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I am part of a small investment group that combines significant business experience in product marketing and communications with legal analysis and interpretation. My partners and I combine for over 50 years of experience in these fields.
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  • PLUG, FCEL, HYSR, CHTP, IGXT: Fuel Cell Technology & More

    A quick recap of some of the stocks we pointed out a while back and some additional thoughts:

    PLUG Power (PLUG): Everyone is talking about this company now so we don't have a lot more to add. We originally said this was a stock that could jump considerably at any time (that turns out to have been an understatement) and that we were planning to trade around a core position throughout the year. We think that remains a great option. If you bought PLUG when we first mentioned it you are looking at gains in the 65% range at today's prices. There is still room for growth here so staying patient is not a bad move. We note an upcoming investor call scheduled for 3/13/2014 which should be very informative. We also understand that news of an additional deal is expected near term. We have also been following Fuel Cell (FCEL) and think that it too has great potential and may even have a little further to run in the very near term than PLUG.

    On a related note there is a tiny company out in Santa Barbara, Hypersolar Inc. (HYSR), that we think bears keeping a close eye on and that seems to have caught some investors' attention over the past many days. As the market turns to the rapid adoption of Hydrogen powered fuel for fuel cell technology this little company, in a partnership with University of California at Santa Barbara (UCSB), is working on what just might be the holy grail in this space: a technology to produce renewable hydrogen using sunlight and water in a process akin to photosynthesis. Hypersolar seems to have had more than one breakthrough in its efforts thus far and at a market cap of just $10M there is little doubt that considerable interest exists on the part of numerous companies operating or investing in this space in what Hypersolar is working on. We have opened up a first position in HYSR but note that it is a penny stock in the truest sense of the word, currently trading at about .04. Normally these type of companies scare us but we like their cornerstone relationship with UCSB and the technology is clearly quite promising. We applaud the fact that they had enough foresight to have been working on this for years - the timing could not be better. Definitely a stock to watch this year as the hydrogen fuel cell power space expands.

    Chelsea Therapeutics (CHTP) - Like most investors here, we are anxiously awaiting news of either a partnership or perhaps even a buyout. The stock is currently trading at levels we saw just prior to approval so frankly we don't see a lot of downside here. Instead, we think an upside move is quite probable.

    IntelGenx (IGXT) - This stock has been very strong in the aftermath of what was a reasonably positive CRL from the FDA on their Migraine film. News came Monday that they had submitted a response to that CRL so we now await the FDA and the determination of the classification of that response (two or six months). Recently we also learned of the positive bioeqivalence results of IGXT's pilot study on their Erectile Dysfunction film. As we have said before we think this will be an outstanding year for IntelGenx with the potential for exponential growth.

    As always do your own due diligence and/or consult with a trusted financial adviser before investing in these or any other securities.

    Disclosure: I am long PLUG, FCEL, HYSR, CHTP, IGXT.

    Mar 06 9:07 AM | Link | Comment!
  • CHTP: Chelsea Therapeutics Mid-Day Update

    The other day we detailed our thoughts regarding Chelsea Therapeutics and its NDA drug candidate, Northera. Since then we have seen shares spike as much as 25% on steadily increasing volume and interest. We initially thought we would see a lower range leading into the FDA decision but now can see a path to a pre-approval price in $6-6.50 range barring any surprises. We think that the market, and more importantly some larger institutions, has been doing the same calculus we have. A 16-1 panel vote + 2nd time around + Orphan drug designation + potential for a near term partner = I don't want to risk being out of this right now. This is not to say that there is zero downside, however for reasons too numerous to list the most logical downside is that of a delay due to labeling. I said before that I believe the FDA had plenty of time to consider labeling for Northera the last time around (and there is back and forth from the FDA which may be researched on that point). This article (and the paragraph below) from the Global Genes Project which explains the FDA's decision to allow the 306 Study was highly persuasive to us as we think it might be to all interested parties:

    "In February, the FDA changed its position, agreeing to use the 306B study as part of a new submission for approval. Specifically, the FDA suggested short term benefits from 306B could serve as a basis of approval if durability questions could be answered in a post-approval follow up study. That news prompted Chelsea to refile for Northera's approval this summer, resulting in an expected February 14, 2014 FDA decision date. It also prompted Chelsea to address the durability issue with the launch of a new study that enrolled its first patient in early December."

    It remains difficult to project a post-approval number but I am leaning toward the higher end of our previous commentary on the subject. As for what we could see on any delay I think a move back to the mid-4's is possible. As of this writing the share price for CHTP is $5.34 on over 6 million shares traded.

    As always please do your own due diligence. Do not rely on us or any other source when making investment decisions. Instead consult with a trusted financial adviser.

    Disclosure: I am long CHTP.

    Tags: CHTP
    Feb 11 1:49 PM | Link | Comment!
  • CHTP: Why Chelsea Therapeutics May Be Set For Exponential Growth

    First an update. Last week we mentioned two new investments. For those holding shares in either company it seems pretty easy to see positive growth ahead (see blog entry-recent investments: PLUG, IGXT) but let's take a look.

    IntelGenx (OTCQX:IGXT) announced that it received a Complete Response Letter (CRL) Tuesday morning on its Oral Migraine Film and yet with apparently minor changes needed in order to ultimately achieve approval (importantly no safety issues or need for further tests), there is much to feel good about. I mentioned the downside consensus on IGXT was around .50 - pre-FDA decision - but the market Tuesday and Wednesday seemed to agree that IGXT has a bright near-term future with the stock closing each day at higher levels as compared to those just preceding the run up to the FDA decision. When we first wrote about IGXT the stock had closed around .90 the previous session and ultimately reached a high of $1.18 Monday. I won't go into it further but I encourage people to read this referenced press release following the CRL. In short, it is our view that IGXT could easily see a double or triple from the current share price (low .80's) at some point in 2014. If you have reasonably patient money this may be a good one.

    PLUG Power (PLUG), having seen some outstanding share price appreciation in the past several months, is still so far from being what might be considered a mature valuation given ramping orders that we see significant share price acceleration in 2014 and beyond (though at times there is likely to be volatility in the shares). We underscore the research note from Cowen & Co. Tuesday reaffirming their "outperform rating" after two of their analysts visited Plug Power's factory last week. PLUG CEO Andy Marsh's interview with the Wall Street Analyst from February 4th provides a nice overview on the company's history as well as its future prospects. In any case this stock is one to watch all year long in our view. We are aware that there is a tendency to be backward looking in this equity as it wasn't so long ago that PLUG's very future was in question. I think the most salient aspect of Andy's interview, in addition to clear expansion and improvements in their product offerings, is the fact that they realized that their customers required turnkey systems and that needing five clothiers to dress the baby made adoption far less appealing. PLUG has clearly addressed this issue and that is why I think their sales are exploding.

    So on to our newest investment, Chelsea Therapeutics (Nasdaq: CHTP)...

    There are many factors that make Chelsea a compelling investment. Their NDA candidate, Northera, has orphan drug status (important in terms of grants, tax incentives and exclusive rights for 7 years) and the potential to fill a long unmet need. The market potential for the drug is at least several hundred million annually and the fact that Northera received a 16-1 advisory committee (adcom) vote less than a month ago make this extremely viable. A comprehensive thesis may be found here which we recommend anyone considering an investment in CHTP read. We note too an interview that Adam Feuerstein from The Street conducted with the CEO of Chelsea in the aftermath of the recent adcom vote. For our part we see a decision on or before February 14, 2014 as we feel the FDA is quite familiar with Northera and had plenty of time to consider labeling the last time this drug was up for review just two short years ago. We see post marketing studies being mandated to better determine long term efficacy (and Chelsea has already begun registering patients in 17-week study 401) but not necessarily restrictive labeling guidelines.

    Whither PPS: Everyone has a guess as to how the market will price an approval of Northera and to be sure it is in large part just a guess. In advance of the upcoming PDUFA date a week from tomorrow, we see CHTP in the $5.20-5.50 range. Provided an approval (which we see as likely though never a sure thing) a valuation of a minimum of three times projected annual sales of $300-350M puts the market cap at about a billion dollars or some $12+ per share. We see an approval generating in the neighborhood of $8-$9 even with minor labeling restrictions. A positive 401 Study moves this into the mid-teens in our view, maybe more.

    The moral case: Neurogenic Orthostatic Hypotension (NOH) stems from such corrosive and heart-wrenching conditions as Parkinson's Disease, Multiple System Atrophy and Pure Autonomic Failure. If any of you have had friends or family members with these conditions (and I count myself among you as my father has Parkinson's) you understand that they steal quality of life first and then life itself. It is also often very difficult for family members who may live with and care for them. I don't consider myself someone who bets with their heart and I'm not doing that here but approval of Northera for the tens of thousands that may well benefit from it would be extremely gratifying.

    Disclaimer: Please do your own due diligence and/or consult with a trusted financial adviser before making an investment in these or any other security.

    Disclosure: I am long CHTP, PLUG, IGXT.

    Tags: CHTP, Biotech, Energy
    Feb 06 9:35 AM | Link | 7 Comments
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