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Valeant Pharmaceuticals INTL Inc VRX Stock News

Valeant Pharmaceuticals Intl Inc (NYSE: VRX)

Keep a close eye on Valeant Pharmaceuticals at the moment, as news is currently hitting that could lead to big declines. Today, we’ll talk about the news, what we’re seeing in the market at the moment, and what we can expect to see from VRX ahead.

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Piper Jaffray Sends Warning Surrounding VRX

As mentioned above, Valeant Pharmaceuticals may soon be facing big headwinds in the trading session. The headwinds are likely to come as the result of a warning received from Piper Jaffray, a well respected firm.

Piper Jaffray weighed in on VRX, warning investors of “significant downward guidance revision(s).” The firm maintained the “Underweight” rating on the stock with a price target of $22 per share.

How The Market Reacted To The News

At the moment, VRX is continuing through the day with business as usual. Currently (1:12), the stock is trading at $22.22 per share after a gain of $0.16 per share (0.73%) thus far today. However, the news is just coming down the wire now and has not broke quite yet. When this news hits the limelight, we could see a big shift toward the negative direction.

What We Can Expect To See Moving Forward

Moving forward, I have a relatively mixed opinion of what we can expect to see from Valeant Pharmaceuticals. In the short- and mid-term, the company is likely to continue to see volatility as investors ponder the financial implications of legal filings following the Philidor scandal.

On the other hand, since the scandal, VRX has made several big changes to the company. In fact, they can be viewed as a brand new company starting with the solid foundation of incredible products. In the long run, I believe that this will allow the company to stay afloat through the rough legal times ahead, likely leading to big long-run gains!

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Banc of California BANC Stock News

Banc of California Inc (NYSE: BANC)

Banc of California found itself in a bit of a rough patch yesterday. While the day started out good, in mid-day everyone started to focus on what could become a big scandal. A well-researched Seeking Alpha writer wrote a piece that accused the company of having ties with a known fraudster by the name of Jason Galanis. The truth is that if you follow the stock you know the story. So, today, we’re not going to focus too much on the claims. Instead, we’ll talk about how BANC has responded to the claims thus far and what that tells us. If you’d like details on the back story, CNA Finance Chief Strategic Analyst Kenny Soulstring wrote a great analysis last night. To read it, click here!

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BANC Responds

The truth is that, given such big claims, it took Banc of California quite a while to submit a response. For several hours, the bank was silent. Not even so much as “we understand what’s going on and are looking into the claims.”

Nonetheless, around 5:00 p.m., the company finally responded. In their response, they pointed out that a complaint filed by the Department of Justice against Galanis and others found that Galanis’ claims to be affiliated with COR Capital (a big part of the issue here With BANC) were fraudulent. In their response, they pointed to the following paragraphs from a sworn statement:

“40. Based on my conversation with a representative of COR Capital, I have learned that, contrary to the representations made in the June 3, 2014 email sent by JASON GALANIS, the defendant, to MICHELLE MORTON, the defendant, (referenced in paragraph 39c above), Burnham, CORFA and Wealth-Assurance AG were not affiliates of COR Capital

41. Based on my review of documents, I have learned that on June 3, 2014, JASON GALANIS, the defendant, sent an email to BEVAN COONEY, the defendant, which forwarded the email JASON GALANIS sent to MICHELLE MORTON, the defendant, earlier that same day, attaching the description of COR Capital which fraudulently asserted that certain entities were affiliates of COR Capital. In JASON GALANIS’s email to COONEY, JASON GALANIS wrote “whoring it out shamelessly[.] thank you [first name of COR Capital representative.]”

The Response Continues On

While investors got something from this press release, they still had questions. With a call coming up today, investors wanted to know if they could expect a discussion about the claims. BANC responded with a very clear answer, “We’re not going to discuss Galanis further on the call…” On top of that, the bank has told Seeking Alpha that if the article is not retracted, they will take legal action.

Concerns In Responses

In my opinion, there are some big reasons to be concerned with the responses from Banc of California. At the end of the day, the bank is doing two things with these responses:

  1. Deny – First, the bank is working to deny all claims that they have ties with Galanis. Using Department of Justice documentation, the company has shown that the DoJ believes that Galanis’ claims to be associated with COR or BANC are fraudulent in and of themselves.
  2. Divert – From there, the company is working to divert attention away from this and onto earnings. With the statement that they would not be discussing Galanis on the conference call, it’s clear that this is not a topic they plan on having too much conversation about.

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Big Problems With This Response Strategy

The connection with COR was a big part of the claims made, it wasn’t the only piece. While the company is denying connection with Jason Galanis and doing what it can to try and prove that COR isn’t connected with him, they have not addressed the entirety of evidence against them, and that’s concerning.

Another big issue I take with the BANC response to the allegations is the divert side of things. At this point, the stories out there, diversion isn’t going to fix that. The more the company works to avoid these discussions, the less investors are going to think of the stock. At the end of the day, Banc of California may be running down the same slippery slope that Valeant Pharmaceuticals found its way down last year.

Again, if you would like more details with regard to the back story here, click here.

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PTC Therapeutics PTCT Stock News

PTC Therapeutics (NASDAQ:PTCT)

On Monday, PTC Therapeutics fell by 40% to $7.97 per share after the company had announced that the FDA refused its appeal for a refuse-to-file letter. PTC Therapeutics has not been able to get the FDA to back its Duchenne Muscular Dystrophy — DMD — drug. What happened was that PTC had filed an appeal to the agency to reconsider its refuse-to-file letter date back in February of this year. This further signifies that the FDA is not interested in approving PTC’s drug Translarna. Another deadly blow to PTC Therapeutics, which has not been having the best year at all. News of this appeal denial by the FDA led the PTC stock lower by 40%.

Major Problem

A major problem or hurdle for PTC is that, while its commitment to get its drug approved to treat DMD patients is sound, it is not highly justified at all. The reason being is that it had run two phase 3 clinical trials that had both failed. Thinking about this more clearly, it doesn’t make too much sense on why PTC is still pursuing this indication at all. Both phase 3 trial were completed and both had failed the primary endpoints of the studies. PTC has a claim of its own on why it is still considering to pursue the DMD indication. It has noted that despite failing both phase 3 trials, there might be a subset of patients that would greatly benefit from treatment with Translarna.

Not Backing Down

PTC had sent its appeal to the FDA and had the request denied. Instead of taking this as a hint that maybe the efficacy of its drug is not as strong as intended, the company is pushing forward. It has stated that it will now send the appeal to a higher level in the agency. The problem is that sending an appeal to the next higher level of the FDA may not work. In that case, PTC may have to end up submitting multiple appeals to each higher level. Even if it does this there can be no guarantee that it will have a positive outcome. After all, if the lower branch of the FDA doesn’t feel that the drug provides enough efficacy, then why would the higher level of the FDA feel differently? It might be a good idea for PTC to move on towards other drugs in the pipeline.

Competitor Appearance

One of the many reasons that PTC might be pushing forward is that it is pointing towards Sarepta’s case. Sarepta Therapeutics just received approval for its DMD drug Eteplirsen about a month ago. While PTC does have a point that Sarepta didn’t back enough clinical efficacy to warrant approval, it doesn’t have the backing by the FDA at all. At least when Sarepta submitted its application for its NDA, the FDA took at a look into it. Even then, it was awfully close as the FDA raised concerns over Eteplirsen as well. Sarepta may have been lucky or may have had the proper papework. In any case, it at least got to have an advisory committee review and FDA review of its drug. This is where PTC lacks because it has to file a massive amount of appeals in hopes that it can get the FDA to give it a chance for possible approval.

Moving Forward

It doesn’t seem like things are going well for PTC Therapeutics on the U.S. front with the FDA. That means the stock will continue to fall, especially after this most recent denial for appeal. The good news is that the company has an application submitted in Europe which may prove to be helpful. Europe is more so trying to work with PCT about getting Translarna approved. The company has submitted additional supplemental information to the European Agency, and a decision for this country will come down sometime before the end of the year. If PTC receives a positive recommendation from Europe, then there is a possibility that the stock might be able to recover.

Pernix Therapeutics PTX Stock News

Pernix Therapeutics Holdings Inc (NASDAQ: PTX)

Pernix Therapeutics Holdings is having a rough day in the market, giving up all of the recent gains we’ve seen and then some. However, regardless of the declines, there are still plenty of bulls out there waiting to pick this thing up at a discount. Today, we’ll talk about why PTX has struggled in the past, what’s changed, and why bulls are buying the dips and happy to do so.

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PTX Has Struggled – There’s No Question!

There’s no question about it, the bears are bears for a good reason. The truth is that Pernix Therapeutics has done an incredible job when it comes to medical innovation. The company has come up with great products, and brought those products to the market. However, sales isn’t the company’s strong suit.

At the end of the day, a company with great products is nothing if it can’t seem to sell its products. That’s exactly what happened with PTX. The company had a great product lineup, a great pipeline, but the sales process was full of redundancies, leading to poor results. Nonetheless, this is changing in a big way.

What Has Changed?

The biggest change that turned many bullish on the stock had to do with the CEO. It was clear that the previous CEO at PTX simply wasn’t doing his job. Whether he blew off the work or simply was incapable of making the business work, something was missing. So naturally, investors pushed for a resignation and got what they wanted.

This left a void. Now we had a great company with no permanent CEO. However, that problem has been solved as well. Early this year, Pernix Therapeutics announced that it had brought John Sedor on board as the new CEO of the company.

Sedor Turned Things Inside Out And Fixed Them

When Sedor came on board at PTX, there was a bunch of work to do, and he knew it. However, instead of hoping that the problems would fix themselves, he rolled up his sleeves and got to work. Shortly after he was appointed as the CEO, we started to see some big changes.

Sedor saw the redundancies in the sales process. Not only did he realize that this was causing them to leave money on the table in sales, he realized that the redundancies were costing the company money. So, Sedor decided to lay off nearly 30% of the team at PTX. This wasn’t only in sales either; many in upper management left the company.

In the restructuring process, Sedor combined the neurology and pain management divisions of the company. This meant that reps could cross sell, taking away half of the cost. Not to mention, routes have been re-routed in order to make the sales team more effective.

Why The Bulls Are Sticking Around

Ultimately, in my eyes (and I am a bull), there are two good reasons why the bulls are sticking around:

  • Restructuring Will Lead To Sales – First and foremost, Pernix Therapeutics has a great line up of products and a decent pipeline. Now that the sales process has been restructured, the bulls are expecting better results to come down the line soon.
  • Possible Acquisition – Another big factor, here, is the idea that the company may be sold. Sedor has a history as an acquisition artist and seems to be positioning PTX perfectly as acquisition bait. So, it’s not unthinkable that an acquisition would be coming down the line.

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Aurinia Pharmaceuticals Inc AUPH Stock News

Aurinia Pharmaceuticals Inc (NASDAQ: AUPH)

Minutes ago, Aurinia Pharmaceuticals spiked in a big way. The interesting thing here was that there was no fundamental news that would have caused such a big move. However, I believe I’ve pinned it down. It’s all about unconfirmed acquisition rumors, but, while an acquisition may be happening behind the curtain, it’s not a good idea to chase AUPH in hopes of an acquisition. I’ll tell you why below.

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The Big Gains Surrounding AUPH

The big gains happened seemingly out of the blue. I did a quick scan. Nothing on Google News, Bing News, or Yahoo! Finance. So, I thought to myself, what is going on with Aurinia Pharmaceuticals?

Knowing that searching the engines wasn’t getting me anywhere, I went to StockTwits. My friends always seem to have the answer, and they had the answer here. It all started right after a StockTwit came out that said an acquisition was around the corner.

While this is speculation, as I can’t seem to find anything else that makes sense, this is the reason I believe all of the gains are happening. Someone started talking about the possibility of an AUPH acquisition in a forum where many of the company’s investors tend to hang out.

Of course, this led to excitement and we started to see larger and larger blocks of the stock purchased. Soon enough, the excitement built into a spike as more and more people got involved, pushing AUPH higher.

Don’t Get Your Hopes Up For An Acquisition… Right Now Anyway

There’s no doubt that there’s a strong argument that an acquisition is going to come down the line at some point for Aurinia Pharmaceuticals. However, that point is not here at the moment. At the moment, there has been no confirmation, and the cause behind all of this is from one investor talking to another on a social network about the possibility of an acquisition. Now, don’t get me wrong, the possibility is real, but the acquisition isn’t happening right now.

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Prepare For The Sell Off

If an acquisition isn’t announced over the next couple of days, we’re going to see some disappointed investors that jumped in on a hope and a dream. This will lead to profit taking and the stock will fall. In the long run, things look great with AUPH. However, beware of the dangers of sharp declines after rumor-fueled gains.

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Teck Resources TECK Stock News

Teck Resources Ltd (NYSE: TCK)

Teck Resources is having a strong day in the market today, and for good reason. Several analysts decided to weigh in on the stock early this morning. Today, we’ll talk about what the analysts had to offer, how the stock reacted to the news, and what we can expect to see from TCK ahead.

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Analysts Like What They See With TCK

As mentioned above, Teck Resources is having an incredibly strong day in the market today because several analysts have decided to weigh in on the stock. Of course, as you could imagine, the notes were positive. All three analysts have upgraded the stock. Here’s what we saw:

  • Credit Suisse Group AG – Researchers at Credit Suisse Group AG started the trend this morning. In the wee hours of the day, the analysts at Credit Suisse upgraded TCK. The rating has been moved from “neutral” to “outperform”.
  • Bank of America Corp – Another big analyst weighed in early this morning. That was Bank of America. The bank decided to begin coverage on the stock this morning, rating it a “buy”.
  • RBC Capital Markets – Finally, analysts at RBC Capital Markets also decided to throw their two cents into the fray. In their note, RBC Capital Markets upgraded TCK from a “sector perform” rating to an “outperform” rating.

How The Stock Reacted To The News

When we get started in the market, one of the first things that investors seem to notice is that the news causes movement. Positive news will lead to gains while negative news leads to losses. In the case of Teck Resources, the news was overwhelmingly positive. While one analyst upgrade will make investors happy, 3 upgrades in one day is downright exciting. As a result, we’re seeing gains in the value of TCK today. Currently (1:35), the stock is trading at $19.55 per share after a gain of $0.77 per share (4.13%) thus far today.

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What We Can Expect To See Moving Forward

Moving forward, I have a relatively mixed opinion of what we can expect to see from Teck Resources. While analysts are obviously bullish, I never advise blindly following in the footsteps of these guys. The truth is that they make mistakes too. With that said, the positive side is simple. The stock has been on the uptrend since June of 2016, even in the face of a struggling commodities market. As they continue to produce, more and more investors are getting excited. However, with the risk of a Fed rate hike just around the corner, this could be a tough play to make. A rate hike could send commodity prices further down, leading to declines for TCK. So, while this is a strong play in the short run, the medium- to long-term view is a bit skewed by the idea that the Fed could raise its rate in December.

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Synergy Pharmaceuticals SGYP Stock News

Synergy Pharmaceuticals Inc (NASDAQ: SGYP)

Synergy Pharmaceuticals is having a relatively strong day in the market today, and for good reason. The company released new data with regard to Plecanatide, its lead candidate. Today, we’ll talk about the data that was released, what we’re seeing from the stock, and what we can expect to see from SGYP ahead.

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SGYP Releases New Plecanatide Data

Plecanatide is a very important compound for Synergy Pharmaceuticals. Over the years, the company has been working on the compound as a dual indication treatment for both chronic idiopathic constipation and irritable bowel syndrome with constipation. At the moment, the treatment is being evaluated by the FDA for both indications.

Today, we received news that further strengthens the argument for FDA approval coming down the line. In a press release early this morning, we learned about clinical data that SGYP presented at the American College of Gastroenterology Annual Scientific Meeting. The data was, of course, overwhelmingly positive.

The data surrounded a long-term study in which 2,370 patients were treated. Today, the company released new long-term safety data that showed that Plecanatide was associated with low adverse events and low discontinuation rates in patients with CIC. These results were found in patients who received between 3mg and 6mg once daily doses of plecanatide for up to 72 weeks. In a statement, Patrick H. Griffin, MD, FACP, EVP and Chief Medical Officer at SGYP, had the following to offer:

Synergy has pioneered a different way to think about constipation, whis is reflected in our approach to plecanatide… We are excited to bring these new data to gastroenterologists at ACG. We are committed to developing and bringing to market novel therapies that offer the potential to significantly improve the lives of patients living with CIC and other GI conditions.”

What We’re Seeing From The Stock

With the positive news release, we saw relatively strong gains in the value of Synergy Pharmaceuticals early on today. Unfortunately, however, shortly after hitting a peak at $5.32 per share, SGYP reversed directions. Currently (9:56), the stock is trading at $5.16 per share after giving up the gains it saw early on.

What I’m Expecting To See Moving Forward

Moving forward, I have an overwhelmingly bullish expectation of what we can expect to see from Synergy Pharmaceuticals. I’ve been following the Plecanatide studies for some time now, and I don’t know if SGYP could come up with negative data about the treatment if they tried. Ultimately, I’m expecting that Plecanatide will be approved in both the CIC and the IBS-C indications with flying colors. Of course, this will allow the company to bring a treatment to market, leading to strong revenue and profit opportunities. All in all, I’m expecting to see gains ahead.

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Stay Tuned For Analysis By Kenny Soulstring

Kenny Soulstring is the Chief Strategic Analyst here at CNA Finance. Throughout the day, he will be analyzing SGYP, and later he will publish the results. Don’t miss it. For a limited time only, his analysis is free! Sign up to receive this analysis as soon as it’s published by subscribing below while it’s still free! Also, to read Kenny’s previous work, click here!

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GoPro GPRO Stock News

GoPro, Inc. (NASDAQ: GPRO)

I’ve been following GoPro for some time now, and like most investors, I haven’t been very excited about what I’ve been seeing. Unfortunately, sales just haven’t been up to par in recent quarters. At this point, investors are getting anxious. With the recent launch of the Hero 5 and the Karma drone, investors are looking at this as the company’s last chance to prove that they can sell their products. However, recent news shows that things have gone bad to worse. Today, we’ll talk about the news, why it’s very bad news for the stock, how the market reacted, and what we can expect to see from GPRO ahead.

Recent News Shakes GPRO

As mentioned above, recent news has raised some new concerns for GoPro. At the end of the day, investors want to see sales, and they want to see them now. Historically, Amazon has been a very important part of the company’s strategy. In fact, it’s been estimated that Amazon makes up between 12 and 14 percent of the company’s sales. However, it was recently announced that the company has halted sales of the Hero 5 on the platform.

In a statement, GPRO said that they were unhappy with how Amazon was listing the Hero 5. Specifically, the two companies agreed on a specific price for the product. However, the company said that Amazon reduced the price lower than the agreed upon figure. As a result, they stopped sales through the popular e-commerce website.

GPRO has said that they don’t expect for the issue to be here for long. In fact, they expect that they will be able to strike a deal with Amazon and start selling the Hero 5 on the platform again within weeks.

Why This News Is So Concerning

While the news that the Hero 5 sales were halted is concerning, at the moment, the news is devastating to GoPro. At the end of the day, the company needs to show with this round of products that it has the ability to increase sales. The news that the company has halted sales on Amazon has caused investors to lose hope that the company will be able to show meaningful growth in sales.

How The Stock Reacted To The News

Since the news that GPRO would halt sales on Amazon broke, we’ve seen big declines in the value of the stock. On Friday, those declines continued. By the end of the trading session, the stock closed the day off at $13.60 per share after a loss of $0.24 per share or 1.73%.

What We Can Expect To See Moving Forward

Moving forward, I would love to say that I expect to see gains in the value of the stock ahead. However, that’s simply not the case. The bottom line is that GoPro needs to increase sales in order for the stock to grow. However, I don’t see that happening. Even before the Amazon halt, I didn’t have high hopes. With the Hero 5 having incredible competition and the Karma competing with far more trusted drones, sales simply don’t seem to be coming down the line. All in all, I’m expecting to see declines in the value of GPRO ahead.

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Abeona Therapeutics Inc ABEO Stock News

Abeona Therapeutics Inc (NASDAQ: ABEO)

Abeona Therapeutics is one of those companies that is set enviably into a unique niche of science that, if they prove to be successful, should meet little competitive headwind. As a gene therapy company, ABEO is relatively insulated from the speed at which competitors can enter the market.  With new competitors restricted by regulatory hurdles and a high risk/reward profile, emerging competitors will need to choose their battles carefully.

ABEO may have strategically positioned itself to be one of the gene therapy success stories of the decade, and in doing so, competitors should be reluctant to compete against their science in the competitive landscape.

Gene Therapy? Isn’t That A Rock Band From The ’60s?

Well, not quite, although perhaps there is confusion because of the popularity of the fictitious band, Blue Jean Committee, which has been made relatively famous in the Documentary Now series.

Simply put, gene therapy is the transplantation of a normal gene into a cell that replaces a missing or defective gene. By replacing the missing or defective gene with a normal, properly functioning gene, the goal is to correct the normal function of the cell that will allow the body to effectively fix itself. But the term “simply put” should not lead any reader to believe that the science is actually that simple.

Many have tried and many have failed. However, that has not deterred the excitement about the emergence of credible gene therapy treatment. Abeona has received analyst coverage from Maxim, FBR & Co., Cantor Fitzgerald, and Jones Trading. The average price target for ABEO sits at roughly $14.00 dollars a share, with Maxim reiterating its “BUY” recommendation and affirming its $14.00 price target on October 13, 2016. Cantor Fitzgerald most recently weighed in with a $21.00 price target.

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What Is The Excitement All About, Specific To ABEO?

At ABEO, the excitement stems from the early, but encouraging results from its current trials treating Sanfilippo and RDEB. The chatter about the potential of gene therapy success has been stirring around the water cooler gossip committee for the past 25 years. Similar to stem cell therapy, it was a topic rooted in science fiction hoopla and considered to be years away from actual practice. However, like the advances seen in computer technology, the development of the procedure has been swift and productive.

Spark Therapeutics (ONCE), for instance, is demonstrating some very encouraging results related to functions within the eye, and AveXis (AVXS) is doing the same in their treatment of spinal muscular atrophy. These results are encouraging for all in the sector, inclusive of ABEO, in that as other companies continue to prove efficacy and contribute to the legitimacy of the science, the pathway for regulatory approval through the FDA becomes greater.

As always, clinical results will always rule the day when it comes to biotech, especially within emerging technologies such as DNA therapy, stem cell research, and gene therapy, those that have a leading position hold a tremendous strategic advantage over any emerging competitor, due to the high barriers to entry and the cost of failure.

So, Is Abeona Demonstrating Strong Clinical Results Too?

They are. And what I like about ABEO is that the information being absorbed by the market is not necessarily being disseminated through the normal company-generated channels. The success of one of their Sanfilippo patients, for instance, has gained a huge Facebook following and the results are being posted by third party participants, adding credibility to the early success. In the case of Eliza, who has the debilitating and often fatal Sanfilippo syndrome, the remarkable early success of the gene therapy treatment is being chronicled on a daily basis.

Sanfilippo syndrome is a lysosomal storage disease, whereby a single defective gene results in the lack of production of a specific enzyme, which retards or even eliminates the body’s ability to clear certain sugars from the lysosome in the cell. In simpler terms, the waste matter that would normally be eliminated from the cell and eventually the body, is not occurring. Thus, the body, in essence, is continually poisoning itself. The results of the body’s inability to cast off the waste has both devastating and often fatal results, a reason that Eliza’s story is gaining so much attention from both parent advocacy groups.and deep-pocketed investors. As of now, there is no approved treatment for Sanfilippo syndrome.

Abeona is also working to restore normal gene function for a rare condition called epidermolyis bullosa, or ” EB”, for short. This condition results in a patient’s lack of ability to produce certain proteins that works as an adhesive between the layers of a patients skin. EB, like Sanfilippo, is a pediatric disease that results in excessive and horribly painful blisters and ulcerative wounds to the skin. It’s a horribly debilitating disease and excruciating to witness and care for. ABEO is currently producing encouraging results on its path toward addressing this unmet medical need.

Is The Abeona Treatment Years Away?

Not necessarily. ABEO is working on a phase I/II study design, whereby they can produce data that demonstrates both clinical efficacy as well as meeting primary safety and tolerability requirements.

With Abeona’s first-in-man trials, the company and the FDA look at the safety endpoints and simultaneously develop clinical protocols and assessments that gauge efficacy and effectiveness. Based on the results of a phase I/II study, the FDA has been amenable, especially in rare and juvenile disease space, to grant marketing approval based on results from the single phase I/II trial. Add the support of the patient advocacy groups, similar to the effect that they had on getting the Sarepta (SRPT) treatment for Duchennes approved, and the path to approval for these novel gene therapies can be highly abbreviated. We saw such a case, for instance, with Galaxo Smith Kline’s (GSK) European marketing approval for its treatment of a rare, pediatric condition in SCID, and that trial enrolled only six children.

All This Sounds Expensive, Does ABEO Have Adequate Cash On Hand?

They do!  And that is a phrase not often read when referring to emerging biotech companies.

The company ended the first half of the year with approximately $34 million dollars in cash, while burning only about $1 million dollars per month during that same period. The low overhead, figuratively speaking, is due to the fact that its trials are run independently, to an extent , from ABEO. The Sanfilippo trial is being studied and financed by Nationwide Children’s Hospital, with ABEO acting as a supplier, if you will , of the gene therapy treatment.

Current cash on hand is projected to last well into the year 2018, and this excludes proceeds from potential grants or FDA Priority Review Vouchers, which can be worth tens to hundreds of millions of dollars on the open market. Abeona is now positioned to benefit from three potential PRV ‘s based on their study and intent to treat unmet pediatric diseases.

Will Abeona Bring Gene Therapy Mainstream?

I sure hope so. Investors often look past the real advances of the treatments and pay more attention to the P/L column. People tend to read less about the benefit of a treatment than they do about stocks being overvalued or hyped, failing to recognize the value of life and the tremendous sacrifices being made by both patients and the scientific community. With gene therapy demonstrating valid results, the science may become a far more appealing alternative for treatment than current courses of medical attention, based on gene therapies “once and done” method of treatment.

Is There Institutional Money Invested In Abeona?

Shareholders in ABEO are in good company, with Soros Fund, Perspective Advisors, and Knoll Capital each representing ownership of at least 5% of the company’s shares. It is likely that these investors, like others, see the humanitarian benefit to their investment and will be willing to support the company through the next stages of development.

For investors in ABEO, the next 12 months should be an interesting period. The water cooler science fiction talk from the 1980’s has made it to the forefront, and companies are actually producing therapies and treatments that allow the body to fix itself. Expectation for 2017 is for a couple of these gene therapy treatments to be approved for market. This will be a watershed moment for the sector and can have direct and positive impact on those that are also in process of delivering promising therapy candidates to market.

So, The Question Was…Is Abeona Doing Everything Right?

Without trying to sound like a pump artist, my response is yes.

Abeona is producing extremely encouraging results that investors can watch real time with Eliza. They also have three shots on goal for a PRV that can be extremely valuable to the company, and they have deep-pocketed investors owning in excess of 15% of the company stock.

Add to that the potential impact of the patient advocacy groups, coupled with the clinical success of the therapies, and the recipe for success looks quite appealing. In some sense, having others in the industry blaze the trail to commercialization of gene therapy products is not a bad thing. As Abeona continues to develop their unique treatments, they can also gauge the FDA to sense the direction that the administration is steering the science and react proactively to address issues raised.

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With ABEO doing things right, it should only be a matter of time before the stock reaches the valuations afforded to its non-competitive partners in the industry. Until then, investors should take advantage of the real time developments of Eliza and watch how this remarkable therapy can potentially save the lives of thousands of children per year.

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Kenny Soulstring is the Chief Strategic Analyst at CNA Finance. For a limited time only, his analysis is available for free. Don’t miss out, subscribe below today!

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MannKind Corporation MNKD Stock News

MannKind Corporation (NASDAQ: MNKD)

Unbelievably, the once highly acclaimed Mannkind and its once promising insulin delivery treatment, Afrezza, is tanking to relative all time lows.

MNKD has seen shareholders exit the stock, many forced out of positions due to its penny stock status, with even more exiting because the company is seeing its opportunity to benefit from Afrezza slipping away.

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Afrezza Had Opportunity, Perhaps It Still Does

MNKD certainly had an opportunity to benefit greatly from Afrezza, but, like many other drugs that have failed to gain the market penetration anticipated, much of the blame can be attributed to poor management and a poor strategy for post-approval execution.

Regardless of the benefit of a specific treatment or product, a company must thoroughly analyze the marketing potential and likelihood of acceptance in the marketplace. Did Mannkind truly take the time to thoroughly study the post-market approval probabilities for an approved Afrezza? Well, if they did, the marketing team at MNKD should be counseled.

MNKD (and Sanofi, for that matter) has failed on its primary initiative of getting Afrezza approved for favorable insurance reimbursements, a key metric in determining whether a company should invest the capital to bring a drug to market. This should have been a preliminary study.

The drug has also lacked expected prescription orders, regardless of the fact that many patients are responding quite well to the product. But, with a dwindling cash balance and with the stock trading at the fifty cent level, the time is fast approaching for management to make a move to salvage their survival.

Mannkind Management: Don’t Listen To The Music, Dance To It

It’s a painful pill for a management team to swallow. They were effective in navigating through all of the regulator hurdles, they developed a novel treatment that was meant to become a mainstream treatment for insulin-dependent patients, and the analyst expectations all favored the notion that the product would be successful.

I have witnessed many entrepreneurial ventures fail simply for the fact that an investor see’s more value in a company than a buyer is willing to pay. Many die with the blueprints still in their pocket, crumpled from the years of showing the work to interested parties still unwilling to pony up the capital that the entrepreneur is asking in value.

The same is true of Mannkind. They brought a product to market, it did not gain traction, and now the company wants to continue to be bold and prove itself right by hanging on to a product that has proven to be of little value to the company. In fact, it may very well destroy them.

To date, the company stock price is down over 80% and the bottom might not be in sight. What now?

Can Mannkind Salvage Some Value From Afrezza And Live To Fight Another Day?

The one known variable here is that Afrezza is a known product and does have marketing potential if it becomes part of a focused and developed marketing plan designed to retrain the market to use the product.

Afrezza is well tolerated and convenient for patients that currently use insulin. But, its not an exaggeration to admit that both Sanofi and Mannkind over-exaggerated its potential.

Sadly, only a small percentage of the patients that started using the Afrezza alternative remained on the product, with estimates indicating that only about 35% of those that began using Afrezza remained on the product. And, if an inhaled product cannot replace an injectable alternative, the company should pay close attention to that metric.

The difficult part for MNKD at this point in time, is to assign a present value for Afrezza, find a buyer, and sell it. Even though the product has potential, the market is telling everyone – Sanofi, Pfizer, and now Mannkind – that an inhalable delivery system for insulin is just not that pressing of a need for patients.

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Will Mannkind Listen To The Music Or Dance To It?

At this point in time, it appears that CEO Matthew Pfeffer seems content in proving the market wrong and reengaging an audience to show why his Afrezza product is better than anything else on the market. In doing so, he will pull out his crumpled piece of paper and show all of the development highlights, the FDA approval, and the initial sales projections in his effort to find a partner for the product.

But, as each day passes, the value of Afrezza actually declines and the opportunity for Pfeffer to make a deal becomes far less likely. Even though Pfeffer is defiant in his claims that the Sanofi breakup is not the end of Afrezza or Mannkind, my opinion is that he better take some dance lessons – and learn the steps quickly.

For Pfeffer, there is no need to save face, but there is a need to save MNKD.

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