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Expert Financial Analysis and Reporting

Review of SmithOnStocks Recommendations; August 17, 2015

Purpose of Report

I am leaving on vacation and will be back on August 27, 2015; you won’t hear from me until then. As the second quarter conference calls and accompanying updates are almost behind us, I thought I would provide a quick summary of where I stand on the15 companies I cover. These are going to be one liners in contrast to the detailed reports that I usually write.

Three Asymmetric Investments: All Buys

There three companies that I view as having paradigm changing technologies in which they are the clear market leaders. They are Northwest Biotherapeutics (NWBO, $9.57), Neuralstem (CUR, $1.32) and Discovery Laboratories (DSCO, $0.48). They are developing products which would truly change the face of medicine and are my true asymmetric investments. The products of all three companies have shown signals of activity but have not yet completed trials that establish proof of concept. In the case of Northwest and Discovery, such trials will be completed in 2016 and in the case Of Neuralstem in 2016 or 2017. As true asymmetric investments we are looking at several fold increases in price as upside in the event of success and enormous downside in the event of failure.

Recent reports are:

Neuralstem: The 2015 Decline in the Stock is in Contrast to Encouraging ALS Data and an Impressive Pipeline (CUR, Buy, $1.38).

Discovery Laboratories: Update from the 2Q, 2015 Conference Call Provides Timelines for Important Aerosurf Phase 2 Trials (DSCO, Buy, $0.47)

Northwest has not yet reported 2Q results and I will like do an update when I get back. I see the major overhang on the stock as being concern about a financing (Woodford is likely to play a major role). The potential upside catalysts are a collaboration with probably BMY on DCVax-L and BMY’s Opdivo and long awaited news on German reimbursement for DCVax-L.

Two Almost Asymmetric Buys

Agenus (AGEN, $7.27) and Cytokinetics (CYTK, $6.45) almost make the list of asymmetric investments. They are both buys.

Recent reports are

Agenus: Its R&D Day Presentation Puts a Focus on the Great Promise of Cancer Vaccines and Checkpoint Modulators (AGEN, Buy, $6.73)

Cytokinetics: Phase 3 Trial for Tirasemtiv About to Begin with Topline Results Possible in 2H, 2016; Successful Outcome Could Make the Stock a Homerun (CYTK, $6.35, Buy, For Paid Subscribers)

Three Fundamental Situations I Really Like But…….

There are three companies I really want to buy I am deterred by the current price from being aggressive. However, you couldn’t pry these companies out of my portfolio with a crowbar. I am looking for an opportunity to be more aggressive. Repligen (RGEN, $34.78) has the best business model that I have seen in biotechnology. ZS Pharma (ZSPH, $50.23) and Chimerix (CMRS, $49.98) have novel products (not quite paradigm changers) that should be approved in late 2016.

Repligen: Fundamentals Are Exceptional but The Stock Carries A Premium Valuation (RGEN, $39.97, For Paid Subscribers)

Chimerix: An Update (CMRX, $52.83, Buy/Hold)

Initiation Report on ZS Pharma (ZSPH, Hold, $40.97, Subscribers only)

Other Buys

I think that Antares (ATRS, $1.89) has the potential to reach $4.00 to $6.00 in late 2016. ImmunoCellular (IMUC, $0.48) could be a surprise in the universe of companies that I follow. Investors give it no credit for being a player in immune-oncology.

Recent reports are:

Quick Take on Antares Following 2Q, 2015 Conference Call (ATRS, Buy, $2.10)

ImmunoCellular Therapeutics: Is There an Investment Case to be Made? (IMUC, $0.57)

Other Companies on Which I Am Neutral

I am watching Alimera (ALIM, $3.89) closely. The launch of Iluvien could be catching traction in the US to the surprise of most investors. However, the company is burning cash at a prodigious rate and may have to do a financing under distress late this year or early next. pSivida (PSDV, $4.05) is a play on Iluvien without the financing risk, but will likely trade in concert with Alimera.

Celldex (CLDX, $16.34) has gotten clobbered lately because of the FDA telling the Company that it will not accept an NDA filing for Rintega. There aren’t major milestones until late 2016 or 2017. I think that this Company will eventually be acquired for its impressive pipeline of products. See Celldex: Meaningful Data on Two Lead Products, Rintega and glembatumumab, is not Likely Before 2017 (CLDX, Hold, $16.99)

Inovio (INO, $7.37) is kind of betwixt and between for me. They have novel products which interest me and they have done an excellent job of strengthening the balance sheet, but like Celldex, there will be some time until we see a major milestone.

Derma Sciences (DSCI, $6.48) appears to hit bottom with its advanced wound care products and is getting back of a growth track. AWC was up 17% in the 2Q, but Medihoney unexpectedly declined in the quarter. Topline data the wound healing product aclerastide will be available in 1H, 2017. This could be an upgrade if management can get a fix on the issues with Medihoney.



Categorized as Smith On Stocks Blog


  1. Thank you for keeping us subscribers abreast of all that is Bio Tech….Have a fantastic vacation…I thought I read a 2 Q report on NWBO….nothing new in in it except no money…..enjoy some free time which is the only thing God gives equally to everyone….24 hours….what a gift…cheers

  2. According to Investor’s hub post#s: 38531, 38536, 38537, 38538– there is a “Temporary Halt” on the trials in EU! Any thoughts

  3. Welcome back…..can’t wait to hear your opinions on the fiasco that hit NWBO….Linda gives an interview at 9 am and then an official few words at 4 pm…..What gives??? leaves me less than impressed with the thought process of the leadership of NWBO….They didn’t tell us anything about what the Germans thought was iffy??? Will they ever tell us when they re-submit the information the Germans want??? Do they ever follow through on any of their teasing announcements??? Where is the #’s of patients being treated in Germany under the special exemption??? Where is the pricing of the re-imbursement??? Where is the hospitals for the phase II of “D”??? Where is the “collaboration”??? What is the actual # of “enrolled” patients in “L”??? Why does a shareholder have to complain about wording???? Will they answer, (or you) the law suit concerns??? Have you changed your opinion on NWBO after this latest fiasco??? What a week to be on vacation…LOL…
    I really want to write a letter to the BOD of NWBO, but want to hear from you first….Sorry, I am emotional and not an analyst or scientist….I brought in to NWBO because of the Germans, what you have reported, what Doc Logic has written and several other authors on SA….Now, no one is going near NWBO except AF nd the various lawyers who want to bring people like me to question the validity of the science and leadership of NWBO…..Thank you if you read my concerns and can answer any of them and help point me in the correct direction with this mysterious company….I say “mysterious” because other companies you and I follow have press conferences at the quarterly reports, but Nwbo says nothing, and then has the strangest interview and the strangest response later about it….can you help, please….thank you, cheers, longNWBO

  4. CYTK: Looks like clinicaltrials NCT02496767 has been updated with a ‘Recruiting” VITALITY-ALS Phase 3. Few “Contacts and Locations”
    Ventilatory Investigation of Tirasemtiv and Assessment of Longitudinal Indices After Treatment for a Year

  5. Larry, Can you give any updates or thoughts for NWBO? There is the strong science but so many other events hitting us investors: screening hold, raising more money, and the price drop from $12/sh to $2/sh. Thanks.


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