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Jason Napodano, CFA

 
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  • Second Quarter Results Confirm Why We Like Aastrom
     • Yesterday, 10:57 AM ASTM 1 Comment

    Summary

    • Second quarter results confirm a turnaround is underway at Aastrom Biosciences, lead by the recent acquisition of the CTRM business from Sanofi.
    • We believe Aastrom will generate roughly $50 million in revenues in 2015 and $5 million in positive cash flow from the CTRM business.
    • The Phase 2b ixCELL-DCM study continues on plan.
    • We believe Aastrom shares are worth $6.50 based on the revenues and projected cash flow from CTRM and the NPV of the Phase 2 ixmyelocel-T asset in DCM.
  • DARA Q2 Shows Good Progress, Signs Of Upside
     • Thu, Aug. 14 DARA 10 Comments

    Summary

    • Revenues for the Q2-2014 were $0.41 million, up 432% from last year and exceeding expectations for the first time.
    • DARA's revamped and enhanced commercial sales efforts seem to be working. We believe revenues in 2015 can approach $5.0 million.
    • DARA will meet with the U.S. FDA to discuss KRN5500 in the coming months. KRN5500 has been awarded two Orphan Drug designations and Fast Track development status.
    • Securing a development partnership for the initiation of a Phase 2b study with KRN5500 is top-priority after the FDA meeting. The company reports being in-talks with potential partners right now.
    • As of June 30, 2014, DARA held cash of $15.9 million. We believe this is enough to fund operations into 2016 based on a declining burn rate.
  • Depomed Shares Offer 50% Upside Over The Next Six Months
     • Fri, Aug. 8 DEPO 6 Comments

    Summary

    • Depomed Q2 financial results exceed Street expectations based on strong product sales and royalties. The company raised guidance on their second quarter call. Business fundamentals looks strong.
    • We expect the company to win its ANDA patent litigation against Actavis, keeping a generic Gralise off the market until at least 2022.
    • Zipsor product sales are poised to increase meaningfully in 2015 based on loss of formulary coverage for chief competition and increase marketing effort by the company.
    • Depomed exited the second quarter with $224 million in cash, representing roughly 1/3rd of the current market capitalization.
    • Depomed currently trades at less than 3X 2014 revenues. The specialty pharma average is roughly 4.5X revenues. We see the stock as meaningfully under-valued. Our target is $17.50.
  • Why I'm Still Optimistic On LymPro And Amarantus Bio
    Editors' Pick • Wed, Aug. 6 LLY, AMBS 42 Comments

    Summary

    • Last month Amarantus presented data on LymPro, the company's Alzheimer's disease blood test, at two Alzheimer's conferences.
    • Amarantus shares ran up significantly in anticipation of this data, then corrected hard when the market was less than impressed with what was released.
    • We believe the market may have misinterpreted the initial data on LymPro. Additional data, specifically with a newer version of the test, is coming in September 2014.
    • Nothing we have seen over the past month changes our belief that the opportunity for Amarantus with LymPro, specifically under CLIA, remains meaningful.
  • Cipher's Business Continues To Hum Along
     • Thu, Jul. 31 CPHMF Comment!

    Summary

    • Second quarter financial results exceeded our expectations on strong royalties from U.S. sales of Absorica and a surge in revenues on Lipofen.
    • We believe Cipher will become active in the in-licensing and M&A market over the next several months. Cipher exited the second quarter with nearly $40 million in the bank.
    • Cipher is trading at only 10x 2014 EPS, well below the specialty pharmaceutical industry average of 16x. Based on fair-value valuation, we see Cipher worth $12 per share.
  • Great Buying Opportunity In Pozen Shares
     • Wed, Jul. 30 HZNP, POZN 14 Comments

    Summary

    • Pozen shares have sold off significantly over the past month on PDUFA delay and Horizon's loss of some formulary coverage for VIMOVO.
    • We believe PA will be approved in December 2014 and there will be a meaningful run in the shares ahead of approval.
    • Horizon losing formulary coverage for VIMOVO is unfortunate, but the impact to Pozen is minimized by minimum guaranteed payments and an increase in the Ex-U.S. sales royalty rate.
    • We believe Pozen is worth $11.50 per share based on DCF. Assuming PA gets approved in December 2014, Pozen should generate over $1.00 in EPS.
  • MYOS Corp. Tackles Muscles Health
     • Tue, Jul. 22 ABT, MYOS 18 Comments

    Summary

    • MYOS Corporation is a biotherapeutics and bionutrition company focused on improving muscle health and function to combat muscle related diseases.
    • We believe a solid scientific basis differentiates MYOS from other bionutrition companies.
    • Rapidly increasing revenues are helping to provide the necessary capital for research initiatives targeting muscle health.
    • The company just recently listed on the NASDAQ. MYOS has a clean capital structure and strong management.
    • We believe MYOS would make a good investment for those looking to get into the emerging area of muscle health. We see the shares fairly valued at $20.
  • For Avita, 'NICE' Decision In September Could Be Huge
       • Tue, Jul. 15 AVMXY 23 Comments

    Summary

    • The UK's MTAC is expected to meet on July 17th to review data on Avita Medical's ReCell for the treatment of burns and scalds.
    • A positive recommendation to MTAC to NICE would facilitate reimbursement of ReCell in the UK, opening up a huge market and setting a precedent for the rest of Europe.
    • ReCell is a simple to use and effective product for the treatment of a number of skin defects. Sales, however, are limited by lack of reimbursement.
    • A decision by NICE is expected in September 2014.
  • Immune Pharma: A Top-Pick Based On Pipeline And Valuation
       • Wed, Jul. 9 DEPO, XNPT, IMNP 10 Comments

    Summary

    • Amiket™ is a Phase 3 ready neuropathic pain product that has been granted Fast Track status by the U.S. FDA for Chemotherapy Induced Peripheral Neuropathy (CIPN).
    • The drug has been tested in over 1700 patients in various Phase 1/2 trials for different types of neuropathic pain.
    • The drug has also received Orphan Drug Designation for treatment of post-herpetic neuralgia (PHN) in the U.S. We anticipate an EU Orphan filing in the next few months.
    • Amiket™ has the potential to reach approximately $850 million in sales as a treatment for various types of neuropathic pain, which we discuss below.
  • Pozen Resubmits PA NDA, PDUFA In Two Months?
       • Thu, Jul. 3 POZN 9 Comments

    Summary

    • We believe Pozen represents a compelling valuation and catalyst play at this level.
    • Despite the minor CRL issued by the FDA in April, the application is now back under review and we continue to believe PA is approved in 2014.
    • Once PA is approved, we think Pozen becomes cash flow positive on an operating basis through a combination of growing royalties on both PA and Vimovo.
    • Pozen is also sitting on enough cash that the company may look to do another cash-distribution to shareholders in 2015.
    • We see the shares fairly-valued at $12.50.
  • Update On Dario Launch And Progress
       • Tue, Jul. 1 DRIO 63 Comments

    Summary

    • Dario has been undertaking a "soft launch" of the Dario device and App since March 2014. Initial user feedback has been very positive.
    • The company is working on securing new distribution agreements and insurance reimbursement over the past year. Recent wins in Italy and the UK are encouraging.
    • LabStyle's market capitalization is a puny $27 million, but we believe the company is well-positioned to become a major player in the $12 billion SMBG market.
    • We believe the shares a meaningfully undervalued at today's level and expect significant news flow on the EU launch and U.S. approval will drive the shares higher.
  • 2 Biotechs Race To Treat Movement Disorders
       • Fri, Jun. 27 ASPX, NBIX 19 Comments

    Summary

    • Tetrabenazine is a 60-year old drug used to treat involuntary movement disorders. The drug is highly effective, but use is limited by poor tolerability.
    • Auspex Pharma and Neurocrine Bio are racing to develop improved forms of tetrabenazine, with each company going after a different lead indication.
    • Auspex shares look attractively valued base on the potential for SD-809. Similarly, Neurocrine shares offer significant upside to investors based on development of valbenazine (and elagolix).
  • Protalex PRTX-100 - A Potential Blockbuster For RA
       • Wed, Jun. 18 PRTX 7 Comments

    Summary

    • PRTX-100 shown to be safe and well tolerated in five weekly doses up to 12.0 micrograms/kg (μg/kg).
    • A majority of PRTX-100 treated patients developed anti-drug antibodies, but these did not correlate with clearance of the drug or preclude a CDAI response.
    • Treatment with PRTX-100 lead to a higher response rate for ACR, DAS28-CRP, and CDAI measures at days 29, 57, 85, and 113 vs. placebo.
  • DARA Snags Second Orphan Indication For KRN5500
       • Tue, Jun. 17 DARA 3 Comments

    Summary

    • The FDA granted KRN5500 a second Orphan Drug Designation, this time for the treatment of multiple myeloma.
    • In our article below we summarize some publications highlighting data from KRN5500 in both neuropathy and multiple myeloma.
    • We believe DARA's commercial business is worth $15 to $20 million. KRN5500 adds another $10 to $15 million in value within our model.
    • Investors are getting DARA's commercial business at fair-value at today's price. We believe they are getting KRN5500 for free. If a deal can be struck, we see sizable upside.
  • Time To Buy Aastrom Biosciences
       • Tue, Jun. 17 SNY, ASTM 9 Comments

    Summary

    • We believe ixmyelocel-T for ischemic DCM is worth $30 million in value, valued based on a probability-adjusted NPV analysis.
    • Management has laid out an aggressive yet comprehensive plan to turn around the newly acquired CTRM business.
    • If our projections hold and the company can generate $5+ million in positive cash flow in 2015, then CTRM could be worth another $25 to $50 million in value.
    • The current market capitalization is only $27 million, making the stock attractive for share accumulation in our view.
  • BrainStorm Tackles Neurodegenerative Diseases With Novel Cell Therapy
       • Thu, Jun. 12 CUR, BCLI 24 Comments

    Summary

    • BrainStorm Cell Therapeutics, Inc. (BCLI) is a biotechnology company developing adult stem cell therapies for a range of neurodegenerative diseases.
    • The company has a proprietary process called NurOwn™ that harvests and propagates autologous Mesenchymal Stem Cells (MSC) and then induces their differentiation into neurotrophic factor (NTF) secreting cells.
    • Brainstorm recently initiated a multi-center, randomized, double blind, placebo controlled trial Phase 2 clinical trial in the U.S. for ALS.
    • While limited, we are intrigued by the clinical data seen thus far. We believe the shares are worth at least $0.50, which is a handsome 67% return from today.
  • ICo's IDEAL Trial Fails, What's Left For Investors?
       • Tue, Jun. 10 IMNP, ICOTF 21 Comments

    Summary

    • Top-line results of the much anticipated Phase 2 iDEAL trial with iCo-007 failed to show separation from the active controls.
    • Full data is expected in the fourth quarter 2014. The company is hoping to show positive subset analysis in VEGF-refractory patients.
    • Residual valuation for iCo-008 and iCo-009 lead us to conclude the stock is worth $0.15 per share.
    • At this stage, risk and volatility remain high.
  • Investment In Nuvo Research Looks Like An Easy Call
       • Fri, Jun. 6 MNK, NRIFF 2 Comments

    Summary

    • Mallinckrodt Nuvo’s licensee for both Pennsaid® 1.5% and Pennsaid 2%, is in the process of converting Pennsaid 1.5% patients and prescribers to Pennsaid® 2%.
    • Most recent IMS data shows Pennsaid® 2% prescriptions exceeded Pennsaid 1.5%. For 2014, we believe Pennsaid 2% sales could approach $29 million.
    • We continue to believe Nuvo has a very strong case in their litigation with Mallinckrodt, and that a likely outcome will result in significant cash inflow to Nuvo.
    • We believe Nuvo Research is significantly undervalued at today's price and offers upside of 200% based on our analysis.
  • Cynapsus Offers Potential Big Returns
    Thu, May. 29 CYNAF 90 Comments

    Summary

    • Investor misconceptions about Cynapsus have led to an incredible buying opportunity.
    • We believe the company's APL-130277 is a potential $700 million product.
    • Cynapsus recently raised $25 million in cash, enough to fund operations through the NDA filing.
    • Our DCF valuation pegs the shares at $2.25-2.50 right now, with upside to $4.50 on a take-out in 2016.
  • Neuralstem NSI-189 Abstract Teases At Potential Greatness
       • Wed, May. 28 CUR 78 Comments

    Summary

    • Phase 1b data will be presented over the course of 2 medical conferences in June. Comments in the abstract lead us to believe the data are strong.
    • Study investigators noted the data showed a clinically meaningful reduction in depressive and cognitive symptoms that persisted well beyond dosing.
    • Neuralstem's goal is to initiate a Phase 2 study later in 2014.
    • We believe Neuralstem would like to partner NSI-189 with a large pharma company in 2015. This move could unlock significant value for shareholders.
  • GlassesOff: Ready For Prime Time
       • Sat, May. 24 GLSO 7 Comments

    Summary

    • We believe the "Soft Launch" of the GlassesOff App was successful, and are looking forward to seeing the full marketing of the App commence shortly.
    • We believe the upside to the App is enormous and the revenue potential over the next few quarters is significant.
    • With a growing user base and through a combination of social media and celebrity endorsements, we believe the company can achieve cash flow positive operations in 2015.
  • Expecting Big Revenue Ramp At ULURU In The Coming Quarters
       • Fri, May. 23 ULUR 20 Comments

    Summary

    • ULURU is expected to launch Altrazeal in 10 countries in the Q2. We believe this will generate revenue of approximately $400k, up 4x from the Q1.
    • We are expecting Altrazeal to launch in another 30 countries in the Q3 and Q4, generating revenue of approximately $1.2 million.
    • Operating burn in the Q1 was only $160k. We believe the company is rapidly approaching cash flow positive operations.
    • ULURU has undertaken several initiatives to improve the balance sheet, which now shows over $1.0 million in cash and $3.1 million in positive shareholder equity.
    • Given the improvements in the balance sheet and the expected ramp in revenues over the next few quarters, we believe the shares are headed significantly higher by year end.
  • An In-Depth Look At Kiacta Yields 200% Upside On Bellus Health
       • Wed, May. 21 BLUSF 7 Comments

    Summary

    • Bellus Health, Inc. (BLU.TO) is a company focused on the development of treatments for rare diseases.
    • The lead product candidate is Kiacta™, a drug candidate currently in a confirmatory Phase III trial for the treatment of AA Amyloidosis.
    • Bellus has an additional clinical stage compound in Shigamab™, a monoclonal antibody treatment for hemolytic uremic syndrome caused by Shiga-like toxin producing E. coli.
    • The company exited the first quarter 2014 with approximately CAD$14 million, which should enable Bellus to finance its operations beyond the end of the Kiacta™ Phase III trial.
    • We feel confident that the Phase III trial for Kiacta™ will be successful. We are initiating coverage with a Buy rating and $2.50 price target.
  • Deal To Acquire Sanofi's CTRM Could Double Shares Of Aastrom Biosciences
       • Tue, May. 20 SNY, ASTM 26 Comments

    Summary

    • We believe acquiring the Cell Therapy & Regenerative Medicine business from Sanofi was an incredible deal for Aastrom.
    • Aastrom will immediately being generating revenues to the tune of $44 million per year, with strong potential to drive operating profits over the near-term.
    • Based on our back-of-the-envelope calculations, Aastrom could see $5-10 million in operating profits from CTRM in 2015.
    • Terms will be announced in the next 2-3 weeks. We believe this could double the shares.
  • Why I'm Early, But Bullish On Cytomedix
       • Tue, May. 20 CMXI 20 Comments

    Summary

    • Q1 2014 financial results were nothing to get excited about. We believe it may take 1-2 more quarters before real progress is demonstrated.
    • Despite being early on our call, we are confident that Cytomedix has a bright future based on sizable revenues opportunities for both Angel and AutoloGel.
    • Cytomedix' valuation is extremely attractive. We believe the shares are worth 3x the current value. We expect significant progress to be demonstrated by year end 2014.
  • DARA Bio - Waiting For Progress
       • Wed, May. 14 DARA 18 Comments

    Summary

    • Q1 financials came in below expectations, impacted by wholesaler inventory workdown and lower-than-expected prescription fill rate at pharmacies.
    • DARA has put a new program in place to increase fill rate at the pharmacies and we expect wholesaler stocking in the Q2.
    • DARA's new sales force is now in place and gaining traction. We expect meaningfully better sales figured in the coming quarters.
    • However, DARA's near-term focus on raising cash (yet again) keeps us on the side-lines. We believe more progress must be demonstrated before we would put new cash to work.
  • Zalicus To Be Acquired By Epirus Biopharma
       • Sat, May. 10 EPRS 17 Comments

    Summary

    • Deal should close this summer.
    • The combined company looks to have an attractive valuation.
    • Over the near-term, we expect Zalicus to focus on asset sales to raise cash prior to the close of the deal.
  • Pozen, Inc.: Buy This Biotech For Growth And Income
       • Sat, May. 10 HZNP, POZN 21 Comments

    Summary

    • Vimovo Sales at Horizon Pharma lead to significant EPS upside in Q1.
    • Pozen should be cash flow positive by the end of the year, even without PA approval. We think this results in more cash distributions / dividends in 2015.
    • Pozen's stock is extremely attractive based on DCF, P/E, and DDM valuation models.
    • We expect PA approval in the second half of 2014.
  • Review Of Depomed's First Quarter Results - Mind The GAAP
    Fri, May. 9 MNK, DEPO 1 Comment

    Summary

    • Depomed posted somewhat disappointing Q1 product sales, and that lead to a significant sell-off in the shares on Friday, May 9th.
    • We think many of the issues that lead to weak Q1 sales were one-time events and expect a snap-back in products sales in the Q2.
    • Depomed financial results are complex because of the differences between GAAP and pro-forma accounting. We attempt to explain the true results below.
    • We continue to believe the core business remains solid and that the shares are attractively valued based on industry-average valuation measures.
    • We see $15 as a reasonable target over the near-term.
  • Acadia Remains On Track With Pimavanserin Program
    Wed, May. 7 ACAD 42 Comments

    Summary

    • NDA for pimavanserin in PDP expected to be filed late 2014. This would put a PDUFA late 2015.
    • Phase 2 program in ADP, a significant value-driver in our opinion, continues on plan, with data expected late 2015.
    • Our DCF model pegs fair-value between $25-30 per share, making the stock attractive for long-term investors at today's price of $17.
  • Nuvo Research Offers Low-Risk With Big Upside
       • Tue, May. 6 MNK, NRIFF 4 Comments

    Summary

    • Nuvo Research, Inc. is a specialty pharmaceutical company with a diverse portfolio of marketed products (Pennsaid®, Pennsaid® 2%, Synera®, Pliaglis®).
    • Beside the marketed products, the company also has an immunotherapy treatment (WF10) for allergic rhinitis in Phase 2 testing.
    • We feel that Nuvo has tremendous upside. We believe investor should ‘Buy’ the shares today, and our target is $7.50 per share.
  • AntriaBio Looks To Corner The Long-Acting Insulin Market
       • Tue, May. 6 FLML, LLY, NVO Comment!

    Summary

    • Long-acting insulin is currently dominated by Sanofi's Lantus. Thanks to once daily dosing, Lantus sales totaled nearly $8 billion in 2013.
    • AntriaBio is taking a unique approach to developing the world's first once weekly insulin therapy.
    • Moving from once daily to once weekly dosing has the potential to capture 30-40% of the $10 billion long-acting insulin market.
    • We believe AntriaBio shares are attractive today based on the potential for AB101.