Kenny Soulstring

Cempra Inc CEMP Stock News

Cempra Inc (NASDAQ: CEMP)

Cempra Inc. is essentially all-in at this point in time, with two vitally important PFUDA reviews pending this week for solithromycin, its drug intended to treat community-acquired bacterial pneumonia. We received a trading tool, news alert from Trade Ideas that brought our focus to CEMP.

The FDA is set to render its decision on December 27th for the oral formulation and provide its decision on December 28th for the intravenous method of delivery for the drug.

At Stake For CEMP

CEMP has already taken a severe beating since the early part of November.  At that time the share price was crushed by over 60% when reports emerged that solithromycin may potentially have caused a rise in live enzymes. This unintended reaction in patients was severe enough for investors to come to the conclusion that the drug would not be approved. However, only two days later, the FDA Advisory Committee concluded by a vote of 7-6 that, while the production of live enzymes may be concerning, the benefits of solithromycin outweigh the risks of the treatment.

The results then led to a 13-0 vote by the Antimicrobial Drugs Advisory Committee that believes that substantial evidence existed to warrant approval of the drug based on the substantial efficacy results demonstrated by solithromycin. But, then, to make sure investors were to remain unsure of the fate of the drug, that same committee voted 12-1 that the risk of hepatoxicity with solithromycin had not been adequately defined in the data set.

With votes saying “yes, its great….but….”, investors are in a tizzy over whether to bet for or against approval of the drug. Even with an FDA that appears to have been nudged around as of late in regard to approving medications despite potential drawbacks, CEMP investors appear to be sitting on the fence on this FDA call.

CEMP…Catch A Wave Or Wipe-Out?

While saying that this decision for CEMP is a make-or-break moment may be farfetched, it will certainly have a strong impact in the near term for the stock.

Solithromycin was granted fast track designation back in 2015, and CEMP subsequently filed its NDA in 2016.  The FDA accepted the application in June, which then set up the crucial PFUDA dates.

Whether or not the FDA will be swayed to approve the drug is a coin toss in investors’ minds, regardless of the fact that CEMP may have demonstrated that they might have eliminated many of the negative aspects regarding the problems associated with Ketex.

As of now, though, CEMP is a fluttering stock, moving erratically at a moment’s notice, and may provide an opportunity to both sides of the trade, long or short.

CNA Finance will keep followers appraised of any breaking news on CEMP.

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AzurRX BioPharma AZRX Stock News

AzurRX BioPharma, Inc (NASDAQ: AZRX)

AzurRx has been generating a lot of attention lately. And, while many emerging companies tend to get some early nods from investors and analysts, the focus on AZRX has strong fundamental underpinnings.

AzurRx is developing a broad pipeline of non-systemic biologics to treat gastrointestinal (GI) and infectious diseases. Importantly, for AzurRx investors, the company is working to provide near term shareholder value by focusing on short-term, lower risk development pathways. More specifically, AZRX recently announced initial patient enrollment for its phase II “MS1819-SD” trial, which sets the stage for a robust 2017.

AZRX Pipeline – MS1819

AzurRx BioPharma’s lead agent, MS1819-SD, is a yeast based recombinant lipase intended to treat exocrine pancreatic insufficiency (EPI), a disease of the pancreas, that is related to chronic pancreatitis (CP) and cystic fibrosis (CF). The company has an on-going phase II trial of MS1819-SD and is currently recruiting and treating patients in Australia and New Zealand, with initial efficacy results expected to be released in the first half of 2017. On Decemebr 21st, AZRX announced that it has, in fact, enrolled the first three patients in this phase II trial at two sites in New Zealand.

The phase I trial not only produced strong safety and tolerability results, it also demonstrated the potential to provide a materially improved efficacy profile and dramatically reduced pill burden. Currently, patients may be prescribed up to forty pills per day to treat EPI, an issue that AzurRx BioPharma is confronting head on. With MS1819-SD, the company aims to reduce the pill burden, down to 4 to 6 capsules per day, while potentially improving efficacy versus the existing standard of care.

AzurRx Advances Phase II Trial For MS1819-SD

The ongoing Phase II study of MS1819-SD, conducted in a partnership between AzurRx BioPharma and its European partner Mayoly Spindler, is an open label, dose escalation study that is being conducted outside of the United States, in Australia and New Zealand. The company expects to fully enroll between 12-15 patients with EPI caused by CP within the next few months, with data being released in the first half of 2017, although AZRX may provide regular updates as warranted and consistent with the study protocol.

While the primary focus of this Phase II trial is to evaluate the safety and tolerability of MS1819-SD dose escalation, the secondary objective is to investigate the efficacy and dose response in patients by analyzing the coefficient of fat absorption and its change from the baseline.

The enrollment of the initial patients in this Phase II trial is a significant milestone for AZRX and furthers the path for MS1819-SD to more fully demonstrate its therapeutic potential, with the goal of improving or eliminating many of the devastating and painful conditions affecting EPI patients.

Unlike the current standard of care which is derived from the pancreas of pigs, MS1819-SD is a recombinant enzyme that is derived from the yeast Yarrowia lipolytica, which makes it non-animal based and entirely vegan compound. In earlier studies tested on animals, MS1819-SD demonstrated an outstanding profile to compensate for the pancreatic lipase deficiency that is common among CP patients. Replacing the activity of this enzyme can alleviate greasy diarrhea, fecal urge, weight loss and could ultimately alleviate malnutrition.

Upon successful trial results, AZRX will look to address a lucrative market, with potential to treat over 100,000 patients in the United States with EPI caused by CP and an additional 30,000 patients with EPI caused by CF. Currently, the standard of care is treatment with porcine (pig) derived replacement pills and in 2015, that market was estimated to be $820 million in the United States alone, and $1.5 billion globally, according to both the National Pancreas Foundation and analysts on Wall Street that cover the sector.

AZRX Pipeline – AZX1101

AZRX’s second initiative, AZX1101, is a proprietary complex biologic being developed to prevent hospital acquired bacterial infections. AZX1101 works by blocking the activity of a broad spectrum of antibiotics from acting within the GI tract. In doing so, AZX1101 may prevent the toxicity of intravenous antibiotics to gut bacteria and the complications that would come from the “healthy biome” in a patient’s gut from being disrupted. The commercial market can be substantial, with the CDC estimating that over 1.7 million hospital associated infections are reported each year, either causing or contributing to death in about 100,000 patients a year, with the annual cost to treat the infections running as high as $11 billion.

AzurRx intends to file an Investigational New Drug (IND) application for AZX1101 by the end of 2017, with a primary development focus on preventing Clostridium difficile (C. diff) infection. However, beyond C. diff, AZRX expects that AZX1101 may demonstrate broad utility in the prevention of antibiotic associated gastrointestinal adverse events.

AZRX Creating Shareholder Value Through Expertise

Behind AzurRx’s pipeline advancement is a strong management team and accomplished advisory board. AzurRx’s core management and scientific team has over 60 years of experience covering hepato-gastroenterology and infectious diseases, clinical practice, basic scientific research and translational medicine, pharmaceutical R&D and university board leadership. This team is focused on creating shareholder value through optimizing clinical milestones, several of which are expected during the next six to twelve months.

AZRX – Word On The Street And Partners

With AZRX focused on both developing and expanding its clinical pipeline, Wall Street analysts are also beginning to take note of the potential in the company. Analysts at WallachBeth Capital have initiated coverage on AZRX shares with a “BUY” rating and a twelvemonth price target of $7.00 per share, representing potential upside of 71% from the current share price.

Coming off of its recent IPO, priced at $5.50 per share, AZRX raised over $5.3 million by issuing 960,000 shares to investors. The proceeds place AZRX in a stable cash position for the near- and intermediate-term, allow AZRX to aggressively pursue clinical validation trials for MS1819-SD, and provide ample resources for working capital and general corporate expenses. The funds will also be used to advance the IND application AZX1101, planned for 2017.

As of November 22, 2016, AZRX had only 9,631,088 shares outstanding, inclusive of the shares sold in its IPO. The low share count provides shareholders significant leverage with positive clinical milestones. AZRX is actively pursuing business development. In December, AzurRx announced a promising deal with TransChem, Inc. that will enable AZRX to license TransChem’s proprietary transition state chemistry technology for MTAN inhibition. AzurRx management believes that this partnership will enable the company to tackle one of the major frontiers in medicine, the impact of bacterial biofilms on humans with its first potential market being the ability to impact h.pylori, the major culprit in stomach ulcers. This partnership with TransChem is expected to move AZRX even closer to becoming a significant player in non-systemic therapies for gastrointestinal and infectious disease.

Understanding AZRX In Simplest Form

Once all of the scientific language is absorbed and investors try to distinguish between a gastrointestinal disease and a GI tract infection, AZRX can be broken down to simplest terms by going to the root of AzurRX BioPharma’s existence.

AZRX management describe the company as “business led, science driven, and clinically advanced.” While this sounds simplistic in nature it drives home the basic mission at AzurRx, to provide shareholder value by developing technologies that can deliver the highest quality therapies to treat patients afflicted with gastric disease.

Secure with a global presence, AZRX is well positioned to advance on multiple fronts, aiming at potential drug approvals outside of the United States, and expanding its geographic footprint. With AZRX having a basic research presence in France and a clinical presence in countries such as Australia and New Zealand, management appears to be aiming at expedited international approvals as well as the United States.

That said, investors should understand that they are on a mission alongside AZRX, one that may produce some truly revolutionary clinical outcomes. If the phase II trial results with MS1819-SD can confirm what has already been demonstrated in prior trials, the science at AZRX can be quickly thrown into the mainstream.

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Abeona Therapeutics ABEO Stock News

Abeona Therapeutics Inc (NASDAQ: ABEO)

Okay, so I’m jumping on the bandwagon of a scathing rebuttal that was posted on a blog site by “World’s Greatest.” It refutes, point by point, the hit piece that was recently done on ABEO by an admitted and masked short seller.

But, even though my headline may appear boisterous, ABEO actually is in a position to provide stunning shareholder value to investors that are willing to cut through all of the garbage and maintain a longer-term investment horizon. Promising stocks like ABEO are always vulnerable to vicious and unfounded short seller attacks, and the fact that ABEO has the taste to avoid publicly confronting them is a testament to the class of management at ABEO.

ABEO Is Entirely Different From The Nonsense Published

First off, lets be clear on the reality of Abeona.

ABEO has three late-stage clinical programs that have been producing remarkable and unprecedented results.

ABEO has an ample war chest that is flush with cash – approximately $70 million dollars at last publication; this is a far cry from the going-concern nonsense that was spewed into investor faces.

ABEO is expected to release clinical updates to investors during the first quarter of 2017, and if it confirms the data already presented, ABEO shareholders may be in store for a happy new year.

While those are just a few of the absolute bullet points that should make any investor be treated for seller’s remorse if they sold stock based on the potentially libelous claims published, investors may still be able to pick up shares at post-hit prices, and should consider themselves lucky in that respect. While ABEO may still be considered a small cap, the ABEO plate is full of opportunity.

Following The Smartest Guys In The Room

Investors like Soros Fund, Perceptive Life Sciences, and Knoll Capital Management don’t take substantial positions into small cap names without hours of deep-seated due diligence. Many investors on the street do nothing but follow the lead of the revered investment gurus and trust that their opinion is based on sound research and a belief in company fundamentals. For an author to question the merit of having a wealth of heavy hitting investors interested in ABEO is almost laughable. And, when it’s shown that several of these heavy hitters took positions at prices higher than current market value, it can become even more embarrassing for the author. I know, the share price is beaten down to levels lower than where these guys invested, so, doesn’t that make them wrong? Certainly not; especially when the decline is based on a fabricated and coordinated effort to spew myth and legend about ABEO.

These investors must see something that they like, and if you asked them they would probably not squawk at a future price many multiples higher from where the share price is sitting today. ABEO is looking to accomplish this creation of value by concentrating on treatments for rare pediatric diseases, where the rewards can be both humanitarian and lucrative.

ABEO has already demonstrated significant and unprecedented results in their Sanfilippo trial and are expected to provide equally impressive results from their RDEB studies.

ABEO Treats Sanfilippo

I have covered it before in prior ABEO articles, but the topic of the two most promising and near-term catalysts need to be addressed again, especially to refute the bogus claims made by a masked short seller.

ABEO is advancing two studies, one intended to treat Sanfilippo type A and B, and a second to treat Juvenile Batten Disease and Infantile Batten Disease for recessive RDEB.

ABO 102, to treat Sanfilippo Type A, is demonstrating the ability to deliver a normal and fully functioning gene duplicate to allow that replacement to take the initiative and provide normal gene and protein expression and waste within the brain. Sanfilippo is a rare genetic disorder that unfortunately results in death in many cases, but ABEO has been showing some promising results. In fact, there is a human interest story following one of the Sanfilippo patients in a Facebook dialogue. The blog is certainly worth a read if any of you doubt the efficacy being demonstrated.

The market for Sanfilippo A is substantial, with revenue estimates running into the hundreds of millions of dollars. ABEO has treated three patients during the phase I/II trial thus far. Contrary to faulty claims made by Mr. Short, data has demonstrated that each patient has responded quite well, perhaps even better than expected, as the phase I/II trials mainly focus on safety and tolerability. To see efficacy was a welcome addition to the data. While some argue that the small patient population of roughly 2000 people inhibits the likelihood that ABEO can generate substantial revenue, they are incorrect. Modeling Biomarins $1.5 million dollar gene therapy treatment, the revenue potential can be staggering. I am not saying that ABEO will charge that much per treatment, I am just pointing out that similar therapies are being sold for that amount of money.

All of the patients had GAG reductions in the right places. GAG reduction was demonstrated in urine, cerebral spinal fluid, liver, and spleen volume, each clinically significant, and each reinforces the promise already being shown in enzyme replacement therapy.

ABEO expects to submit regulatory filings during the latter part of 2017 and is targeting approval in early 2018.

ABEO Competitors?

While ABEO has been compared to others that have either given up trying or simply have a process that is almost unbearable to describe, the fact is that ABEO will not face much competition, if any, for the next ten years.

ABEO’s closest competitor treats patients by drilling multiple holes into the skull in an effort to deliver the drugs it believes will address the disease. ABEO, on the other hand, offers a single injection, breaks through the blood-brain barrier and begins to work without the substantially invasive procedure of its closest competitor.

ABEO Priority Review And Revenue

The revenue potential in treating Sanfilippo alone is enormous, but ABEO may also benefit from priority review vouchers, which have been sold on the open market for over $300 million dollars. Further. low cost of goods for the treatment will lead to super high margins that will generate tremendous trickle down benefit to the bottom line.


ABEO is also targeting RDEB with the company’s second late-stage product. RDEB is a destructive disease that limits the production of certain collagens in the body to act as a “glue” between layers of the skin. In most cases, the skin on patients can usually be peeled right off and, in extreme cases, lead to total loss of skin coverage on bones, painful blisters, and open wounds.

Like Sanfilippo, RDEB is a genetic disorder that affects the production of collagen in the skin. Initial phase I results indicated that collagen expression was present after the ABEO treatment for 90% of patients at three months, 66% of patients at six months and 42% after twelve months. Investors can expect ABEO to provide additional data in early 2017, with the intent to approach regulators for an expedited pathway for approval.

Clearly, with over $1.65 dollars per share in cash, almost none of the potential from either trial is properly reflected in the share price. However, as I stated earlier, with coverage emerging on the stock and with increased liquidity down the road, ABEO should begin to grow into its skin and reflect a value far higher than current levels.

How To Get To $120 A Share

Now, the big question… How can I say that ABEO can reach $120 dollars per share? Well, based on the potential enterprise value of $3 billion dollars to treat the captive Sanfilippo market and the projected $5 billion dollar market to treat RDEB, and providing a 25X multiple, ABEO can climb in excess of $120 dollars per share. I’m not predicting that number, but to rule it out is just as unfathomable. To remain consistent, I’ll follow the market data provided by market sources familiar with the space.

ABEO For The Future

The on-line rebuttal to Mako that refutes, point by point, the hit piece sent out against ABEO, should relieve any investor anxiety about the future. If not, read it twice, because it is filled with factual data that is easily fact checked through reading published reviews and publicly available patient data.

It’s a shame though, that while some blog sites permit totally unmerited claims to be published, trying to get a rebuttal published can take weeks. All in all, for ABEO investors, a buying opportunity has been created – one that should be taken advantage of, in this writers humblest of opinions.

Disclosure: This article was written by Kenny Soulstring, and it reflects my own opinions and unique articulation. This article is not intended to offer investing advice, guarantee 100% accurate predictions or to be interpreted as providing a personal recommendation. What I can guarantee, though, is accurate research, thoughtful analysis and an enthusiasm about any stock that I cover.

While I seek to uncover emerging companies that I feel have true value and potential, it’s important that investors assign an appropriate time horizon to each of their investments, understanding that emerging companies need time to mature.

I wrote this article myself and it includes my own research and expresses my own opinions. I am not receiving compensation for it (other than from CNA Finance). I have no business relationship with any company whose stock is mentioned in this article.

Additional Disclosure: I am long ABEO and may purchase additional shares within the next 72 hours.

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Ecoark Holdings Inc EARK Stock News

Ecoark Holdings Inc (OTCMKTS: EARK)

For the millennial generation, holding the latest technological advances in the palm of their hands has become commonplace. Middle school children with iPhones, most owning smart tablets, are now part of an inter-connected social community that is taking far more personal action to bring about social change and to promote personal responsibility as citizens of the “world” than ever before.

Within that movement, there are a handful of select companies that are also taking on a leading role to endorse and incorporate more socially conscious methods of conducting business, with a goal of promoting sustainability, eliminating substantial amounts of waste and streamlining business processes with the intent to keep these savings perpetual.

Ecoark Holdings (EARK), for instance, is introducing an approach, through its subsidiary, Zest Fresh, that can literally save millions of tons of food per year, provide logistical solutions that can save fossil fuel resources and provide an important solution within the farm to market supply chain that can ensure quality, freshness and safety in the foods and commodities that consumers purchase.

What Is Zest Fresh And What Does It Have To Do With EARK?

Zest Labs is a subsidiary of Ecoark, a company that is piloting a supply chain enhancement system to address the significant challenge of reducing fresh food waste throughout the world. In the United States alone, estimates indicate that over $165 billion dollars worth of food makes it to the trash cans instead of hungry mouths. Part of the issue is simply irresponsible purchasing by consumers and businesses, other causes include inefficient expiration dates provided on packaging, often leading to spoilage due to the inaccurately calculated shelf life of perishable food items.

Contributing to the system wide inefficiencies and product waste factor is that preceding the emergence of the EARK “Zest Fresh” system, there have been very few, if any, products or systems that have had the capability to enable the tracking of perishable food products throughout the supply chain cycle. Prior to Zest Fresh, the food supply chain from farm to market was predominantly manifested by hand written documentation and loosely enforced safety inspections. Zest Fresh, though, can offer an immediate solution at every level of the supply chain, providing precise information as to how that food was handled, processed, transported and eventually put to sale to the end consumer.

Ironically, despite the enormous waste of valuable food and resources, EARK is one of the first companies to actually introduce a viable product and system that can immediately translate to increased freshness for the consumer, streamlined efficiencies to locate and eliminate failed processes that lead to waste, and specific and direct suggestions necessary to boost profitability for those in the supply cycle. In a multi-billion dollar market, EARK is the pioneer to offer a fully integrated, user friendly platform specifically designed to address two key drivers….be socially responsible to eliminate food waste and to allow its users to become streamlined, efficient and profitable.

A Simple Tool That Does All The Work

Zest Fresh, to put it in simplest terms, puts in place a mechanism that encourages both supplier and retailer to adhere to best practices and remain cognizant to quality and freshness guidelines. Or, they can go it alone and risk the chance that an entire shipment of product can be refused by the purchaser due to the lack of quality control and subsequent poor product quality.

The EARK tool provides both companies and workers with real-time tools and alerts that not only improve operational efficiency, but can also serve to demonstrate that the products being purchased from that company have the highest probability of being top grade, properly handled products. In other words, the Zest Fresh system can offer large quantity customers a high degree of confidence that what they will be receiving will be shelf ready and remain fresh for an extended period of time. And, for a retailer, that’s the perfect recipe for an increasing profit.

Not surprisingly, when a supplier knows that they are being “watched”, they will typically do the right thing every time. However, Zest Fresh is no “big brother”, it’s a tool designed to bring material and positive change to a business and industry, intended to reduce unnecessary waste and eliminate the loss of potential revenue by reducing waste.

Is Zest Fresh, Accountable To Freshness

The concept is relatively simple, however, the science, data and technology behind the Zest Fresh system will be difficult for any potential competitor to duplicate. Taking into consideration the strong IP portfolio at EARK and the barriers to entry get even higher after Zest Fresh is introduced.

The system works by placing a small sensor based transmission device onto a pallet of food. This device stores, records and transmits, in real time, the logistical journey of that product. The EARK system will provide the purchaser with vital information about the purchase.

Zest Fresh can identify if the critical temperature zone has been breached, record in exact time how long the product was in transit and provide additionally important information as to whether the items have been moved or stored in an unacceptable staging area. With these measures in place, a customer is treated to better quality product with a historical manifest to ensure its safety.

The Benefits Of The EARK System Are, Well, Systemic!

Not only does the customer benefit, the seller does as well. The Zest Fresh system offers both the production and transportation companies with a logistical “first in first out program” for the product, replacing the antiquated eyeballing of pallets with the hope that conscientious employees rotate the product. To that end, the Zest Fresh system dictates which pallet should be loaded first, which should be sold first and manifest deliveries to maximize quality by delivering product in a “freshness sequence” that provides top grade product to both wholesale and retail sellers.

The transmission tag uploads real time data to a hand held computer or tablet, providing instantaneous information at each level of the supply chain. The software that drives the system can use predictive analytics to predict product failure or can be used to predict when a product will fail, or lose freshness. Ultimately, the goal is to extend shelf life for food, maximize efficiency in how the food is handled through environmental factors and then use the analytical tools to predict how many days of freshness the product has remaining. Having this knowledge leads to more products on the shelves, which translates to more dollars in the register.

The beauty of the Zest Fresh system is that it is applicable at every stage in the supply chain, allowing for broad industry adoption. Here’s how it can work.

Farmer Uses Zest Fresh

A farmer can often be the party blamed for inferior quality products. Without Zest Fresh, he has little defense. With the system, however, he can monitor the flow of delivery for each of the products sold. He can ensure that appropriate measures were in place at all times to maintain the products quality and freshness. He can remain fully appraised of the best storage and transportation processes and become aware if the product was detoured from its intended path.

From a business perspective, EARK is helping to save money with Zest Fresh by cutting waste, refines the pre-harvest season and defines a portrait of quality for his products. If the farmer knows the customers are watching, you can bet that he will perform even better for them. The farmer also remains part of the information loop to provide valuable insight and information as to how or why the vendor is seeing waste in the purchase. Maintaining a streamlined and accurate line of analytical communication builds increased confidence in the grower and vendor relationship, building trust that each are committed to preserving the quality and integrity of the products being sold to consumers.

The Wholesaler

The next value added component of using Zest Fresh technology takes place at the wholesaler level. These are the entities that sell to retail outlets or sometimes directly to consumer. For the wholesaler, quality is crucial to remaining successful in a business that is not short of competition.

Vendors use Zest Fresh to track real time data related to product temperature, time traveled and product variance due to storage facilities that can affect a products freshness. But more importantly, wholesalers can utilize the systems analytical tool that can predict the length of product freshness as a key driver to promote sales and storage efficiency within their own sales channel.

While the FIFO method of selling goods is still commonly recognized, the Zest Fresh system will provide a wholesaler with information specific to a product pallet, allowing them to shuffle product sales as necessary to take advantage of the data provided by Zest Fresh, which analyzes product characteristics as well as purchase date. Simply because a pallet is first in does not make it an automatic first out, this is where Zest Fresh provides significant customer benefit.

The wholesaler also has the benefit of tracking temperatures and logistics, in real time, to ensure the safe transfer of all food product, isolating themselves from potential liability in food borne illness cases that are beginning to permeate the industry landscape. In any business, information is power, and owning a data set that memorializes the journey from farm to consumer can be a critical component to not only protecting their business, but to build and maintain strong relationships with clients.

Consumer Benefit

The consumer receives the ultimate benefit, at least from a freshness standpoint. While the retailer may find a benefit to sharing the logistical data with the customer, the consumer ultimately provides their endorsement by purchasing the food. It is not unreasonable to imagine several of the organic and whole foods based grocery chains demonstrating their commitment to quality by offering the Zest Fresh information as a guarantee of freshness and quality.

With produce being a commodity item, except by looking at the outer leaves or skin of a product, consumers must take the word of the retailer that the product has been handled properly and safely throughout the supply chain. Too often, these days, restaurants are in the news because of food borne illness related to lettuce, tomato and other commodity items. These occurrences are not only costly for the customers who get ill, the headlines associated to the illness can cost millions of dollars in lost product due to recalls and can cost tens of millions in market cap to publicly traded companies that may have served the food.

Once again, information is power…but, it can also be protection.

Ecoark Capital Structure

Here’s the way I see it. EARK is offering investors an opportunity to take advantage of a multi billion dollar industry that is need of bottom up efficiency, that is, from the farm to market. If Zest Fresh can save the food industry a small percentage of its current waster, it is a vast opportunity for the food industry and EARK.

From a capital perspective, EARK is well positioned, with a small amount of debt and only 36.7 million shares currently outstanding and approximately 41 million shares on a fully diluted basis. From that, the trading float is relatively small with only about 10 million shares being traded in the open market. While EARK may experience some growing pains and potential dilution to raise capital, management appears to be focused on building the company through innovation and implementation, rather than by outright share dilution.

Zest Fresh Potential For EARK

It’s worthy to repeat, for customers that use Zest Fresh, information becomes power. But, even more than that, Zest Fresh can also provide a farmer or distribution company with credibility. The use of the system demonstrates the willingness of the seller to take the extra step to provide exceptional service and uncompromising quality. Perhaps more significant, it also demonstrates the willingness of the seller to allow the buyer to peek behind the company screen, unafraid of what the buyer may see.

While technology continues to advance at tremendous speed, the reality in business is that people still make the difference. I spent over twenty five years in the restaurant business and remained with the same vendor and salesperson for that entire period. I did so because we built a relationship on mutual trust and confidence that each of us would fulfill our role in being responsible customers to each other.

Even though the Zest Fresh will never replace a person, it will certainly work to boost the level of trust in a mutually beneficial relationship. While many restaurants are fine with commodity grade products, many are explicit in regard to quality specifications and supply chain handling.

With patent protected technology, Zest Fresh is in a position to capitalize on a three tiered strategy, providing crucial information from ground to consumer. And, while freshness and quality is always a prime concern, the many millions of dollars that can be saved by modeling best practices from the data provided by the Zest Fresh system, the amount of food and resources saved in just a single year would be enough to feed millions of people a month.

Thus, from a social, economic and financial standpoint, the Zest Fresh system may be the most beneficial tool that has been brought to market in the food and hospitality industry in quite a long time. The benefit from farm to table is enormous, and in a world that is beginning to get squeezed by population growth, maximizing output and reducing waste will be crucial for the coming generations.

The EARK solution offers the best of all worlds for both the environmentally conscious and the business savvy…sustainability of resources and bottom line profitability. And, in which ever order gets priority, it still delivers a win/win proposition for all involved.

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Simon Property Group SGP Stock News

Simon Property Group Inc (NYSE: SPG)

Simon Property group (SPG) may not be on its way to ZERO, however, investors can expect significantly lower prices for the stock as the economy improves. Wait, even with an improving economy, SPG will suffer? That’s exactly what I am saying.

Yes, despite an economy that may finally get some real stimulus, SPG, because of its failure to remain principled, has positioned itself to fail from an improving economy. And, while that position may be quite contrary to popular belief which reasons that a rising tide lifts all boats, it won’t be the case for SPG.

SPG,The Evolution

Years ago, when SPG was run by Mel and Herb Simon, the company was centered on realistic goals, little to no long term debt and with the fundamental belief that it is the people within an organization that lead to ultimate success or failure. And, while SPG experienced staggering growth during the previous decade, they did so at the expense of its core philosophical positions…untertaking little to no debt and treating people with dignity and respect.

Since David Simon took the reigns of SPG, the share price has certainly seen its value increase. But, behind the curtain lay the dirty details of propped up numbers, an unmanageable debt load in a rising rate environment and a slew of high level departures during the previous twelve months. In fact, “glassdoor” shows that the employee sentiment from current and former employees at SPG are rating the company with some of the lowest marks in the industry. Low pay, extensive work loads and an ever changing and unattainable bonus structure lead the fray of publicly posted opinion. From what I can deduce from Glassdoor, the mantra appears to be,”the beatings will continue until morale improves.”

What Happened To SPG?

What ultimately made SPG the most successful player in the brick and mortar industry, will eventually lead to their downfall. And, it is baffling that David Simon did not have the sense to stop the risky endeavors while he had the chance.

Drunk from the punch bowl of artificially low rates, SPG listed debt of $23 billion dollars at the end of September 2016 with current assets listed at roughly $4.6 billion. The 4.99% debt to equity ratio sits just below its all time high of 5.5% in March of 2009.

Like so many other retailers that have remained blind to the reality that what goes up must come down, SPG now sits extremely vulnerable to a rising interest rate environment that can cause massive liquidations of assets just to meet its obligations. SPG must have never assumed that sometimes the inverse of gravity rings true, what goes down does go up.

During the past three months alone, SPG share price has fallen from $216.00 a share down to its current level of $179.00 a share, and while those that are now chattering to back up the truck, they should think again.

While SPG is certainly bloated in its debt to equity ratio, the current exodus from the stock is being caused by just the slight increase in interest rates that the markets have recently experienced. With the talk of the Fed implementing a small twenty five basis point increase in the Fed Funds rate, investors are already running for cover. Imagine what happens to SPG if the Trump administration causes enough heat in the economy to drive interest rates higher by 3%-5%? Perhaps more concerning for SPG shareholders would be if the new Fed chairman took the punch bowl away sooner rather than later, intent of normalizing the economy away from the politically manipulated policy by the Fed.

I’m not even suggesting that interest rates climb beyond historical norms, but if they reach levels that are still considered artificially low, say 4%, SPG shares will get clobbered.

SPG And The Fickle Markets

Institutional money managers are very quick to lend money and take companies on the road when they have both hands in the till. This has been the case with SPG. Money has been easy, property has been undervalued through much of the prior decade and with SPG’s aggressive growth strategy, the money men were more than happy to assist. But, for those that do not believe that they will quickly turn on this mega retail giant, they are being naive.

Markets could care less about last year, they are a forward looking beast intent on finding current opportunities and leaving the carcass of those that are on a respirator to fend for themselves. Oh, they will take the pieces and SPG may have many to give.

Obviously, the market is already turning its back on SPG, as the stock has declined almost 15% during the past three months alone. Subsequently, as the headlines may skew positive to entice investors to take advantage of this “buying opportunity” in SPG, I believe that they are nothing more than the best headlines that money can buy.

Pump Up The Profits

I give credit to David Simon for being shrewd enough to double the size of his inheritance. However, the guy did not know when to stop. Now, he is stuck in the quagmire of continuing to generate a profit at any expense to save what could be a precipitous decline in his company’s value.

At SPG, its all about leasing. In fact, SPG has gotten so good at taking advantage of available space that if there was a two inch crack in the basement floor, they would probably try to lease it to rodents as storage space. And, if the rodents didn’t take the space, they would exterminate them.

Seriously, I mean it. SPG is struggling to engineer numbers. They feast on small and often naive temporary tenants to provide the extra dollars necessary to keep the analysts happy. And, as SPG provides enormous rent relief to big box tenants, even buying Aeropostle to simply keep the lights on it that space, it becomes apparent that SPG must continue to target the 3-6 month “temporary” tenants at exorbitant rental rates. I don’t have a problem with a company leasing space to a small entrepreneurial based venture, but, I do disagree with the tactics they use.

The specialty leasing component of SPG is geared on squeezing the most out of the smallest and most vulnerable business person, filling them full of pixie dust dreams, failing to mention that mall traffic has been in a steady decline for years. SPG also fails to tell these mom and pop shops that while they are paying outrageous rent per square foot, that they are actually subsidizing the in-line space that is getting rent concessions in order for them to remain at the mall.

Leasing Everything In Sight

SPG is leasing everything in sight, from phone charging stations to floor tiles. I would not be surprised to see the public restrooms soon covered with advertisements as SPG searches for every nook and cranny of available advertising space that they can market for sale.

The problem with that strategy is that at some point the space runs out and SPG will not be able to engineer the numbers necessary to keep investors on board for an additional quarter. Eventually, the walls at an SPG mall will need to look like a NASCAR racing vehicles, covered with graffiti like advertising that battles for a quarter inch of space to distinguish between two separate advertisements.

While investors have had a great run with SPG, its time to pay attention to the reality that the company has gotten far too intoxicated on easy money and engineered profits. But, that’s the game they took on when they became public and at some point in the near future, it may all come crashing down.

The Food Court Effect

I like to use the food court as a key indicator as to how a mall is doing. The more independent food service counters you see, the greater the likelihood that the mall is not delivering the traffic required for the national chains to remain interested.

SPG malls are becoming filled with these enterprising mom and pop concessionaires, filling the court with hand written signs and out of order neon lights. What was once a bastion of social gatherings has become a worn out looking shell of its former glory. Sure, the high profile mall’s are hanging in there with some very colorful and energetic food courts, however, if you look at an SPG mall on Main Street, USA, the tenants look far different.

You can use it, I call it the “Food Court Effect”, and when investors begin to see these independent locations become more prolific in the mall’s court, it’s an early indication that they should reconsider their investment in SPG, taking the lead from the billion dollar franchise industry that feels the same way.

Will SPG Go To Zero?

While SPG may not get all the way to zero, don’t consider the assumption to be pure folly. General Growth Properties (GGP) almost got there during the Great Recession, trading at less than a dollar share before being rescued from collapse.

Now, with the economy poised to truly pick up steam with a free thinking and opportunistic Trump administration, the benefit to the economy may conversely lead to the demise of SPG.

Forget the impact of Amazon and other online retailers that are crushing the brick and mortar business, that is for another article. I am only focusing on the impact of interest rates, the decline of pedestrian foot traffic and the unwillingness for SPG to publicly commit to changing its stress ridden culture that rewards few but scolds many.

Glassdoor ratings are most likely propped up by those at the senior management level, or maybe by professional bloggers that are being paid to post. If not for the few that remain loyal to a culture that minimizes success, I believe that the ratings would be far lower.

SPG was the pillar of the brick and mortar space, now they are a shell of its former glory. Until David Simon and the rest of his executive management team come to grips that his human infrastructure is crumbling and that his debt load will soon be unmanageable, the company to me is uninvestable.

Disclosure: I have no position in any stock mentioned and no plans to initiate any positions within the next 72 hours.

I wrote this article myself and it includes my own research and expresses my own opinions. I am not receiving compensation for it (other than from CNA Finance). I have no business relationship with any company whose stock is mentioned in this article.

[Image Courtesy of Wikipedia]

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PixarBio Corp PXBR Stock News

PixarBio Corp (OTCMKTS: PXRB)

Okay, as an investor that works to uncover interesting and compelling stocks which have the potential to trade sharply higher in the near term, I often fall upon those penny stock magnets that have the tendency to draw investors in based purely on a clever stock symbol or that they happen to be associated with a hot sector, regardless of how insignificant of a player they may be.

However, within that subset of stocks are the victims of the dreaded Bully Beatdown, those stocks that have been unmercifully beaten down to such low levels that they become a compelling opportunity for investors. Like PXRB.

Enter PixarBio, PXRB

While PixarBio has been a around for several years, I want to focus your attention on the PXRB that has recently become the surviving entity of a wholly owned merger with its subsidiary BMP Holdings. That history has a lot of yada,yada,yada and isn’t essential to how I see PXRB moving forward in the near term. However, if you want the long version of the PXRB story, their website explains it all.

Yet, for those that read the winners/losers section of the finance page, PXRB is probably not a stranger. In fact, PXRB has made the list on both sides of the ledger, trading as high as $30.00 and as low as $3.00 per share since October 31st. Incidentally, October 31st was the opening day of trading for the new PXRB, so investors have had a monstrous run as well as a severe beatdown all within 30 days.

Hey PXRB…What The!

On October 31st, PXRB opened for trading on the OTC market at a price of $3.00 per share. The stock traded as high as $4.77, its closing price for that day, with volume of 77K shares.

The very next day, PXRB opened at $6.45 and traded as high as $15.00 a share before retreating back to $11.00 per share at closing time on volume of 32K shares. It gets better.

On November 2nd, PXRB opened at $12.00 and traded as high as $30.00 per share and actually closed at that level on volume of 11K shares.

On November 3rd, PXRB closed at $15.00 a share. Huh?

And then it happened, the Bully Beatdown.

Now, if PXRB was just a run of the mill pump and dump stock on the pink sheets, they wouldn’t warrant a story. But, since PXRB actually has a strong management team and a relatively robust pipeline with near term catalysts, I believe that the beatdown may offer investors an opportunity to grab some discounted shares in the very near term. It’s important, though, to let this stock settle before considering a position, and for PXRB, cost averaging is definitely recommended.

PXRB Can Stand Up To The Bully

Bullies can get their way with those that refuse to fight back, but for PXRB, I expect things to play differently. The company is managed by long time biotech veteran Frank Reynolds, who founded InVivo Therapeutics. Mr. Reynolds is a colorful leader, with the acumen to raise money for his ventures without considerable difficulty.

At PXRB, he just closed a $23.44 million dollar deal, buffered with an additional $10 million dollar line of credit to fund the advancement of its lead clinical product NeuroRelease™.

That funding was completed on November 7th and extends the strong run of strategic cash raises under the guidance of Frank Reynolds. With the combined cash and warrant proceeds bringing in excess of $23 million dollars, PXRB, is well positioned to advance its clinical initiatives through 2017.

It’s the goal of PXRB to take advantage of a shift within the pharmaceutical industry, an industry with several clinical stage companies now focused on developing non-addictive pain medications. For PXRB management, the initiative to advance non-opiate, non-addictive pain relief for patients has been an endeavor for over ten years. With NeuroRelease™, PXRB may be closer than others in getting such a product to market.

Additionally, having a CEO that is both progressive and has the strength to stand up to a bully market doesn’t hurt, either. In a recent statement, CEO, Frank Reynolds stated the following, “In the last year, our valuation has been outpacing the market and our competitors. We believe that we’ll continue to outperform the market in regards to invention and shareholder value maximization. Discussions in recent months with strategic partners, gives us great confidence for maximizing shareholder value at PixarBio. I’m not an “annuity CEO/CFO” with less than 1% of their Pharma/Biotech shares, and seeking a steady paycheck. I own over 60% of PXRB and I will defend the shareholder value that I invent and capture for PixarBio shareholders. We have zero bad actors on our Board of Directors and we will fight to maximize shareholder value EVERYDAY.”

Can NeuroRelease Replace Opiates?

As of now, NeuroRelease is the only non-addictive, non-opiate morphine replacement that is engaging the FDA to demonstrate its effectiveness in fighting post-operative pain for up to 14 days. NeuroRelease is neither neuro-toxic or cario-toxic and PXRB intends to launch the product in 2018.

Without a doubt, the addiction plagued opiate space has been a big part of the FDA’s discussion for the past few years, with the FDA clamping down hard on physicians that over-prescribe and making it more difficult for patients to be on long term pain management without apparent justification. The niche that NeuroRelease™ is trying to exploit includes physicians that treat chronic pain, battlefield settings, surgical and hospital centers and for extended post-op treatment.

In pre-clinical models, NeuroRelease™ has shown the potential to achieve six months of sustained therapeutic release of non-opiate drugs to treat post-operative, acute and chronic pain.

Incidentally, PXRB management does not stay quiet for long, so expect regular updates pertaining to the advancement of NeuroRelease™. And with $23 million dollars in the bank intended to push the drug forward, investors should expect frequent updates.

Amazing Movement From Pink Sheets To OTCQX

The speed at uplisting the stock is truly an accomplishment and perhaps serves as a great demonstrator of what this CEO can actually accomplish in a short period of time. He took PXRB from the pink sheets to OTCQX in a matter of months, well ahead of the years that is typical for a newly listed company to even be considered for uplist privilege.

The new listing enables PXRB to provide transparent trading for investors and allows PXRB to grow and deliver on its business strategy to deliver long term shareholder value. The move also opens the door to institutional investment and provides shareholder confidence and SEC regulated compliance in regard to its financial reporting procedures.

Although the inauguration onto the OTCQX did not relieve the stock from its continued beatdown, I expect that insiders will soon step in to stop the shareholder pain. With the CEO owning over 60% of the stock and with other insiders owning an additional 30% of the stock, even a small amount of buying pressure has been shown to have the power to move the stock violently higher.

Thus, as we look for the prime bully beatdown candidates, PXRB fits the mold. Personally, while I do not own any of PXRB stock as of yet, I would consider picking up shares once this distribution period is over, potentially grabbing some shares in the $3.00 price range. From that level, I expect the same madness to occur again, with shares trading sharply higher on the first remark of positive news.

For those that follow Frank Reynolds, they know that the investment will not be void of a consistent flow of adrenaline and that investors will be kept in the loop at every step of progress being made at PXRB.

Based on the history of Mr. Reynolds and his prior endeavors, I don’t think that he will allow PXRB stock to remain on the canvas too much longer.

Disclosure: I have no position in any stock mentioned, but may initiate a long position in PXRB within the next 72 hours.

I wrote this article myself and it includes my own research and expresses my own opinions. I am not receiving compensation for it (other than from CNA Finance). I have no business relationship with any company whose stock is mentioned in this article.

[Image Courtesy of Flickr]

Catalyst Biosciences CBIO Stock News

Catalyst Biosciences Inc (NASDAQ: CBIO)

When I first covered Catalyst Biosciences on November 9th, I had a strong feeling that the bully beatdown that they fell victim to would be short lived. While bullies can take advantage of the weak, they always fail against the opponent that does one simple thing – keep getting up. And that is exactly what CBIO has done during the past few trading days.

CBIO Withstands The Beatdown

A great stockwise philosopher once said, “A stock is not measured by how many times it gets knocked down, it is measured by how many times it climbs back up.” That was said by Peter Lynch. Oh, not the famous Peter Lynch from the early days of mutual funds, I am referring to my old neighbor, Petey “Quicktrader” Lynch. He was a great trader, and CBIO would be exactly the type of stock he would pick as a winner.

Few traders doubted his wisdom, and I, abiding by the lessons, have done the necessary and required diligence to support my thesis that CBIO is on the verge of breaking out of its long slumber and trading toward the upper right corner of the stock chart.

From a technical perspective, CBIO has hit my targeted trigger points that signal a reversal of fortune in both the near and longer term. The pivot point at 68¢ on November 17th began the reversal process, and, since that day, CBIO has traded higher by over 22%, closing at 82.99¢ on Monday, November 21st.

Technically Speaking

From a technical perspective, I watched the pivot point being challenged relentlessly by traders, and when the 68¢ level bounced and held for the third time, investors embraced it as the bottom and started to accumulate shares quickly.

Recent trading volume has been demonstrably higher than the monthly daily average, and while analyzing the trading on Monday to gauge the strength in the conviction of the move CBIO was staged with an imbalance of buyers and sellers with large blocks consistently placed on the bid, met with an unequal and far less quantity for sale.

Trading on Monday supported the reversal from a technical sense, and my leading indicators show that there is more room to the upside with my near-term target set at $1.06 a share representing a potential gain of 26% if my endpoint is reached.

Using my CIS (combined indicator strategy), both the RSI and the MACD are positioned in such a manner that the likelihood for the shares to appreciate in value is high.

The weekly RSI stands at 39.97 and the daily RSI closed the day at 52.66. Each of these numbers indicate room to grow, however, the weekly RSI at only 39.99 gives me bullish cause. The weekly reading at 52.66 is also a reinforcing factor to my thesis, and despite the recent 22% climb on strong volume, the RSI is still well below my 70 threshold – the point at which I begin to reassess the holding and consider taking a profit. In full disclosure, I rarely short-term trade, and such a strategy has not always been the wise choice.

I have written on more than one occasion that no investor ever went broke by taking a profit. And, it is solid advice. When investors are trading in stocks that are volatile similar to what we have seen in CBIO, taking money off the table at appropriate times is a wise and prudent move. By nature, I am a long-term trader and don’t appreciate paying my accountant t additional fees to tell me that I owe more in taxes. It’s a double negative that does not equal a positive. Thus, I try to avoid short-term gains, but try even harder to avoid any type of loss.

However, with that said, stocks that have rapid moves in either direction will more often than not correct to a mean. The problem is is that when that mean is reached, investors can almost toss a coin from a technical perspective as to which way the next break will go. Therefore, don’t ever be afraid to take the money and run.

Coupled Indicators

Now, just because the RSI is at a level that indicates a bullish trend, I can’t rely on that signal alone. I incorporate the use of the MACD, an indicator that provides investors with information on both momentum and trend – the two best friends of an astute trader. For those not so astute, the MACD is a great tool that can help simplify a trading decision when using trend and momentum as a leading indicator. Specific to CBIO, the MACD (similar to the RSI) is providing me bullish indications as well.

Just as we are witnessing with the RSI, the MACD is also far from overheating in regard to the recent trading in CBIO. The MACD base line (the level that signals divergence from a trend) has been kept relatively sober, maintaining a positive trend, but not doing so with exorbitant pitches in the wave pattern.

On Monday, the MACD closed slightly bullish above the baseline, a level that I like to see at the day’s end, as it generally leads to a bullish follow through in the following trading session. CBIO not only has the RSI and MACD in position, but like I mentioned earlier, the buying momentum was increasing into the close and was strong through the final trade. In all honesty, the closing price is a Pinocchio’s tale.

CBIO was trading at 84¢ a share just prior to the final trade, but market makers gapped the stock down to 82.99¢ a share on a very small volume trade, which scalped a little over 1.5% off of the day’s total gains. Perhaps a bit of window dressing to disguise the strength, such mm deception goes both ways.

Back to the MACD, though. Even with the heavy volume and with both trend and momentum strong into the close, the MACD remained just above 0, which leads me to believe that CBIO will open higher. My speculation is bolstered by the RSI levels, which in and of itself provides me confidence, but coupled with the MACD, I would be surprised to see a lower opening price.

Importantly, political, social, and worldwide economic factors can and will weigh heavily on any market, and even though investors can utilize a multitude of technical tools to facilitate a trading strategy, investors must always keep an eye on the macro aspect of a trade. Always check the morning news prior to market open.

Remember Why We Like CBIO

Technicals’s are only an indicator, and unless you are a strict technical trader that only needs a chart and a symbol to make a decision, CBIO still works for you.

But, for other investors, like me, there needs to be an underlying thesis to support the technical move.

We do know that CBIO may very well be benefiting from its focus to advance the development of next generation Factor VIIa and Factor IX programs using subcutaneous dosing to treat hemophilia.

CBIO has reiterated that they are on track to initiate a phase I/II clinical trial for Factor IX variants in 2017 utilizing its unique and differentiating approach to treatment – subcutaneous therapy rather than the current method of care that uses an intravenous method of dosing. CBIO has demonstrated feasibility of the subcutaneous treatment in animal models, and improving upon Factor IX proteases is intended to lead to additional compounds to treat hemophiliaB, a life-long disease caused by a genetic deficiency in coagulation Factor IX.

Pivoting off of the bullish technical position, investors should also be aware that 2017 will be an emergent year for CBIO. The company plans to initiate a phase I/II proof of concept study for patients with hemophiliaB and will enter a second phase I/II proof of concept study for its combination treatment utilizing CB 2679d and ISU304, subcutaneous treatments that offer a differentiated and well-tolerated therapy option.

CBIO will also advance its next generation coagulation compound, Marzeptacog alfa, in a study to determine its prophylactic ability in 2017, intending to build upon their earlier results that demonstrated that Marzeptacog alfa provided higher clot-generating activity at the site of bleeding coupled with improved efficacy that could make the compound a candidate for use as both a subcutaneous and prophylactic treatment for patients.

CBIO Cash Value

Putting it all together, CBIO has the technical indicators in its favor and has a strong clinical agenda for 2017. However, there is still at least one other major indicator that is hard to ignore. CBIO is trading for less than its cash value!

CBIO has approximately $19 million dollars in cash on hand, which equates to a little over 80¢ in share value that investors have not yet factored into the current share price. As I showed in my prior article, CBIO should be trading closer to $1.63 a share, based on cash alone. When the IP portfolio and clinical accomplishments are factored in, that price should move substantially higher.

Yet, as investors, we know that the market is an inefficient beast. Pricing stocks is such an inexact science that some pundits have let monkeys throw darts at a board and use those picks against the pros’. Sometimes the monkeys won.

I’m not saying that a monkey can consistently beat a professional investor, but if an investor fails to use some of the most basic tools at their disposal to assist in the process, the chimp’s odds increase dramatically.

For CBIO, now trading at 82.99¢ a share, an opportunity exists for investors to grab a position and follow the trend higher in the near term. My analysis indicates a move past the $1.00 level with initial resistance at $1.06 and with secondary resistance at $1.22 a share. The first point represents a 26% gain and the second level represents a 45% gain.

CBIO has strong management, cash on hand, and a populated pipeline to generate additional momentum into 2017. Once the two milestones are hit (guided to happen within the next six months), investors will be fortified with additional data to drive the investment thesis in one of two directions. But, at that point, once the stock grows into its skin, investors will have gained enough insight as to the overall promise at CBIO.

In the near term, indicators and momentum make me confident that CBIO will perform well. Technically speaking, CBIO is well positioned to make it to Dollarsville in the near term, facing down the bully that beat them senseless since the start of the year.

All stocks trade in cycles and, if an investor can catch a ride, it can be mighty fine. Keep an eye on the technicals, though, because when they turn, gains can be sucked back faster than a college student can do a shot in a Jagermeister bar.

In the meantime, CBIO looks strong and I expect some follow through in the near term. Reevaluate your holding at $1.06 and determine your anxiety threshold before proceeding to the next level.

Disclosure: I am long CBIO and may purchase additional shares within the next 72 hours.

I wrote this article myself and it includes my own research and expresses my own opinions. I am not receiving compensation for it (other than from CNA Finance). I have no business relationship with any company whose stock is mentioned in this article.

[Image Courtesy of Flickr]

Portage Biotech PTGEF Stock News

Portage Biotech (OTCMKTS: PTGEF)

Portage Biotech is not only under the radar, they are barely a blip on the screen. In fact, so much about Portage Biotech has not been publicized that I believe investors have a short opportunity to grab PTGEF at current prices rather than at prices that may move substantially higher after the new year.

For investors that mine for undiscovered gems, PTGEF is just that and earns a place on the Penny Ante wall of opportunity.

Investors Are In Great Company With PTGEF

Essential to my coverage of stocks, I always begin my analysis by making sure that the management team has the credentials to advance an investment opportunity and deliver substantial shareholder value. PTGEF clearly delivers on both.

PTGEF is led by an all-star management team, and even the briefest introduction should impress potential investors. The medical team at PTGEF is led by the following medical professionals and is supported by well qualified board members, each with extensive experience within the financial industry:

  • Declan Doogan, MD. – Dr. Declan Doogan has over 30 years of industry experience in both major pharma and biotech. He was the Senior Vice President and Head of Worldwide Development at Pfizer, where many multi-billion dollar programs were delivered. Since leaving Pfizer in 2007 he has been engaged in executive roles in small pharma. Declan was CMO and acting CEO of Amarin (AMRN: Nasdaq), transforming it from a failing neuroscience company to a vibrant cardiovascular company with a market capitalization of over one billion dollars before his departure.
  • Greg Bailey, MD. – Gregory Bailey is a co-founder and managing partner of MediqVentures. Previously he was a managing partner of Palantir Group, Inc., a merchant bank involved in a number of biotech company start ups and financings. Palantir was also involved in acquiring intellectual property assets and founding companies around the IP. As such, Greg was the co-founder of Ascent Healthcare Solutions, VirnetX Inc. (VHC:AMEX), Portage Biotech Inc. (PTGEF: OTCBB) and DuraMedic Inc. He was the initial financier and an independent director of Medivation, Inc. (MDVN:NASDAQ) from 2005 to December 2012.
  • Ian Walters,MD, MBA – Dr. Walters is the Chief Executive Officer of SalvaRx Group PLC and is part-time CMO of Intensity Therapeutics, Inc. Over his 16-year career, he has demonstrated both leadership and expertise in drug development, including the advancement of multiple cancer compounds from research stages through approval. Ian specializes in the evaluation, prioritization, and the innovative development of new therapies for the treatment of severe diseases. He has worked at PDL BioPharma, Inc., Millenium Pharmaceuticals, Inc., and Sorrento Therapeutics, Inc., leading corporate development, translational medicine, clinical development, and medical affairs.

Individually, this group has delivered numerous successes prior to coming to Portage, and, with this team owning a substantial portion of the outstanding shares in PTGEF, each is motivated to bringing shareholder value. They plan on doing so through strategic investments in Biohaven, Sentien, and Portage Pharmaceuticals, of which PTGEF holds substantial investment interests.

Additionally, for investors, it’s important to note that PTGEF insiders own over 50% of the outstanding shares of PTGEF and have purchased over 9.7 million shares of stock on the open market since March of 2015. To emphasize, these are open market purchases, not freebie shares or discount priced warrant purchases.

Strong Management, Strong Clinical Programs

PTGEF is a somewhat complex entity to understand, as their assets are primarily recognized through their investment and equity interests in three private companies – Biohaven, Sentien, and Portage Pharmaceutical Ltd.

From an investors point of view, PTGEF is like a mining company, with ultimate success being derived from the clinical discoveries and compounds that can drive lucrative marketing potential. Finding these opportunities is the first step, but having the management expertise to capitalize on them is a crucial element to deliver success. With PTGEF having a highly specialized and experienced team already in place, investors should take comfort in the fact that when these discoveries are uncovered, they will be maximized. And, PTGEF is well on the road to having a full plate of opportunity to drive growth.

Biohaven is already producing some provocative data, and as the asset base at Biohaven continues to strengthen, it will only be a matter of time before the trickle down benefit reaches PTGEF, who owns a considerable interest in Biohaven.

During my recent interview with Dr. Greg Bailey, he commented on the PTGEF investment approach. “Our investment in Biohaven exemplifies our approach: approximately two years ago, we provided critical early funding to Biohaven and helped assemble a highly experienced drug development team that previously worked at Pfizer, Bristol-Myers Squibb, and Alexion. The Biohaven team then efficiently advanced its lead drug candidate, acquired additional assets, and is now poised to have multiple drug candidates entering pivotal Phase 3 trials this next year. When we first invested in Biohaven, the initial valuation of the company was approximately $7M, and Biohaven’s last round of funding was at a $133M valuation. With success in its upcoming pivotal clinical trials, we would expect Biohaven’s valuation to continue to rise and attain a level of return that investors should continue to find attractive.”

He continued by saying, “Portage has a substantial position in Biohaven Pharmaceutical Holding Company Ltd., which is currently entering Phase 3 trials and raising capital to finance their programs through FDA approval.  And Portage wholly owns PPL, which may be looking for third party investment as it progresses towards an IND. Sentien Biotechnologies is structured as a straightforward investment.

We believe that our investment approach in biotech is one of the best models for long-term public investors to participate in sector, an investment sector that should prove to be one of the most dynamic over the next decade.”

It’s important to note that subsequent to those comments, Biohaven has successfully raised $80 million dollars in a private offering with accredited investors, including participation from two undisclosed blue chip pharmaceutical companies as part of in-licensing agreements with Biohaven.

Portage Has A Vested Interest In Orphan Compounds

To date, PTGEF already has a vested interest in at least two compounds that have been granted Orphan Drug Designation by the FDA. This interest, again, is through Biohaven.

Biohaven has been able to efficiently advance two of its lead molecules into clinical testing (BHV-0223 and BHV-4157) and expects to begin pivotal clinical trials in 2016 with the goal of being granted an NDA, should the trials be successful.

BHV-0223 is a novel sublingual formulation of riluzole for the treatment of ALS, also known as Lou Gehrig’s Disease. This was developed by Biohaven in conjunction with its formulation partner, Catalent Pharma Solutions. BHV-0223 completed a Phase I trial in late 2015 that demonstrated sublingual absorption of the drug and confirmed the dosing for the bioequivalence study that would be needed for approval in ALS. This bioequivalence study for BHV-0223 is scheduled to begin before the end of 2016; the clinical trial start is only awaiting delivery of the final commercial grade product from their formulation partner.

Biohaven has received clearance from the FDA to begin clinical testing of its second drug, BHV4157, a new chemical entity prodrug. The FDA granted Orphan Drug Designation to BHV-4157 for the treatment of Spinocerebellar Ataxia (SCA) in March 2016, and they expect to begin the pivotal trial with BHV-4157 in its first target indication, SCA, possibly before the end of 2016. BHV-4157 has the potential to be a pipeline within a single drug and could have therapeutic application across multiple disease indications.

Biohaven’s strategy is to begin the development of their glutamate platform by focusing on rare, orphan illnesses where the unmet medical need is the highest and the scientific rationale is the greatest, and then to expand to larger therapeutic areas. Obtaining drug approval in orphan indications can have cost and time line advantages compared to standard drug development pathways. PTGEF management believes that Biohaven will likely have significant market opportunities across several CNS diseases in the coming years.

While the addressable market potential for any orphan drug indication is often difficult to assess, as it depends on the drug’s final indication, efficacy, and pricing, management believes that the peak annual revenue of BHV-0223 and BHV-4157 combined would be in the few hundreds of millions each year. Those numbers increase in magnitude if even one of the larger indications for BHV-4157 is factored in.

PTGEF Is Under The Radar For A Reason

Because of the competitive nature in the biotech space, PTGEF has been keeping much of the clinical development private. The industry is obviously a competitive beast, and the importance of maintaining the integrity of a trial is vital to maintaining a competitive advantage over potential poachers. In the case of PTGEF, however, the company faces additional restraints due to its investment structure.

First, there is the constraint already mentioned – the constant competition with other biotech and big pharma. PTGEF will, though, benefit from large pharma when it comes to advancing clinical trials, as evidenced by the recent investment of $80 million dollars into Biohaven, which, as stated, included two undisclosed blue chip pharma players.

Second, for PTGEF, much has to do with the non-disclosure agreements that PTGEF undertakes with its portfolio companies during the normal course of business. Competitive constraints prevent PTGEF from discussing topics like portfolio strategy and positioning of particular drugs – a constraint that partially lifts after compounds are brought into clinic. Like most biotechnology and pharmaceutical companies, Portage typically discusses potential transactions under the cover of a non-disclosure agreement. These agreements allow them to transact business without compromising the IP portfolio, and with the additional benefit of Confidential Disclosure agreements, the company conducts business with outside pharmaceutical entities.

PTGEF Is Committed To Delivering Shareholder Value

Shareholders want immediate benefit, but when it comes to PTGEF, patience may be well rewarded. Keeping in mind that management owns in excess of 50% of the company stock, the investment interests are aligned.

PTGEF investors must understand that valuation is dependent on a number of factors, including perception as well as the exchange in which the stock is being traded. With only Biohaven entering a phase III trial, providing value may be forthcoming once additional data is released. However, in regard to being given value from Sentien and PPL, the value proposition is more difficult to assign, as both are pre-clinical companies.

Management did discuss in recent letters to shareholders, as well as through interviews, that they are cognizant of the fact that there is a need to move to a larger and more recognized exchange in order to realize the full value of PTGEF. And, while the board and management wait for the appropriate opportunity to execute on that strategy, investors should be reassured in knowing that it is a high priority item on the agenda for PTGEF.

And, while the most recent $80 million dollar investment into Biohaven provided only a short-term benefit to PTGEF stock, the value will eventually trickle down to PTGEF shareholders, where a portion of it truly belongs.

Delivering Shareholder Value

At current prices, PTGEF is extremely undervalued, in my opinion, especially when incorporating the value within each of its portfolio investments, inclusive of the additional funding into Biohaven.

While uncommon for a company trading at twelve cents a share to receive analyst coverage, the fact that PTGEF is managed by such an esteemed group of professionals, coupled with the ability to secure significant funding agreements for their portfolio companies, means that coverage is not out of the question.

As a matter of fact, management has already indicated that they are speaking with several institutions, many of which see the value in PTGEF. Now, with the $80 million dollar funding complete and led by Cowen and Company, it is quite possible that PTGEF does receive institutional coverage in the near term. Once they do, the stock price may finally begin to enjoy increased and sustained traction to the upside.

And, like all discoveries, it’s usually better to find the asset first, rather than join the feeding frenzy already in progress.

Disclosure: I am long PTGEF and may purchase additional shares within the next 72 hours. Special thanks to Dr. Greg Bailey and his team for providing exacting insight into both strategy and drug development at PTGEF and Biohaven, respectively.

I wrote this article myself and it includes my own research and expresses my own opinions. I am not receiving compensation for it (other than from CNA Finance). I have no business relationship with any company whose stock is mentioned in this article.

[Image Courtesy of Flickr]

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Terra Tech TRTC Stock News

Terra Tech Corp (OTCMKTS: TRTC)

When investors first bought into the Terra Tech story, the company was growing, executing on their aggressive growth strategy, and framing a multi-level opportunistic business intent on building an infrastructure in both Edible Garden products, and, for the cultivation and sales of marijuana products, speculating on the continued relaxation of marijuana laws throughout the country.

What investors did not expect at this point in TRTC’s life cycle,was that they would be holding a bag of schwag instead of shares in a company that is truly intent on delivering shareholder value instead of insider enrichment.

TRTC’s Latest Conference Call Was Ridiculous

If investors needed the final reason to sell their shares, TRTC provided it during their November 9th conference call.

This was the quarter that investors were waiting on – the quarter that finally included retail sales from its Blum dispensaries and supporting revenue from additional branded products in Las Vegas. Failing to live up to the guidance provided by Derek Peterson during prior calls, the sales figures fell flat into a warm puddle of mud. But, to add insult to the disappointing revenue of just $7 million dollars, the margins were a pitiful 19% of sales.  This from a company that has told investors that the TRTC benefit was that they controlled the seed-to-sale lifecycle of the transaction.

It’s a good thing that TRTC retained that much cost savings power, because if they didn’t, the $1.3 million dollar of gross profit would have been in the negative column. But, after hearing a multitude of excuses during previous calls, I would not have necessarily been surprised by a negative gross margin. As for that $1.3 million gross profit, don’t get too excited just yet.

Yes, by now you must have surmised that I sold my shares. Maybe I am one of the lucky ones that escaped with a profit. And, while many other investors still may enjoy owning shares purchased at the 20¢ level, be careful of the future.

Gee, Another Investor Turned Basher!

The question begs, is Soulstring another one of those long term investors that has now turned basher? Absolutely not. In fact, since I actually made a small profit on the long-term holding, I have no reason to bash. But, I do feel that the TRTC story should be presented in greater detail so that investors do not assume that TRTC is cheap at these levels, because the stock is not cheap.

Forget the share price – it’s at $0.3972. Yes, that sounds cheap. But, factor in that TRTC has over 521 million shares of common stock outstanding as of November 9th, compared to the 349 million shares outstanding on August 12th, 2016, and the picture begins to get blurry.

But if that increase in share count does not twist your joint, perhaps the additional and ambiguous Series B stock that can be converted into an additional 202 million shares at the request of the holder will do the job. Then, investors should add to that mix the options and warrants available to insiders that allow them to purchase an additional 16 million shares of stock. But, don’t worry, TRTC was keen to increase the number of authorized shares upwards of 950 million in its most recent regulatory filing. Even pushing through the threshold as a billion share company, it may not be enough.

But management had little choice but to raise the authorized shares, since the company was well under water in having the ability to convert shares. For instance, management told investors straight up that that if all the shares were converted, they will issue in excess of 439 million shares of common stock. This is in addition to the 349 million that are already outstanding. Thus, even with the rise in a/s, TRTC is still weak with a very limited cushion for future cash raises since they would have roughly 100 million shares, at best, to use as currency.

For those that argue that the warrants will provide cash, well, I’m sure that they will. However, when those shrewd insiders buy the shares for 12¢ to 13¢ and eagerly sell them into a market at anything higher than that level, their payday is sweet, but I guarantee you that it will be at the expense of the retail holder.

And who gets rich off of these shares, despite the share price? Well, TRTC insiders do, and these insiders have had good practice over the previous twelve months with 30 sell orders without a single insider purchase. I wonder if the husband and wife team of Peterson and Almeister, the CEO and Secretary- Treasurer, respectively, file their tax returns jointly and show their holdings of over 100 million shares. Or, perhaps Kaufman and Ibrahamim file together, another husband and wife team of TRTC insiders who own just under 200 million shares. It’s ironic that these insiders don’t share last names. Are they trying to hide something? And, what did they actually do to gain control of almost 40% of the company?

So, remember when TRTC had 350 million shares authorized? Well, even a second grade student studying to be a rocket scientist can figure out that this small group of insiders already owned most of the available float, when accounting for the convertible shares that they owned. And, the scraps were left for enthusiastic retail investors who were oblivious to the massive level of dilution that was pending.

But Soulstring, They Had To Grow

I’ll grant you the one wish. I’ll let you believe that all the shares were properly valued and wisely spent. Yes, I’ll grant you the wish and even allow you to believe it, but, in actuality, many retail investors may get toasted very soon.

Okay, so the Vandevredes and the Blum cartel got hefty share distributions, but at least they had a viable business to sell in order for them to earn that stake. But, beyond those two, most of the insiders probably never worked beyond an eight hour day to earn those multi-million share holdings.

And Amy Almeister – well, if investors take her share-selling lead, the dumps will be so heavy that even a twelve ton truck couldn’t hold the paper transferred into fresh retail hands. Oh, and Derek is selling too. If you ask them why they sell, you will most likely get the “tax reasons” response.

But, shareholders did not get to ask those questions during the most recent call. Instead of legitimate shareholder questions, which are typically accommodated by Peterson, the call on November 9th had staged questions and responses. Perhaps the CEO is smarter than many believe. Even he knows when to hide. And, its a good thing that he did hide.

Hiding From The Truth

If Peterson would have been willing to take questions, he could have explained how a record quarter led to even steeper losses. He could have explained how a seed-to-sales distribution program provided a 1% difference in gross margin. He could have explained how the Blum outlets only booked a total of $7 million dollars for the quarter when daily sales estimates were ranging in the $65K dollar per day level, per location.

He also hid from the fact that the company went from being virtually debt free to having $2 million in debt at the end of the third quarter. Investors would be safe to wager that the $2 million in debt is tied to some convertible notes that can return 20X that amount instead of the going rate for a junk company of 17% annual interest. But, why go mainstream when insiders can enrich themselves?

With all of the tailwinds finally at the back of TRTC and with the dispensaries finally contributing to the revenue stream, TRTC posted a net loss of $5.2 million dollars for the quarter, compared to a net loss of $2 million dollars in the comparable quarter. Thus, even with every positive thing that could have happened to bring TRTC into the black having happened, those accomplishments did absolutely nothing. Well, it did do something, it helped to increase the net loss by over 180% from a quarter that did not include dispensary sales.

Here’s The Final Bong Hit

TRTC has been nothing but a huge disappointment to retail shareholders since this company started. The red flags were all over the place, especially in relation to the CEO and his wife. But that is just the tip of the iceberg. Investors can do their own Google search on those two.

Insiders are dumping shares by the millions and are most likely laughing all the way to the bank. They have bloated this company to a virtual billion-share entity, and the next action will be the reverse split. Oh, you don’t think so? Well, don’t hang around to learn the hard way. A 10K share holding will likely become a 1K share holding within twelve months. From there, expect a second r/s and watch your shares become 100 shares with a 99.9% loss.

If TRTC can’t make it without direct competition, they are going to be hard pressed to survive when it does arrive. And believe me, competition is on the way. Big tobacco will become Big Kush before you know it, and little guys like TRTC won’t get bought out, they will be snuffed out.

The latest 10Q from TRTC needs to be read by all investors, and for those that are not willing to spend one hour to see what your company has done with your investment trust, you may regret the decision. For those that expect TRTC to go to a buck a share because they opened a few dispensaries, well, think again. TRTC is not worthy of its current market cap, so putting it at a billion dollar market cap is a pipe dream. In fact, that pipe better be stuffed with some of your dispensary favorites so that the pain will be eased when reality sets in.

I rarely write negative pieces on a stock. However, when I received a few questions about my thoughts on TRTC today, I felt it was the opportunity to be brutally honest.

I was warm on TRTC last month, and I provided the benefit of the doubt to management, expecting a legitimate report to be filed for the third quarter. What investors got, however, was more hype, garbage and excuses. Oh, yeah, and a couple hundred million more shares added to the o/s count. As for that huge spike in shareholder equity, well, $32 million of it was gained from and recorded by a goodwill accounting entry. C’mon, man!

For investors looking to find a niche play in the marijuana sector, look to the companies that are going to feed the frenzy. Equipment manufacturers, paraphernalia makers, and ancillary items needed by users to enjoy their lifestyle will be the winners in the early growth stages of the industry.

Saving 80¢ on a TRTC owned IVXX-branded package won’t get TRTC any closer to profitability than what we have just witnessed. And that was a conference call pat on the back.

TRTC threw the best they could at investors in November, and all they have to show for it is a huge increase in share count and almost triple the loss.

If I need to more blunt, I will be. TRTC should be dismantled, the insiders should be stripped of their shares, and the class actions should soon feast on their carcasses. Read the filings and read the staged Q&A from November. After you do that, decide whether or not hanging around the TRTC joint is a good decision for your financial future.

[Image Courtesy of Pixabay]

Asterias Biotherapeutics Inc AST Stock News

Asterias Biotherapeutics Inc (NYSEMKT: AST)

Asterias Therapeutics is continuing to trade higher, tacking on an additional 15% gain to its share price as traders enter the final few hours of trading on Friday.

AST is expected to release earnings on 11/14/16, however, investors appear to be looking past those numbers and are focused on the news that AST has treated their first patient with complete cervical spinal cord injury in their dose escalation SciStar clinical trial.

AST Is Proving That Stem Cells Can Work

With the first patient dosed and with enrollment continuing, AST is quickly advancing their clinical initiatives to design a treatment for complete spinal cord injury, utilizing stem cells for the therapeutic treatment.

AST Receives Data Monitoring Committee Approval

The dose escalation trial follows the review from the DMC, which had analyzed the data from the previous 2 million and 10 million cell dose cohorts. AST has recently presented positive early efficacy data observed in patients from the lower dose cohorts.

After extensive clinical research, the AST medical team expects to see optimum clinical improvements in patients being treated in the current 20 million cell cohort.

Safety and Efficacy

AST’s trial results to date continue to support a positive safety profile, with no serious or unexpected adverse events. The trial also provided a short course of low dose immunosuppression drugs, which can sometimes complicate the patient responses. Such data was not reported in the AST trials.

Back in September, AST reported early positive efficacy data for its AST-OPC1 trial from five of its AIS-A patients. Those patients were treated with a two million share dose of the AST-OPC1 cells. At the 90-day follow-up, all of the patients have shown at least one motor level improvement, and the efficacy target of 2 of 5 patients achieving at least a two motor skill improvement has already been met.

A two motor skill improvement is correlated with a significant increase in functional ability, as well as the ability for patients to care for themselves.

Asterias On The Radar

Investors should keep an eye on Asterias as the trial continues to develop. Even with the recent gains, if the SciStar trial posts positive results confirming the earlier data, AST can be off to the races.

[Image Courtesy of Wikimedia]

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Gevo, Inc. GEVO Stock News

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Gevo, Inc. (NASDAQ: GEVO) Before we get into this interview, I'd like to extend a special thanks to my friend Joey who both set up the...