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SA Editor Douglas W. House
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Independent trader/analyst for over 12 years.
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  • MusclePharm's Stock Buyback: Yet Another Example Of Bad Management

    This morning an announcement from MusclePharm (OTCQB:MSLP) came over the wire announcing a $5M share repurchase program. Here is how the CEO describes it:

    "We believe repurchasing our shares is a prudent use of our cash and believe this initiative is consistent with the goal of maximizing shareholder value," said Brad Pyatt, President and CEO. "The new share repurchase program demonstrates our continued confidence in MusclePharm's strategy to generate long-term profitable growth and strong cash flow, and reflects our commitment to delivering value to our shareholders."

    Are you kidding me? I do not recall ever seeing a $70M market cap bulletin board company do this. Here is a firm supposedly in its early growth phase and management apparently believes that there are no better uses for the money than buying back shares. How about signing up more celebrity endorsers? How about bringing powder manufacturing in-house? How about an advertising campaign? How about extending its sponsorships (cross-fit championships, extreme sports, triathlons, etc.)? How about an acquisition?

    How in the world can investors trust a company that does something like this? Folks, this is yet another example of why you should stay on the sidelines with one. The only reason that this buyback is taking place is to goose the share price for insiders so that some or most can exit profitably. Never a dull moment with this one....

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: MSLP
    Dec 10 10:23 AM | Link | 5 Comments
  • Encouraging News About ONVO's Liver Assay

    Organovo (ONVO) issued a press release today stating that it now has data demonstrating a shelf life of 40 days for its liver assay. This is a significant increase from its earlier metric of ~5.6 days and it represents a significant improvement in its marketability to drug and biotech firms. Customers will now have the capability to perform toxicity studies over a timeframe that more closely aligns with reality. Liver toxicity in response to a novel drug, if it occurs, typically presents over a 1-2 month period.

    ONVO plans to launch the liver assay in late 2014 so, ideally, we'll see some formal collaborations closed between now and then.

    Here's the PR:

    Organovo Achieves One Month Performance, Drug Responsiveness for 3D Bioprinted Liver Tissues

    10/22/2013

    SAN DIEGO, Oct. 22, 2013 /PRNewswire/ -- Organovo Holdings, Inc. (NYSE MKT: ONVO) ("Organovo"), a creator and manufacturer of functional, three-dimensional human tissues for medical research and therapeutic applications, today provided a summary of the data presented at the 3rd Annual Cell Therapy Bioprocessing Conference in Bethesda, MD International Bioprocessing Conference on October 22, 2013.

    Building on data first presented at the Experimental Biology conference in April 2013, the company presented data demonstrating retention of key liver functions in bioprinted tissues for up to 40 days, longer than one month. Additional data presented at the Cell Therapy Bioprocessing Conference demonstrated that Organovo's 3D liver tissues exhibit dose-dependent responses to acetaminophen, a known liver toxicant, and that the toxic effects can be assessed using both standard screening assays and histopathological assessment of the treated tissue. The data demonstrate that Organovo's 3D Liver tissue can potentially have value in assessing toxicology problems in human liver over a long period, including sub-acute and multiple dose effects.

    "This additional functional validation of Organovo's 3D Liver continues the demonstration of strong performance of these tissues," said Keith Murphy, Organovo's chief executive officer. "In April we were able to show that liver function was retained in our 3D Liver for over five days, and we have now demonstrated that our tissues perform consistently for at least 40 days, a significant improvement over the average 48 hour performance of 2D cultures. The stable, liver-specific functionality of 3D Liver is consistent with our observations that other NovoGen bioprinted tissues become fully cellular, steady state, living tissues that persist over time. Furthermore, the fact that these tissues demonstrate similar activity to native liver when presented with a known challenge drug is an encouraging indication of utility in drug development."

    The demonstration of extended function in Organovo's 3D liver tissues was achieved faster than Organovo's projected timeline of achieving these results by the end of 2013 and highlights progress in the development of a 3D Human Liver product, which is on track for launch in 2014. The company believes that a multi-cellular bioprinted 3D Liver system with extended life span in culture can provide superior results to current human cellular models and offer significant value to pharmaceutical researchers by enabling assessment of both biochemical and tissue responses.

    Oct 22 8:50 PM | Link | Comment!
  • HART Share Distribution Announced

    HBIO announced today that HART shares will be distributed to HBIO shareholders of record effective at the close of business October 21 with book-entry distribution occurring November 1. HBIO shareholders of record will receive one share of HART for every four shares of HBIO owned. The value of fractional shares will be paid in cash on a pro rata basis after the aggregate sale of such shares by the transfer agent.

    HART shares will trade on a "when issued" public market on or about October 21 under the ticker symbol "HART". This means that the underwriter may accept orders from institutional clients before regular trading commences on November 4. These orders will establish the initial price of HART when regular trading commences.

    As I stated in my article, if you want to own HART shares now, then you should purchase HBIO shares promptly because the dividend play run-up has already begun (HBIO is up 5%+ this morning). After October 21, the price should come back down due to post-record date selling. Once regular trading of HART begins, you should be prepared for volatility as profit takers, gamblers and regenerative medicine bulls jockey for supremacy.

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in HBIO over the next 72 hours.

    Additional disclosure: I had a long position in HBIO when I wrote my article, but was chased out when the price dropped 7%.

    Oct 16 12:02 PM | Link | Comment!
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