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March was a devastating month for investors holding long positions in several companies at the wrong times. Shareholders of Affymax (OTCQB:AFFY), Ziopharm (NASDAQ:ZIOP), Aastrom Biosciences (NASDAQ:ASTM), A. P. Pharma (APPA.OB), Supernus Pharmaceuticals (NASDAQ:SUPN) and others were sharply reminded of the risks associated with clinical failures, regulatory rejection, product recalls, lead candidate abandonment, poor financials, unfavorable financing and large investor selloffs as their holdings plummeted. Such failures are common in this high-risk, high-reward sector with risk averse investors often staying away as their personal risk assessments do not allow them to invest capital here. However, for those possessing the luck, skill, fortitude, time and risk tolerance the sector requires for success, the rewards can be substantial with 20%-100% one day gains (RPRX gained 76% last Thursday on the heels of favorable Phase 3 data release) being commonplace for the right types of clinical successes, regulatory approvals, marketing goals met and investor interest increases necessary to push share price past technical resistance points. The euphoria can even drive share price and company valuation well beyond where the fundamentals indicate they should be, even higher than later times when the products are marketed and garnering peak sales revenue. For the month ahead, I present four companies that investors may consider researching for gains in April and beyond. With some of these having imminent catalysts and others having significant catalysts simply in the near future, investor interest should be strong or increasing as awareness increases and expected events approach.

Affymax longs took a huge hit when the company announced a voluntary recall of its anemia drug, Omontys, after 0.20% of recent patients experienced adverse events (AE) with 5 (0.02%) of those dying due to complications of anaphylactic shock. Shares trading at over $16 before the announcement opened on February 25th at $2.4, down over 85%. However, the heartache was not yet over as on March 18th the company announced a company-wide restructuring resulting in a layoff of 75% of its workforce in order to conserve money while it continued its investigation into the issues around its sole product's recall. Most concerning for investors was a statement in the release noting "The company also announced that it will retain a bank to evaluate strategic alternatives for the organization, including the sale of the company or its assets, or a corporate merger. The company is considering all possible alternatives, including further restructuring activities, wind-down of operations or even bankruptcy proceedings." The news sent shares plummeting once again from March 18th's closing price of $2.95 to open on the 19th at $1.18, an additional 60% drop.

Last week's volatility in AFFY shares provided ample time for trading opportunities as traders entered and exited long positions for short-term gains. Although these trades can provide for quick returns, recall updates, depending on the type, would likely significantly affect share price in either direction. Bullish investors exiting at just the wrong time may find themselves chasing the share price upwards, while traders trying to garner 5-10% via "flip" trades may find themselves losing a substantial amount if the share price plummets. Although I do find myself trading such volatility from time to time, if I have a truly bullish outlook on an investment I typically daytrade only small amounts while maintaining a base holding for the longer term (or at least up to the expected catalyst event).

While things appear to be bleak for Affymax and its shareholders, I believe there is still a possibility that Omontys returns to the market in one form or another. Whether this potential return is for a more limited patient set, with a different product warning/label, with a companion diagnostic kit or simply completely released back to the markets intact with no changes made (after correcting possible manufacturing issues), I believe the upside from yesterday's $1.36 close and market capitalization of $50.6 million could be substantial. In a February 28th article, I presented some possibilities on what may have gone wrong with Omontys. I believe that article, as well as accompanying comments written by myself and the readership should be considered by all those wishing to risk their funds in this high risk, high reward investment. Last Thursday's closing hour of trading and after hours trades were bullish with large block buys for a daily share price close of almost 11% on no news. Pertinent for the week ahead, Friday's report by the Wall Street Journal will likely induce a bit more downside for the already punished shares, and could offer cheaper entry prices for investors willing to bet on Omontys being returned to the market in the future. While early reports from Affymax had indicated that adverse events in Omontys seemed to be a more recent occurrence, the Wall Street Journal reported Saturday that "Adverse-event reports to the Food and Drug Administration, obtained under the federal Freedom of Information Act, show for the first time how early the drug's worrisome reactions emerged. Omontys, from Affymax Inc. and Takeda Pharmaceutical Co. Ltd., was linked to allergic reactions and respiratory distress beginning in August 2012, shortly after it went on the U.S. market in late April." This revelation could indicate a more significant problem than just a short-term production or raw material supply issue. Interested investors should watch the trading action early this week to ascertain how this news will affect share price and find cheaper long-term holding prices during this time while considering the risks associated with a possible bankruptcy filing and/or possibility that Omontys may never return to the markets again.

DARA Biosciences (NASDAQ:DARA) shares are up over 30% since early January's $0.76, closing yesterday at $1.0 with a 2013 high of $1.20. The company launched two licensed products in 2012: Soltamox®, an oral liquid formulation of tamoxifen citrate for the treatment of breast cancer and Bionect®, hyaluronic acid approved for the treatment of multiple indications within the oncology and radiation oncology marketplace including partial to full thickness dermal ulcers (pressure sores, venous stasis ulcers, arterial ulcers, diabetic ulcers), wounds (including cuts, abrasions, donor sites, and post-operative incisions, irritations of the skin), and first and second degree burns. Much of the share price run-up in 2013 is due to anticipation of the Orphan Drug Designation (ODD) decision for internally-developed KRN5500 for cancer patients suffering from chronic chemotherapy induced neuropathy (CCPIN). This designation for KRN5500 would give the product, if approved, up to 7 years of marketing exclusivity in treating CCIPN along with reduced regulatory fees while undergoing clinical development. While awaiting the lucrative designation, the company is also actively pursuing a partner to help develop the drug in a Phase 2b (dose escalation) study, another huge catalyst lying in wait for DARA. Phase 2a data were promising with KRN5500 yielding statistical significance versus a placebo for reduction of pain with a good safety profile. A partnership announcement for KRN5500 would be significant, with share price impact dependent on how lucrative the announced agreement could prove to be.

Although KRN5500 seems to be standing out with the ODD decision as a significant near-term catalyst, DARA has also announced that it is seeking to out-license its next in line clinical candidate, DB959, which has completed a Phase 1 clinical for the treatment of diabetes and hyperlipidemia. DB959 activates genes involved in the metabolism of sugars and fats, which improves the body's ability to regulate both aspects of diabetes. Phase 1 data indicated that the first-in-class, small molecule, non-TZD PPAR delta/gamma agonist had an impressive safety profile, even at ten times the expected dosage levels. With the ever-present tradeoffs often seen in efficacy versus safety in drugs (more is usually more efficous while less is usually safer), there is much room for development in anticipated dose-escalation Phase 2b trials once a suitor or licensee is found. While no indication of a timeframe has been mentioned, I would label this catalyst as "imminent," and something to keep investor interest strong for the company in 2013.

DARA licensed another cancer supportive care drug in September of 2012, Gelclair®. The drug is FDA-approved for the treatment of oral mucositis, a common and often debilitating side effect of both chemotherapy and radiotherapy treatments for cancer. The complication causes pain, affects the ability of the patients to eat (and obtain nutrition), and increases the risk of infection due to open sores. The condition can sometimes be so troublesome that it affects the cancer treatment regimen and can necessitate a change in dosage or treatment type if not controlled. According to the licensing press release, Gelclair® is to launch in Q1, 2013. With April now here, I believe the launch is imminent and an event interested shareholders should watch for closely.

In its 2012 10-K filing, DARA noted "Management believes that such currently available funds, together with projected sales of Soltamox and Gelclair in 2013 will enable the Company to fund its planned operations and to meet its obligations through at least December 31, 2013." With a 10-year license agreement, and the company in need of revenue, the sooner the Gelclair® launch the better, with investors watching it and other developments unfold for this highly-undervalued $23 million market capitalization company. With cash and equivalents on December 31st of $6.3 million and an additional $2.8 million from the December 31st offering, a solid partnership for KRN5500 or a better-than-expected year from Gelclair®, Soltamox® and/or Bionect® could possibly forgo, reduce or delay the need for any additional financing. This week's trading is important for DARA longs as the shares have been teetering just above and below the significant $1.00 support/resistance level. Not only is this a psychological level, but the company needs to have its common shares remain above $1.00 in order to remain in compliance with Nasdaq's listing requirements.

PLC Systems (OTCPK:PLCSF) investor interest has been increasing rapidly over the past week, trading as low as $0.15 last Tuesday while peaking at $0.23 yesterday. Yesterday's 37.5% share price surge comes on the heels of Thursday's 2012 10-K for the company which featured an impressive 157% revenue increase over 2011 with multiple catalysts possible for the year ahead. PLC received the European CE mark in December of 2007 for the company's RenalGuard System™, the source of most of PLC's revenue growth. RenalGuard is a medical device that addresses Contrast Induced Nephropathy (CIN), a side effect of cardiovascular imaging in which the radiographic contrast media (dyes that enable imaging of the patient's circulatory system) damages the patient's kidneys, particularly those with pre-existing renal (kidney) problems. According to PLC, 15-20% of all patients undergoing imaging during radiology or cardiology treatments suffer from CIN, with a mortality rate of roughly 35% for those developing the condition. PLC's RenalGuard is a matched fluid replacement apparatus with a novel but effective design. The device monitors urine output and matches the volume of that output by infusing an equal amount of fluid back into the patient's body in real-time via catheter. This high volume infusion and excretion helps to flush the damaging dyes from the patient's kidneys before the damage can occur. With the product just beginning to gain traction in 2012, the growth could be significant as word-of-mouth advertising increases and the company continues to increase awareness of the device and its potential, as evident in its multiple international presentations in 2012.

As PLC continues its international push to present data, gain additional regulatory approvals and find new partners, its biggest market lies just a few months away as the company is deep in a pivotal Phase 3 trial in the U.S. In a recent article, I discussed the numerous catalysts ahead for the year and the timelines involved with PLC with regard to the company progressing through its critical clinicals. With initial enrollment of 163 patients targeted, the company will then perform a sample size re-estimation to determine what number of patients ultimately enrolled would be necessary to have statistically significant results at the trial's conclusion, with a range of 326-652 patients expected. Updates on this final enrollment size will indicate how much longer the trial may take and give an indication about how much more money PLC would require for trial completion. With no enrollment updates in last Thursday's 10-K, I would venture a guess that this information could be forthcoming via a separate press release as this is a highly significant event.

According to the 2012 10-K, PLC had cash and equivalents of $258,000 as of December 30th, 2012. On February 25th the company announced that it had secured additional financing of just over $4 million, sufficient to fund the company through most of 2013. Not to be overlooked, investors should note in the press release that a $5.25 million loan through GPC IV, LLC had its maturity date extended from the initial February of 2014 to now maturing on June 30, 2015, giving PLC a bit of breathing room until after it completes its Phase 3 pivotal trial, with RenalGuard likely already marketed in the U.S. by then. Although another potential offering appears to be likely by year end, I believe the increased awareness of this company's potential and its current low market capitalization of only $13.06 million despite its advanced-stage clinicals will more than offset any share price depression caused by a dilutive offering likely by the end of the year.

Yesterday's dramatic 37.5% share price surge could be the beginning of an exciting month ahead for PLC's investors. Investor awareness should continue to increase due to the advancing Phase 3 trial, announced increasing revenue behind RenalGuard, partnerships possibly forged in the near future, and an imminent trial enrollment number update due out at any time. Nonetheless, the company is certainly not without risk, as it is currently traded on the OTC Pink securities exchange making it more prone to share price manipulation, especially for a low market capitalization company such as PLC. Despite 2012's dramatic revenue increase, the company is still operating at a loss. However, it is certainly taking long strides toward profitability, especially if Phase 3 clinicals merit a regulatory approval for marketing in the U.S. I advise a cautious and well-planned entry for interested investors, with an exit plan already in place for this high-risk, high-reward candidate.

TrovaGene Inc. (NASDAQ:TROV) has had an exciting year so far with much more to come in 2013. The company is developing, validating and commercializing a medical diagnostics platform that uses nucleic acid fragments (RNA and DNA) found in urine to screen for various cancers, infectious diseases, transplantation rejection and hereditary diseases. TrovaGene announced Wednesday of last week that it was launching its urine-based HPV-HR (high-risk) assay for the detection of the human papilloma virus (HPV). The diagnostic test is capable of accurately identifying the presence or absence of 15 known high-risk HPV strains using its proprietary DNA sequences. TrovaGene's shares closed out last Tuesday's trading at $5.75 and peaked at $6.69 on Wednesday after its product launch announcement before settling down to close the week on Thursday at $6.26. Shares pulled back slightly yesterday, closing out the day at $6.18, down 1.3%. I believe that the long holiday weekend enabled more investors to research the under-the-radar company a bit more closely and anticipate a solid month ahead for existing shareholders. With multiple catalysts possible in 2013 as the company potentially enters commercialization stage for other diagnostic tests, I believe the upside potential in April and beyond could be significant for this $96 million market capitalization company.

In a recent article, I highlighted the potential catalysts for the year ahead and gave a brief overview of the longer-term investment quality the company has due to large targeted indications with multiple patents protecting its product line from competition. With enough cash to fund TrovaGene's operations well into 2014, short-term offerings are unlikely which removes a bit of risk for new shareholders looking to open positions in the near future while they await more company updates on commercialization, potential partnerships and sales growth. With a 52-week trading range of $1.86-$8.96, I believe there is significant upside as TrovaGene steps into the spotlight in 2013. TheStreet's Robert Pedone has taken note of TrovaGene's recent bullish trading pattern and stated in last Thursday's article "5 Stock Under $10 Set to Soar" "If you take a look at the chart for TrovaGene, you'll notice that this stock has just started to break out above a key downtrend line with strong upside volume. Prior to TROV flirting with taking out its downtrend line, the stock was downtrending badly from $8.96 to its recent low of $5.09 a share. That downtrend has started to reverse, with shares of TROV entering an uptrend over the last month, with shares moving higher from $5.09 to its recent high of $6.69 a share. That move is quickly pushing TROV within range of triggering a near-term breakout trade."

I believe this week's stock activity will be significant and indicative of what could be in store for investors in April and beyond. With March 15th's short interest in the company at 272K shares, shorts may consider covering their positions if this reversal confirms itself and the share price increase continues. As indicated by Mr. Pedone, a breakout above $6.69 should be construed as a bullish indicator with little resistance between there and its next resistance of $7.40, almost 20% above yesterday's closing price. TrovaGene is rapidly becoming one of my favorite investments for the year, and I anticipate that I will see that opinion affirmed in the month ahead.

Source: The Week Ahead Could Be Pivotal For These Small-Cap Companies' Stocks