEN) still downticking from seven…McDonald's Corporation (NYSE:MCD) pushing a hundred again…Starbucks Corporation (NASDAQ:SBUX) ends the week strong.
Happy Trading…
Disclosure: Long AMPE, IMSC, SIGA, CVM, IMUC, NBY, NRIFF. VFC's Stock House has received compensation from a third party, TrimRX LLC, to provide research and coverage of Coronado Biosciences for a period of one month. The goal of VFC's Stock House is to bring new ideas, companies and discussions to investors and readers. With respect to the increased amount of time necessary to maintain quality, VFC's Stock House is compensated from third parties to research and cover certain companies that fit the profile of what interests readers of VFC's Stock House. While taking compensation poses as an inherent perception of bias in coverage, the ultimate goal is to bring ideas and information to the eyes of readers, who can then decide what is and what is not relevant.
Contact the Author: vfc@vfcsstockhouse.com
VFC's Stock House offers investing opinions, insight and ideas on a variety of different stocks, options and ETFs, as well as commenting on news that affects the market.
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