Companies featured in this edition of the newsletter: CHIP, ENZ, ICLK, IMUC, IWEB, MBCI, OMCM, ONEZ, ORMP
Markets extended their losses last week as less than encouraging economic news suggesting that the economy might be recovering more slowly than previously anticipated led to sell offs in all the major indices. All told, the Dow ended the week down 177, surrendering 1.8% on the week to close at 9487, paring its YTD gains to 8.1%. The Nasdaq lost 2% on the week, closing at 2048, up 29.9% on the year, while the S&P 500 and Russell 2000 lost 1.8% and 3.1% respectively, bringing their yearly gains to 13.5% and 16.2%.
Employment data weighed heavily on investors’ minds this week, as labor market concerns sparked selling in advance of Friday’s lackluster Nonfarm Payrolls report. The report proved to validate concerns, falling short of even the most negative expectations coming in at -263,000 lost jobs versus forecasts for -175,000. Despite the larger than anticipated decline, markets sold off modestly following the release, as the poor figure appears to have been priced in during the S&P 500’s 2.6% plunge during Thursday’s session. Weak Payroll numbers weren’t the only reason for Thursday’s drubbing, as weekly initial jobless claims released the day before rose to 551,000, more than expectations of 535,000 and ADP employment change also came in worse than expected, declining by 254,000 versus expectations for 200,000.
Despite the poor labor market data, corporate developments left some room for positive interpretation on the week as activity is slowly beginning to return to pre-crisis levels. Several notable mergers and acquisitions took place in addition to several IPO’s which had all but vanished in the months prior. Xerox paid $6.4 billion in cash and stock to acquire Affiliated Computer Services on Monday which helped markets post their largest gains of the week, and Abbott Labs acquired Salvoy Group’s pharmaceutical business for $6.6 billion. Despite these positive signs, nine of the ten sectors of the S&P declined on the week, with consumer staples being the sole winner gaining a modest 0.7%.
Earnings reports will be few and far between again this week, but look for reports from Pepsi Bottling (NYSE: PBG) Tuesday pre-market, and YUM! Brands (NYSE: YUM) after the close that same day. Costco (NASDAQ: COST) and Monsanto (NYSE: MON) report before the market on Wednesday with Alcoa (NYSE: AA) reporting after the close. PepsiCo (NYSE: PEP) and Marriott (NYSE: MAR) finish out the week reporting on Friday morning.
Economic releases for the week begin with ISM Services for September at 10:00am Monday morning. On Wednesday, look for weekly crude inventories at 10:30am followed at 2:00pm by Consumer Credit for August and Treasury Budget for September. On Thursday, weekly initial jobless claims and continuing claims will be released together at 8:30am, followed by Wholesale Inventories at 10:00am. The week wraps up with Trade Balance data for August at 8:30am on Friday.
Conference schedules for the week begin with the two day JMP Securities Healthcare Focus Conference and the Brean Murray, Carret & Co. Consumer One on One Conference, both beginning in New York on Monday along with the William Blair & Co. Emerging Growth Stock Conference. The Johnson Rice Energy Conference begins on Tuesday and is being held in New Orleans, as is the Jefferson Companies New Orleans Investment Conference which begins on Thursday.
Enzo Biochem (NYSE: ENZ), a leading vertically integrated biotechnology company engaged in the research, development, manufacture and licensing and marketing of innovative health care products, technologies and services based on molecular and cellular techniques, announced last week that its Enzo Life Sciences subsidiary, a world leader in non-radioactive probe technology, and BioTek Instruments, a privately held global leader in the development, manufacture and sale of microplate instrumentation for drug discovery and life science applications, have begun a co-marketing partnership aimed at research institutions, biotechnology and pharmaceutical companies. The collaboration is designed to allow researchers to obtain integrated instrumentation and reagent solutions that are high-performance, yet affordable, by creating a highly reproducible and reliable platform for live cell analysis, offering a cost effective alternative to dedicated microplate imaging-based systems, which often are too costly for investigators to implement. The collaboration will be formally launched next month at MipTec 2009, an international conference focused on drug discovery held in Basel, Switzerland. Shares lost forty nine cents on the week to close at $6.88.
Verichip Corporation (NASDAQ: CHIP), a provider of radio frequency identification systems for healthcare and patient-related needs, which recently acquired identity security provider Steel Vault to form PositiveID Corp, a provider of identification technologies and tools for consumers and businesses, announced last week that it has regained compliance with NASDAQ’s minimum $1.00 per share bid price requirement and is in compliance with all other NASDAQ requirements for continued listing. In other news last week, the company also announced that it has entered into a definitive agreement for a $10 million investment commitment. Verichip expects to use a portion of the proceeds to fund its development programs with RECEPTORS LLC to develop a virus triage detection system for the H1N1 virus and an in vivo glucose-sensing RFID microchip with the remainder to be used for working capital and general corporate purposes. In related news last week, the company has announced further details regarding the development of its virus triage detection system for the H1N1 virus developed using RECEPTORS’ patented AFFINITY by DESIGN platform, which is intended to provide two levels of virus identification within minutes. Once developed, it is expected that the first level will prep the sample and identify the agent as a flu or non-flu virus, and the second level will sub-classify the flu virus as H1N1 or other types, and alert the user to the presence of pandemic threat viruses. The company believes the influenza triage diagnostic system will be scalable and will be able to be rapidly adapted to identify new strains of influenza and other viruses as they evolve, giving the virus triage detection system value for future testing applications in healthcare. The first phase of development of the virus triage detection system, consisting of the sample prep and flu or non-flu classification, is expected to be completed in four months, with the second phase, which will have the ability to identify the precise pathogen present, expected to take approximately six to eight months. Shares lost seventy eight cents on the week to close at $2.44.
IceWeb (OTCBB: IWEB), a leading provider of storage solutions and on-line cloud computing application services, announced last week that it has partnered with Mezeo Software, the leading provider of deployable cloud storage solutions purpose-built for service providers. The collaboration will provide a solution that enables service providers to quickly and easily deploy their own complete, service-enabled cloud storage offering designed to provide an end-to-end, multi-tenant cloud storage solution that can be easily, rapidly and securely deployed in a centrally managed private storage cloud or in a hybrid public/private cloud configuration. The goal of the collaboration is to create a solution that enables service providers to go to market efficiently and affordably, without the costs and delays of developing a solution from the ground up. Shares lost a penny on the week to close at $0.08.
interCLICK, Inc. (OTCBB: ICLK) the leading ad network in data and inventory transparency, announced last week that it has applied for listing on the Nasdaq exchange. An application was filed in June 2009, at which time Nasdaq indicated that ICLK needed to satisfy the minimum $4.00 price criterion required for new listings. In order to gain compliance with the price requirement, the company’s board of directors authorized a reverse split on September 24, 2009; approval of the measure requires an affirmative majority vote. The company has indicated that it expects the measure to pass due to its anticipation of support from 12 individuals representing 52% of its outstanding shares and will not solicit any proxies in connection with obtaining approval. Upon receiving the requisite vote, management retains the right to determine the required reverse split, or to abandon the proposal as it sees fit. Shares gained two cents on the week to close at $2.02.
ImmunoCellular Therapeutics, Ltd. (OTCBB: IMUC), a clinical-stage biotechnology company that is developing immune based therapies for the treatment of brain and other cancers, announced results from its pilot study evaluating the cancer detection abilities of one of its lead monoclonal antibody product candidates, ICT-109 last week. Data demonstrated that ICT-109 had a statistically significant ability to discriminate between cancerous and non-cancerous samples, suggesting the potential to detect pancreatic and lung cancer in plasma and serum study sets. IMUC plans to conduct additional studies of ICT-109 in combination with other markers to design a sufficiently robust assay for early stage detection of these cancers that could potentially be widely adopted as a diagnostic tool in this field. The company now plans to find a partner within the diagnostic space to further develop and commercialize the approach. Shares gained seven cents on the week to close at $1.20.
MabCure, Inc. (OTCBB: MBCI), a biotechnology company using its proprietary technology to create highly specific monoclonal antibodies (MAbs) for the early detection of cancer, announced last week that it has developed MAbs to be used in the detection of Colorectal Cancer (CRC), a debilitating form of the disease that is a leading cause of death in men and women over the age of fifty, with a potential US and European diagnostic market estimated by the company to be in the billion dollar range. The company plans to explore options relating to both the early detection of cancer from blood and feces samples as well potential applications related to imaging agents for detecting micrometastatic disease during surgery and the detection of cancerous polyps during colonoscopy. Shares lost five cents on the week to close at $1.24.
OmniComm Systems, Inc. (OTCBB: OMCM), a leader in integrated electronic data capture solutions for clinical trials, announced last week that Kendle, a leading global clinical research organization (CRO), will add OmniComm’s TrialMaster EDC solution to its current eClinical offerings in a multi-year enterprise-wide agreement. Management from Kendle cited TrialMaster’s ability to, “offer the right mix of functionality to streamline the study development process and drive efficient study operations,†as a reason for the agreement. Kendle is one of the largest, most respected and successful global CROs, with extensive eClinical experience, having conducted more than 250 trials utilizing EDC technologies to expedite the clinical trials process. Share remained unchanged at $0.15 on the week.
Oramed Pharmaceuticals (OTCBB: ORMP), a developer of oral drug delivery systems, was featured in a video on the Forbes.com video network last week. In the clip, Nadav Kidron, CEO of ORMP, highlights the current state of the global diabetes epidemic and discusses how the company’s proprietary oral insulin delivery system may potentially revolutionize the treatment of the millions of people afflicted with diabetes. Mr. Kidron continues on to discuss the benefits of oral delivery versus traditional insulin injections, as well as the drug’s clinical progress and development outlook, highlighting their Phase II trials in South Africa and plans to work with the US FDA in designing trials for the drug to gain approval in the US. The interview can be found on the Forbes website at www.forbes.com. Shares remained unchanged at $0.57 on the week.
ONE Holdings (OTCBB: ONEZ), an investment company owning majority equity interest in core operating assets in Biotechnology located in the Asia Pacific region, announced last week that it has closed on the acquisition of Jianou Lujian FoodsStuff Co. Ltd, an award-winning green-technology enterprise that specializes in the highly profitable production of organic products and fertilizers based on bamboo. The acquisition closed prior to the end of the third quarter as the company had previously indicated that it expected to and marks the third acquisition that the company has made in the past three months, adding $50 million dollars in revenue, $11 million in operating income and $8 million in net income based upon the recent additions’ 2008 results. Shares remained unchanged at $1.20 on the week.
