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Hot Biotech Stock – Aastrom Biosciences Soars on Buy Recommendation

Admin — Tue, 29 Mar 2011 14:55:52 +0000

Shares of Aastrom Biosciences Inc. (Nasdaq: ASTM) soared 18.5% yesterday after a research company initiated coverage on the stock with a Buy rating. The stock hit $2.68 during the intraday trading and closed the session at $2.62. Approximately 4.6 million shares changed hands, a 215% increase over the 90-day average volume. Shares of ASTM this morning lost steam, losing nearly 3% this morning.

Despite the surge, ASTM shares are still 19% down from the 2011 high of $3.25, mainly due to concerns for another dilutive stock offering this year, as well as uncertainties regarding the clinical results in the upcoming phase III studies for critical limb ischemia. With a 52-week range of $1.32-$4.45, the March 28 trade is in the middle of that range.

ASTM is developing adult stem cells therapies for use in the treatment of severe, chronic cardiovascular diseases such as critical limb ischemia (CLI) and dilated cardiomyopathy (DCM). The company developed a proprietary Tissue Repair Cell technology in which cells are derived from a small amount of bone marrow taken from a patient and expanded to generate a mixture containing high doses of stem and progenitor cells. The cell mixture is then directly injected into the affected tissue: limb or myocardium.

The company has two clinical programs ongoing, one for vascular applications in CLI, the most severe (end-stage) of peripheral arterial disease, and another for cardiac applications in DCM, the leading cause of heart transplantation. The CLI program received Fast Track designation from the FDA.

For CLI, ASTM presented encouraging proof-of-concept data, as well as statistically significant interim results from phase II trials, on FDA-validated endpoints for CLI major amputation and amputation-free survival. Going forward, the company plans to report the final results from phase II study during the second quarter, as well as to launch the first of two phase III studies. According to management, the special protocol assessment for phase III trials could be agreed with the FDA in Q2 2011 for the “no option” patients and in Q3 2011 for the “poor option” patients.

For DCM, management has demonstrated promising trends from an interim analysis of phase II IMPACT-DCM program, which show meaningful improvements in the stage of heart failure for patients on therapy. Going forward, ASTM is expecting to report interim data from the IMPACT-DCM study and complete the ongoing phase II Catheter DCM trial in Q3 2011 and launch the next phase of clinical testing in DCM by the end of the year.

Both programs are targeting large markets with limited therapeutic options. The standard of care for patients with CLI or DCM is often to treat secondary co-morbid conditions such as hypertension, diabetes or renal failure. Analysts covering ASTM predicted blockbuster potential for both therapies, with annual revenue to peak at $800 million for CLI program and $700 million for DCM program.

Critical limb ischemia affects approximately 1 million people in the U.S. each year, representing 2% of the population over the age of 50. More than 25% of patients with peripheral artery disease will eventually development CLI. The disease leads to an average of 150,000 major limb amputations each year and has a high mortality rate: 20% after six months after initial diagnosis and 25% after 12 months.

There are approximately 250,000 people in the U.S. living with dilated cardiomyopathy, with nearly 20,000 new cases diagnosed each year. The one-year survival rate for a DCM patient is roughly 75%. The five-year survival rate drops to only 30% because many patients with DCM go un-diagnosed until the disease has progressed to the most severe stages.

The positives outcomes from the phase II trials of DCM as well as a successful conclusion of negotiations with the FDA to commence phase III trials in CLI patients could significantly add to the company’s valuation and attract potential partners to speed up the research. In addition, ASTM’s current capitalization of nearly $80 million leaves significant room for growth and appreciation, given the market potential of investigated therapies. However, the company would further require external financing, diluting investors’ interests, despite the fact that it raised $20.5 million in December and ended 2010 with a cash balance of $31 million.

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When will Generex Biotechnology (GNBT) stop falling?

Editor — Wed, 14 Apr 2010 13:32:25 +0000

GNBT has been around forever in the pennystock world. It has been touted as the next Nasdaq stock (or a piece of crap that is going to zero) in the time that I have been watching it.

It definitely isn’t going to zero, but right now traders and investors are down on GNBT…..for good reason.

Generex Biotechnology Corporation (GNBT) is a biotechnology company that is working on variations of its drug delivery systems for diabetes (and other illnesses). Here is a link to their site if you want to do more DD.

GNBT has been trading in a range between $0.40 and $0.70 for the last 6 months. Right now, it is trading at the bottom of that range.

I am not recommending that anyone “catch the falling knife” on this one, but I am thinking that GNBT is prime for a reversal. For all of the negative press that GNBT has been receiving, the news that they have received a financing commitment is a positive indicator. True, the financing is at a discount to GNBT’s current trading price. But, the commitment is real and they have already drawn the first tranche. It is composed of 24 tranches. The financing guys are not stupid. They want to be able to limit their exposure if things get worse for the company.

The negative press stems from the ever-irascible Adam Feuerstein of TheStreet.com, who called out GNBT and labeled them frauds. The company responded with a $250 Million defamation suit. I like MIchael Fizhugh’s article on SeekingAlpha.com about the whole mess. Read it here.

The Chart

Clearly, GNBT is in a downtrend. But, there is hope for a recovery. In the last 5 trading days, there has been 3 high volume selling days BUT there have been two up days. All the news is not bad. It looks like buyers are trying to bid up the stock. The oversold stochastics will exert some pressure for a bounce, but with the MACD still bearish, the stock could continue to fall for a while yet.

Watch for the MACD histogram to indicate that the bearish trend intensity is lessening. Another indicator that I am using lately is On Balance Volume (OBV). That indicator is telling me that the stock is still in distribution.

I am not qualified to pass judgment of GNBT’s drug portfolio. I look at anecdotal information to give me some idea of whether this stock has a chance. The financing is a huge indicator to me that GNBT will be around a bit longer. The company has plenty of cash, low debt, great ratios….that will help them see this “crisis” through. Any good FDA news and this stock will fly….Bad and the reverse will happen.

GNBT’s volatility is a great thing for short-term traders like us.

Trade with confidence,

Jeffrey Dean, Editor

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DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Neither MicroStockProfit.com nor its affiliates have a beneficial interest in the mentioned company; nor have they received compensation of any kind for any of the companies listed in this communication. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

Hard to get a read on HTDS

Editor — Tue, 25 Aug 2009 06:11:58 +0000

Hard To Treat Diseases, Inc. is a hard company to get a read on…as my title indicates. It is in the Pharma business, but not really much of a player. They have operations in Serbia and China under two separate operating divisions and appear to have a “story to tell”. .

In China they operate through Shenzhen Mellow Hope Pharm Industrial Co Ltd.. According to the company, Mellow Hope is the biggest exporter of Biological Vaccines in China. HTDS purchased Mellow Hope in February of this year in an all-stock transaction. It appears that the company has a viable product line and an active global client base. Here is a link to the Mellow Hope web site that makes for interesting reading.

In Serbia, they have a controlling interest in a company called Slavica Bio Chem Company. Their primary focus involves the enhancement and modification of existing approved drugs such as “Virazole” for the purpose of chemical repair of damage to the CNS (central nervous system), MS (Multiple Sclerosis), SARS, Hepatitis C and HIV. Here is the link to Slavica’s web site.

HTDS has garnered a huge amount of attention on the boards and as a stock to trade. Here is the chart:

The chart is not really compelling and tends to indicate that the stock is “taking a breather”. The MACD, while above the zero line, is indicating bearishness. The stock is under distribution and is being sold (profits takers, anyone?). Volume has dropped off lately and indicates that the stock is out of favor right now. Let’s put my last statement in perspective, though. The stock still traded 196 Million shares yesterday, off significantly from its 3-month average. What is amazing is that the trading activity of this magnitude is occurring with only 1,072,581,000 in the float (as of Mar 30, 2009). The thing to keep in mind is that this is a penny stock play and subject to all the manipulation and pumping of any penny.

What I find compelling is that HTDS has done some very astute things (acquisition of Mellow Hope) and appears to be very cost efficient in searching for new products. I will be very interested to see what kind of numbers Mellow Hope can produce for the company going forward. The Serbian operation holds out great hope for the company, too. It is working on modifications to a number of existing drugs to treat some of the more “popular” diseases of today’s society. Working with existing drugs also means that the dreaded FDA turndown is less likely and drugs can be brought to market quicker.

I could see this company retesting its recent highs of last week (21.9 cents) and pushing into new territory. Their is no resistance above 21.9 cents and limited resistance between 11 cents and 21.9 cents. The stock rebounded 29.41% today and may retract a little today, but I think the direction for the stock is up. Look for the right entry point and make sure you have a tight stop on it.

I believe that HTDS has the right formula for traders and investors.

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DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Neither InvestorSoup.com nor its affiliates have a beneficial interest in the mentioned company; nor have they received compensation of any kind for any of the companies listed in this communication. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

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