Let's look at several healthcare/biotech stocks under $5 whose technical and historical indicators tell us that the stocks have reached a “bottom” and appear ready to bounce higher, even if just for a short term trade.
Of the companies which were captured in the scan, some have pending news catalysts which could set the table for such a move. Some of those fundamental events are listed as notes under each of the company names.
In addition, investors may ask how can we guess that these firms may be headed higher with any type of certainty. We hedge our bets using advanced charting and market analytics.
By looking for certain mathematical characteristics and filtering for several trending factors on a stock chart, including an analysis of the firm’s Weekly Williams %R (both one and two days ago) as well as the Stock’s Weekly Relative Strength Index (also for the past two days), and other factors such as Bear Power and Bull Power, technical analysts are able to set and apply various histograms. They also track other specific points on the Moving Average Convergence Divergence of a stock and in the end, come up with a mathematical formula which yields very specific results.
The results of these scans do not take into account broad market activities, news or other factors which may influence a particular stock, but tests which have been performed as well as methods which have been refined can help us predict how investors and traders will react.
Remember that no one can predict how any one particular individual will act, but crowd psychologists can usually tell us with a high degree of probability how a group or crowd will act given a specific set of circumstances. That study and methodology is the basis for some pretty basic predictive market behaviors and even to some extent the actual technical analysis of stocks.
If you still don’t buy it, then the answer is simple. Paper trade and track these stocks and see if the mathematicians, analysts and market monitors who came up with this list were right.
CEL-SCI Corporation (CVM)
Price at the time of this scan $0.295
CEL-SCI develops immune-based therapies that harness the body's own immune defense system to fight disease. These therapies are effective and non-toxic to the body's normal cells and organ systems, unlike traditional cancer therapies such as chemotherapy, radiation and surgery, which are most often highly toxic or damaging. Its core capabilities include: drug discovery, research, development and manufacturing of complex biological substances.
CEL-SCI's flagship product Multikine is currently in Phase III clinical trials. Officially titled: "Phase III Study of LI [Multikine] Plus SOC (Surgery + Radiotherapy or Surgery + Concurrent Radiochemotherapy) in Subjects With Advanced Primary Squamous Cell Carcinoma of the Oral Cavity/Soft Palate vs. SOC Only," some preliminary data associated with this study should be available in 2012 and this will likely be a big story.
So far, arrangements have been completed with leading clinical investigators and institutions from 8 countries on 3 continents to conduct the study. So far thirty five clinical centers have met all legal, regulatory, and protocol requirements to screen and enroll patients.
ISTA Pharmaceuticals, Inc. (ISTA)
Price at the time of our scan $3.75
ISTA Pharmaceuticals Inc is an ophthalmic pharmaceutical company developing, marketing and selling its own products. Their products and product candidates include: therapies for inflammation, ocular pain, glaucoma, allergy, and dry eye. 2012 could be a big year for ISTA as the company has several pending catalysts which they announced for 2012.
The company plans to initiate Phase III studies in 2012 for T-PRED which is being developed for the treatment of steroid responsive inflammation.
ISTA also said they intend to pursue development of a strong steroid to treat ocular inflammation. The U.S. topical / plain steroid segment of the anti-inflammatory market, based on 2010 data from IMS Health, is estimated to be 186 million Dollars in sales.
ISTA's OTC product for dry eye disease is anticipating a launch in 2012. Positive Phase II results were announced June 2009 and Phase III program began 1H 2010.
In October, the company announced Statistically Significant Phase III Results for Prolensa- as a modified ophthalmic solution developed to treat pain and inflammation associated with cataract surgery. Based upon the results announced they plan to file a New Drug Application with the U.S. Food and Drug Administration for Prolensa in the first quarter of 2012, with a commercial launch planned for late 2012 or early 2013.
AEterna Zentaris Inc. (AEZS)
Price at the time of our scan: $1.61
AEterna Zentaris Inc. is a late-stage oncology drug development company currently investigating potential treatments for various cancers including colorectal, multiple myeloma, endometrial, ovarian, prostate and bladder cancer. Up shortly, the company will be presenting some abstracts and data on perifosine, its novel, oral anticancer Akt inhibitor, at the upcoming American Society of Hematology (ASH) Annual Meeting and Exposition, which will be held December 10 -13, 2011 , at the San Diego Convention Center.
Last week, the company announced that the FDA had granted an Investigational New Drug (IND) approval for the initiation of a Phase 2A trial to assess the safety and efficacy of repeated doses of the Company's ghrelin agonist, AEZS-130 (macimorelin), in patients with cancer cachexia.
Prior to that, AEZS announced that it had signed a licensing agreement with Hikma Pharmaceuticals (HKMPF.PK) concerning the registration and marketing of AEZS lead anticancer compound perifosine. The agreement is for Middle East and North Africa region and AEZS is entitled to receive an upfront payment and certain milestone payments for a total of $2 million, as well as royalties on future net sales in those regions. Currently in Phase III trails, important NDA and MAA filings for Perifosine are planned in 2012 with the Food and Drug Administration. The company also filed its financial results for the quarter ending September 2011, which sounded promising. Revenues had increased on an quarter-over-quarter basis from $5.7 million to $9.5 million.
Those interested in reading through the investors presentation which lists several other catalysts can read it here (pdf).
Complete Genomics, Inc. (GNOM)
Price at the time of our scan $3.64
Complete Genomics, Inc. is a human genome sequencing company that provides complete human genetic data at a lower cost and at a higher throughput. While it is not known by many, the company continues to make progress in expanding its customer base. In the third quarter, they signed orders for approximately 3,400 genomes valued at approximately $17 million. It appears undervalued as their backlog as of September 30, 2011 was approximately $24 million and 4,800 genomes. The company ended the third quarter of 2011 with $105.1 million in cash, cash equivalents and short-term investments.
In the last couple of months, the company launched a Comprehensive Cancer Sequencing Service at the International Congress of Human Genetics (ICHG) and American Society of Human Genetics (ASHG) Annual Meeting in Montréal.
They announced a collaboration aimed at unlocking genetic secrets of healthy aging with Scripps Health and they told investors that they will partner with Inova Health System to sequence the Genomes of 500 Babies and their parents.
Nabi Biopharmaceuticals (NABI)
Price at the time of this scan $1.79
Nabi Biopharmaceuticals failed to deliver at nicotine addiction- one of their core business areas. Last month, the firm announced that thier NicVAX (Nicotine Conjugate Immunotherapeutic) did not meet its primary endpoint in the company's second of two confirmatory Phase III clinical trials.
Raafat Fahim, President and Chief Executive of Nabi Biopharmaceuticals, said that the Board of Directors had retained Piper Jaffray to assist with its exploration of the strategic alternatives available to the company to enhance shareholder value. This includes but is not limited to joint ventures, strategic alliances, recapitalization, the sale or merger of all or part of the company or liquidation. Our goal is to move expeditiously to maximize the value of the company's assets while continuing our effort to reduce our operating expenses.
We're not saying this would be a great investment, in fact, this is now purely a very risky speculative play but it could certainly be worth watch-listing for developments from the sidelines as a day trade. Shares have been flat for some time with very little downside left and could see a boost on news as it relates to the possibilities now being explored by the company.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.