Seeking Alpha

Smith On Stocks'  Instablog

Smith On Stocks
Send Message
Follow @SmithOnStocks on Twitter for more updates (http://twitter.com/#SmithOnStocks Please read this section carefully for some important disclosures. Who Am I? My name is Larry Smith. My career was spent on Wall Street as a biotechnology and pharmaceuticals analyst and also as Director of... More
My company:
SmithOnStocks.com
My blog:
Smith On Stocks
View Smith On Stocks' Instablogs on:
  • Derma Sciences: Highlights Of The June 17th Analysts' Meeting

    Price Target Thinking

    In my initiation report of January 31, 2014, I argued for a 2018 price target of $20 to $27 under the assumption that DSC-127, their new drug for wound healing, fails in phase 3 and development is abandoned. In this event, the valuation of the Company would be based on its attractive and rapidly growing line of Advanced Wound Care Products, which I am projecting to reach sales of $92 million this year.

    I further suggested that with success in the phase 3 trial that the stock could sell at $31 to $45 in 2018. Topline results for the trial should be released in early 2016. The reason that I focus on this somewhat distant year of 2018 is that by then we will know if DSC-127 is approved and commercially successful (or has failed) and the price will reflect whichever of these two outcomes emerges.

    Another issue to consider is that DSCI would make an excellent acquisition for a larger company trying to establish a strong position in the treatment of diabetic foot ulcers, a large and rapidly growing market. There are few if any peer companies and none may be as attractive as DSCI.

    Purpose of Report

    I attended the Derma Sciences (NASDAQ:DSCI) analyst day on June 17 and this report gives you my impressions of the meeting. This company has limited Wall Street analyst coverage and is not well understood. These are factors that I find attractive when I pick up coverage. I initiated coverage of the Company with a buy on January 27th, 2014. That report and follow-up pieces can be found on my website at this link

    smithonstocks.com/company-reports/?compa...

    My fundamental interest in the stock is importantly based on their growing portfolio of advanced wound healing products that are sold along with a broad line of wound dressings. The Company is focused on the treatment of difficult to heal wounds with a particular focus on diabetic foot ulcers. The epidemic in obesity has led to an epidemic in diabetes has led to an epidemic in diabetic foot ulcers. The pharmaceutical industry has paid a lot of attention to the treatment of diabetes and increasingly obesity, but has largely ignored diabetic foot ulcers, doubtless because numerous attempts at drug development have failed. DSCI is emerging as a leader in the treatment of diabetic foot ulcers.

    The Full Report

    The full note is available on my website and is free to all who are interested.

    Disclosure: The author is long DSCI.

    Tags: DSCI
    Jun 18 10:57 AM | Link | Comment!
  • Northwest Biotherapeutics: The Perfect Storm May Be Brewing For Short Sellers

    I wrote on June 12th that Northwest Biotherapeutics (NASDAQ:NWBO) stockholders may be seeing a changing in the tide of investor opinion. The release of an update on interim data on the phase 1 trial of DCVax Direct has had a major impact as the stock has increased 20% in the week since that release. Today, the Company announced that it has been added to the Russell Global and Russell 2000 Indexes which are benchmarks for an estimated $5.2 trillion of assets. This usually (always) results in significant buying for stocks added to the index.

    Short sellers are extremely exposed to this stock with nearly 6.5 million shares sold short and I have heard that may be an additional 2.0 million of naked short sales. The strong reaction to positive news on DCVax Direct and the addition to the Russell indexes have to be a major cause of concern and could lead to short covering and potentially a short squeeze.

    More ominous clouds on the horizon for short sellers are a number of positive catalysts that could potentially arise through the balance of 2014. I discuss these in a blog on my website. This is free content and be reached with the following link.

    smithonstocks.com/northwest-biotherapeut.../

    Disclosure: The author is long NWBO.

    Tags: NWBO
    Jun 16 11:32 AM | Link | 2 Comments
  • Northwest Biotherapeutics: The Investment Tide May Be Turning Positive

    I have just written a new report that goes over recent news on the company in regard to DCVax Direct and DCVax-L and then goes into the issues that have affected the stock this year and upcoming events that will determine the stock price in the balance of the year. NWBO may have turned a corner and gained the high ground against an intense shorting program directed at the stock. I continue with my buy on the stock. This report is free for all interested investors.

    Since the beginning of the year, Northwest Biotherapeutics (NASDAQ:NWBO) has been the subject of significant shorting activity. The battle of the shorts against the longs can be seen by looking at the rise in stock sold short that is provided by NASDAQ and the price action. On December 31, 2013 there were 3.4 million shares that were short and the price closed at $3.77. By February 28, 2014 the short interest was 4.6 million and the price closed at $7.09. By May 30, 2014 the short interest 6.7 million and the stock closed at $5.98. The closing price yesterday, June 11, was $6.41.

    The shorts seem to have had a significant impact on the stock since March. The stock price is flat despite the very positive announcement of the approval of DCVax-L in Germany for the treatment of all gliomas (brain tumor) under the German hospital exemption early access program. This approval for five years goes far beyond the disease target for the phase 3 trial that is glioblastoma multiforme, the most aggressive form of brain cancer. DCVax-L is also eligible for reimbursement in Germany comparable to drugs that have gone through the traditional approval process. This was the first such approval for any systemic drug under this program since it was implemented in 2011. This is a really big deal. In addition to the German approval of DCVax-L, NWBO has released some very interesting early data on DCVax Direct that is also exciting.

    Disclosure: The author is long NWBO.

    Tags: NWBO
    Jun 12 9:15 AM | Link | 2 Comments
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.