Vaxgen Redux
by Michael Shulman
BiotechBlitz
Folks, this is right out of a made for TV movie, maybe. Maybe not.
Vaxgen (VXGN.PK) is one of those money sucking, never producing nothin’ biotechs that have broken more individual investors hearts and ticked off more institutional investors than most. It became famous, then infamous, as part of the bio-defense mini-bubble with potential vaccines for anthrax and smallpox. The key word here is potential. They never materialized.
It is something of a wreck right now except for one thing – it has north of $80 million in cash, a market cap of $18 million and convertible debt (if I got it right) of $30 million, giving the company a negative enterprise value of $32 million. The cash burn is supposedly down to $4-$4.5 million a quarter so the company has too many years of cash on hand.
Why is it so cheap?
Because it plans to buy/merge with Raven biotechnologies, a privately held outfit doing work in monoclonal antibodies that has a deal with Wyeth (WYE). It does not appear to be a great deal, I could be wrong, but Wyeth has not hyped it and has little to say about it – and, well, who needs another monoclonal antibody company, anyway? The shareholders have yet to vote approval. And this is where it gets interesting.
If I were a shareholder, I would vote no and return the dough to investors via a dividend or liquidation of the company. You think, maybe, some others have the same idea? The largest investor (15% +) I could find (using Yahoo data that is a few weeks old – remember this is a pink sheet company and may have unregistered shares floating around) is Gruber & McBaine, a San Francisco hedge fund.
I spent a tough hour with the Gruber part of this fund a few years ago talking about our ChangeWave Alliance and he is the Webster’s definition of, well, politely put, a no-nonsense guy.
Gruber & McBaine has been around a long time and made a lot of money, so it’s hard to imagine a savvy investor like Mr. Gruber liking the Raven deal when so much cash might be available. C’mon, another monoclonal antibodies company?
I’m not the only one thinking this way – the stock popped yesterday, up from 42 cents to 55 cents.
Someone out there smells something brewing. If there is a shareholders revolt, the company – based on cash minus debt – is worth somewhere between a buck and a buck and a half per share if someone would force them to disgorge the cash.
The buzz is there — I even got a call about Vaxgen from a killer of a hedge fund guy who specializes in little biotechs grossly undervalued because of unknown or rapdily changing financial conditions. This one hit his radar recently and it may have hit others.
So, have fun, do your own valuation analysis, don’t forget to visualize what happens to VXGN’s stock price if the shareholders approve the Raven deal. I am totally agnostic on this, I have no sense of the probability of the deal groing through – and I don’t buy, own or recommend this or any other pink sheet stock to anyone. Nada, never.
Not to mention I have done all of two hours homework on this one. But this kind of stuff, once in a while, is a lot more interesting than reading FDA panel minutes, right? Just thought you might find it interesting too.
BiotechBlitz is a regular contributor to BioHealth Investor
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Korean Scientists Clone Glow-in-the-Dark Cats
by H.S. Ayoub, DMD
BioHealth Investor
Scientists at the Ministry of Science and Technology in Seoul announced the cloning of three cats that glow in the dark when exposed to UV radiation.
The cloned cats carry a manipulated fluorescent protein gene which could aid in finding treatment for many human disease conditions. Cats are affected by 250 different types of genetic conditions that mirror those affecting humans.
It may now be possible to produce cloned cats as varying models of human disease, and the flourescence can aid researchers in visualizing how different areas of the body are affected by certain diseases, and how successful different therapies are in combating those conditions.
Let’s just hope this isn’t another Hwang Woo-Suk type announcement. The Korean scientist was hailed as a national hero after announcing the very first isolation of human stem cells, only to be found as a fake.
And if these cloned cats are found not to have much use for medicine then at the very least, Holloween should be much more fun!
BioHealth Investor.com
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What if Google finds out you have cancer before you do?
by David E. Williams
Health business blog
I’ve pooh-poohed Google diagnosing in the past, but I also concede that it’s more than possible for your search pattern in Google to reveal that you may have a disease before you and your doctor figure it out. A friend got a little worried when ads for Neulasta started popping up along his searches. The drug, made by Amgen (AMGN)…
…is prescribed to reduce the risk of infection (initially marked by fever) in patients with some tumors receiving strong chemotherapy that decreases the number of infection-fighting white blood cells.
There is something creepy about getting a knock from a virtual grim reaper even when if it turns out to be a false alarm. As ad placement technology gets better and better I expect you’ll see examples of targeted advertising portending the diagnosis of serious illness.
Health Business Blog is a regular contributor to BioHealth Investor
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Friday’s Top Biotech & Medical Stocks
by H.S. Ayoub
BioHealth Investor
Biotechnology
IDM PHARMA INC [IDMI] +28.70%
BIODELIVERY SCI INTL [BDSI] +23.67%
INNOVIVE PHARMACEUTL [IVPH.OB] +20.83%
NEURALSTEM INC [CUR] +13.25%
CURAGEN CORP [CRGN] +9.90%
Diagnostic Substances
INTERLEUKIN GENETICS [ILI] +9.17%
IMMUNOMEDICS INC [IMMU] +5.43%
LEXICON PHARMACEUTCL [LXRX] +4.12%
REMOTEMDX INC [RMDX.OB] +2.93%
INFINITY PHARMACEUTI [INFI] +1.84%
Drug Delivery
EMISPHERE TECH [EMIS] +8.82%
NEKTAR THERAPEUTIC [NKTR] +2.53%
FLAMEL TECH SA ADR [FLML] +2.44%
PETMED EXPRESS INC [PETS] +2.27%
NOVEN PHARMACEUTIC [NOVN] +1.97%
Drug Manufacturers
NEUROGESX, INC. [NGSX] +19.90%
PRANA BIO LTD ADS S1 [PRAN] +10.05%
ADOLOR CORP [ADLR] +7.87%
WUXI PHARMATECH ADS [WX] +6.47%
[MAPP] +5.55%
Drug Related Products
BOND LABORATORIES [BNDB.OB] +15.79%
AUXILIUM PHARMACEUT [AUXL] +2.84%
PRESTIGE BRAND HLGS [PBH] +2.32%
DRAXIS HEALTH INC [DRAX] +1.26%
PERRIGO COMPANY [PRGO] +0.32%
Generic Drugs
CATALYST PHARMACEUTI [CPRX] +11.30%
CARACO PHARMA LABS [CPD] +0.93%
PHARMACUTICAL CO [PRX] +0.43%
BARR PHARMA INC [BRL] +0.41%
HI-TECH PHARMACAL [HITK] +0.29%
Medical Appliances & Equipment
SIRONA DENTAL SYS [SIRO] +12.58%
ALLIED HEALTHCARE [AHPI] +10.33%
LECTEC CORP [LECT.OB] +9.09%
RESTORE MEDICAL INC [REST] +8.55%
LAKELAND INDS INC [LAKE] +6.73%
Medical Instruments & Supplies
ARISTOTLE CP [ARTL] +6.60%
ANGEION CORP [ANGN] +5.43%
ENCISION INC [ECI] +5.41%
MINDRAY MEDICAL INTL [MR] +5.08%
OCULUS INNOVATIVE SC [OCLS] +4.65%
Medical Laboratories & Research
PREMD INC [PME] +3.52%
RADNET INC [RDNT] +1.51%
GENOMIC HEALTH, INC. [GHDX] +0.99%
PSYCHEMEDICS NEW [PMD] +0.77%
ENZO BIOCHEM INC [ENZ] +0.24%
- Thursday’s Top Biotech & Medical Stocks
- Wednesday’s Top Biotech & Medical Stocks
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Big Pharma and Biotech: Marriage Made in Hell?
by Hisham S. Ayoub, DMD
BioHealth Investor
In Thursday’s edition of the Wall Street Journal the feature article focused on the grim future of big pharmas, as old ways of doing business, top drugs facing loss of patent protection coupled with increasing competition from generics, and dried up pipelines add up to a not so bright horizon.
In fact, Wall Street has built in the negative view of big pharma into the market price of many stocks. The Dow Jones World Index gained 75% over the last six years, while the FTSE Global Pharmaceuticals Index dropped almost 20%.
So what’s the solution? Many big pharmas are already involved in damage control. Many are establishing in-house generics subsidiaries in order to squeeze out as much as possible from their own blockbuster drugs. Pfizer’s (PFE) generics company, Greenstone, launched a generic version of the parent company’s blockbuster Zoloft as the wonder drug went off patent las year. Novartis’s (NVS) generics unit, Sansoz, actually grew three times as fast as the parent companies brand name business, and contributed almost 20% of total revenue in the first nine months of the current fiscal year.
Some pharmas are spending on corporate image and public awareness campaigns, while others are cutting workforce and downsizing!
But I believe there exists a greater force that big pharmas must contend with other than generics companies and public backlash, and that is biotech. While some argue that the biotech industry has so far failed, others contend that the pharmaceutical industry is losing ground. The old way of drug development using “dart board“-like chemistry is giving way to the modern technology of gene sequencing, protein analysis, and nanotechnology.
Big pharmas have already began to swallow up as many biotechs as possible to bolster a depleted pipeline born out of an aging technology platform. Big pharmas have spent almost $76 million since 2005 to acquire biotech companies, and the trend is pointing upwards. In 2005 there were 33 deals worth $16.5 billion. In the first nine months of this year there were 49 deals worth $28.7 milllion, including the blockbuster acquisition of MedImune by AstraZeneca PLC (AZN) for a whopping $15.6 billion after a heated bidding war with Eli Lilly (LLY) and others. Some pharmas are saving some money and establishing in-house biotech outfits, including Pfizer and Novartis.
But this raises an important question; is it possible for big pharmas to integrate biotechs into their business seemlessly? I personally do not think so.
Biotechnology companies were born out of a necessity to live on the edge of medical research if you will. Many biotechs today have risen out of little laboratories of educational institutions, the corporate world’s equivalent of teenagers building a website in their parents’ basement. To carry out research that is based on cutting edge, and usually unproven, technology and to target a relatively small population of disease sufferers would seem like suicide to big pharma who bank on large scale production, and view the world population as a target patient base.
I can see how a biotech firm might fold under the corporate pressures of a large pharma. Biotech firms need the free-flowing and open environment that is necessary in order to think outside of the box. Unless big pharma can provide this environment, the only way I can see this marriage working is if pharmas can evolve and change their ways.
Big pharmas must accept the fact that biotechnology will provide a way to attack diseases at a personal level. Genetic-based drug development is on the horizon. Thinking on a large scale and viewing problems with a wide lens will not work, and this marriage will be doomed from the start.
BioHealth Investor.com
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ChinaBio® Forum Gives “Most Promising” Award to Two China Biotechs
by Richard Daverman, PhD
ChinaBio Today
The ChinaBio® Investor Forum 2007, held December 4-5, 2007 in Shanghai, gave the “Most Promising” award to two early stage China biotech companies. PanAsia Bio of Shanghai won the prize in the Drug Company category, and Chiral Quest of Suzhou was the recipient in the Services group.
PanAsia Bio uses pegylation technology to develop PEG-based drugs. The company was represented at the Forum by its President, Michael Xu, PhD. Chiral Quest, Inc. is a contract manufacturer of chiral drug candidates. It was represented by its Chief Technical Officer, Xumu Zhang, PhD. The two companies were chosen from a list of fifteen companies that made presentations to the forum.
The awards were sponsored by Unitalen, Attorneys at Law, a firm that specializes in intellectual property law. Unitalen has offices throughout the PRC.
The purpose of the ChinaBio® Investor Forum 2007 was to connect early and mid-stage biotech/medtech companies with US and China investors. It also served to update investors and executives on the state of the biotech industry in China, and to help entrepreneurs and executives build global companies. It was the first such event in what the organizers hope will be a series of similar meetings.
Besides the fifteen biotech/medtech companies that presented, discussions of the state of bipharma development and advice on building companies were given by three keynote speakers and fourteen speakers or panelists. All of these speakers are involved in biopharma development, either as venture capitalists, lawyers or industry executives.
The ChinaBio® Investor Forum was sponsored by ChinaBio® Accelerator and ShanghaiBio Corporation. ChinaBio® Accelerator is a non-profit organization that seeks to accelerate the globalization of China’s biotechnology industry by providing funding, mentoring and connections between early stage China life science companies and investors/partners in the U.S. ShanghaiBio Corporation makes biochips and provides drug discovery and development services from its facilities in Shanghai and the US. The company is one of the largest biotech companies in China. Neither one of the sponsors was eligible for the “Most Promising” award.
The seven firms that were VC Partners for the Investor Forum were responsible for choosing the two “Most Promising” awards. These firms were Bay City Capital, BioVeda China, HBM BioMed China, Morningside, Life Science Angels, Sequoia Capital China and Mingly China Growth Fund.
The ChinaBio® Investor Forum was held immediately before the Zero2IPO CVCF China VC Annual Forum, the largest annual gathering of venture capitalists in China.
ChinaBio Today is a regular contributor to BioHealth Investor
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OPX Biotechnologies: Series A $3.6M
by Adam Rubenstein
CLSDF
OPX Biotechnologies (Boulder, Colorado) announced the close of a $3.6M Series A financing led by Mohr Davidow Ventures and X/Seed Capital Management.
OPX is enabling renewable fuels and chemicals that are economically and environmentally superior to petroleum-based products by using a pioneering technology platform known as SCALEs to enable massively parallel full genome search and modification to rapidly optimize the microbes used for producing biofuels and biorefined chemicals. The goal is to vastly decrease production costs and capital requirements, thus removing one of the major barriers to the use of renewable fuels and chemicals.
Colorado Life Science Deal Flow (CLSDF) is a regular contributor to BioHealth Investor
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Thursday’s Top Biotech & Medical Stocks
by H.S. Ayoub
BioHealth Investor
Biotechnology
CERAGENIX PHARMACUTL [CGXP.OB] +21.14%
MOMENTA PHARMA [MNTA] +13.15%
NASTECH PHARM CO [NSTK] +11.53%
THIRD WAVE TECH IN [TWTI] +10.69%
JAZZ PHARMA INC [JAZZ] +9.78%
Diagnostic Substances
IMMUNOMEDICS INC [IMMU] +9.09%
TORREYPINES THERAPEU [TPTX] +6.62%
ABAXIS INC [ABAX] +4.78%
MYRIAD GENETICS [MYGN] +4.77%
ISTA PHARMACTLS [ISTA] +4.77%
Drug Delivery
NEKTAR THERAPEUTIC [NKTR] +8.22%
PENWEST PHARM CO [PPCO] +7.96%
BENTLEY PHARMACEUTIC [BNT] +4.65%
ALKERMES INC [ALKS] +3.70%
MATRIXX INITIATVS [MTXX] +3.23%
Drug Manufacturers
MINRAD INTL INC [BUF] +19.78%
NEUROGEN CP [NRGN] +16.45%
ALEXZA PHARMACEUTICA [ALXA] +14.06%
[SCMP] +11.41%
TELIK INC [TELK] +10.45%
Drug Related Products
CURATECH INDUSTRIES [CUTC.OB] +29.41%
TIENS BIOTECH GR USA [TBV] +13.72%
MEDICAL NUTRITN USA [MDNU] +7.69%
CHINA SHENGHUO PHARM [KUN] +7.47%
IMAGENETIX INC [IAGX.OB] +4.76%
Generic Drugs
CARACO PHARMA LABS [CPD] +2.31%
PHARMACUTICAL CO [PRX] +1.65%
HI-TECH PHARMACAL [HITK] +0.69%
WATSON PHARMACEUTCLS [WPI] +0.59%
Medical Appliances & Equipment
[ETRM] +18.84%
MICRUS ENDOVASCULAR [MEND] +10.88%
CRYOLIFE INC [CRY] +8.79%
THERMAGE, INC. [THRM] +8.05%
EDAP TMS SA ADR [EDAP] +7.01%
Medical Instruments & Supplies
DEXCOM [DXCM] +8.30%
BIOLASE TECH INCS3 [BLTI] +6.45%
BIOMIMETIC THERAPEUT [BMTI] +6.34%
ENDOLOGIX INC [ELGX] +6.07%
CONCEPTUS INC [CPTS] +5.77%
Medical Laboratories & Research
ENZO BIOCHEM INC [ENZ] +16.42%
SPHERIX INC [SPEX] +10.49%
ARRAY BIOPHARMA IN [ARRY] +6.34%
NEOGENOMICS INC [NGNM.OB] +5.17%
RADNET INC [RDNT] +5.08%
- Wednesday’s Top Biotech & Medical Stocks
- Tuesday’s Top Biotech & Medical Stocks
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Wednesday’s Top Biotech & Medical Stocks
by H.S. Ayoub
BioHealth Investor
Biotechnology
IMMTECH PHARM INC [IMM] +13.60%
EXELIXIS INC [EXEL] +11.81%
PROTALIX BIOTHERAPEU [PLX] +9.97%
MOLECULAR INS PHARMA [MIPI] +9.30%
TERCICA INC [TRCA] +8.55%
Diagnostic Substances
EPICEPT CORPORATION [EPCT] +13.85%
[IMRX] +11.11%
REMOTEMDX INC [RMDX.OB] +9.76%
ROSETTA GENOMICS LTD [ROSG] +8.47%
HUMAN GENOME SCI [HGSI] +5.86%
Drug Delivery
PENWEST PHARM CO [PPCO] +3.43%
DELCATH SYSTEMS INC [DCTH] +3.33%
COLUMBIA LABS INC [CBRX] +2.86%
BENTLEY PHARMACEUTIC [BNT] +2.06%
NEKTAR THERAPEUTIC [NKTR] +1.39%
Drug Manufacturers
ADOLOR CORP [ADLR] +19.47%
SOMAXON PHARMACEUTIC [SOMX] +14.34%
RIGEL PHARMACEUTLS [RIGL] +10.79%
OPKO HEALTH INC. [OPK] +9.63%
MARSHALL EDWARDS [MSHL] +9.05%
Drug Related Products
CHINA SHENGHUO PHARM [KUN] +26.48%
TIENS BIOTECH GR USA [TBV] +7.36%
NUTRACEUTICAL INTL [NUTR] +1.92%
INTEGRATED BIOPHARMA [INBP] +1.81%
DRAXIS HEALTH INC [DRAX] +1.54%
Generic Drugs
LOTUS PHARMACEUTICAL [LTUS.OB] +3.77%
PHARMACUTICAL CO [PRX] +3.72%
ISOLAGEN INC [ILE] +2.89%
CARACO PHARMA LABS [CPD] +2.01%
HI-TECH PHARMACAL [HITK] +1.51%
Medical Appliances & Equipment
SYNERGETICS USA INC [SURG] +15.95%
SYNOVIS LIFE TECH [SYNO] +14.95%
CRITICARE SYS INC [CMD] +6.87%
ARTHROCARE CP [ARTC] +6.24%
HANSEN MEDICAL, INC. [HNSN] +5.75%
Medical Instruments & Supplies
STEN CORPORATION [STEN] +37.50%
MILESTONE SCIENTIFIC [MLSS.OB] +15.15%
ANGEION CORP [ANGN] +14.05%
CARDICA, INC. [CRDC] +13.97%
YOUNG INNOVATIONS [YDNT] +10.66%
Medical Laboratories & Research
PREMD INC [PME] +10.37%
[GXDX] +5.00%
ARRAY BIOPHARMA IN [ARRY] +3.69%
SPHERIX INC [SPEX] +3.62%
ENZO BIOCHEM INC [ENZ] +3.44%
- Tuesday’s Top Biotech & Medical Stocks
- Monday’s Top Biotech & Medical Stocks
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GeneLink: Genetically Tailored Nutritional Supplements
by Hisham S. Ayoub, DMD
BioHealth Investor
There are many biotech and medical technology companies racing to bring to market a variety of drugs tailored to an individual’s unique genetic makeup. Many on Wall Street are betting that these products will revolutionize medicine. Shares of Biotech companies utilizing the latest in genetic based drug manufacturing have been one of the hottest stocks over the last two decades.
Yet, genetically tailored nutritional and dermatological supplements have flown under the radar. On Tuesday, GeneLink (GNLK.OB), a little known company which manufactures and sells personal gene testing kits announced that it has entered into an agreement with Solgar Vitamin and Herb, a nutritional supplement manufacturer and distributor.
According to the press release under the terms of the agreement,
“Solgar, in 2008, will begin marketing a brand of advanced genetically-guided nutritional supplements, called Nutrigenomx™, utilizing GeneLink’s Nutritional System™ which includes its patented DNA Collection Kit and Genetic Compass™ reporting system”.
and,
“GeneLink and Solgar expect to be the first companies, on a retail basis, to offer a proprietary dietary supplement system tailored to an individual’s genetic makeup”.
Now let’s think about this for a minute; How great would it be to test your genetic makeup and based on the results, say maybe you are prone to dehydration or weak joints, or have a chronic condition such as diabetes or arthritis, a supplement is formulated optimally for your specific needs?
If GeneLink management is smart, and promotes the product extensively, then I could see Nutrigenomx being a great revenue producer for the company, which is worth a miniscule $9 million on the open market.
The company also markets Dermagenetics, a proprietory gene-based line of skin care products. According to the company’s website Dermagenetics Skin Care System “is the first and only clinically tested, scientifically proven customized skin care system genetically matched to an individual’s skin’s DNA“.
T
his tiny stock could still reap huge rewards for risk loving investors, even though it has more than quadrupled over the last 52 weeks. The tiny market cap, coupled with a low float of 30 million shares and insiders holding 30% of the outstanding shares, all add up to a potentially lucrative investment.
Of course, with any tiny penny stock, actually with all stocks for that matter, especially these days, investors must be carefull. Penny stocks are easily manipulated by traders and market makers no matter the business activities of the company.
Still, I personally am betting on a great year in 2008 as sales of Nutrigenomx commence. I purchased shares three weeks ago at $0.15 for a quick trade based solely on volume spikes and stock movement. But after Tuesday’s announcement I am looking to hold GeneLink stock well into 2008.
BioHealth Investor.com
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