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.
The news flow eased somewhat from Europe last week, forcing investors to key mainly on indications pertaining solely to the state of the US economy and its respective recovery. Jobs and unemployment numbers disappointed on that front, however, and Friday's 100-plus point drop on the DOW could be an indicator that investors also expect lackluster numbers to start pouring in from the new earnings season. Those same investors may also be taking a 'wait and see' approach regarding additional economic indicators, which should be forthcoming on Wednesday when the Fed releases its minutes.
While the week ended on a down note, the dramatic volatile shifts of previous weeks failed to materialize this time. It's possible, if last week's action is a judge, that a little bit more stability will be upon us during the summer months. There's likely to be some shift in action though, as the media outlets and politicians trump any and all economic data to feed their respective agendas regarding the upcoming presidential campaign, which is likely to start getting pretty heated real soon.
There's always the threat of another international crisis playing havoc with the markets, too. The situation in the Eastern Mediterranean is as tense as ever with Syria continuing to demolish its own citizenry and shoot Turkish jets out of the sky - all while Vladimir Putin's Russia offers to sell Assad more weapons - and the newly-elected president of Egypt could look to re-shape the long-standing peace deal with Israel.
Meanwhile, Iran is still playing hard ball - even as European sanctions took full effect this month - and is always a threat to toy with the idea of shutting down the Straits of Hormuz, through which about a fourth of the world's oil supploy flows.
Never a dull moment with geopolitics, but there will be ample time for recreation this week, as well.
The MLB will break for the All-Stars to open the week, with the Mets sitting where no one expected them to be at this point - and the Phillies - well, who are they anyway?
Even in retirement Tony LaRussa is still making controversial calls, this time by not wanting to start R. A. Dickey for the big game. It seems, to paraphrase a few LaRussa quotes, that Dickey's knuckler is just too good to count on an MLB catcher to catch it.
This is the All-Star game, ain't it?
Back to business, MLB may be on break, but the earnings season will just be waking up and should supply plenty of excitement over the next few weeks.
All eyes will be on JP Morgan Chase's (JPM) Friday report that will finally give good insight into the scope of the trading losses racked up during the last quarter. Opinions have been mixed about the short term future of the banking giant, but many see the losses as just a bump in the road and consider the stock a good buy right now.
The more cautious investor, however, might still consider the banks a bit risky right now as many of JPM's international brothers and sisters are standing - or wobbling - on shaky ground as they await an influx of bailout cash.
Alcoa (AA) will kick off the earnings season on Monday, an announcement that could set the pace for the week. Also significant will be Google's (GOOG) Thursday report. Analysts do not expect surprises in either case.
Another busy week is ahead of us, here's a few stocks and stories to keep an eye on...
Healthcare, Biotech, Pharmaceutical:
Sunshine Heart (SSH): With a close like last Friday's, Sunshine Heart will be a hot stock to watch this week. On volume of nearly forty times the daily average, both Thursday and Friday of last week, shares of SSH soared over sixty percent higher, while reaching even higher during intra-day trading.
As outlined last Tuesday, Sunshine Heart could start attracting its fair share of new investor interest as its potential breakthrough medical device designed to treat the unmet medical need of Class III and ambulatory Class IV heart failure makes significant progress towards market.
The C-Pulse Heart Assist System is implanted in a patients heart, although outside of the blood stream, and has proven to not only halt the progression of heart failure while improving a patient's performance and quality-of-life, but possibly even reversing the effects, as well.
If trading over the past couple of days last week is any indication, investors may be taking notice of this unique investing opportunity.
Debuting on the Nasdaq only a few of months ago, shares are trading for roughly half of what they were in April and could be gearing up to return to those previous highs as pending catalysts continue to develop. For instance, Sunshine could register its first sales later this year, right around the same time it is expected that the company will initiate a US trial.
Both events could prove significant, as investors may jump on the growing mainstream potential of the company as it prepares to enter a very large market with a potentially game changing device. Big media is also starting to jump on board, with reports from MSN Money and Fox Business hitting the wires over the past couple of weeks.
With a minimally-invasive procedure to implant the device, the C-Pulse technology falls well in line with today's medical trends of finding cheaper and more effective ways to treat what have been very expensive and invasive conditions. Medical costs are also conserved, based on data thus far collected, due to the decreased need for hospital visits and/or extended stays.
Given Friday's impressive move, SSH is going to be a stock to keep an eye on this week. It's likely that this one is no longer an obscure, under-the-radar play.
Mannkind Corp (MNKD): Just weeks after making a push for the two dollar mark, Mannkind is now pushing three. Another two percent jump on Friday helped MNKD shares close the week at $2.75, a full buck above its closing price of a month ago, and some recent hype surrounding insider buys once again has investors interested in this stock.
One confidence boost came from the company's co-founder, Al Mann, who threw some more money the way of his company, but this move is to be expected as Mann already has about a billion dollars invested in the company. That's not to say, however, that his willingness to throw more money into the company is not a positive sign.
Mannkind made a nice intriguing play earlier this year and late last year when the stock's high short interest helped it set new 52-week lows, but keep in mind as the share price increases, so does the immediate-term risk. The risk has little to do with Afrezza, the company's Phase III candidate to hit the market as an inhaled insulin alternative to the needle for diabetics, but increases with the speculation that a dilutive financing event may take place later this year.
Reports have it that Mannkind has enough cash on hand to last through the fourth quarter.
Recent history suggests that MNKD rallies are followed by sharp declines after the shorts jump in on top of any run, but as the time draws nearer to the next Afrezza date with the FDA, the follow-on dips may not be as protracted as before.
Currently, Mannkind needs to complete additional trials testing the effectiveness of its next-generation inhaler, as requested by the FDA after the most recent denial.
MRI Interventions (MRIC): MRI Interventions is another company whose shares have been on fire lately. Having well more than tripled in price within weeks, MRIC touched the five dollar mark last week before retreating on Friday to close the day at $3.40. Volume was up big during the run - and still looked to be growing - as investors continued to jump on board of the company's growing success story.
A financing deal announced last week netted the company about six million dollars and may have stalled the recent price run for the time being, along with routine rounds of profit taking, but given the growing potential of MRIC's MRI-augmenting technology, there's reason to believe that the run can continue.
MRI Interventions uses its ClearPoint MRI-augmenting system to "perform minimally invasive surgical procedures in the brain guided by intraoperative MR imaging," according to the company website and other publicly-available information.
This technology provides convenient use for hospitals as it augments already-existing MRI suites and takes well advantage of the growing trends of developing less-invasive means to conduct major procedures, while also cutting costs. The successes of the technology have already enabled the company to land some heavyweight partners. Brainlab, a leader in the image-guided surgery field in the US and Europe, has already partnered-up in advancing the ClearPoint technology towards its full potential, and Siemens AG (SI) came on board for the development ClearTrace, a similar technology to that ClearPoint, only this one is geared towards less-invasive heart surgery.
Boston Scientific Corporation (BSX) also jumped in already with a deal that paid MRIC $13 million up-front to incorporate MRIC's technologies into its cardiac pacemakers and neuromodulation products. Future revenues would also become a part of this deal should BSX utilize the technology in any of its products.
With the rapid rise in MRIC share price over the past weeks, and then Friday's retreat, this will be another hot one to watch during the coming week. As volume continues to roll in to this previously lightly-traded play, the potential is there for a continued move higher.
It's also possible that MRIC becomes the target of a buyout by a larger medical device company, especially with an already-established relationship with Boston Scientific.
Spectrum Pharmaceuticals (SPPI): Shares of Spectrum Pharmaceuticals continue to fly higher, setting new 52-week highs last week amid robust short interest that has had this stock on the radar as a 'mother of all short squeezes' play for weeks.
The shorts were counting on the re-emergence of generic competition for Spectrum's Fusilev, which never developed, and they've been paying ever since. Spectrum has also made some positive progress with Zevalin over the past few quarters that could elevate that product as a major player in terms of revenue, as well, which lands SPPI as a stock that could continue to run well into the just-started third quarter.
For quite a while now the development of SPPI has reminded me of the developments of Jazz Pharmaceuticals (JAZZ) - maybe more in terms of price appreciation than pipeline - and the current price spike and positive pipeline developments may have Spectrum on the way to realizing just-as-significant gains.
Still a hot one to watch.
Prolor Biotech (PBTH): Prolor Biotech remained trading above the five dollar mark for the duration of the week last week, bar a Monday dip to below that mark, and the latest lull in news flow and relative drop in volume may provide those investors looking towards the development of hGH-CTP the opportunity to slowly accumulate.
HGH-CTP is Prolor's Phase III-ready treatment for hormone deficiency that - if early results hold through - could replace once-daily injections of hGH with once weekly injections for hormone deficient patients.
The initiation of a European Phase II trial testing the product in children came as a huge show of validation earlier this year since European regulators need to be essentially overwhelmed with positive results before allowing the initiation of pediatric trials. With a Phase III in adults scheduled to start later this year, Prolor could be preparing to release a nice one-two punch of trial results in the not-so-distant future.
It's also likely that a continued positive trend in trial data could land Prolor as a solid takeover candidate. HGH-CTP, if successful, would be positioned to enter into a billion dollar market once approved, a solid number for larger pharmaceutical companies looking for new pipelines, technologies and products. Teva's (TEVA) Dr. Phillip Frost already owns a nice chunk of Prolor shares, which fuels the buyout speculation even further.
The CTP technology could also be applied to extend the life of other protein-based treatments, as demonstrated by some late-June news, adding additional potential value to an already-intriguing play. Merck (MRK) also owns the license to four fertility-related CTP indications, which have already been successfully commercialized in Europe.
Prolor owns the license to all other indications.
One to watch, and potentially accumulate.
Titan Pharmaceuticals (TTNP): Shares of Titan Pharma will be worth keeping an eye on as a very significant volume influx last week could have this one positioned to run some time pretty soon. Volume picked up each day during the week and culminated in a day on Friday that saw more than double the daily average trade hands. The volume numbers were even more relevant when considering that only once during the past two months, for the most part, did volume touch or exceed the average.
Titan shares have already risen from the dead once, and although they have been doing their best Willie Nelson impression - stuck in the sixties - this could be an example playing out of volume precedes price.
The company has been quiet on the partnership front of late, but developments with the FDA have moved along with positive momentum in outlining a path for Probuphine approval and the company may be set to file for approval within months. Any updates from the company on that front could reignite investor interest, which looks to be increasing anyway, and possibly spark the run needed to move back above the one dollar level.
The recent spike in trading volume could also be an indicator that news is pending, a welcome sign after months of silence. Another angle to the volume boost may be related to Titan's appearance in the Wall Street Journal last week. Exposure for such a small company in a well-reputed journal such as the WSJ always comes as a welcome boon and there may be something to the theory that last week's mention is what led to the volume boost.
If that's the case, then it's sure likely that a price spike would follow.
Titan's ProNeura drug delivery technology holds significant potential as a subcutaneous controlled-release technology and may also be an attractive target for an acquiring company. Put to the test with Probuphine, results have been positive in the treatment of opioid addiction and additional testing continues for its use in the treatment of chronic pain.
Still one to keep an eye on. Historically speaking, when TTNP moves, it moves quick.
Lpath, Inc. (LPTN): Lpath is another stock that may be gearing up for a move back to the dollar mark, as they were cruising along earlier this year at prices over the dollar mark - supported by volume fluid enough to sustain those levels - until two proof-of-concept trials for iSONEP, PEDigree for the treatment of retinal pigment epithelium detachment ("RPE detachment" or "PED") and NEXUS, targeting Wet AMD, were halted earlier this year due to FDA compliance issues with Lpath's finish/fill contractor.
The announcement of the trial delay sent shares quickly south of the one dollar mark while a subsequent stock offering sent shares even further downward. LPTN has since started to rebound as investors take note of the fact that the expected trial re-starts could provide the catalyst needed to launch shares back to over a buck.
Before the trial delays, investors were keying into this small company's status as a recognized leader in the field of lipid-based therapeutics and were also quick to notice the interest of Pfizer, Inc (PFE), which jumped on board early on in development. Pfizer's interest could have been piqued when it became apparent that Lpath was, at least to date, the only company to have successfully developed monoclonal antibodies against bioactive lipids. The targeting of bioactive signaling lipids has been the subject of increased medical research over recent years and Lpath, with its ImmuneY2 platform, is the only company to yet take the technology as far along in development as it has.
The company's proprietary ImmuneY2 platform 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. The market potential for this technology in treating a plethora of modern day illnesses and diseases, should it advance past the clinical stages, is huge, and Lpath is first applying its technology to the treatment of Wet AMD and cancer, both multi-billion dollar markets, and that could just be the beginning.
Through ImmuneY2, Lpath has developed a pipeline of two lead product candidates, iSONEP and ASONEP, with a third, Lpathomab, in earlier stages of development.
According to previous comments by company officials, the iSONEP trials should re-start in August, or at some other point during the third quarter of this year.
Although trial halts will make some investors nervous, there is no reason to believe that the temporary halt effects the potential of iSONEP in any way. In a statement issued by the company via press release at the time of the trial halt, Lpath stated that "it has taken appropriate steps to oversee Formatech's manufacturing in order to ensure product quality, it has suspended dosing as a precaution to ensure the continued safety of all patients in its clinical trials.
With that in mind, the current prices could be considered quite the bargain for potential LPTN investors, especially considering the continued investment by Pfizer.
Pfizer holds a limited first right of refusal for ASONEP in the treatment of cancer, but threw down a large sum of money to become a full partner for iSONEP. A significant up-front payment came with assurances that the full value of the deal could be worth as much as nearly half a billion dollars to Lpath, should certain milestones be met and should Pfizer decide to continue the relationship following the completion of the Phase II trials.
Additionally, if Pfizer were to stay on board during the iSONEP commercialization phase, then Lpath would be due double digit royalties on sales. It's largely assumed, however, that a full acquisition would take place well before that point as the ImmuneY2 technology would have been proven to work as advertised and could lead to multiple new and ground breaking treatments for Pfizer.
The full potential of Lpath's pipeline should not go unnoticed to investors, and with catalysts pending later this summer, this is a stock to watch for the duration of the current quarter.
Generex Biotechnology Corp (GNBT): Generex is developing Oral-lyn, what could be considered as competition to Mannkind's Afrezza. For a time it looked as if the two products were in a race to market, but after seemingly gaining ground due to the the Afrezza FDA denial in early 2011, Generex shifted its primary focus to its immunotherapeutic cancer treatment, AE-37, being developed by subsidiary Antigen Express.
An announcement in late June from the company informed investors that the lights are still on and that Oral-lyn is still on the table, but progress on the US FDA front has taken a back seat to seeing the product approved in India, where Generex's licensee is currently conducting a late-stage trial in anticipation of filing for approval in that country later this year.
Still highly speculative, a few 'night on the town' shares could pay off fairly well down the road, but bear in mind that developments have been slow to materialize over the past couple of years.
In regards to the Afrezza/Oral-lyn race to market, it's got to be assumed - at least at this point - that Afrezza gets there first and will have the time to gain significant market share before Oral-lyn pops up on the radar again, if it ever does.
If Generex were to land a major partner, then that would provide the catalyst needed to reinvigorate the share price, but nothing has panned out in that front in years.
Historically, speculative moves have materialized out of this air for this one, and there's no saying that won't happen again, but I'd have to suggest keeping an itchy trigger finger and taking advantage of any jumps, at least for the time being.
Cytosorbents (CTSO): With a medical device already approved and on the market in Europe, Cytosorbents may continue to be an attractive buy while trading for closer to ten cents than fifteen. The company's flagship product, CytoSorb, demonstrated enough success in treating conditions of high cytokines, such as severe sepsis, in European trials that officials across the pond were compelled to approve, even before the final data were tallied.
Treatments targeting the unmet medical needs that CytoSorb does have been highly ineffective in the past, so the medical profession may be playing on a case of "I'll believe it when I see it" in regards to CytoSorb. Early reports from Europe have been encouraging that professionals are becoming believers when they see the device in action, but investors will be looking to see if those stories of success will translate into sales over the coming quarters since the commercial launch in Germany is now official.
Expect more trials before Cytosorbents seeks approval in the United States.
Still a sleeper, CTSO has been know to at least double or triple very quickly over the past few years - although there were months and months of patient accumulation in between those runs, each time.
Still one to watch.
Teletouch Communications (TLLE): Still a potential growth story based on a few recently realized developments, Teletouch Communications continues to trade under the radar while solidifying its redirected business plan that heavily emphasizes distribution and hardware sales, mainly through the company's primary subsidiary.
The refocused plan was met with early success.
Multiple new distribution agreements were announced last month, a key indication that Teletouch is making headway in securing a dominating presence in the distribution channels of several well-known brands, such as AT&T (T). Also noteworthy to the Teletouch bottom line was settled litigation with T that brought in over $18 million dollars, not a small sum for a still-growing company. The litigation related to certain hardware that the telecom giant was not allowing Teletouch to sell through its channels, but as a result of the settlement the two entities agreed upon another multi-year contract that - since they also agreed to forgo any further litigation - should keep the marriage well intact.
Most significantly, the large settlement sum from T eases the monetary burden for Teletouch as it shifts its core business from providing wireless services to the more profitable one of hardware sales and distribution.
Volume, although having picked up during last month's news flow, has again tailed off, possibly providing patient investors a better opportunity to jump in by naming their price with limit orders. High volume shot shares past the sixty cent mark earlier in the year, a good indication of where this stock could again go, should volume and investor interest start to pick up.
With the amount of new deals announced over the past couple of months, Teletouch will be a stock to watch during the coming quarters as a potential growth story.
Worth keeping an eye on as TLLE is currently slipping beneath the radar trajectory.
Facebook (FB)/Yahoo (YHOO): Yahoo! may still be searching for its next CEO, but a swift end to legal drama with Facebook that resulted in a new partnership between the two could have the company now positioned to realize a rebound.
Yahoo! had accused Facebook of infringing on ten of its patents and Facebook then counter-sued.
With the suits now settled, the two can move forward with a partnership and possibly start eating away at the dominance of Google in the online advertising space.
Any valid rebound could return YHOO shares to the twenty dollar mark, while FB may still be fighting off the demons resulting from its IPO a couple of months ago that looked more to do with milking the retail investors for every penny possible while enriching the insiders - but isn't that always the case.
In the long run both could be proven runners, but it's likely still just the hype that keeps Facebook shares over thirty.
With the patent wars over, however, at least between these two big players, investors could key in on the value of this intriguing partnership.
Regarding both of these companies, I'm a little bit more of a believer today than I was yesterday, but still not convinced.
Explosive Trace Detection and Homeland Security:
Implant Sciences (IMSC): Implant is still on the hot list moving into the new trading week. Another buying opportunity was realized early last week, but shares rebounded and showed particular strength on Friday with a late-day rebound to close in the green.
Implant Sciences has enough pending in terms of catalysts to support this continued price run on its own, but a prominent mention last week on the Forbes website augments an already-impressive run of new hires over the past couple of month that should have the company ready to realize any potential increases in demand for its Quantum Sniffer technology, should the TSA grant its approval in August, as expected.
Another event that could start taking shape is a potential move to one of the larger trading exchanges, where the company's stock may achieve another credibility boost from investors who don't necessarily dabble in OTC and Pink Sheet stocks. To speculate even further, CEO Glenn Bolduc noted in a recent interview with 'Government Security News' that a name change could eventually be in effect to match the company's now primary selling point - providing security through explosive and narcotics trace detection. Should the company follow-through with such a move, the opportune time to do it would be in conjunction with a move to a large trading exchange.
Just something to keep in mind.
With key catalysts pending and a nice run already realized, this is one to keep on the radar, at least through the summer months.
Disclosure: Long SSH, IMSC, LPTN, PBTH, CTSO, MNKD.
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