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.
Another quarter is in the books, and boy did this one end with flair. After weeks of fluctuation and volatility thanks to the ups-and-downs of the European debt crisis, the US markets soared by over two percent on Friday as some definitive plans look to have been formulated at last week's European Summit that should all but erase any remaining uncertainty that the Euro Zone (EZ) can - and will - be saved.
The only one who looks to have lost face as a result of the summits is Germany's Angela Merkel, who used an alliance with France's Nicolas SarkozY to essentially 'lay down the law' in regards to the EZ's bailout policies. The winners will likely be the governments of Spain and Italy who, thanks to the permanent 'European Stability Mechanism' bailout fund that will go into effect this week, will find it easier to receive bailout cash.
The Spanish banks, being the most recent to steal the spotlight, will also receive a direct monetary influx, thanks to the creation of this fund.
Most significantly, the European leaders moved to create a single banking supervisor for euro-zone banks - based around the European Central Bank - that just might finally put the word "Union" back into the words "European Union." Beforehand, it was hardly safe to assume that each individual country was acting on behalf of 'the union' or 'the zone' when they all played by their own rules.
Of course London's banks, like Barclay's, looked out for themselves pretty well, too, by 'fixing' the Libor rate for years, as has been reported over the weekend. Looks like the big banks of Britain will be looking to hire the Major League Baseball Players Association attorneys to litigate this one - no one can win a good collusion fight like the MLBPA.
Back on track, with Europe having issued what could probably be considered the most definitive economic plan in years, future market fluctuations this summer may not come as a result of EZ fears anymore, barring a major change of face from leaders once who return to their stomping grounds and often do an about face after facing their people.
Attention will now be more aptly paid to developments in the US, where economic news has come and gone relatively unnoticed while the games were played out overseas. On that note, consumer sentiment is on the decline and, according to reports, consumer concerns about the health of the US economy are also on the rise, but much of that could be attributed to what is likely to become a bitter election season in the US.
The primary question to ask this week will for too many be, "How much is Katie going to take Tom to the bank for, and what's the real juice behind the TomKat breakup (that was bound to come sooner or later)?"
The real question for the week, however, is whether or not last week's news from Europe was strong enough to propel the markets into a sustained rally, or whether attention will swiftly shift rudders and concentrate mainly on any negative trends taking shape in the US.
Friday's boom could lead to an enthusiastic beginning to the third quarter on Monday. Another exciting round of earnings will quickly be upon us and significant milestones will be in the headlights over the coming months by numerous small cap and developmental companies that will be worth keeping an eye on.
Here's just a few of those stocks and stories...
Healthy Food and Beverage:
Celsius Holdings (CELH): A few months ago Celsius Holdings landed 5WPR as the public relations agency that would lead the company's turnaround story. Celsius had recently stabilized its revenue flow, but was still lacking that added thrust in the market that would push those revenues and product exposure to a higher degree, hence the signing of a new PR partner to potentially ignite the marketing flame.
After months of relative silence following the deal, the first phase of the new campaign came to light last week when the company announced that Fitness Icon Tony Little will assume the position as the Celsius 'Fitness Ambassador'. Tony also was revealed as a stakeholder in the company.
Little, an inductee of the Fitness Hall Of Fame, has a long-standing reputation in the health and fitness industry and has a significant presence in the advertising market for numerous health and wellness products. He also has an international following, maybe a key point since the company looks to be growing its international customer base as well as its domestic one.
Trading volume picked up a bit after the announcement, with shares trading at roughly double the daily norm for the two days following the announcement, but the numbers leveled off to close the week. That said, shares closed Friday at the high of the week and investors will be looking for additional signals that the Celsius turnaround is in position and ready to take off.
In commenting about the new PR deal, Little noted, "I love the idea that Celsius is a drink that burns calories while providing you with healthy energy. I drink Celsius before my workouts and can truly feel the benefits."
Last week's press release could be an indication that the Celsius turnaround campaign is going to pick up some summer steam. Still lightly-traded and with a barely noticeable market cap, it may not take much aside from a volume boost to propel the share price to back over the dollar mark.
Having a solid repertoire of product offerings, including a total of seven carbonated and non-carbonated beverage flavors, and powder packets that can be mixed with water, Celsius has been gaining a nice niche in the pre-workout market, and Tony Little should be able to help out there.
What could significantly launch this company and its share price higher is an effective push into the mainstream.
One to keep an eye on as the PR push moves forward.
Explosive Trace Detection and Homeland Security:
Implant Sciences (IMSC.PK): The surge continued last week for shares of Implant Sciences, with a high of $1.84 being struck before shares retreated for the duration of the afternoon on Friday and closed down by nineteen percent on volume of over a million shares traded. There's no doubt that the quick triple in share price registered by IMSC garnered the attention of a few new investors, many of whom contributed to the notable increase in trading volume that saw the stock approach or exceed a million shares traded on five of the past eight trading days.
Before that stretch the average trading volume was well under 200,000/day (for the previous three month period) and it had been well over a year since IMSC had a million-share day.
While a solid news flow and some significant pending catalysts likely attracted the new investor attention over the past few weeks, the shorts were also fighting to keep a lid on the upper limit in order to have a chance to cover. It's possible, if not probable, that the shorts took advantage of the profit-taking that ensued after a quick spike and covered some shares.
Although the future still looks bright and solid for Implant Sciences, the momentum, swing and day traders all jump in on quick moves like the one experienced here, which means that a correction will eventually materialize as those short-termers take their profits and bail out in search of the next quick mover.
With that being said, Implant still has some major catalysts in play and and dip resulting in the currecnt pull back could again provide an opportune 'buy time'. The expected approval of Implant's non-radioactive Quantum Sniffer explosive trace detection technology by the TSA this summer - and the TSA's December 3rd mandate of having all inbound air cargo on passenger airlines screened for explosives - both still loom as huge catalysts.
The TSA approval itself could launch the company to the status of elite global player in the ETD marekt, as predicted by the Government Security News in its June edition, and the huge advantages of Implant's technology over the competition could land the company as a prime benefitor of any contracts secured by government and civilian aviation agencies as a result of the December mandate.
Keep an eye on IMSC shares during the coming week. The spike that turned IMSC into a quick triple could only be just the beginning, should the catalysts play out to the positive, but investors will also be looking for signs of how much influence the shorts may be able to press the share price over the short term.
And regardless of Friday's retracement, the long term still could be very bright for Implant Sciences.
Still a hot one to watch for the week, and for the new trading quarter that begins on Monday morning.
Healthcare, Biotech, Pharmaceutical:
Prolor Biotech (PBTH): Shares of Prolor Biotech received a boost last week on the presentation of data from an already-concluded Phase II trial for hGH-CTP, the company's flagship product candidate that - if successful in the course of trials and the approval process - would be slated to replace the current standard-of-care daily injections of hGH with a once-weekly injection for hormone deficient patients.
Having touched just under five bucks on Thursday, a modest push on Friday returned PBTH shares to that level for the first time in weeks.
While hGH-CTP has been making all the headlines for Prolor lately, with the initiation of a key Phase II pediatric trial in Europe and the expected launch of a Phase III later this year, the company released news on Friday regarding the development of another of its pipeline candidates.
According to a Friday press release, Prolor's Dr. Gili Hart was slated to present data on the company's long-acting clotting factors in preclinical development for the treatment of hemophilia at the 58th Annual Meeting of the Science and Standardization Committee of the International Society on Thrombosis and Haemostasis (ISTH). The meeting took place in Liverpool, England, land of the Scousers, and keyed in on early studies that showed the potential long-acting versions of Factor VIIa (Factor Vlla-CTP) and Factor lX (Factor IX-CTP).
Like hGH-CTP, this product would provide longer-lasting versions of treatments already on the market.
With a rebound to the five dollar mark, investors will be looking for the initiation of a Phase III trial later this year and any updates regarding the pediatric trial in Europe.
Volume has been relatively modest over the past couple of weeks. A rebound there could keep shares sustaining highs of over five.
The heavy investment in Prolor by Teva's (TEVA) Dr. Frost is also an intriguing side-story to watch.
Lpath, Inc. (LPTN): Lpath, Inc. is another company with catalysts pending later this year that can have positive implications on the share price. LPTN shares were trucking along solidly at $1-plus price levels earlier this year before the halt of ongoing Phase II trials and a subsequent stock offering sent shares below that point, but knowing that the trial halts were the result of Lpath's fill/finish contractor, Formatech, Inc., not being in compliance with FDA's current Good Manufacturing Practice (cGMP) requirements and had nothing to do with the effectiveness of iSONEP, it's safe to assume that a rebound to above the dollar mark once the trials resume could materialize quickly.
According to previous comments by company officials, the two iSONEP trials -, PEDigree for the treatment of retinal pigment epithelium detachment ("RPE detachment" or "PED") and NEXUS, targeting Wet AMD - are slated to resume within the just-started quarter, adding a short term price potential catalyst to the already-established long term potential of the ImmuneY2 platform, which contains the ability to generate therapeutic antibodies that bind to and inhibit bioactive lipids that contribute to the spreading and growth of various diseases and inflammatory/auto-immune disorders.
Already established as the leader of a technological field that targets bioactive lipids, the modestly-valued Lpath also boasts a hefty partnership with Pfizer (PFE) that has real potential to turn into an acquisition deal for the larger company, especially since Pfizer recently made some moves to boost its cash reserves in anticipation of M&A deals.
Recent buyout speculation quickly ran the LPTN share price to above eighty cents, and with catalysts pending, the current share price might quickly be looked back upon as a nice value.
MRI Interventions, Inc. (MRIC): Here's another company that may be emerging from 'under the radar' as its share price has quickly tripled in price with growing volume since going public just over a month ago. A solid news flow over the past couple of weeks has fueled a volume and price run that culminated in an over thirty percent rise last Friday and could have the company positioned to attract additional investor interest during the days and weeks to come, as well.
Friday's spike was also significant in the fact that the three dollar price mark was registered for the first time with volume for the day well over four times the daily norm.
MRI Interventions is a medical device company positioned to take well advantage of the current day's trends towards more minimally-invasive surgeries, specifically of the brain and heart. The company already has an FDA-cleared product, ClearPoint, which is "used to perform minimally invasive surgical procedures in the brain guided by intraoperative MR imaging," according to the MRI Interventions website.
A key announcement last week that Tocagen would adopt the ClearPoint technology in association with its ongoing clinical trial for Toca 511 against the most aggressive form of brain cancer, recurrent high grade gliomas including glioblastoma multiforme (GBM), helped to spark the volume boost that led to Friday's spike. As noted in the PR announcing the collaboraion, ClearPath will assist medical professionals at selected sites in delivering Toca 511 "into brain tumors under real-time magnetic resonance imaging (MRI) guidance."
The collaboration between MRIC and other parties could continue to expand, and should be looked at as very noteworthy developments by investors. As the technology becomes more widely-accepted in the community, then interest in the company's shares would surely follow.
Currently MRIC is partnered with Brainlab, a leader in the image-guided surgery field in the US and Europe, for the advancement of the ClearPath technology. MRIC also landed Siemens AG (SI) as a partner for the development of the ClearTrace system to assist in less-invasive heart surgery, and with Boston Scientific Corporations (BSX) in a deal that brought in an up-front payment of $13 million. Should BSX incorporate any MRIC technology into its products or procedures, then royalties would also ensue for MRI Interventions.
The company also received another key patent last month, further solidifying its place and reputation as a leader in the field.
News coverage, developments and rising investor interest may have created the perfect storm for MRI Interventions. As the surgical trend is to look for less-invasive - and therefore less expensive - means to conduct critical surgeries, MRIC is primed to become a leader in the genre, and could already be considered so with the initial successes of its technology.
Amarin Corporation (AMRN): Amarin received positive news on the patent front last week as the US Patent and Trademark Office gave indications that it would approve key patents for AMR-101 in the treatment of high triglycerides that will ensure protection until 2030. The AMRN share price moved in kind and closed the week at $14 and a half after having set a new 52-week high just days earlier.
A Jeffries analyst also raised the price target on AMRN shares to $26 from $24 as a result of the news and indicated a positive approval opinion for later this month, when AMR-101 will be due an approval decision from the FDA.
With the patent issues now out of the way, look for the buyout or partnership talk to heat up in regards to this company. Shares previously flew to nearly twenty bucks on such talk after positive Phase III results were released, and it's likely that the stock is again primed to approach those highs.
Potential buyers and partners now know the value of the patent and could look to make a move even before the FDA approval deadline as many in the sector already assume an approval is in the bag - although one can never call any event a certainty when dealing with the FDA.
With the patent news out and investor interest regaining steam, AMRN will be a hot one to watch this week, and for the remainder of the month.
Sunshine Heart Inc. (SSH): Friday's nearly thirty percent price drop for shares of Sunshine Heart could ordinarily be considered a warning sign for investors who may have been considering jumping in, but in this particular situation, the positives far outweigh the negatives and SSH could be another candidate ready to emerge from 'under-the-radar-land'.
For starters, Friday's trading volume alone exceeded the number of shares traded for the past two months COMBINED.
That's huge, although trading over that time frame was very light.
It's Sunshine's technology that may be attracting the new interest. The company has developed the C-Pulse Heart assist system that could "revolutionize the treatment of Class III and ambulatory Class IV heart failure," according to comments posted on the company's website. Currently being tested in clinical studies for effectiveness, the device may be able to significantly improve the quality-of-life and performance of patients suffering from moderate to severe heart failure. If proven successful, the product will also be able to halt the progression of the disease.
Also in keeping with the current surgical trends of developing less invasive surgical methods, the device can be implanted with minimal intrusiveness - a huge plus in today's market - and is also implanted outside of the bloodstream, another significant advantage over current competition.
In addition to exposure on both MSN Money and Fox Business last week that likely led to increased investor interest, Sunshine has a few key catalysts pending over the next few months and quarters that could continue to attract new attention.
The company submitted earlier this year documentation to receive CE Mark approval in Europe for its device and has also completed the initial steps in preparation for conducting a pivotal trial in the United States. Assuming all goes well, Sunshine could register its first sales this year and also initiate the US trial at right around the same time.
Given the scope and impact that this potential blockbuster new product could have in the heart failure market, it'll be well worth keeping an eye on shares of SSH over the coming months. Friday's action is an indicator that investors may be starting to wake up to this story.
Arena Pharmaceuticals (ARNA): Shares of Arena Pharmaceuticals have traded all over the place over the past few weeks leading into and following decision day for the FDA to approve the company's weight loss drug Belviq. That day came last week with a positive approval from the FDA and ARNA shares spiked accordingly on huge volume before trending lower and closing the week at under ten bucks.
Although many looked for a continued run on approval news, it's likely that many investors considered the FDA approval already baked in when the stock hit its recent highs and decided to bail either just before or just after the FDA announced its decision.
That said, ARNA is still trading at close to a ten-bagger off its 52-week lows and is still a noted success story for the year, even if it is peddling a pill that could hardly be as effective a weight-loss aide as good diet and exercise.
It's been a fairly common occurance over the past few years to see share prices in the healthcare sector decline after positive approval decisions, BioDelivery Sciences (BDSI) and Avanir (AVNR) come to mind, but if partnership or buyout news starts to circulate around Arena - which it should - then a quick recovery could be in store.
It's also debatable at the current time just how well a weight loss pill can do on the open market. A number of such 'miracle cure for laziness' pills are already available on the supplement market and are easily deemed as fads; sales take off at first and then peter out when consumers realize that they are hardly replacements for a little lifestyle effort.
The same fate may hinder Belviq as it's hard to believe that physicians will - or morally can - recommend a pill over exercise and dieting.
Regardless, bank ARNA as one of 2012's money success stories and keep an eye on the action this week as many more trading opportunities may materialize with all this interest paid. It may be a more predictable and profitable move, however, to start looking for the 'next undiscovered ARNA'.
Vivus Inc. (VVUS): For additional proof that the weight-loss sector is a hot one right now, take a look at Vivus, too, if you haven't already. It's also a hot one to watch this month as the FDA is due to announce its approval or rejection decision for Qnexa, another weight-loss product, later this month.
Although denied back in 2010, consensus has it that the FDA may approve this time and shares have traded accordingly. While there may be some price fluctuationss and trading opportunities left for this one, I also have a hard time believing that a 'weight loss pill' will have trouble maintaining long term momentum on the open market.
Again, what ever happened to good old diet and exercise?
Also noteworthy in the healthcare/pharmaceutical/biotech sector:
The Spectrum Pharmaceuticals (SPPI) price rise that is fueled, in part, by the possibility of HUGE short covering continued last week. Spectrum closed the week closer to sixteen bucks than fifteen and will continue to be a stock to watch as long as the short interest remains nearly half of the float. Again, the right news could bring out the mother of all short squeezes here.
Oncothyreon (ONTY): Could be time to take a look at Oncothyreon again. Identified earlier this year for its rebound potential after dropping to under four dollars once again, shares have quickly resurfaced onto the radar screen and could be primed to move higher leading into the results of an ongoing Phase III Stimuvax trial, which are slated for release early next year.
One of a few candidates to make a Dendreon (DNDN)-like move on positive results, keep an eye on ONTY shares for the near future.
Telecom, Wireless Services and Electronics:
Teletouch Communications, Inc. (TLLE): Still bouncing around in the forties, it's worth keeping a continued eye on Teletouch these days as the recent resolution of a lawsuit with AT&T (T) brought in a nice chunk of change right when the company was shifting its strategy to concentrate on the more profitable business of hardware distribution.
Although having picked up somewhat over the past month, trading remains relatively light and any increased investor attention combined with a solid news flow could quickly have a positive impact on the share price.
With numerous deals announced over the past months, this could be the beginning of a solid quarter of growth for Teletouch.
Worth keeping a watch on.
Disclosure: Long CELH, IMSC, PBTH, LPTN.
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