Tuesday's Top Biotech & Medical Stocks

by H.S. Ayoub
BioHealth Investor



Biotechnology

GPC BIOTECH AG [GPCB] +11.52%
LPATH INC [LPTN.OB] +9.09%
NOVAVAX INC [NVAX] +8.39%
GTX, INC. [GTXI] +7.86%
METABASIS THERAPEUTI [MBRX] +7.40%



Diagnostic Substances

GENELABS TECH INC [GNLB] +7.43%
ISTA PHARMACTLS [ISTA] +5.92%
PONIARD PHARMA [PARD] +3.20%
INTERLEUKIN GENETICS [ILI] +2.99%
RESPONSE GENETICS, I [RGDX] +2.93%



Drug Delivery

ELAN CP PLC ADR [ELN] +3.88%
COLUMBIA LABS INC [CBRX] +2.92%
GENEREX BIOTECH CORP [GNBT] +1.91%
MATRIXX INITIATVS [MTXX] +1.51%
QUIGLEY CORP THE [QGLY] +1.40%



Drug Manufacturers

TAPESTRY PHARMA INC [TPPH] +12.20%
PROTALEX INC [PRTX.OB] +10.71%
DEPOMED INC [DEPO] +5.05%
CELL THERAPEUTICS [CTIC] +4.12%
NEUROCHEM INC [NRMX] +4.11%



Drug Related Products

QUEST GROUP INTL [QSTG.OB] +42.86%
AUXILIUM PHARMACEUT [AUXL] +8.44%
TIENS BIOTECH GR USA [TBV] +6.56%
NATROL INC [NTOL] +4.97%
ARGAN INC [AGAX.OB] +2.60%



Generic Drugs

HELICOS BIOSCIENCES [HLCS] +6.12%
LOTUS PHARMACEUTICAL [LTUS.OB] +3.70%
HI-TECH PHARMACAL [HITK] +1.08%
ISOLAGEN INC [ILE] +1.05%
PHARMACUTICAL CO [PRX] +0.38%



Medical Appliances & Equipment

REGENERATION TECH [RTIX] +8.61%
QMED INC [QMED] +6.91%
INVACARE CORP [IVC] +6.42%
BSD MEDICAL CORP [BSM] +6.00%
THERAGENICS CORP [TGX] +4.50%



Medical Instruments & Supplies

VYTERIS INC [VYHN.OB] +27.43%
NEUROMETRIX, INC. [NURO] +9.37%
MILESTONE SCIENTIFIC [MLSS.OB] +6.67%
OPHTHALMIC IMAGING SYS INC [OISI.OB] +5.88%
LEMAITRE VASCULAR [LMAT] +4.89%



Medical Laboratories & Research

MEDTOX SCIENTFIC INC [MTOX] +9.56%
OSI PHARMACEUTIC [OSIP] +3.60%
RADNET INC [RDNT] +2.43%
GENOMIC HEALTH, INC. [GHDX] +2.10%
ERESEARCHTECHNOLOG [ERES] +0.84%




- Monday's Top Biotech & Medical Stocks
- Friday's Top Biotech & Medical Stocks
____________________

HemCon Dental Dressing Receives CE Mark

by Sara Calabro
Med Tech Sentinel



HemCon Medical Technologies, of Portland, OR, has received clearance to sell its Dental Dressing in Europe, satisfying the international demand that’s been present since the product became available last year in the U.S. Armed with the CE Mark, the company will begin distributing dressings in the U.K., Germany and other EU countries.

The HemCon Dental Dressing is designed to be used by oral surgeons and dentists following tooth extractions and other oral procedures; it has also been used successfully to treat oral trauma. This dressing uses the same materials and technology as HemCon’s bandages, which are used by the military to control severe bleeding on the battlefield. Earlier this month, HemCon signed a deal with Cardinal Health to expand the use of its bandages into hospitals and surgery centers.

The Dental Dressing measures 10mm x 12mm and, when placed in an extraction socket, adheres to the surrounding tissue, protecting it and relieving pain; it dissolves within seven days.



RELATED READING:
- Do Anxious Dental Patients Really Need Oral Sedation?
- Align Technology Blows Through Estimates
- Investing In the Growing Dental Industry
- Why Does Procter & Gamble Need a Dental Laser?
- Oragenics Betting on Dental Cavity Vaccine



Med Tech Sentinel is a regular contributor to BioHealth Investor
_________________

Monday's Top Biotech & Medical Stocks

by H.S. Ayoub
BioHealth Investor



Biotechnology

GPC BIOTECH AG [GPCB] +20.77%
ENTREMED INC [ENMD] +10.24%
JAZZ PHARMA INC [JAZZ] +7.94%
LEV PHARMACEUTICALS [LEVP.OB] +7.64%
VIA PHARMACEUTICALS [VIAP] +5.96%



Diagnostic Substances

AVALON PHARMACEUTIC [AVRX] +4.58%
MONOGRAM BIOSCIENCES [MGRM] +3.66%
GENELABS TECH INC [GNLB] +3.06%
HEALTHCARE TECH LTD [HCTL] +2.97%
ABAXIS INC [ABAX] +2.62%



Drug Delivery

AVALON PHARMACEUTIC [AVRX] +4.58%
MONOGRAM BIOSCIENCES [MGRM] +3.66%
GENELABS TECH INC [GNLB] +3.06%
HEALTHCARE TECH LTD [HCTL] +2.97%
ABAXIS INC [ABAX] +2.62%



Drug Manufacturers

JAVELIN PHARMACEUTIC [JAV] +5.34%
BAYER AKTIENGES ADS [BAY] +4.95%
SCICLONE PHARMA [SCLN] +3.24%
ALLERGAN INC [AGN] +2.70%
PRANA BIO LTD ADS S1 [PRAN] +2.50%



Drug Related Products

XELR8 HOLDINGS, INC [BZI] +9.24%
AUXILIUM PHARMACEUT [AUXL] +3.34%
NUTRACEUTICAL INTL [NUTR] +2.20%
SALIX PHARM DEL [SLXP] +2.01%
LABOPHARM INC. [DDSS] +1.78%



Generic Drugs

CATALYST PHARMACEUTI [CPRX] +5.21%
HI-TECH PHARMACAL [HITK] +3.47%
CARACO PHARMA LABS [CPD] +2.37%
MYLAN LABS INC [MYL] +2.34%
HELICOS BIOSCIENCES [HLCS] +2.04%



Medical Appliances & Equipment

DYNATRONICS CP [DYNT] +12.58%
MEDICAL SOLUTION MGT [MSMT.OB] +12.50%
MINE SAFETY APPL [MSA] +10.28%
ARRHYTHMIA RES TECH [HRT] +8.15%
PATIENT SAFETY TECH [PSTX.OB] +7.14%



Medical Instruments & Supplies

BIOTEL INC [BTEL.OB] +15.07%
ROCHESTER MEDICAL [ROCM] +8.66%
BIOLASE TECH INCS3 [BLTI] +7.49%
ANGIODYNAMICS INC [ANGO] +6.93%
COVIDIEN LTD [COV] +5.85%



Medical Laboratories & Research

RADNET INC [RDNT] +7.59%
HEALTHCARE PROVIDERS [HPRD.OB] +7.53%
ENZO BIOCHEM INC [ENZ] +3.78% M
GENOMIC HEALTH, INC. [GHDX] +2.52%
PSYCHEMEDICS NEW [PMD] +1.19%




- Friday's Top Biotech & Medical Stocks
- Thursday's Top Biotech & Medical Stocks
____________________

Cal Ripken: A Biotech Role Model

by Michael Shulman
BiotechBlitz



Forgive the lack of posts last week, but I've been on the road. It was less my speaking engagements at the San Francisco Money Show than vacation time with one of my twin 15-year-old sons -- my baseball player son. (His brother is a lacrosse player.)

We walked the wharf, ate some of the best dim sum in the U.S. (at a restaurant called Yink Seng), discovered two tea-tasting stores in traditional Chinatown, had great sushi and watched the syringe man, Barry Bonds, hit a home run to the raucous cheers of the home-town delusional -- my son’s highly visible Stanford baseball hat even made the ESPN highlights.

And we both think Barry Bonds is a disgusting mockery of baseball.

And then there's Cal Ripken, who is a world apart, and did it the right way.

Before the Nats came to D.C., we made many visits to the Orioles' Camden Yards and were in the stands when Ripken hit his 400th homer. If not for 9/11 and the re-scheduling of games, we would have been in the stands for his last game.

The only baseball I ever caught in the stands was a Ripken foul ball -- which he signed (since there is possibly no more fan-friendly player) -- and my sons attended his camp -- with mom and dad paying more than double the regular rate for the the week Cal was actually at the camp the boys got to hit batting practice off of the Hall of Famer. My left hitting son said he could to pitch to lefties.

And yes, there is relevance between Cal and biotechs, as he is a role model for how to manage a biotech company and how to invest in one.

Ripken came to work every day. He's the iron man who shattered a record no one thought could be broken -- 2,632 consecutive games. He was never a lunch pail player -- he was an all star, has a World Series ring and so on -- but work was what it is all about. Not flash, not a super homerun season, not a special chair in the clubhouse, not grand juries and mistresses, just work -- excellent work, sometimes great work, often clutch work, but work.

And that is what you need to look for in biotech companies.

* Not companies living on press releases.
* Not companies rushing to get an FDA approval with a flawed trial design and middling trial results.
* Not companies looking to become billion-dollar outfits overnight and refusing to hook up with larger marketing partners.
* Not companies paying their executives excessive salaries and bonuses even though they are years away from revenues.
* Not a GPC Biotech (GPCB) asking for a drug approval using a trial with primary endpoints never before seen by the FDA.
* Not a Dendreon (DNDN), reacting to a failure with Provenge by rushing to get a new application in that may not only fail but may forever kill the drug.

Look for the Ripken companies -- more like BioCryst (BCRX) bringing in a CEO with operations experience, and having lined up marketing partners and Uncle Sam to take it through its next stage of development as a company.

Successful biotech investors will look for the steady and reliable leadership doing the work that it takes to make a company successful. It is work, and even if we strive for the 10-to-1 or the 100-to-1 payoff, it's not done by rolling the dice on rumors, incomplete information and guesswork. It is about building a portfolio, accepting risk and volatility, riding it out if you believe in the company, and avoiding the temptation to trade.

Forgive the piety and pedantic tone, I really believe this.

And let me tell you why this works and use my sons as an example. My baseball son played rec league ball for eight years, never summer ball, never All Star ball, always worked very hard, took practice seriously, made himself a catcher and a very fine hitter.

He began ninth grade at a very serious sports high school, went to the winter workouts, the team was thin because of seven graduating seniors, and after returning from spring training in Florida (yeah, really -- this is high school!), was the starting varsity catcher. 88 mile an hour fastballs, soon to be Division I pitchers, nasty curve balls, serious baseball.

Why? To quote his coach, he was a coach’s kid, took everything seriously, worked hard every inning to improve his game. My lacrosse son is a goalie and had never played before eighth grade. He played middle-school lacrosse as if he were born to do it, went to high school, rode the bench due to a lack of intensity at practice and a queue of players in front of him.

He did not sell off – he joined a weekend league, playing up to four games each Sunday, has been in and out of lacrosse clinics from Johns Hopkins to lessons with the Notre Dame goalie and is totally re-dedicated to hard work this fall.

Yeah, I'm proud of them both, but not for their achievements so much as their work ethic and dedication. It's the Ripken way. And as investors, we should all do the same. Hard work pays.




BiotechBlitz is a regular contributor to BioHealth Investor
_____________

Breast-Cancer Detection Firm Seeks Series C Funding

by Sara Calabro
Med Tech Sentinel



Infrared Sciences, a Stony Brook, NY-based company focused on early breast-cancer detection, is seeking $5 million in fourth-round financing, to further advance its Sentinel BreastScan technology.

Unlike mammography, ultrasound or MRI, which detect anatomical features such as a mass, the Sentinel BreastScan uses infrared technology to identify physiological features of the breast tissue — areas of blood perfusion and angiogenesis, when abnormal cells begin forming their own blood supply, as well as temperature signs — that are often present at the earliest stages of cancer. Studies have shown that angiogenesis can start 10-12 years before a cancerous lesion is large enough to be detected by conventional technologies.

A Sentinel BreastScan procedure takes about 10 minutes and does not involve any compression or touching of the breast. The patient sits in a chair disrobed from the waist up, with her arms on the armrests. In front of the patient is the Sentinel system, which includes an infrared camera, a cool air source, a video display so the patient can see her own infrared image in real time, and the operator’s station. Once the exam begins, the patient’s thermal images will be recorded for analysis. A few seconds later, the cool air source comes on for approximately 3-4 minutes. At this point, the system’s software analyzes the recorded images for possible abnormalities. This part takes about 4-5 minutes, after which a report is generated.

Another advantage of the Sentinel system over traditional screening tools is that it involves no radiation, making it a viable option for women of all ages — typically, women do not start getting mammograms until age 40, to avoid exposure to radiation. The Sentinel also has proven effective in the 30-40% of women with dense breast tissue, for whom mammography is suboptimal. It does not respond to benign conditions, such as a cyst or fibro adenoma, which helps physicians more accurately determine next steps for suspicious legions.

The Sentinel BreastScan was cleared by FDA in 2004 and in Europe in 2006. It costs $50,000, but Infrared Sciences is currently offering it for free, as a method of introducing the technology quickly. The company is targeting primary care docs, OB/GYNs, breast surgeons and comprehensive breast centers.

Infrared Sciences started generated revenues in 2006, and CEO Tom DiCicco says, “Profitability is within sight.”




Med Tech Sentinel is a regular contributor to BioHealth Investor
__________________

Returning a Product to Market After it is Tossed

by Mark S. Senak
Eye On FDA



The FDA announced on Friday that the drug Zelnorm, manufactured by Novartis (NVS), would be returning to market for the treatment of women with irritable bowel syndrome (IBS) for certain patients only.

"These patients must meet strict criteria and have no known or pre-existing heart problems and be in critical need of this drug," said Steven Galson, M.D., M.P.H., director of FDA's Center for Drug Evaluation and Research (CDER). "Zelnorm will remain off the market for general use."

You may recall that there are two patient types for IBS - one whose suffering is characterized by diarrhea and one by constipation. Coincidentally, at nearly the same time, there were two medications devised to treat IBS - Lotronex, manufactured by GlaxoSmithKline (GSK) and Zelnorm.

Lotronex experienced some safety-related issues once it was approved and was subsequently pulled from the market. However, it returned to the market under a patient safety risk management program.

Much later, Zelnorm also was perceived to have a safety related issue - this one heart attack related and on March 30, the FDA asked that it be pulled from the market. However, as of Friday, it returns, albeit to a more limited population of patients laid out by terms and conditions specified by FDA.

Zelnorm and Lotronex returned to market under different circumstances - the former under a treatment IND and the latter under a risk management program.

What does it take to return a product to market? This may not be a complete list, nor or all of these necessary, but here are characteristics that help make the case.

Fill Unique Role - It doubtless helped both of these drugs considerably that the conditions they treat do not have other drugs that fulfill this role. In other words, suffering patients were without choice.

Provision of Clear Benefit - Here both drugs provided a clear benefit to patients that needed to be re-evaluated against newly discovered risks or perceived risks.

Vocal Patient Population - The Lotronex patients, in particular, were very vocal and formed a pretty solid group going into the FDA hearing on the risk management plan necessary to re-introduce Lotronex. There was some very moving and effective patient testimony given during that meeting that put a human face on a condition many might otherwise be inclined to minimize.

Companies Willing to Compromise - A company may not agree with the risk assessment, but it also may be tempting for a company to take the matter so seriously and personally, that they are unwilling to compromise. Here, in both instances, the companies were willing to accept limitations to their marketing of drugs in order to get patients what they needed. These were both mature and FDA-experienced companies, whereas a small start-up or single product company might not be so pliant.

Novartis is providing further information on Zelnorm at its site.



Eye On FDA is a regular contributor to BioHealth Investor/
_____________

GPC Biotech: Dead Money!

by Andrew Vaino
Vaino's Biotech Corner




GPC Biotech (GPCB) took a big hit (the stock closed at $20.36 on July 24 and opened at $13.35 on July 25) on July 25 when an FDA advisory panel voted unanimously to wait until a complete Phase 3 study of their drug Satraplatin is available. GPCB had been trading at over $32 on July 19. Often this type of price decline can be a good buying opportunity. Or not.

Satraplatin looks like a promising cancer drug. It’s related to cisplatin, a platinum containing drug that cross-links DNA. A big advantage of Satraplatin is that it’s taken orally, not an injection.

One important detail about Satraplatin: it was initially being developed by Bristol-Myers, but they stopped a clinical trial after only 50 patients were treated due to “…low commercial priority for this drug by BMS at the time.” This is a valid explanation. A large company like Bristol-Myers just can’t make a big profit from a smaller drug such as Satraplatin. Sensing opportunity, Spectrum Pharmaceuticals (SPPI) licensed the drug, and subsequently re-licensed it to GPCB.

Resistance to platinum drugs is becoming a problem. In a study published in Biochem. Pharmacol. (2007, 74, 20–27) in vitro resistance to cells engineered to be resistant to platinum crosslinkers was nearly 5 times less for Satraplatin than for either cisplatin or oxaliplatin. As both incidence of prostate cancer and resistance to Pt agents are rising, this bodes well for future sales.

The drug actually looks promising. Results of a 950 patient Phase 3 study published in Lancet Oncology (2007, 8, 290) as a second line treatment for hormone refractory prostate cancer (HRPC) were good. Six months after treatment, 30% of the Satraplatin cohort and 17% of the placebo group had not progressed: after one year these figures were 16% and 7%, respectively. Regardless, the FDA still wants to see a more complete dataset.

So, a company selling at steep discount with what looks to be a viable drug could be a bargain. Or it could still be overpriced. The FDA’s decision pushes approval of Satraplatin back to late 2008 in a best case scenario. According to GPC’s SEC filings, the primary patents covering Satraplatin expire in 2008 and 2010 in the United States, and in 2009 in most other countries. This leaves a very limited time frame in which to sell the drug before generic competition forces the price down. The chemistry of making Satraplatin is straightforward, so generic competition is pretty much assured.

Now, GPC can seek an extension of up to 5 years of patent coverage, but whether they obtain this or not is uncertain. Further, it remains uncertain even if the FDA will approve the drug after the final data is submitted. Also, it’s unclear how robust sales will be. While I do believe an orally available cross-linker will be of benefit, this won’t necessarily translate into sales. The company does have an antibody in a Phase 1 study, but that's years from any payoff.

The company has enough money to see them through the next couple of years. My take is even at this steep discount this stock is dead money.



RELATED READING:
- Spectrum Pharmaceuticals and Satraplatin



Vaino's Biotech Corner is a regular contributor to BioHealth Investor
___________________

Cancer Stocks Weekly Review: Falling with the Market

by Alan J. Brochstein, CFA
AB Analytical Services



The post-ASCO hammering, which has been almost unabated, continued this week, with the median return of the group now -8% on the year thus far. The AMEX Biotech Index (BTK) is still up about 2%. The lists below, with data from StockVal, are comprised of domestic companies primarily with market caps in excess of $50mm, ranked by the return this past week. If the reader believes that there are erroneous inclusions or exclusions, feel free to let me know.

In an absolutely horrible week for the market overall, the median decline of -4.4% was actually about 0.4% stronger than the S&P 500. The average decline of -4.9% was in line with the overall decline. While it might seem immune from the developing problems that are related to housing woes and a rapidly spreading commercial credit crunch, the group, one must remember, is predominated by companies that frequently access public equity markets (debt sometimes too) for funding. In times like these, it is worthwhile remembering that capital isn’t always available. In other words, perhaps, for now, one should be focusing on companies that are profitable




STRONG

Trubion (TRBN) was the only double-digit gainer on the week. Oddly, there didn’t appear to be any news. TRBN conducted its IPO late last year at $13 and is now up from its $18 close at year-end. The company’s lead product is not cancer-related (rheumatoid arthritis), though its second product under development does address NHL and CLL. Tomotherapy (TTPY), while not a double-digit gainer, was certainly well ahead of the market. This recent IPO offers a specialized radiation treatment machine (over 125 installations) and continues to gain clients for its Hi-Art system. My understanding is that the Hi-Art has certain applications but can’t be used as broadly as an IMRT or IGRT machine. Finally, Onyx (ONXX) had a decent week, relatively speaking. This stock rocketed in February when Bayer announced positive news on Nexavar (treats liver cancer) and has been consolidating recently. Nexevar was submitted to the FDA in late June. ONXX sold 6mm shares at 28 in June, so clearing that level would be nice.




WEAK

Spectrum Pharma (SPPI) continued its plunge subsequent to the FDA questioning one of its lead drugs, prostate cancer pill Orplatna. The stock had done well following its May equity sale at $6.25 that raised $30mm. While the news was disappointing, the company’s pipeline appears diverse and their finances in great shape. My comment last week about support at $5 was clearly not helpful, but I will offer that the $4 area has the potential to hold as well. Immunomedics (IMMU), which has been selling off since April, fell despite no apparent catalyst. There appears to be some support between 2.50 and 3.00. Immunogen (IMGN) lost a senior executive this past week, but, more importantly, has an open shelf filed recently for $75mm. This one looks like $4 is coming


The two screens below attempt to focus the investor on stocks that are working. The momentum list highlights stocks beating the market over the past month and quarter but eliminates those that have had extreme moves. The rebound list highlights stocks that are oversold but showing one-month relative strength without too much one-quarter relative weakness (if at all).




SHOWING MO

Parameters: 4-week outpeformance (S&P 500) of 3% or more, 13-week outperformance of 10% or more and Price Momentum Index of <2







(Note that CYTC and DIGE are in the process of being acquired)

Myriad (MYGN) is one that I wrote about earlier this year. I hope it drops to the 35 area, where it looks like a good entry





POTENTIAL REBOUNDS

Parameters: 4-week outperformance of >5%, 13-week underperformance of <5% and Price Momentum Index of <0.








For the record, I am not a fan of Radiation Therapy Services (RTSX), which is subject to both reimbursement risk as well as competitive threats. Celgene (CELG) bounced on the heels of a strong earnings report. With that said, though, I would be very cautious on the name, as I expect that it could get dragged down in the market sell-off.


Disclosure: None, though I am seriously considering buying ACEL after they do a financing





RELATED READING:
- Cancer Stocks Weekly Review: Now Down for 2007
- Cancer Stocks Weekly Review: Lagging Again!
- Cancer Stocks Weekly Review: Tracking the Market




AB Analytical Services is a regular contributor to BioHealth Investor
_____________________

Friday's Top Biotech & Medical Stocks

by H.S. Ayoub
BioHealth Investor



Biotechnology

HEMOBIOTECH INC [HMBT.OB] +27.50%
TARGACEPT, INC. [TRGT] +19.89%
REXAHN PHARMACEUTICL [RXHN.OB] +10.59%
ANIKA THERAPEUTICS [ANIK] +8.58%
GENETIC TECH SPON [GENE] +7.88%



Diagnostic Substances

GENE LOGIC INC [GLGC] +7.87%
IMMUCOR INC [BLUD] +4.76%
SONUS PHARM INC [SNUS] +4.51%
AMER BIO MEDICA [ABMC] +4.27%
IMMUCELL CP [ICCC] +3.21%



Drug Delivery

ACURA PHARMACEUTICAL [ACUR.OB] +11.22%
DELCATH SYSTEMS INC [DCTH] +3.39%
INSITE VISION INC [ISV] +3.03%
PENWEST PHARM CO [PPCO] +0.47%



Drug Manufacturers

AP PHARMA INC [APPA] +6.76%
ALEXION PHARM INC [ALXN] +2.52%
CARRINGTON LABS IN [CARN] +2.50%
POZEN INC [POZN] +1.80%
NEXMED INC [NEXM] +1.76%



Drug Related Products

N B T Y INC [NTY] +11.17%
CURATECH INDUSTRIES [CUTC.OB] +10.59%
ZILA INC [ZILA] +2.62%
SCHIFF NUTRIT INTL [WNI] +1.77%
PACIFICHEALTH LABS [PHLI.OB] +1.57%



Generic Drugs

CATALYST PHARMACEUTI [CPRX] +5.50%
HELICOS BIOSCIENCES [HLCS] +2.61%
HI-TECH PHARMACAL [HITK] +1.87%



Medical Appliances & Equipment

ARTHROCARE CP [ARTC] +9.50%
MEDICAL ACTION IND [MDCI] +6.53%
QMED INC [QMED] +3.35%
CRITICARE SYS INC [CMD] +3.29%
CRYOLIFE INC [CRY] +3.17%



Medical Instruments & Supplies

KYPHON INC [KYPH] +24.07%
LEMAITRE VASCULAR [LMAT] +9.53%
ROCHESTER MEDICAL [ROCM] +7.23%
PERKIN ELMER INC [PKI] +6.64%
NUVASIVE, INC. [NUVA] +5.86%



Medical Laboratories & Research

HEALTHCARE PROVIDERS [HPRD.OB] +8.15%
RADNET INC [RDNT] +0.48%
PSYCHEMEDICS NEW [PMD] +0.05%




- Thursday's Top Biotech & Medical Stocks
- Wednesday's Top Biotech & Medical Stocks
____________________

3 Sell Candidates in Healthcare

by Alan J. Brochstein, CFA
AB Analytical Services



The stock market is beginning to wake up to the rapidly proliferating credit crunch. Many Healthcare investors will no doubt take comfort in recognizing that the sector is extremely immune from these developing macroeconomic issues. If there is one thing that I have learned and learned again, though, is that fundamentals can get lost in the shuffle pretty rapidly when everything is going down. With that in mind, I have identified 3 stocks in the sector that I believe have an especially high risk of experiencing large price declines in the coming weeks. Using StockVal, I created a screen that would quickly help me potentially identify stocks with certain characteristics. In particular, I was looking for stocks with relatively high PE ratios (>24), that were well above their 52-week low but within 15% of their 52-week high, that have climbed immensely over the past 5 years and that are not experiencing upwards revisions in their earnings estimates. I restricted the list to market caps in excess of $2.5 billion.

The first name is Celgene (CELG), one of the few Biotech names that have been working, though it is lagging the market now year-to-date. This one had a rather good “bad” quarter in Q1, growing “only” 61%, which was well below the growth rates in the prior two quarters. Q2 was definitely better, with the growth picking up to 76%. The stock moved up to it’s the resistance at 61. While it is hard to be fundamentally negative on the name, this is one that profit-taking by some could induce more by others. This one is a 15-bagger over the past 5 years. The key downside support level to watch is 56, my chart-based target is 50, and I would wave the towel at 65.

The second name is Hologic (HOLX), which is a member of my watchlist and which I am actually considering shorting. I mentioned this one in my interview on this website earlier this month. To rehash, I believe that the adoption ramp for digital mammography was much steeper than expected, but that it is a mistake to assume that it will keep up at this pace. The company is in the middle of a big acquisition that was quite expensive as well. As you can see in the chart below, this one has been marking time since it plunged following the deal announcement (CYTC). I know that a certain “Mad” guy loves the stock, but I see an expensive stock rolling over. As you can see, this one is something like a 15-bagger since early 2003. The key downside support level is 51, my chart-based target is 40, and I would wave the white flag at 56.50.

The last name is Stryker (SYK), which dropped a bit today on its rival’s weak report. Historically, this stock is cheap relative to its own history, but it still is being valued somewhat highly. The industry has had some issues over the past few years. While this stock is not up nearly as much as the other two, it still has more than doubled over the past five years. The key support is 63, the chart-based target is 55 and the stop-loss is at 68.





AB Analytical Services is a regular contributor to BioHealth Investor
____________________

Plexus Biomedical Raises $2 Million

by Sara Calabro
Med Tech Sentinel



Plexus Biomedical, a small device company based in Oakland, TN, has raised $2 million from individual investors, according to an exclusive report by TechJournal South.

The company’s CEO, David Burton, was tight lipped about Plexus’ technology, but research by TechJournal on clinicaltrials.gov uncovered a study by Plexus Biomedical and the University of Tennessee Health Science Center of the HEM-AVERT Perianal Stablizer, a device designed to reduce the occurrence or severity of hemorrhoids during childbirth.

According to clinicaltrials.gov, the HEM-AVERT Perianal Stablizer “is both non-invasive and poses a non-significant risk. It is classified as a manual, general instrument with no specific indications, but has a general indication of stabilizing pressure.”

The study description says there is currently no preventative treatment for the 9-34% of vaginal births that cause hemorrhoids. TechJournal says the study has enrolled 300 patients and is scheduled to start this month.




Med Tech Sentinel is a regular contributor to BioHealth Investor
________________

Too early to call on Ziopharm

by Brett Scott
Sizz's Biotech Blog



Last week, I blogged about Ziopharm Oncology (ZIOP), which was featured is Business Week's Inside Wall Street. This week, I'll take a look at the company and its potential for investors.

Ziopharm has three clinical trial-stage drugs that are being tested to treat various cancers from myeloma, liver cancer, and sarcoma. Its drugs ZIO-101 and ZIO-201 are currently in Phase II testings. The company believes it will complete its current Phase II trials for ZIO-101 in myeloma, liver tumors, and hematological cancers by the end of this year. It also thinks it will be able to complete its Phase II trials for sarcoma with ZIO-201 by the end of the year.

This should be encouraging to investors. The end of these trials could create catalysts for the stock to move, which it needs, as the stock has been stuck in neutral ever since going public. However, the data that has been made available so far has been very limited. The company appears to be having success in its trials, but I'm afraid it is too early to make a call on this stock. The end of the current trials should give us a better idea of the direction this company is headed.

I am not currently comfortable making a investment or recommendation on this stock. I am cautiously optimistic about the future though. In looking at the potential value of this firm, I came up with a fair value of about $6, which only takes into account part of ZIO-101's potential, and ZIO-201, it doesn't include ZIO-301, which is in Phase I trials. I feel like I'll be able to get a better idea of the company's potential value later in the year, when more data comes out. I am also cautiously optimistic because the two analysts that follow the company have buy ratings on the stock with price targets of $10 and $20. I will be following this stock as we get closer to year-end. There is potential for Ziopharm, I just feel we can take our time and do the proper research before investing in this risky biotech.




Sizz's Biotech Blog is a regular contributor to BioHealth Invesgtor
________________

Thursday's Top Biotech & Medical Stocks

by H.S. Ayoub
BioHealth Investor



Biotechnology

INCYTE CORP [INCY] +8.66%
HESKA CORPORATION [HSKA] +5.21%
ACCENTIA BIOPHARMACE [ABPI] +4.98%
SEQUENOM INC [SQNM] +4.90%
OPEXA THERAPEUTICS [OPXA] +4.08%



Diagnostic Substances

IMMUCOR INC [BLUD] +7.24%
THRESHOLD PHARMACEUT [THLD] +4.85%
REMOTEMDX INC [RMDX.OB] +2.41%
RESPONSE GENETICS, I [RGDX] +2.31%
TRINITY BIO ADR [TRIB] +1.55%



Drug Delivery

SYMBOLLON PHARM CL A [SYMBA.OB] +7.92%
QUIGLEY CORP THE [QGLY] +7.37%
MATRIXX INITIATVS [MTXX] +1.34%
DELCATH SYSTEMS INC [DCTH] +0.73%



Drug Manufacturers

MINRAD INTL INC [BUF] +6.32%
OPKO HEALTH INC. [OPK] +5.50%
PROTALEX INC [PRTX.OB] +4.62%
COLLAGENEX PHARM I [CGPI] +4.26%
PHARMION CORP [PHRM] +3.14%



Drug Related Products

AMEXDRUG CP [AXRX.OB] +6.67%
XELR8 HOLDINGS, INC [BZI] +3.70%
N B T Y INC [NTY] +1.08%
USANA HEALTH SCIEN [USNA] +0.57%
AUXILIUM PHARMACEUT [AUXL] +0.44%



Generic Drugs
N/A



Medical Appliances & Equipment

MEDICAL SOLUTION MGT [MSMT.OB] +14.29%
SONTRA MEDICAL CORP [SONT.OB] +6.38%
RESPIRONICS INC [RESP] +5.91%
LECTEC CORP [LECT.OB] +5.26%
ATS MEDICAL INC [ATSI] +5.23%



Medical Instruments & Supplies

PROTHERICS PLC ADR [PTIL] +11.07%
BIOTEL INC [BTEL.OB] +7.35%
STEN CORPORATION [STEN] +5.85%
ARISTOTLE CP [ARTL] +3.42%
INSULET CORPORATION [PODD] +3.11%



Medical Laboratories & Research

NEOGENOMICS INC [NGNM.OB] +2.74%
HEALTHCARE PROVIDERS [HPRD.OB] +0.75%




- Wednesday's Top Biotech & Medical Stocks
- Tuesday's Top Biotech & Medical Stocks
____________________

Wednesday's Top Biotech & Medical Stocks

by H.S. Ayoub
BioHealth Investor




Biotechnology

TRUBION PHARMACEUTIC [TRBN] +19.88%
POLYDEX PHARM LTD [POLXF] +14.46%
ANIKA THERAPEUTICS [ANIK] +12.39%
ILLUMINA INC [ILMN] +9.78%
BIONOVO INC [BNVI] +7.14%



Diagnostic Substances

DADE BEHRING HLDGS [DADE] +32.82%
CNS RESPONSE, INC. [CNSO.OB] +18.18%
IMMUCELL CP [ICCC] +10.15%
PALATIN TECH INC [PTN] +6.49%
IMMUCOR INC [BLUD] +4.00%



Drug Delivery

ACURA PHARMACEUTICAL [ACUR.OB] +9.90%
MATRIXX INITIATVS [MTXX] +3.88%
INSITE VISION INC [ISV] +3.73%
EMISPHERE TECH [EMIS] +3.55%
ELAN CP PLC ADR [ELN] +1.66%



Drug Manufacturers

SIGA TECH INC [SIGA] +22.01%
ALEXION PHARM INC [ALXN] +17.51%
VERTEX PHARMACEUT [VRTX] +10.97%
SOMAXON PHARMACEUTIC [SOMX] +9.97%
OREXIGEN THERAPEUTIC [OREX] +6.46%



Drug Related Products

IMAGENETIX INC [IAGX.OB] +8.53%
ARGAN INC [AGAX.OB] +2.60%
SALIX PHARM DEL [SLXP] +2.27%
MANNATECH INC [MTEX] +0.65%
AUXILIUM PHARMACEUT [AUXL] +0.13%



Generic Drugs

MYLAN LABS INC [MYL] +1.70%
HELICOS BIOSCIENCES [HLCS] +1.41%
BARR PHARMA INC [BRL] +0.42%



Medical Appliances & Equipment

ALIGN TECHNOLOGY I [ALGN] +7.16%
SPECTRANETICS CP T [SPNC] +4.88%
TOMOTHERAPY INC [TTPY] +4.71%
WORLD HEART CORP [WHRT] +3.86%
MEDICAL ACTION IND [MDCI] +3.24%



Medical Instruments & Supplies

ANGIODYNAMICS INC [ANGO] +9.19%
OPHTHALMIC IMAGING SYS INC [OISI.OB] +8.00%
IMPLANT SCIENCES CP [IMX] +6.77%
BIOLASE TECH INCS3 [BLTI] +5.86%
LUMINEX CORP [LMNX] +5.47%



Medical Laboratories & Research

HEALTHCARE PROVIDERS [HPRD.OB] +8.06%
AETERNA ZENTARIS [AEZS] +3.62%
ENZO BIOCHEM INC [ENZ] +3.49%
PHARM PROD DEV [PPDI] +2.80%
ARRAY BIOPHARMA IN [ARRY] +2.38%




- Tuesday's Top Biotech & Medical Stocks
- Monday's Top Biotech & Medical Stocks
____________________

Trans1 Files for IPO

by Sara Calabro
Med Tech Sentinel



Trans1, a spinal-surgery device company based in Wilmington, NC, has filed to raise up to $80.5 million in an initial public offering of stock. The company, which hopes to be known as “TSON” on the Nasdaq exchange, did not reveal how many shares it would offer or how much it would charge.

Founded in 2000, Trans1 is a 60-person firm that makes surgical devices for treating degenerative disc disease affecting the lower lumbar region of the spine. The company’s AxiaLIF product is a percutaneous access and fusion system that enables lumbar fusion to be performed with complete preservation of the annulus and all paraspinal soft tissue structures. This video shows how it works.

TranS1 is also developing two mobility platforms: a disc replacement and prosthetic disc nucleus, both delivered through the same percutaneous, trans-sacral approach. According to The News & Observer, TranS1 plans to use the money raised in the IPO to pay for further testing of these products.

Lehman Brothers, Piper Jaffray, Cowen and Company, and Leerink Swann & Co. will underwrite the offering, according to a statement issued by Trans1.




Med Tech Sentinel is a regular contributor to BioHealth Investor
_________________

Tuesday's Top Biotech & Medical Stocks

by H.S. Ayoub
BioHealth Investor



Biotechnology

THIRD WAVE TECH IN [TWTI] +25.25%
INTL STEM CELL CORP [ISCO.OB] +14.81%
PROGEN PHARMACEUTICL [PGLA] +10.43%
ACCENTIA BIOPHARMACE [ABPI] +7.08%
NORTHWEST BIOTH NEW [NWBO.OB] +6.13%



Diagnostic Substances

HEALTHCARE TECH LTD [HCTL] +8.91%
NEOGEN CP [NEOG] +5.28%
AVIGEN INC [AVGN] +2.53%
MONOGRAM BIOSCIENCES [MGRM] +2.40%
SCOLR PHARMA INC [DDD] +1.48%



Drug Delivery

ALKERMES INC [ALKS] +4.63%
SYMBOLLON PHARM CL A [SYMBA.OB] +3.96%
ACURA PHARMACEUTICAL [ACUR.OB] +1.59%
BIOVAIL CORP [BVF] +0.82%
MATRIXX INITIATVS [MTXX] +0.77%



Drug Manufacturers

NEUROCHEM INC [NRMX] +6.97%
DUSA PHARM INC [DUSA] +6.04%
ACCESS PHARMACEUTICL [ACCP.OB] +4.41%
MARSHALL EDWARDS [MSHL] +4.14%
GENTIUM SPA ADS [GENT] +3.64%



Drug Related Products

ZILA INC [ZILA] +0.71%



Generic Drugs

PHARMACUTICAL CO [PRX] +0.45%



Medical Appliances & Equipment

LECTEC CORP [LECT.OB] +11.76%
SHAMIR OPTICAL INDUS [SHMR] +6.52%
FONAR CORP [FONR] +5.49%
CAMBRIDGE HEART INC [CAMH.OB] +3.40%
DYNATRONICS CP [DYNT] +2.65%



Medical Instruments & Supplies

HEMOSENSE INC. [HEM] +3.63%
PRO-DEX INC NEW [PDEX] +3.37%
AMDL, INC [ADL] +3.31%
BIOJECT MEDICAL [BJCT] +2.84%
EP MEDSYSTEMS INC [EPMD] +2.74%



Medical Laboratories & Research

HEALTHCARE PROVIDERS [HPRD.OB] +19.23%
QUEST DIAGNOSTC [DGX] +6.86%
PSYCHEMEDICS NEW [PMD] +0.59%
PHARM PROD DEV [PPDI] +0.30%
BIO-IMAGING TECH [BITI] +0.28%




- Monday's Top Biotech & Medical Stocks
- Friday's Top Biotech & Medical Stocks
____________________

Biotech gets a boost from earnings, upgrades

by Brett Scott
Sizz's Biotech Blog




The Dow Jones US Biotechnology Index was up more than 1% during trading today after some positive outlooks from Amylin (AMLN) and Biogen (BIIB) and a couple of analyst upgrades. Amylin, the diabetes drug maker, met earnings expectations after the close yesterday and shares were sent higher today as analysts expect a Phase III diabetes drug and a Phase II obesity drug to fuel future growth. Analysts are expecting positive results from clinical trials to be announced later this year. Amylin also received an upgrade to Buy from Hold over at Stanford Research.

Biogen, meanwhile, posted much better-than-expected earnings results today, which had the stock trading nearly 4% higher. The company also raised its full-year guidance as it is now expecting 16-18% growth in sales and 16-20% growth in EPS on strong sales of its multiple sclerosis drugs.

Additionally, Amgen (AMGN) received an upgrade yesterday to Hold from Sell by Citigroup. Amgen reports earnings Thursday.





Sizz's Biotech Blog is a regular contributor to BioHealth Investor
__________________

iWalk Unveils Computerized Prosthetic

by Sara Calabro
Med Tech Sentinel



iWalk, a Cambridge, MA, startup backed by Nicholas Negroponte, founder of the One Laptop per Child organization and one of the original investors in Wired magazine, has unveiled what it says is the world’s first robotic ankle.

The device, called PowerFoot One, was created by a team of Massachusetts Institute of Technology researchers, led by a professor who co-founded iWalk and now serves as its chief scientific officer.

PowerFoot One uses microprocessors and environmental sensors to propel users forward and create a sensation of walking normally. Control algorithms generate human-like force while walking on level ground or climbing slopes and stairs, providing amputees with near normal gait and lower energy expenditure compared with traditional prosthetics.


“This design releases three times the power of a conventional prosthesis to propel you forward and, for the first time, provides amputees with a truly human-like gait,” said iWalk co-founder and chief scientific officer Hugh Herr, in an article issued by MIT’s press office.

According to iWalk’s Web site, the device will be available next summer.

An initial target will be amputees returning from Iraq and Afghanistan. PowerFoot One was introduced yesterday at the Veterans Affairs Medical Center in Providence, RI, and demonstrated by a soldier who lost his leg below the knee in battle in Iraq. According to Reuters, the soldier “showed almost no sign of a limp” during the demonstration. And he later told the news organization, “Once you get used to it, it feels like you have your leg back.”

Joel Kupersmith, Veteran Affairs’ chief research and development officer, told MIT’s reporters after the unveiling that PowerFoot One offers significant advantages over currently available prosthetics. “Up to now, prosthetic devices have not been able to duplicate the complex functions of our feet and ankles as we walk and run,” said Kupersmith. “The ingenious computerized design of this new prosthesis changes all of this, as it constantly ‘thinks’ and responds, allowing the person to walk or run in a more natural and comfortable way.”

iWalk isn’t the only company looking to create a more natural mechanism for below-the-knee amputees. Ossur, an Icelandic company, is using artificial intelligence to develop a prosthetic foot that reacts in real-time to users’ movements. The VA and the U.S. Department of Defense are also backing Ossur’s Proprio Foot, which was the winner of a 2007 Medical Design Excellence Award and featured this month in Business Week’s Cutting-Edge Designers issue.

Ossur’s device has been out since September 2006 and has already been used on multiple soliders returning from Iraq and Afghanistan. The company has also applied its bionic technology — the kind used to develop the Proprio Foot — to two knee prosthetics, the Rheo Knee and Power Knee. The Rheo Knee was actually developed by iWalk’s Herr, himself a double amputee, and has been hailed by such media outlets as Fortune, Time, Business 2.0 and Popular Mechanics.




Med Tech Sentinel is a regular contributor to BioHealth Investor
________________

Monday's Top Biotech & Medical Stocks

by H.S. Ayoub
BioHealth Investor



Biotechnology

PIPEX PHARMACEUTALS [PP] +15.00%
LPATH INC [LPTN.OB] +8.00%
GENAERA CORP [GENR] +7.81%
VICAL INC [VICL] +6.89%
ADVANCED LIFE SCIENC [ADLS] +5.81%



Diagnostic Substances

SURMODICS INC [SRDX] +3.25%
MERIDIAN BIOSCIENC [VIVO] +1.68%
PRESSURE BIOSCIENC [PBIO] +1.27%
EZ EM INC [EZEM] +1.23%
TRINITY BIO ADR [TRIB] +0.89%



Drug Delivery

PETMED EXPRESS INC [PETS] +8.67%
PENWEST PHARM CO [PPCO] +4.64%
BIOVAIL CORP [BVF] +3.25%
ACURA PHARMACEUTICAL [ACUR.OB] +2.16%
COLUMBIA LABS INC [CBRX] +1.50%



Drug Manufacturers

OPKO HEALTH INC. [OPK] +20.42%
DEPOMED INC [DEPO] +7.69%
ALEXZA PHARMACEUTICA [ALXA] +7.08%
MERCK CO INC [MRK] +6.75%
CORTEX PHARM INC [COR] +5.46%



Drug Related Products

CHINA SHENGHUO PHARM [KUN] +16.28%
SCHIFF NUTRIT INTL [WNI] +4.22%
NATURAL ALTERNATIV [NAII] +3.15%
IMAGENETIX INC [IAGX.OB] +2.29%
PACIFICHEALTH LABS [PHLI.OB] +1.45%



Generic Drugs

CATALYST PHARMACEUTI [CPRX] +7.57%
BARR PHARMA INC [BRL] +6.34%
MYLAN LABS INC [MYL] +1.66%
WATSON PHARMACEUTCLS [WPI] +1.13%



Medical Appliances & Equipment

BSD MEDICAL CORP [BSM] +11.68%
QMED INC [QMED] +7.98%
ESCALON MED CP [ESMC] +7.36%
AMER MED ALERT CP [AMAC] +5.86%
CAMBRIDGE HEART INC [CAMH.OB] +5.82%



Medical Instruments & Supplies

ARROW INTL INC [ARRO] +16.72%
BIOLASE TECH INCS3 [BLTI] +14.31%
FOXHOLLOW TECH INC [FOXH] +11.04%
EV3 INC. [EVVV] +10.26%
ATRICURE, INC. [ATRC] +6.30%



Medical Laboratories & Research

ERESEARCHTECHNOLOG [ERES] +1.69%
AETERNA ZENTARIS [AEZS] +1.58%
ALLIANCE IMAGING INC [AIQ] +1.52%
BIO-IMAGING TECH [BITI] +0.71%
OSI PHARMACEUTIC [OSIP] +0.30%




- Friday's Top Biotech & Medical Stocks
- Thursday's Top Biotech & Medical Stocks
____________________

Spectrum Pharmaceuticals and Satraplatin

by Michael Shulman
BiotechBlitz



I typically avoid discussing the stocks I recommend and report on in my newsletter, but this is a rant against the FDA -- specifically the process by which the agency approves or fails to approve drugs for diseases with no treatment, such as advanced prostate cancer.

If you read this blog, and subscribe to my newsletter, you would note I am one of the few analysts who consistently defends the FDA -- but not this time and not on the issue of drugs for the terminally ill.

I believe the statistical fascists at the FDA need to add humanity to their slide rules for certain illnesses – and one of the worst illnesses is advanced prostate cancer. There is no real treatment (there is Taxotere which extends life for nine weeks for the patients willing to put up with its toxicity and side effects) and the men who get this disease die very hard

The drug under consideration is satraplatin, an oral form of a platinum chemotherapy, developed by Spectrum Pharmaceuticals (SPPI), and to be marketed by GPC Biotech (GPCB) and Pharmion (PHRM). The trial results were a bit mixed, in part because the primary endpoint was not an endpoint previously recognized by the FDA, and, in part, because final survival data for patients will not be available until the end of the year. Frankly, this is all irrelevant! Men with advanced prostate cancer die a an agonizing death after following a terrible treatment regimen.

What's the big deal with approving a drug that may work on a subset of the patients -- the same argument I made here for Provenge from Dendreon (DNDN). These drugs have been shown NOT to harm people, and the trial data suggests satraplatin reduces the progression of the disease and the pain associated with the disease. The FDA should not have convened a panel, it should have just approved the damned drug.

The panel itself will be dominated by oncologists -- and don’t kid yourself, they are not there for the betterment of humanity. They are their to represent one point of view -- their point of view.

Many oncologists are fanatical about their own treatment regiments and the doctors who participate in these kinds of panels are even more obsessed by the statistics and data about the drugs. They could give a damn if a subset of patients may benefit. If the treatment doesn't meet statistical goals, it doesn't matter if it's a treatment that's better than anything else out there.

Forget the futility of current treatment, forget that satraplatin is a pill and does not need to be infused like other chemotherapies -- vastly improving the treatment experience for the patient! Just stick with the numbers, the docs say -- the toll on the human beings afflicted doesn't count.
This obdurate attitude is palpable if you attend one of these meetings. I am not going to this one as the meeting on Provenge was enough for me for one year.

I would give satraplatin an even-money shot at getting a panel approval. That does not mean the FDA staff will go with the advisory panel decision if it's positive. After the Provenge debacle anything is possible.

And if it gets voted down, think about this -- the number of men who die every month from prostate cancer is about the same number of boys and girls we have lost in Iraq since the inception of the war (3600-plus). So if satraplatin extended life in a meaningful way for 8.6 percent of the victims of advanced prostate cancer, it would be the same as extending the life of all our soldiers who have died in Iraq.




BiotechBlitz is a regular contributor to BioHealth Investor
______________

Neurogesx: A speculative possibility

by Brett Scott
Sizz's Biotech Blog



Since I've started this blog, I've been scouring the Internet for other ideas for investing in biotech. Recently, Baby Biotechs ran a three-part piece featuring small biotech firm NeurogesX (NGSX). I was intrigued. The company has a late-stage drug candidate with some potential to fill a hole in medical need. However, the stock has struggled since its IPO. After reading Baby Biotech's take on the stock, I looked into it, and to say the least, I'm tempted to buy it.

NeurogesX develops pain management therapies, specifically in the area of neuropathic pain relief. Is main candidate is NGX-4010, which is in separate Phase III trials to treat Post-Herpetic Neuralgia (pain associated with shingles) and HIV-associated Neuropathy. It is also in Phase II trials to treat Painful Diabetic Neuropathy. Based on my research, I've estimated the PHN and PDN markets to be around $1.5 billion each. While I estimate the HIV market to be around $500 million. For more information on neuropathic pain, go to Baby Biotech's post.

I like this stock for speculative purposes only for several reasons. First, the company announced in June that it had completed the enrollment for its Phase III trial of PHN, which means that data should be announced within the next couple of months. This gives the stock a catalyst. Positive data will definitely move the stock. However, negative data is also at risk, as this would send the stock lower. Secondly, the data up to this point has been positive, which gives reason to believe that the final Phase III data will be too. Thirdly, I like the fact that the Street is starting to catch wind of this stock. TheStreet.com ran a piece in June about the stock and two analysts have rated the stock a buy with price targets at $12 and $13. Finally, a like the stock because it appears undervalued. This was the same conclusion Baby Biotechs came to. Using conservative market share estimates, I found a fair value of $9.50 for NGSX using my rNPV template (password: biotech), with $6.61 coming from NGX-4010's treatment of PHN.

However, there are some risks that we need to be aware of here. First, the stock (trading around $7) has had significant selling pressure since its IPO. The stock priced at $11 in May, but have never traded above that mark. That is very negative for an IPO. Secondly, even after the positive data release in June, the stock has resumed its move to the downside. Lastly, there are many pain treatments on the market, including generic treatments that will compete with NGX-4010.

I believe my fair value takes into account the potential competition, possibly even more than necessary (I estimate a 10% market share), so I believe that the stock is fairly undervalued here. I also believe that this stock carries very significant risk and should only be invested on a speculative basis and only by those individuals that are risk tolerant. I am placing a speculative buy rating on this stock with a price target of $11. I will revisit this stock after its Phase III data is released later this year.




Sizz's Biotech Blog is a regular contributor to BioHealth Investor
___________________