Biotech Bulls Becoming Restless

Includes: CLBS, CYTR, HNAB
by: M. E. Garza

Based on the influx of mail asking for updates on companies we've covered, I think the last few terrible market days have the Bulls feeling a bit restless. In short, some people are feeling a bit edgy about so much of the red that has filled their trading screens, following the worst two-day stretch the market has seen since June.

President Obama caused some of that when he asked Congress for limits on how large big banks can grow to become and to end some of the risky trading large financial companies have used in recent quarters to boost profits. As we saw during the banking crisis, whether we like it or not, the market goes as the banks go. Big money has big influence and if big money isn't happy, the market's going to suffer.

That being said, careful analysis (both technical and fundamental) as well as careful research into forward looking and breaking news events will continue to help us guide our subscribers and readers to make better decisions. For example, even as the rest of the market imploded Friday, our subscriber alert and article about Hana Biosciences (HNAB) brought so much volume and attention to the stock, that the price went from a day low of $.195 to a high of $.28. In addition, HNAB's chart still looks strong and could run a bit more after some profit taking.

NeoStem (Amex:NBS), which we spotlighted with a CEO interview this week went from $1.72 to $2.07 before investors were spooked by the company's new Securities Registration Statement filing (Form Type: S-1/A)- which appeared just as we were publishing our interview with Robin L. Smith M.D., Chairman of the Board and Chief Executive Officer.

The stock has pulled back a bit and closed at $1.76 Friday, but that's only because investors may be mis-reading the filing. Let me assure you of one thing. NeoStem is going places now that it has acquired a controlling interest in China based Suzhou Erye Pharmaceuticals Company Ltd. It has now transitioned into a multi-dimensional international biopharmaceutical company that will be doing some incredibly interesting things to not only help develop its science in a country that is much more receptive to open stem cell research, but it will also be leveraging that pharmaceutical company's income and distribution resources to generate even more revenue and value for its shareholders.

That filing, upon closer inspection, leads me to believe that big news is coming followed by some form of dilution that, in short order, will be absorbed and result in a higher share price as the company moves forward on multiple fronts. Let's not forget that there was some interesting insider buying recently and the promise of NBS's VSEL (very small embryonic-like) stem cell technology, which is what got most investors into NBS to begin with.

I've received more email about NewCardio, Inc (OTC:NWCI) than any other company the last two days. The stock went crazy after I revealed news of a possible buy-out. Then it pulled back the last two days, causing many to get nervous. I'm going to stand by my initial report and add the following: It now looks like there may be at least two interested partners/deals in the works.

If my sources are correct, and for the record these are not public relations people or stock pumpers, then this undervalued play could become a big story not only in the short term, but a very solid winner for the long haul as well. I'm not hyping or sticking my neck out for this, folks. I'm simply reporting what I am hearing. How does a move to a bigger exchange sound? That could also be in play here, but revealing too many details could expose my sources or theirs, so I'll stop here. Instead, I'll I refer you to this article and to this one. Remember, these types of deals don't happen overnight. Patience is always key. By the same token, remember that one of the shoes can drop at any moment, so be ready. For those who think this is some sort of pump and dump scheme on my part, know this: I'm still long and own every single one of my original shares and if it pulls back, I'll pick up even more. I suggest you do your own due diligence here. Rumor plays are always risky, but do offer high rewards.

Finally, if you missed the latest "update" press release about CytRx Corporation (NASDAQ:CYTR) you may want to read it. I'd like you to consider and compare what it has started to reveal publicly as a company against what I said in my articles about the company late last year (I said then that I feel this is a $10+ stock by the fourth quarter of 2010). Is it me or does everything appear to be on track over there? Big moves coming for CytRx.

Disclosure: Long NBS, NWCI