Shares of SanuWave Health (OTCBB: SNWV) swiftly achieved a near double in price earlier this year as investor anticipation grew in regards to the initiation of a new Phase III trial testing the company's dermaPACE shockwave therapy in the treatment of diabetic foot ulcers. A new trial design and an agreement with the FDA to utilize some previous Phase III data added to the enthusiasm and hinted that SNWV shares had the potential to approach price levels seen during the last Phase III trial. That trial, as previously discussed, ended without the endpoint being met, although the results were convincing enough that success could be easily achieved after the new trial designs were implemented.
Since the quick spike in price, however, SanuWave shares have retreated again after many of the short-term minded day, swing and momentum likely took some profits and moved on in search of another quick winner - although you can never blame anyone for taking some profit from the table - but the result of such action could potentially be another buying opportunity for investors who may have missed out on the last quick run. Given the encouraging prospects for the upcoming trial and the numerous catalysts that will be slated to unfold - in terms of interim and actual results - once the trial gains momentum, SanuWave shares could quickly rebound once the current phase of consolidation is complete...
A letter to shareholders issued last month by Assured Pharmacy (OTCBB: APHY) emphasized an aggressive expansion strategy that would be implemented over the coming quarters. The first phases of that plan look to be taking shape as an announcement last week revealed that new locations in Denver and Boston have been targeted for summer openings. Enthusiasm is high in regards to these new locations, as the company has sought the support of local physician groups in an all-out effort to replicate the quick success of its Kansas location. In light of the robust expansion plans, company officials and some investors are beginning to estimate that break even and profitability milestones may not be that far off into the future.
The company's current market cap, however, does not yet indicate a widespread acceptance of that theory, leaving a potential ground floor opportunity still open for investors looking to speculate on the maturity of Assured Pharmacy and its business plan, which looks to take advantage of shifting trends in the healthcare industry...
Many market analysts and economic pundits have predicted over the past few months that the record-setting highs - although nice while they lasted - would only be short-lived and a pullback or outright market correction was in store. Stocks proved overly resilient, though, and despite some questionable economic news at times to go along with gloomy predictions from many financial media outlets, new records have continuously been set, defying the negative forecasts and making winners out of many green portfolios and IRA accounts. The continuous uptrend may have made believers out of many, but some skepticism still prevails as we head into a new trading week, leaving the door open for investors to take advantage of the individual stocks and stories that may not be gaining much mainstream attention.
Here's a few to keep an eye on for the week of 13 May, 2013...
Assured Pharmacy Announces New Store Openings
Shares of Assured Pharmacy (OTCBB: APHY) have been steadily gaining investor attention over the past weeks, if trading volume is to be an indication, and recent announcement just days ago of multiple new store openings over the near term may not only explain the uptick in volume, but also provide assurances that the company's potential to significantly grow its revenue stream over the coming quarters is leaning more towards the likelihood of being a probability, rather than just a possibility.
A letter to shareholders last month set the stage for what's to come over the coming year, but last week's definitive announcement of major store openings within months confirms the previous promises and speculation. According to the news, two new stores - in Denver and Boston - are slated to open this summer in what Assured officials are labeling a "major expansion strategy." ...
Through the course of its early development and growth stages, Assured Pharmacy (OTCBB: APHY) has admittedly faced challenges not uncommon to other niche start-ups in a tough economic climate, but with trends shifting in the company's favor and its newest store also its most profitable, this company could be on the verge of a breakout with significant expansion coming. Assured Pharmacy is a unique, personalized pharmacy that caters specifically to the prescription needs of its customers while also heavily scrutinizing the distribution and use of heavily-regulated prescription medications for both doctors and patients in order to ensure strict compliance with federal regulations. Assured has targeted the chronic pain market for its services, given the high rate of abuse and misuse in the sector, which has highlighted the need for specialized pharmacies. Its customer base of both doctors utilizing its services and patients receiving their personalized care has grown and is currently in a backlog, according to statements made in a recent letter to shareholders.
As additional funds can support, Assured will be able to take on additional customers, which could quickly double the current patient base - again according to recent communications by the company...
The imminent expectation of multiple product launches during the course of the coming year and the further development of a pipeline full of urine-based diagnostics designed to detect various cancers and infectious diseases placed TrovaGene Inc (NASDAQ: TROV) on the map during the closing half of 2012, especially when shares nearly quadrupled in value in anticipation of the many milestone catalyst events that were due to unfold throughout 2013. The first of those catalysts came to fruition in late March when TrovaGene announced that it had commercially launched a urine-based human papillomavirus (HPV) diagnostic test, the first of numerous elements of its pipeline expected to hit market this year and a move into a very lucrative market, as six million new cases of HPV are diagnosed in the United States each year, according to the Centers for Disease Control and Prevention.
TrovaGene's technology utilizes transrenal DNA and RNA from simple urine samples to detect genetic abnormalities that may result from cell deaths and/or disease progression. Any diagnostic test resulting from the advancement of this technology follows the current healthcare industry trends of emphasizing early detection through less-invasive (and less costly) means and launching its first test onto the market is a huge validation to the company and its future prospects. That said, the development and commercialization of such next-generation technology may not be enough alone to convince investors looking at the near term that the medical community is ready to fully embrace such a drastic shift in early-detection methods, but investors could quickly become convinced if much larger and more relevant parties from the industry come into play to support future development...
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...
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...
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.
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...
Despite some recent concerns speculating 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...
FluoroPharma Medical (OTCBB: FPMI), as briefly described earlier this 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 the noted early trial returns hint that FPMI's PET technology is superior to the current market standards...
Shares of SanuWave Health (OTCBB: SNWV) have about doubled in the time span of just a few days - after already having tripled since the beginning of the year - with volume growing methodically higher along the way. No significant news has been released along the way to fuel the rally, but with some trial catalysts pending that could thrust SanuWave's Pulsed Acoustic Cellular Expression (PACE) technology directly into the middle of a booming subsector of the healthcare industry, investors may have again become aware of the company's potential as a short term rebound play and a longer term growth play. The PACE technology, known as a 'shockwave therapy' has been employed into the dermaPACE and orthoPACE medical devices and have already received CE Mark Approval in Europe for the treatment of chronic wounds, where revenue is already rolling in. In America, a Phase III trial is expected to begin enrolling patients within the current quarter for dermaPACE in the treatment of diabetic foot ulcers and improved trial designs devised in conjunction with FDA guidance has many investors enthusiastically expecting more definitive results than those seen in a previous trial, where efficacy was demonstrated, but an endpoint was not met and market approval was not achieved.
With a new round of trial catalysts pending, and given the size, scope and rapid growth of the diabetes and chronic wound markets, it could be argued that this latest rally was based on the SanuWave market cap catching up to its speculative potential. If that is in fact true, and if the pending trial progresses in a more defined manner under its new design, then both interim and actual results have the potential to rally shares even further than what has already been realized since the beginning of 2013. By comparison, SanuWave shares approached the six dollar mark in early 2011 at the height of previous anticipation regarding the thermaPACE therapy, and it's reasonable to believe that another push towards FDA approval could fuel a similar share price run. Such action is expected and routine in the developmental sector, although heavy volatility should also be expected, given the fair amount of day, swing, momentum and catalyst traders that move in and out of stocks in search of quick returns...