Competitive Technologies, Aethlon Medical: Pain Relief Without the Pills

I failed chemistry in college. My ego says it was because I didn't apply myself. Still I feel grossly inept when it comes to analyzing biotech stocks. I bought Vanda Pharmaceuticals (VNDA) near $1 because of their strong cash position, then sold at $1.23 to get my money into something I understood better. If I had waited a week longer I could have sold over $12.

Nevertheless, two positions I intend to be very aggressive with are in the treatment business. Their products are not ingestible, yet both are proven to either reduce high levels of pain or significantly reduce viral loads. Neither stock is valued very highly, so shareholders get their own dose of pain with high volatility due to lack of interest.

1. Competitive Technologies (CTT): This stock should be an easy one to buy. Recent years have been baron for CTT, with no major projects and very little revenue. The company is valued at $20M and has GUARANTEED contracts for $25M in 2009 and $50M in 2010. From the prospectus:

The Company is a full service technology transfer and licensing provider. It provides technology transfer, selling and licensing services focused on the technology needs of its customers, matching those requirements with commercially viable technology solutions, bridging the gap between market demand and raw innovation.

Earlier this year CTT bought the sales and marketing rights for a highly demanded pain relief device. They are mass producing it with South Korean partner GEOMC and expect sales to exceed guaranteed levels. The device has FDA 510(k) status, CE certification from the Europian Union and has been used on over 3,000 patients in Europe.

The stock was overbought recently, as massive insider buying tipped off more than a few investors. It has pulled back over 20% lately and shown strong support at $2.20. CTT has additional products in its portfolio and has shown the ability to profit from good technology in years past.

2. Aethlon Medical (AEMD): Even my biochemistry-deficient store of knowledge can deduce what a "Hemopurifier" does: It cleans blood. I do not know if Aethlon Medical (AEMD) makes a device that will be genuinely effective at fighting disease, however being a true innovator comes with a potential for upside that few stocks can claim. Clinical studies have shown the Hemopurifier to reduce viral loads in both AIDS and Hepatitis-C patients by over 50%. Aethlon is petitioning the Bill Gates Foundation for a grant and, while dilution may be an issue, the share price has been quite steady and remains near all time lows.

These are speculative long term plays with what I consider tremendous upside and minimal downside, given current valuations.

Disclosure: Long CTT and AEMD