TFN Biotech Stocks: Keepers and Losers
Today's Financial News - Posted April 16, 2009
TFN’s biotech picks, like Aastrom Biosciences (ASTM), Geron (GERN), and Isis Pharmaceuticals (ISIS) have been moving with the markets. Today we take a down and dirty second look at each.
By Laura Cadden, TodaysFinancialNews.com
Baltimore (TFN): The biotech stocks we’ve recommended to TFN readers have not been immune to market volatility. Today we take a cold hard (if quick) look at each and decide which to retain, and which cut loose.
Aastrom Biosciences, Inc. (NASDAQ:ASTM): KEEPER
Initial recommendation: Four biotechs set to soar – 01/12/09
Aastrom Biosciences, Inc. develops autologous cell products to repair damaged human tissue.
The company’s share price rose over 48% after our Jan. 12 recommendation. But it gave back all of those gains when a clinical hold was placed on its Phase II clinical trial related to the treatment of congestive heart failure due to dialated cardiomiopathy (DCM).
One patient experienced an adverse event due to anesthesia management. This was entirely unrelated to Aastrom’s treatment, and the FDA removed the hold in early March. Still, the stock remains undervalued – even putting its NASDAQ listing in jeopardy.
But make no mistake: This IMPACT-DCM clinical trial holds the most promise right now for Aastrom. Over 5 million people in the U.S. suffer from DCM and it’s a contributing factor in the deaths of at least 250,000 Americans each year.
The treatment involves injecting cardiac repair cells directly into the heart muscle.
A “compassionate use” case in Germany (where the untested therapy was allowed as all other options had been exhausted) showed positive indications.
The company anticipates completing enrollment for this trial by the end of the year.
This technology could very well be the future of DCM treatment – and we sure could use more (and better) options. Hold these shares.
ATS Medical, Inc. (NASDAQ:ATSI): KEEPER
Initial recommendation: The 3 top healthcare micro caps on the verge of a breakout – 02/17/09
ATS Medical Inc. designs and creates mechanical heart valves.
The company already has 15% of the current market share. With its latest revolutionary valve, the ATS 3f Aortic bioprothesis, it could well capture even more.
Another promising product is the ATS CryoMaze Surgical Ablation System for the treatment of atrial fibrillation.
Traditional ablation involves the burning of top tissue to create scar tissue and thereby dull the erratic electrical signals from veins that lead to cardiac arrhythmia.
The heat can be difficult to control – potentially leading to more damage than intended.
ATS’ option is to instead freeze the top layer – allowing better control.
Over 2 million Americans suffer from atrial fibrillation – including our own executive publisher, J. Christoph Amberger.
Since our recommendation of this stock on Feb. 17, the stock has risen over 9%.
Cutting edge products with enormous market potential = winner. Keep this one in your portfolio.
Cerus Corporation (NASDAQ:CERS): KEEPER
Initial recommendation: Four biotechs set to soar – 01/12/09
Cerus Corporation’s INTERCEPT Blood System finds and inactivates blood-borne pathogens in donated blood components to be used in transfusions.
This technology has been designed to detect and destroy viruses, bacteria and parasites and is currently in use at Red Cross locations in Germany.
On April 14, the Belgian Red Cross signed a contract to purchase the system.
The company is initiating Phase I clinical trials for the system in the U.S.
Since our recommendation on Jan. 12, the stock price has dropped over 5%.
But as a long-time blood then platelet donor, I’m a huge fan of this company’s technology and how far it could go to make blood component supplies safe.
This company has plenty of upside potential: Hold on to your shares.
***UPDATE 04/21/2009: Cerus (CERS) is up over 60% since April 1
Cord Blood America Inc. (OTC:CBAI): LOSER
Initial recommendation: Stem Cell Mania: Cord Blood is the flavor of the day! – 01/27/09
A tiny company, Cord Blood America Inc. has seen plenty of ups and downs – and that’s just this year!
The company stores and individual’s umbilical cord stem cells for possible future use in the treatment of heart disease, diabetes or other illnesses that may arise in that individual.
Soon after we first mentioned this it shot up 57%, but today it’s way down from that initial price.
Cord Blood’s technology is at best, theoretical and this micro cap is simply too volatile. Dump it.
Cytori Therapeutics, Inc. (NASDAQ:CYTX): KEEPER
Initial recommendation: Four biotechs set to soar – 01/12/09
Cytori Therapeutics, Inc. makes and markets regenerative therapy from adipose (fat) tissue intended for use in reconstructive surgery, cardiac disease treatment, radiation tissue-injuries, and gastrointestinal disorders.
The company’s CEO expects approval of the Cytori Celution System in the U.S. next year. The system processes patient fat tissue into cells and has already been approved in 30 other countries.
The Celution 800 System for reconstructive surgery hit record sales last year in Europe.
As of this year, Cytori is partnering with GE Healthcare to market its regenerative cell Systems and cell banking applications.
Of recent interest is the System’s use in breast augmentation. A recent test in Japan showed promising preliminary results in relation to appearance and texture. The company will gather data from the patients over the next year.
Though the share price dropped significantly since our Jan. 12 recommendation, we feel the company has solid potential. Hold.
Geron Corporation (NASDAQ:GERN): KEEPER
Initial recommendation: Four biotechs set to soar – 01/12/09
Geron Corporation set the newswires buzzing when it become the first company to get FDA approval to begin clinical trials of a human embryonic stem-cell-based therapy. The treatment is for patients suffering from spinal cord injury.
The news sent the stock bolting up 75% from our entry price on Jan. 12.
The price has settled down quite a bit since then as the hype dissipated and the usual suspects pooh-poohed the possibilities of the technology. Right now, we’re only up about 1.8% from that initial entry price.
But we haven’t lost faith in the company.
Just following its telomerase-inhibiting technology for the treatment of cancer and other diseases makes the mind whirl with possibilities.
Whether it will be the restoration of spinal cord function, a successful cancer vaccine, a new treatment for destroying cancerous tumors, or all of the above… this company will most likely change the face of medicine.
Hold on to your shares.
GTC Biotherapeutics, Inc. (NASDAQ:GTCB): KEEPER
Initial recommendation: The 3 top healthcare micro caps on the verge of a breakout – 02/17/09
GTC Biotherapeutics, Inc. creates genetically engineered human proteins form the treatment of blood disorders via a transgenic goat’s milk.
Seriously.
I couldn’t make this stuff up.
Its methods are significantly less costly than lab-focused techniques and just as useful.
The company partnered with Ovation to create the FDA-approved Atryn. The drug is used to prevent thromboembolic events related to surgery or childbirth in people with Hereditary Antithrombin Degiciency (ATII).
The drug should begin marketing in July.
This should help pave the way for the company’s other treatments for hemophilia, etc.
The share price for GTC has dwindled lately but should get a nice boost this summer as Atryn hits pharmacy shelves.
We consider this one a hold.
Human Genome Sciences (NASDAQ:HGSI): KEEPER
Initial recommendation: An up and coming biotech: Human Genome Sciences Inc. (HGSI) – 02/04/09
You may know biopharma Human Genome Sciences for its drug to treat inhalation anthrax, Abthrax. The U.S. government began receiving its 20,000 purchased doses earlier this year.
After our recommendation on Feb. 01, HGS’ share price suffered a big setback when it was announced that it’s drug Albuferon, in Phase III clinical trials to treat Hepatitis C, wasn’t as effective as Roche Holding’s (OTC:RHHBY) drug, Pegasys.
I have to admit, I too was tempted to throw in the towel on this pick. But then I noticed some insiders picking up shares right after the price fall. Makes one pause.
The company does have other good products in its pipeline…
Through a partnership with GlaxoSmithKline PLC (NYSE:GSK), HGS has LymphoStat-B (belimumab) currently in Phase III trials (one for a duration of 52 weeks and the other for 76 weeks) for patients with systemic lupus erythematosus (SLE).
The Phase II results for this treatment showed a sustained improvement and was well tolerated in patients.
Other drugs created through GlaxoSmithKline in Phase III trials include Darapladib for the treatment of heart disease and Syncria for the treatment of diabetes.
Hold on to HGS shares for now.
Isis Pharmaceuticals Inc. (NASDAQ:ISIS): KEEPER
Initial recommendation: It’s time to buy Isis Pharmaceuticals (ISIS) – 12/17/08
Up over 17% since our initial recommendation on Dec. 17, Isis Pharmaceuticals Inc. has been a solid pick.
Isis has a load of treatments in its pipeline – many based on its groundbreaking antisense technology.
Its star drug Mipomersen is in Phase III trials to reduce LDL-cholesteral by blocking the formation of lipoproteins that lead to atheromatous plaques in arteries.
This is especially beneficial for patients who cannot adequately control their cholesterol levels – including those with homozygous familial hypercholesterolemia, a genetic disorder causing high cholesterol levels resulting in an early onset of heart disease.
We’ll hold on to Isis for at least 20% gains.
RTI Biologics Inc. (NASDAQ:RTIX): KEEPER
Initial recommendation: The 3 top healthcare micro caps on the verge of a breakout – 02/17/09
RTI Biologics Inc.’s share price has dropped over 10% since our recommendation back on Feb. 17.
The company uses human-donated and animal tissues to create implants that repair and promote healing. The biologic grafts they produce are primarily for spinal, orthopedic and sports medicine surgeries.
RTI also signed a distribution and supply agreement with Aesculap Implant Services for the sterile spinal allograft implants.
The revenues from this deal should hit the books this summer.
We’ll hold on for now.
Next Article: The power of options: Beta-trading strategy pays off
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