The RegMed Daily Dialogue, Mid-day, Monday, 5/9/11 – Sputtering and Struggling
Regenerative medicine/stem cell universe stocks are slightly up since the day started on Monday (5/9/11) with 9 downs and 7 ups and a few flats. The NASDAQ is up +18.97 (0.67%) to 2846.53 from 2830.03 (11′ish). The Dow is up 71.44 from (0.57%) from 7.64 (11′ish) to 12,710.18. What’s driving the market today … regenerative medicine/ stem cell equities stocks are sputtering and struggling to rebound after last week’s rout. While earnings (Loss per Share = LPS) performance for Q1/11 have been reasonable and predictable, catalyst have run out of gas. I believe regenerative medicine/ stem cell equities could see a 3% to 5% higher by the end of June.
BrainStorm Cell Therapeutics (OTCBB: BCLI), will open today’s trading session on the Over-the Counter Bulletin Board (“OTCBB”). BCLI.OB core technology, NurOwn™, processes adult human mesenchymal stem cells that are present in bone marrow and are capable of self-renewal as well as differentiation into many other cell types. BCLI.OB is among the first to have successfully achieved the in vitro differentiation of adult bone marrow cells (animal and human) into astrocyte-like cells capable of releasing neurotrophic factors, including glial-derived neurotrophic factor (GDNF). The ability to induce differentiation into astrocyte-like cells along with intramuscular or intrathecal (or other) delivery makes NurOwn™ technology highly attractive for treating ALS and Parkinson’s disease as well as MS and spinal cord injury. The bottom line, BCLI.OB has been current on all its filings and has been eligible to trade on the OTCBB. However, due to issues related to the market makers that quote on the OTCBB, BCLI, together with hundreds of other companies, stopped being quoted on the OTCBB in 2/11.
EU Patent Battles Continue; EPO Ruling Confirms KAEL- GemVax’s Patent Position on GV-1001. A recent ruling by the European Patent Office dismissing appeals relating to Geron’s (GERN) EU telomerase patent confirms KAEL-GemVax’s patent position on lead product GV-1001, an anti-telomerase vaccine, currently completing the TeloVac PIII trial for pancreatic cancer. The appeal case number was T 1456/06 and concerned GERN’s European patent no: 841396, and in particular the case concerned the outcome of an earlier filed opposition against the patent. The bottom line, after careful consideration the Technical Board of Appeal decided that GERN’s patent does not sufficiently disclose peptide vaccines derived from human telomerase protein. The Board therefore affirmed the first-instance decision that the originally granted patent claims relating to such peptide vaccines are revoked.
Osiris Therapeutics (OSIR) Earnings . Q1/11 net income was $4M with basic earnings at $0.12 per share . Q1/11 revenues were $10.4M, consisting primarily of the amortization of license fees from collaboration agreements versus $11.4M in Q1/10. Product sales were $37K minus cost of goods sold for a gross profit of $22K. R&D expenses were $4.7M, compared to $6.6M incurred in Q1/10. G&A expenses were $1.7M compared to $1.8M in Q1/10. Net cash used in Q1/11 continuing operations was $6.0M. Q1/11 net income was $4M with basic earnings at $0.12 per share compared to $2.4M or $0.07 in Q1/10. The weighted average of common shares was 32.8M while the weighted average of diluted common shares was 33.1M. As of 3/31/11, OSIR had $63.2M of cash, receivables and short-term investments
Regenerative Medicine Weekly Trend Line: Last Week … Shares of regenerative medicine stem cell companies gyrated by low volumes and earnings by Friday, 5/6/11, after being excruciatingly pushed way down and some up during the week. The bottom line, US markets wrapped up one of Wall Street’s wildest weeks in a while Friday (5/6/11), marked by reaction to the death of Osama bin Laden and riding out one of the craziest weeks in memory for commodities trading. Stocks gyrated after mixed readings on the US employment picture, while currency markets were roiled by talk of varying interest rate differentials and the upheaval in commodity prices. The 3 major U.S. stock indexes all fell, snapping a 2 week winning streak. From the 5/6/11 close, the continued volatility in the markets is adjusting investors’ attitudes, as can be seen by the numbers. Declining stocks (9 to 9 versus last weeks 11 to 7) were even to those advancing, a weakening indicator. The regenerative medicine universe continues to gyrate during periods of market unrest. The biggest winners of the regenerative medicine universe week were BioMimetic (BMTI) up $0.58 (4.56%) to $13.29; BioTime (AMEX: BTX) up $0.31 (5.13%) to $6.35; followed by ReNeuron Group (RENE.L) up $0.11 (1.99%) to $5.37. The biggest event from the previous week was the Stem Cell Ban being overturned causing stem cell stock to jumps; but, I did not see many new heights. Q1/11 earnings from Opexa (OPXA), BioTime (AMEX: BTX); Cytori (CYTX); Athersys (ATHX); StemCells (STEM) and ThermoGenesis (KOOL) Q3/11 results set a downward slide in league with the depreciating market forces. No one anticipates the forces roiling the stock market however, “buy the dips”, as I am always outspoken when the street is filled with doubt, so I won’t be quiet. Always reiterating, short sale ratio data continues to carry significance. Yet again, trading traffic is lethargic as traders took “any” profit from increasing share pricing. Hesitancy continues to be nudged by smaller volume indicators. The conventional-wisdom of “sell in May” rule of thumb needs watching as optimism is suspect; the universe needs some promising news. To set precedence, what you don’t know can hurt you. Investors nowadays should realize this all too well, as headline-making events are forcing people to expect the unexpected. Short term (1-2 months) I see constant gyration, near term (2-4 months) I feel slow appreciation but, long term (4-6 months) expect solid appreciation. I am putting my money with my mouth is – so, I will be posting OUR model portfolio each week. My favorite constant and rebounding BUYS are: CYTX, AMEX: NBS; BMTI and AMEX: BTX. Believe it or not ASTM’s potential appreciation post its response from the FDA re its pending SPA will appreciate but, with the caveat that they will need a financing or even 2 to finalize their trials. So, post ASTM’s regulatory event it is definitely a SELL. And. One final thought, keep your eye on ImmunoCellar Therapeutics (IMUC) down -0.05 (-2.50) to $1.95 (LW $2.10). Manish has done a great job with a virtual model. http://www.scimitarequity.com/blog/2011/05/07/regenerative-medicine-weekly-trend-line-8