The Maxim Group LLC is a leading investment banking, securities and investment management firm. The Firm provides an array of financial services including: investment banking, equity research, private wealth management, structured products, global institutional equity, and fixed-income and derivative sales to a diverse range of corporate clients, institutional investors, and high net worth individuals.
Maxim has years of successful analysis and capital investment -- Let's take a look at some of their recent buy calls and investments to see how they are doing since issuing the calls and making their investment.
StemCells Inc. (STEM). Price at time of Maxim coverage: $1.65. Current price: $2.12
On August 23rd The Maxim Group LLC initiated independent research coverage on the Company with a "Buy" recommendation. The report was authored by Jason Kolbert, Senior Biotechnology Analyst at Maxim Group.
StemCells Inc. engages in the research, development, and commercialization of stem cell therapeutics, and related tools and technologies for academia and industry. It develops cell-based therapeutics for the central nervous system and liver. The company's product candidate HuCNS-SC cells has completed a Phase I clinical trial for the treatment of infantile and late infantile neuronal ceroid lipofuscinosis, a neurodegenerative disorder of the brain; and completed a Phase I clinical trial for the treatment of Pelizeaus-Merzbacher disease, a fatal myelination disorder in the brain. It also engages in developing HuCNS-SC cells, which are in Phase I/II clinical trial for the treatment of chronic spinal cord injury; and HuCNS-SC cells that are in Phase I/II clinical trial for the treatment of dry age-related macular degeneration.
Shares of StemCells rallied on Thursday as the company has reported it has been making progress on its clinical trials related to spinal cord therapy. The stock rose 9.84% closing at $2.12 on very high volume coming in at approximately four times the recent average. It has made significant progress from the $0.59/share which is the 52 week low.
The stock seems to be running into resistance at its current price range, and while the news today was very positive, I think traders and investors are concerned with the possibility that the company might engage in a secondary offering to raise additional capital.
On September 6th of this year, Ron Leuty reported for The San Francisco Business Times:
StemCells Inc. and three other research projects won a total of $63 million in funding Wednesday night from California's stem cell research funding agency.
But the $20 million loan earmarked by the California Institute for Regenerative Medicine for StemCells -- the Newark company's second award in two months, comes with a catch. StemCells must satisfy CIRM staff "of the company's ability to access the capital needed to fund the project," StemCells President and CEO Martin McGlynn said in a statement Sept. 10.
Total Cash (mrq):
Total Cash Per Share (mrq):
Total Debt (mrq):
Total Debt/Equity (mrq):
Current Ratio (mrq):
Book Value Per Share (mrq):
Cash Flow Statement
Operating Cash Flow (NYSE:TTM):
Levered Free Cash Flow :
With the company burning nearly $20M a year, I think it's a good bet we will see a capital raise at some point. I think for investors to consider a long term bet on STEM, a "wait and see" attitude might be the best course of action with this company.
Maxim analysts believe that Pluristem is a well-positioned company with a unique product and a strong SWOT (strengths, weaknesses, opportunities, and threats) product analysis that it expects to progress solidly over the next year as a global phase II trial begins in intermittent claudication (IC).
The firm notes that in June 2011, Pluristem signed a license with United Therapeutics (UTHR), $49.87, Not Rated) for the development of PLX cells in pulmonary disorders. The license agreement was initiated at $7M and includes an additional $37.5M in regulatory milestones, as well as other attractive elements. Maxim believes this could be one of many therapeutically focused deals to come.
On Thursday September 13th, 2012, the company announced that it has priced a firm commitment underwritten public offering of 8,000,000 units, with each unit consisting of one share of the company's common stock and one warrant to purchase $0.35 of a share of the company's common stock, at a purchase price of $4.00 per unit for an aggregate gross offering amount of $32 million.
I first starting writing about Pluristem in July of this year when the stock was trading around the $3 dollar level. Since that time, the stock has hit a 52 week high of $5 dollars a share on Aug 17, 2012.
At first, I was not wild about the company's secondary offering because I felt it would be better served going for a Phase II pivotal compassionate use trial to treat a-plastic bone marrow. Phase II pivotal trials with compassionate use cost less money and provide a possible faster track to FDA approval. This tends to give these type of companies more exposure with Philantrophist institutional investors, much like we have seen with Ariad Pharma's (ARIA) stock price take off with its pivotal phase II trial for Ponatinib, an investigational pan BCR-ABL inhibitor for patients with hematologic cancers, including chronic myeloid leukemia and Philadelphia positive acute lymphoblastic leukemia.
Pluristem now has roughly $70M in cash on hand after closing its secondary offering. In my opinion, the company now has to show it will spend the newly raised money wisely, and not spend it on lavish executive salaries, wasting investors' money much like Zalicus Inc. (ZLCS) has done in my opinion over the last year or so.
On September 10th of this year, Zalicus reported that its Phase 2b trial showed that patients treated with Synavive achieved a statistically significant improvement in signs and symptoms of moderate to severe RA compared to placebo, measured by Disease Activity Score (DAS28-CRP). After 12 weeks of treatment, the company missed the key secondary endpoint of demonstrating a meaningful clinical benefit, assessed by DAS28-CRP, compared to prednisolone 2.7mg, the active glucocorticoid component in Synavive. As a result of this failure, the company ended its clinical trials for Synavive.
It is only natural for investors to question why Zalicus engaged in a $75M mixed securities shelf after the company raised $15M (March of this year) in advance of Z944 multiple dose trial, and an additional $15M (completed by 1 August) in advance of Z160's first of two phase II clinical trials.
I think Pluristem is in a different league than Zalicus, but I feel investors need to use caution and consider all possibilities -- both the pros and cons.
On September 20th, the Maxim Group initiated coverage of Threshold Pharmaceuticals Inc. (THLD) with a Buy rating and a price target of $10 per share. Price at time of coverage: $7.42. Current price: $7.37
Maxim Group commented,
THLD's lead drug, TH-302, is currently in a phase III trial as a first-line treatment with doxorubicin for advanced soft tissue sarcoma (NYSEMKT:STS) and at the end of a phase IIb trial as a first-line therapy with gemcitabine for pancreatic cancer. Both cancers are difficult-to-treat malignancies with limited chemotherapies on the market. Based on earlier trial results, we believe there is a good chance for THLD to deliver significant improvement of overall survival (OS) in expanded patient populations.
On April 11th of this year, Threshold announced it has earned a $20 million milestone payment from Merck KGaA (MRK), for achieving a statistically significant progression free survival benefit in its 214-patient randomized controlled Phase 2 clinical trial ("404 trial"). The trial evaluating the efficacy and safety of two doses of TH-302, a hypoxia-targeted drug, in combination with gemcitabine compared to gemcitabine alone in patients with first-line advanced pancreatic cancer. The observed safety profile was consistent with previous studies of TH-302. These results were recently presented at the American Association of Cancer Research 2012 Annual Meeting in Chicago.
Pancreatic cancer is one of the most deadliest and untreatable cancers in the world. TH-302's success with this cancer alone would place its value in the billions in my opinion. Threshold could be on the 'threshold' of something huge here, notwithstanding TH-302's orphan drug status, EU approval, and the company's discovery into Hypoxia and how it relates to cancer. Much more detail about TH-302 can be found by clicking the link above and in another Seeking Alpha article which I think is a well written article.
Threshold is highly speculative stock, but from its current price of $7.37 a share, the upside potential is hard to ignore if the company is successful in its phase clinical trials of TH-302.
Maxim is also involved in capital investment in the following 2 companies:
Medgenics (MDGN) Price when Maxim first invested: under $6. Current price: $11.14.
Medgenics is a protein-therapeutics medical technology company engaging in the research and development of products in the field of biotechnology. Founded in San Francisco, the company develops the Biopump Platform technology to provide sustained protein therapy for the treatment of various chronic diseases and conditions, including anemia, hepatitis, hemophilia, multiple sclerosis, arthritis, pediatric growth hormone deficiency, obesity, diabetes, and other chronic diseases or conditions. Its Biopump Platform technology converts a sliver of the patient's own dermal skin tissue into a protein-producing Biopump to produce and deliver therapeutic proteins.
The company filed for Orphan Drug designation on April 23rd this year, and on June 20th, the company announced it received approval from the FDA for the orphan drug designation for Infradure to treat Hepatitis D, a serious liver disease caused by the hepatitis D RNA virus.
3 potential lead products address markets >$16B/yr in anemia, hepatitis, and hemophilia.
- Epodure Anemia/EPO - Completing Phase I/II in Israel, cleared for Phase IIa trial in dialysis patients in Israel commencing in Q2; IND cleared for Phase IIb in USA.
- Infradure: Hepatitis/Interferon alpha - awaiting clearance of Phase I/II trials in Israel to treat hepatitis-C in Q2; filed for Orphan Drug Designation in hepatitis D.
- Hemodure: Hemophilia/FVIII - being developed as a sustained Factor VIII therapy for the prophylactic treatment of hemophilia.
- Reimbursement: aiming at replacement value of current therapy.
- Clinically demonstrated: one treatment can relieve anemia for 6-36 months.
- US FDA Clearance for Phase IIb Trial in dialysis patients with anemia.
- IP protection: 30+ issued and 70+ pending patents.
On August 30th Analyst Sharon di Stefano called two upcoming trials of Medgenics' Infraddure Biopump for treating hepatitis C as "a leap forward for viral medicine no less important than the first studies in HIV decades ago."And with the recent failure of a Bristol-Myers (BMY) treatment in clinical trials, the timing is good. I agree with Sharon, and the time might be right for Medgenics, notwithstanding the novelty of the Biopump platform.
The Biopump method is certainly a novel approach, which differs from other smaller cap HCV companies and their clinical trial treatments:
BioCryst Pharmaceuticals, Inc. (BCRX)
BioCryst designs, optimizes, and develops novel small-molecule pharmaceuticals that block key enzymes involved in infectious diseases, inflammatory diseases, and cancer. It uses structure-based drug design, which incorporates the disciplines of biology, crystallography, medicinal chemistry, and computer modeling to discover and develop small molecule pharmaceuticals. The company has three novel late-stage compounds in development, which include peramivir, a neuraminidase inhibitor for the treatment of influenza, which is in Phase III clinical trial stage; BCX4208, a Phase II clinical trial stage purine nucleoside phosphorylase (PNP) inhibitor for the treatment of gout; and forodesine, an orally-available PNP inhibitor for cancer, which is in Phase II clinical trial stage. Its pre-clinical compounds include BCX4161, an oral prophylactic drug for hereditary angioedema; and BCX5191, a novel adenine nucleoside analog targeting viral RNA polymerase for the treatment of hepatitis C.
Inovio Pharmaceuticals, Inc. (INO)
Inovio engages in the discovery, development, and delivery of DNA vaccines with a focus on cancers and infectious diseases. The company's SynCon technology enables the design of DNA-based vaccines capable of providing cross-protection against new, unmatched strains of pathogens, such as influenza. Its electroporation DNA delivery technology uses controlled electrical pulses to enhance cellular DNA vaccine uptake. The company's clinical programs include human papillomavirus/cervical cancer (therapeutic), avian influenza (preventive), prostate cancer (therapeutic), leukemia (therapeutic), and hepatitis C virus and human immunodeficiency virus vaccines.
Both of the above small cap companies are attempting an oral tablet solution to HCV. As Sharon di Stefano mentions in her note, some companies lately have been experiencing failures via this form of treatment. This certainly does not mean the above 2 companies will see failures in their early clinical stage trials for HCV, but it is something to consider when looking at the Medgenics novel approach for different forms of Hepatitis.
As a side note, INO also has several other potential upcoming catalysts that traders might want to look into to decide whether or not the company makes for a good catalyst trade.
On August 29th, Medgencis announced that Israel's Ministry of Health (NYSE:MOH) has approved two Phase I/II clinical trials to assess the safety and efficacy of INFRADURE™ in patients with hepatitis C. One study will evaluate previously untreated patients with genotypes 1 and 3, and the other will study genotype 1 patients who have relapsed after initially responding to prior treatments.
Medgenics is in the very early stages of this technology being confirmed to work, and is at least 2 to 3 years away from potentially hitting the market -- making the company an extremely risky speculative bet, but a good one in my opinion.
The riskiest part of an investment in Medgenics is another much larger pharma getting an oral tablet treatment to market first -- why? Patient compliance -- The last thing any patient would want is a pump attached to their body for any extended amount of time. However, if this treatment can truly be proven to help treat, even actually cure forms of Hepatitis, then from my point of view, the pump would certainly be a much-welcomed necessary evil.
BillMyParents, Inc. (BMPI) Price when Maxim first invested: under $0.40. Current price: $0.74.
BillMyParents provides payments solutions to teens, young adults, and their parents. It offers SpendSmart card, which provides a way for teens and their parents to learn how to spend smart. The company was formerly known as Socialwise, Inc. and changed its name to BillMyParents, Inc. in June 2011 to reflect its business and lead product. Price when Maxim first came in: Under $0.40 cents. Current price: $0.75 cents.
Company's flagship product: The SpendSmart Card.
The SpendSmart card is good for birthdays, special occasions, or for parents with teens living in different households. The card is not a pre-paid debit card, but a totally monitored and parent controlled spending solution for their children -- parents can instantly add and remove money on the card via a web interface.
Features of the SpendSmart card:
- Strict Spending Limits and Easy Monitoring.
- No Credit Checks and No Credit Risks.
- Parents can Instantly Lock and Unlock the Card.
- Safer Than Cash with Lost Card Protection.
Just recently, on September 25th Acceleron Equity Research reissued their BUY rating on shares of BillMyparents Inc. and increased their price target to $4/share.
The article quoting the analyst released by EquityBrief goes on to remark:
"BMPI shares more than doubled from just under $.40 in July to a 52 week high late last month. The 52 week trading range for the stock is between $0.21 and $0.90. Recent reports indicate that the firm may be getting set to launch an aggressive celebrity marketing campaign as they aim to help push card membership and firm revenue growth exponentially."
The trading volume for BMPI has been picking up a lot lately, which might indicate the EquityBrief report could very well be correct. I have been hearing the same thing from my sources that Equity research remarks about BMPI -- that a major marketing campaign might be on the way with well-known celebrities leading the charge.
However, I would caution investors/traders that sources can be wrong, but when I see a kind of confirmation from the article mentioned above, I tend to give it a lot more credit than just a single sourced rumor. Usually EquityBrief is right on the money, so this bodes well in my opinion. When I consider the stock doubled for no apparent reason in the last 2 months, its does appear to me that these reports we are hearing might have some meat.
BMPI is trying to engage in a somewhat unique attempt at reaching a certain demographic -- if successful, the current price of around $0.75 could definitely be around the area the Acceleron analyst thinks -- $4.00 in time.
The Maxim Group LLC has a solid track record over the years in making good calls and capital investments. I feel investors should consider Maxim's calls and investments for a nice beginning point for their due diligence and for some solid ideas when it comes to companies for investment consideration.
*Data sourced from Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Family member is long BMPI.OB
Disclaimer: This article is intended for informational and entertainment use only, and should not be construed as professional investment advice. They are my opinions only. Trading stocks is risky -- always be sure to know and understand your risk tolerance. You can incur substantial financial losses in any trade or investment. Always do your own due diligence before buying and selling any stock, and/or consult with a licensed financial adviser.