Companies featured in this edition of the newsletter: ACTC, CUR, CVM, DKAM, ENZ, IMUC, MFGD, NXOI, OMCM, ONEZ, PSID, XSNX
Markets continued to carry momentum during the early stages of last week, as the absence of significant economic news led to a continuation of the upward trend characterizing the past few weeks, until an earnings miss from Dell on Thursday led to a selloff in the technology sector which caused the major indices to end the week mixed. All told, the Dow ended the week in positive territory, gaining 47 points to close at 10318, up 0.5% on the week and 17.6% on the year. The Nasdaq surrendered 1.0% to close at 2146, paring its YTD gains to 36.1%, while the S&P 500 and Russell 2000 lost 0.2% and 0.3% respectively, reducing their yearly gains to 20.8 and 17.1.
Things got off to a strong start on Monday, with the performance of the prior week fresh in the minds of investors, helping to spur outsized gains which were largely eroded throughout the course of the week. Economic news was mixed, as weekly initial jobless claims met expectations but remain elevated above the 500,000 mark, while retail sales for October handily beat consensus estimates, growing by 1.4%. These relatively positive developments were offset however by news of weakness in the housing sector, in the form of significantly worse than expected housing starts, which fell by 10.9% in October.
In corporate news, the few retailers reporting last week posted generally positive results, as Gap, Limited Brands, Sears Holdings and Target all managed to beat consensus EPS estimates. The lone disappointment on the earnings side last week was Dell, which disappointed both revenue and EPS. The news was not well received by investors, as shares of Dell traded 7.2% lower the following day, despite the announcement that the company was seeing generally improved demand for IT services. The Dell miss weighed heavily on the tech sector, which ended up underperforming the rest of the S&P’s ten sectors, leading the laggards with a loss of 1.4% on the week, with healthcare leading the way with a gain of 1.9%.
What should investors look for this week? Earnings reports will continue to trickle in slowly during this holiday shortened week; expect results from Tyson Foods (NYSE: TSN) on Monday premarket, followed after the bell by Hewlett Packard (NYSE: HPQ). Barnes & Noble (NYSE: BKS) report Tuesday morning along with HJ Heinz (NYSE: HNZ) and Medtronic (NYSE: MDT) with Deere (NYSE: DE) reporting Wednesday morning before the bell to close out the week. Of course, markets will be closed on Thursday for Thanksgiving and will trade until 1 p.m. on Friday.
Economic releases for the week begin with Existing Home Sales for October due out at 10:00am on Monday, followed on Tuesday by Preliminary Q3 GDP and Preliminary Chain Deflator at 8:30am, with Consumer Confidence for November at 9:00am and FHFA Home Price Index figures for September at 10:00am. Wednesday will be a busy day, as Personal Income and Spending for October will be released along with PCE and Core PCE Prices for October at 8:30am. Also due out at 8:30am that morning are weekly initial jobless claims and continuing claims and Durable Orders for October, followed by Revised Michigan Sentiment for November at 9:55am and New Home Sales for October at 10:00am; weekly crude inventories round out the week at 10:30am.
There are no conferences of note scheduled due to the holiday shortened week.
Enzo Biochem (NYSE: ENZ), a vertically integrated biotechnology company engaged in the research, development, manufacture, licensing and marketing of innovative health care products, technologies and services based on molecular and cellular techniques, announced last week that it has entered into an agreement with GeneNews, of Toronto, Canada, for exclusive rights to market GeneNews’ ColonSentry, a proprietary blood test for colorectal cancer, in the states of New York and New Jersey. Enzo expects that the test will be available in the second half of 2010, following the completion of requisite state regulatory processes in New York and New Jersey. The test offers a novel, non-invasive option for determining an individual’s current risk for colorectal cancer and helps prioritize patients at greater risk for the disease; Enzo is currently the only US provider of the test and will provide an important segment of the eligible US population with the diagnostic tool. Shares gained sixteen cents on the week to close at $5.90.
PositiveID Corp. (NASDAQ: PSID), a provider of unique health and security identification tools to protect consumers and businesses, announced last week that it has formed a new animal health division, PositiveID Animal Health, to focus on diagnostic/clinical response and source food safety products and applications. Randolph K. Geissler, founder of Destron Fearing and former CEO of Digital Angel Corporation, a specialist in managing companies and technologies involved in the veterinary science field, will serve as CEO of the newly formed entity. The Animal Health division will address the growing concern of animal health through diagnostic/clinical response products, applications and test kits, and will seek to apply the patents recently obtained from its partnership with RECEPTORS LLC relating to the in-vivo glucose sensing microchip technology to animals. The company also plans to seek out applications similar to its recent virus triage detection system for H1N1 and other pandemic viruses in humans, for detection of viruses such as bird flu and mad cow disease in animals. Shares lost twenty six cents on the week to close at $1.35.
Neuralstem (AMEX: CUR), a company targeting major central nervous system diseases using neural stem cells of the human brain and spinal cord, announced results for its third quarter ended September 30, 2009 last week, and provided an update on its clinical program, including the proposed Phase I trial in Amyotrophic Lateral Sclerosis (ALS), or Lou Gehrig’s Disease, for which the company was recently granted approval of its IND from the US FDA. Phase I trials to treat ALS with its spinal cord stem cells are expected to commence during the first quarter of 2010 and will be conducted under the supervision of world renown ALS researchers at the University of Michigan and Emery University. In addition to providing a clinical update, the company also released results for its third quarter; during the period, CUR reported a net loss of $5,096,983, or $0.15 per share, compared with a net loss of $3,177,957 or $0.10 per share, for the comparable 2008 period. Net loss attributable to common stockholders for the first nine months of 2009 was $7,380,751 or $0.22 per share, compared with $8,410,081, or $0.26 per share, for the comparable period in 2008, resulting from a year to date gain in accounting for warrants, partially offset by increases in non-cash stock-based compensation expense, R&D and legal fees. Shares gained twelve cents on the week to close at $1.82.
CEL-SCI Corporation (AMEX: CVM), a developer of vaccines for the prevention and treatment of infectious diseases and a late-stage oncology company, announced last week that it has commenced its first clinical study for hospitalized H1N1 patients at The Johns Hopkins University School of Medicine. The initial study will involve taking blood from 20 hospitalized, laboratory-confirmed H1N1 patients and activating their cells with the LEAPS-H1N1 investigational therapy in order to assess the cells’ response as the basis for the planned future treatment of this patient population under a next-stage clinical trial protocol; the study will also investigate the effects of LEAPS on the blood of 20 non infected patients as a control group. Shares lost two cents on the week to close at $1.30.
Volume Alert: Shares of stem cell developer Advanced Cell Technologies (OTCBB: ACTC) gained 8% on twice average volume following the announcement last week that it has filed its Investigational New Drug (IND) application with the US FDA to initiate a Phase I/II multicenter study using embryonic stem cell derived retinal cells to treat patients with Stargardt’s Macular Dystrophy (SMD). Stargardt’s is an Orphan disease and is one of the most common forms of juvenile macular blindness; Age-related Macular Degeneration (AMD), another degenerative retinal disease similar to SMD, is one of the leading causes of untreatable blindness. The proposed treatment for eye disease uses stem cells to re-create a type of cell in the retina that supports the photoreceptors needed for vision. These cells, called retinal pigment epithelium (RPE), are often the first to die off in SMD and AMD, which in turn leads to loss of vision. In pre-clinical animal models, implantation of RPE cells resulted in 100% improvement in visual performance in subjects with degenerative retinal conditions over untreated controls without any adverse effects. Following approval from the FDA, a total of twelve patients will be enrolled into the study at three clinical sites, including the Casey Eye Institute in Portland, Oregon, the University of Massachusetts Memorial Medical Center in Worcester, Massachusetts, and the New Jersey Medical School in Newark, New Jersey. In related news last week, ACTC announced that it has entered into definitive agreements on three private placements with institutional and other accredited investors, under which the company has received definitive commitments in excess of $15 million; the agreements are expected to provide proceeds sufficient to fund general operations and working capital for the next two years, including support of the RPE program and the expected Phase I clinical trial relating to the IND application which was just filed. Shares gained $0.008 on the week to close at $0.108.
Drinks Americas Holdings (OTCBB: DKAM), a company that develops, owns, markets, and nationally distributes alcoholic and non-alcoholic premium beverages associated with renowned iconic celebrities, announced last week that it has sold and is shipping $250,000 of its spirits brands, including Trump Super Premium Vodka, Willie Nelson’s Old Whiskey River Bourbon, and Olifant Vodka, to distributors nationwide in the first month of its third quarter in preparation for the holiday season. The company has utilized credit facilities now in place in order to begin rebuilding inventories and expects that the effort will be rewarded with higher revenues as inventories return to their pre-downturn levels. Management has indicated that it plans to continue to reduce debt, strategically outsource and aggressively manage overhead to build towards profitability once the higher revenues resulting from the rebuilt inventories are realized. Shares remained unchanged at just under $0.03 on the week.
ImmunoCellular Therapeutics, Ltd. (OTCBB: IMUC), a clinical-stage biotechnology company that is developing immune based therapies for the treatment of brain and other cancers, had its BUY rating reiterated by analysts from New York based brokerage firm Griffin Securities last week, in addition to a raise in its 12 month price target from $2.50 to $3.25 on the shares which are currently trading around $0.80. The recommendations came in a research update issued last week, in which analysts cited the recent partnership arrangement with Roche in addition to several recent clinical successes, including positive Phase I results for ICT-107, the company’s dendritic cell therapy for glioblastoma, the most common and deadly form of brain cancer, which demonstrated an ability to significantly improve the life expectancy of glioblastoma patients beyond the historical life expectancy. The report also cited the strong potential of IMUC’s maturing product portfolio including ICT-121, the company’s cancer stem cell targeting vaccine which is expected to begin Phase I trials early next year, which have led Griffin to reaffirm their support for the company’s future growth prospects. Shares gained ten cents on the week to close at $0.90.
Volume Alert: Shares of Money4Gold (OTCBB: MFGD), an emerging global leader in direct-from-consumer, reverse logistics specializing in the procurement of precious metals and stones, surged 18% on almost twice average volume last week, following the announcement of record results for its third quarter ended September 30, 2009. The company reported gross revenue of $6.8 million, an increase of 871.4% compared to gross revenue of $0.7 million in the year-earlier period and 460.4% compared to gross revenue of $1.5 million in the previous quarter; gross revenue exceeded the company’s previous guidance of at least $6 million. The increased revenues are primarily attributable to international expansion and higher advertising spending, which drove increased collections of gold, which combined with higher gold prices to improve revenue. During the period, the company was also able to significantly improve its already high margins, posting a gross margin increase from 40.8% in the year-earlier period, to 69.8% in the 2009 third quarter, up from 58.0% in the second quarter of this year. Gross profit for the period was $4.8 million, compared to $0.3 million in the year-earlier period and $0.9 million in the 2009 second quarter. Management believes that the results are indicative of its ability to cost effectively acquire new customers through a combination of highly effective media channels and international expansion. As a result of this ability and a strong month of October, management has indicated that it expects fourth quarter sequential revenue growth of approximately 100%, or about $13.5 million in revenue. Given the strong expected revenue growth and improving margins, the company expects to generate positive EBITDA in the fourth quarter for the first time in its history. Shares gained $0.035 on the week to close at $0.235.
Next One Interactive (OTCBB: NXOI), an interactive media company specializing in Digital Media with a focus on Travel and Real Estate, provided an update last week regarding its Resort and Residence Network which has completed its second week on the air, with the initial launch in over 21 million households, available on satellite and cable. By the end of the 2010 first quarter, the network will be distributed to 40 million subscribers with programming that explores the world’s best vacation destinations, resorts, entertainment and activities around the world, in addition to a real estate lineup that features luxury homes with a connection to the related real estate broker, along with programming that includes home decor, landscape architecture, green living, antique collecting and home improvement projects. In 2010, the network will offer full interactive applications so that viewers will be able to request information, enter promotions and sweepstakes and book vacation travel with just the click of the remote control. In other news last week, the company announced that it has appointed two new executives, Tom Armstrong as Vice President of Advertising Sales and Wendy Borow Johnson as President,to its subsidiary Resort and Residence TV. Ms. Borow Johnson is a veteran in the field of electronic media, having served in key positions in the launch of several targeted lifestyle transactional television networks, including Healthy Living Channel, Beauty and Fashion Network, Brands Shopping Network and the Recovery TV Network. She is also a pioneer in interactive television having served as VP of Marketing for Source Media and launched the first two way digital cable systems in addition to her time as SVP of Turner Media Group where the networks deployed over 200 interactive programming and advertising campaigns. Mr. Armstrong has over 20 years of experience in the travel industry, having worked with several of the most notable travel companies in the world, including experience in the sale of travel related advertising mediums. Shares lost eight cents on the week to close at $1.11.
OmniComm Systems, Inc. (OTCBB: OMCM), a leader in integrated electronic data capture solutions for clinical trials, announced last week that its TrialMaster EDC solution has been selected to streamline data collection for a 24-month Phase IV cardiovascular study that will enroll 100 subjects across 7 sites. The collaboration marks a continued working relationship between the two companies, who have worked together on twelve studies in the past five years. In other news last week, OMCM announced that it has opened a new office in Monmouth Junction, NJ, located strategically between Princeton and Rutgers Universities in close proximity to the Route One technology and pharmaceutical research corridor. Management believes that the new location will provide access to the broad talent pool of clinical research and technology professionals located in the area, in addition to helping it better serve the clinical needs of the Northeast region. Shares gained two cents on the week to close at $0.20.
ONE Holdings (OTCBB: ONEZ), a green process manufacturer of high quality health supplements, organic fertilizers and pesticides, announced last week that it has applied for listing on the Nasdaq Capital Markets exchange following the recent shareholder approval of an initiative to complete a 5 to 1 reverse common stock split that it expects will allow it to meet the exchange’s minimum listing requirements; the company also announced that it has changed its name to ONE Bio Corp. and will begin trading immediately under the new symbol ONBI on the OTC Bulletin Board while it awaits approval from the Nasdaq. In other news last week, the company announced strong third quarter results for the period ended September 30, 2009. Revenue for the period was up 57.8% to $4,157,806 compared to $2,634,409 for the same period a year ago. Operating Income was up 22.4% to $1,491,037 compared to $1,218,137 for the same period last year. Net Profit was up 16.2% to $849,970 compared to $731,314 for the same quarter last year. Management is encouraged by the strong turnaround that they have been able to achieve since taking control five months ago and expect that the strong market conditions which currently exist in the Asia Pacific region will provide a viable alternative to US investors seeking to invest in the growth of the Asia Pacific region but wanting a strong US domestic management team coupled with Asian operational expertise. Shares of the new entity are trading at $6.50 following the reverse split.
XsunX (OTCBB: XSNX), a developer of advanced, thin-film photovoltaic (TFPV) solar cell technologies and manufacturing processes, released a letter to shareholders last week highlighting the surge in recent media interest experienced by the company and providing an update on the progress being made in developing a working prototype of a sample CIGS thin film solar cell device. In the latest update to shareholders, the company provided details of its plans to complete a sample device prior to the end of this year thanks to the achievement of developmental milestones relating to the establishment of optimized baselines and validation of various layers comprising the CIGS cells. The completion of a working prototype would be a significant step in development of the technology and should aid significantly in fostering adoption of the technology on a broader scale. In addition to the progress being made in technological development, the company has also made significant strides towards raising its profile within the industry. In another letter to shareholders released earlier this month, the company discussed the recent surge in attention which it has been receiving from industry-focused media outlets, including Solar Industry magazine, which published a cover story in its October issue entitled CIGS Deposition: A Crucial Challenge, that was authored by the company’s Chief Technology Officer, Robert Wendt and discusses potential challenges associated with manufacturing the cells as well as potential methods for overcoming current limitations. The company’s CEO was also recently interviewed by RenewableEnergyWorld.com during the Solar Power International Conference in Anaheim last week where he discussed the company’s decision to shift to manufacturing CIGS cells and why they believe that thin-film solar is the future of the photovoltaic industry. Shares lost a penny on the week to close at $0.16.