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  • The Next Market Move And 6 Swing Trade Requirements For Success
    Why the market is stuck in a 7 month sideways pattern:

    This past week we continued with the market volatility both on the upside and the downside. We have maintained a 7 month base pattern in the SP 500 that stalled out so far at the 150% Fibonacci pivot at 2130 area recently. Markets as a whole tend to move based on human behavioral patterns and whether the collective chooses to interpret the gauntlet of news as bullish or bearish.

    In a Bear cycle, news is interpreted with a negative bias whether its great, good, bad, or ugly. In a bull cycle, bad news is good, good news is great, and great news is even greater. We are in a Bull cycle, so the overwhelming sentiment will always be to interpret economics and or other news as bullish. This continues until such time that the Bull cycle reverts to a Bear cycle. Those usually last anywhere from 9-18 months historically. So when we mention a 150% Fibonacci pivot in the SP 500, we refer to the current Bullish up cycle (Or Elliott Wave) as it relates to a prior upcycle in terms of amplitude. Certain areas like 150% and 161% are common bull sentiment stall out areas, where there is flux of bullish and bearish interpretations to news. This is why the market is in a 7 month base pattern, there is a major tug of war. Our longstanding 2181 SP 500 target that we gave out last November remains on track because we knew it was a likely MINIMUM upside wave target based on prior wave structures during this Bull market.

    We think eventually this 7 month base pattern could resolve to the upside once again, with a common Fibonacci cluster occurring at 2525 sometime in 2016. The market therefore remains great for swing traders during this sideways pattern and its where SRP has been dominating with our returns. Just in the past 10 days or so we closed out interim position swings for 20%, 23%, 18%, 13%, 9.4% in our 5 most recently closed out positions. We are doing this while the SP 500 remains in a sideways pattern. The way we do it is complex but essentially we focus most of our time and money on the strong sectors while shunning the weak or "value" sectors. We have stuck with Biotech, Medical, Technology for quiet some time, even during the corrections this year. In addition, we have branched recently into Financials and Molecular Diagnostics as two more examples. The SRP investment committee is always on the lookout for the up and coming sectors that are gaining strength and for the individual stocks within those sectors that have consolidated and look poised to break north with a combination of strong fundamentals and near term catalysts both.

    Being contrarians to some extent, we want to note that the NYSE short interest has been climbing for several weeks getting to near multi month highs. We also have the percentage of Bullish Advisors at multi-month lows now only 45.5%, where we were at 58% at the highs not long ago in 2015. Along with other indicators we review, it keeps us more on the Bull side of the fence rather than the Bearish side at this time.

    With that said, the SRP portfolio which consists of 80% swing trades and 20% long term positions has managed a very conservative 208% return vs 29% for the SP 500 index since our 9/1/13 inception. We do not compound any of our gains, and we assume each position dollar amount is the same as when we started almost two years ago, even though our portfolio returns would have taken us from $60,000 to north of $180,000 during that time frame. This is inclusive of all losers and winners as well.

    Our swing trade record over last 16 weeks (Click to Review)

    With swing trades, we focus on several elements for success:

    1. Proper entry ranges observed, which means a maximum entry point for all positions (No chasing)

    2. Proper monitoring of upside projections within market dynamics and forcing ourselves to take partial profits on certain percentage moves. Many traders forget to take profits when they are feeling giddy and proud of themselves, and yet this is the best time to do so. Sell when everyone is on the message boards congratulating themselves, and buy when everyone is bored with a good story, a post IPO Base pattern, 8, 13 fibonacci day and week patterns etc.

    3. Not falling in love with a story, and certainly not if its a swing position. Follow your initial intent.

    4. Using a "stop near close" methodology as opposed to intra-day hard stops which most traders use and will generally reduce your performance dramatically due to "noise" and computer trading algo's.

    5. Setting the "stop near close" points at strategic areas that are not too tight nor too loose for the stock condition. Setting them too tight will cause a lot more losses, and too loose big losses. We use proprietary signals and technical indicators to pinpoint where that stop near close level is. In probably 80% of cases we have seen our swing trades come down to or below the stop near close points, only to later in the day reverse higher and keep us in the position. We find this methodology has led us to massive outperformance against nearly all other swing trading methods.

    6. We first focus on fundamentals, and then we look at chart patterns… not the other way around like many do.

    So those are just a few of our thoughts this weekend. We now turn to a small list of potential swing trade candidates that are making the initial grade for our preferred list. We share these with traders and members every weekend and often pull from them for actual SRP swing alert positions.

    13 Stocks of interest or potential further gains or breakouts worthy of more study:CBM; PAYC; GTN; OUTR; SYNA; NSR; BSFT; HZNP;BZUN; SNCR;HAWK;INCR;ESNT

    If you are not yet an SRP member, read all about our work and our track record at our website:

    www.stockreversalspremium.com

    Jun 21 1:12 PM | Link | Comment!
  • ICEL- An Under The Radar Cell Sciences-Regenerative Medicine Value Play

    Notes: This research report was going to go out to our SRP members on 3/23, but the Biotech sector took a hit and we held off. Well, they got bought out by Fuji Film for $16.50 as announced 3/30/15 in pre-market. Either way, we wanted to sample our research work and not lose all the time we put into this report... stockreversalspremium.com is our paying subscribers premium service and stockreversals.com is our free opt in service.

    ICEL- Cellular Dynamics International $8.03 as of 3/23/15 Close

    All time post IPO high $24 2013; Post IPO Low: $4.72 2015

    Shares Outstanding 16 Million; Current Cash: 34 million; Market Cap: 125 million

    IPO Date: 7/25/13- $12.00 3.8 Million shares sold, about 25% of the total shares outstanding.

    Underwriters were JP Morgan and Cowen and Company. Also, we note the esteemed Piper Jaffray firm was recently participating on the last conference call, which is a good omen. Also, a Goldman Sachs executive joined the board in the 4th quarter of 2014 which we find of interest.

    • With over 100 employees and more than 800 patents, CDI manufactures human iPS cell-derived cell types with the quality, quantity, and purity required for basic life science and drug discovery research.
    • Their founder, James A. Thomson, VMD, Ph.D., is considered the pioneer and inventor of modern day Stem Cell research and technology.
    • The company is emerging as a leader in Regenerative Medicine with recent 57% year over year revenue growth.
    • The Pritzker family (Hyatt Hotels) controls 20% of the shares; Wasaatch Advisors own 10%; Founder owns 6%.
    • Insiders took up 25% of the original shares in the IPO offering
    • No insiders have sold a single share since the IPO
    • Insiders basis in the stock prior to the IPO was $10.46 per share, lower than the current price

    Company Summary: CDI (NASDAQ:ICEL)

    We develop and manufacture fully functioning human cells in industrial quantities to precise specifications. Our proprietary iCell Operating System (iCell O/S) includes true human cells in multiple cell types (iCell products), human induced pluripotent stem cells (iPSCs) and custom iPSCs and iCell products (MyCell products).

    Our iCell O/S products provide standardized, easy-to-use, cost-effective access to the human cell, the smallest fully functioning operating unit of human biology. Customers use our iCell O/S products, among other purposes, for drug discovery and screening; to test the safety and efficacy of their small molecule and biologic drug candidates; for stem cell banking; and in researching cellular therapeutics.

    Its important we think to understand the background of this company and specifically Dr. Thomson:

    Dr. Thomson's derivation of human ES cells was featured as Science Magazine's "Scientific Breakthrough of the year" in 1999, and work from Dr. Thomson's laboratory has been cited in TIME Magazine's "Top 10 Discoveries of the Year" on three separate occasions, including the isolation of human ES cells (1998, #1), the isolation of human iPS cells (2007, #1) and the collaborative mapping of the human epigenome (2009, #2). He was featured on the cover of TIME Magazine's "America's Best in Science and Medicine" in 2001, and in 2007 was named one of TIME Magazine's "100 Most Influential People in the World." Dr. Thomson has published over 150 scientific, peer-reviewed papers and has been an inventor on 30 issued patents.

    Since the IPO, this BioScience company has managed to fly under investors radars in a big way. After initially doubling from the IPO on a lot of initial excitement, the stock has drifted down for about 15 months until very recently when then trend we believe has reversed for the long term. With a market cap of only about 125 million we could call this a micro cap company and the smallest market cap in our long term SRP stock universe. That also means the upside may be the best as well.

    Company description of business:

    Our iCell product line currently includes four different cell types: cardiomyocytes, neurons, hepatocytes and endothelial cells. We are actively developing an additional seven different cell types, and we expect to use our platform to continue to expand the iCell product line. iCell products are a consumable designed to be used once and then reordered. We manufacture our iCell products from our iPSCs. An iPSC is a cell that has the ability both to replicate indefinitely and to be transformed into any cell type in the human body. We develop and manufacture our iPSCs from ordinary blood or skin using proprietary techniques that expand upon those pioneered by our founder Dr. James A. Thomson. Once we produce an iPSC, it becomes a renewable source of starting material for our iCell products and stem cell banks.

    The fact is the controversial method of using human embryos to create stem cells was holding stem cell research adoption back. Isolating the cells typically destroys the embryo, and the research sparked fierce debates over bioethics. In many countries, including the United States, political decisions limited the work scientists could do with hES cells. However, Dr. Thomson was among a few scientists to make all of that change in 2007.

    In 2006, Japanese researchers reported that they had found a possible way around the practical and ethical questions surrounding hES cells. By introducing just four genes into mouse tail cells growing in a lab dish, they could produce cells that looked and acted very much like ES cells. They called these cells induced pluripotent stem (iPS) cells. This development was recognized as the first runner-up in Science's 2007 Breakthrough of the Year issue, that same team and Dr. Thomson, the founder of ICEL, extended the reprogramming technique to human cells. That result opened the floodgates to new research.

    First published in Science in late 2007 in an article titled "Induced Pluripotent Stem Cell Lines Derived from Human Somatic Cells", the results garnered international attention for potentially ending the ethical controversy surrounding human embryonic stem cell research. Science later featured induced pluripotent stem cells in its "Scientific Breakthrough of the Year" article, 2008. The invention in 2007 though of stem cells derived from human tissue has since then quickly paved the way for massive innovation by ICEL and a tremendous growth in their customer base. Using iPSCs sidesteps any ethical concerns that have been raised over the years in using human embryonic cells as well as decreases the risk of an immune system response to attack implanted cells.

    Cumulatively, through its licenses from Japanese Scientist Dr. Shinya Yamanaka (he won the Nobel Prize in Medicine or Physiology in 2012 for his work on iPSCs) and intellectual property, CDI uses iPSCs to make human heart cells, brain cells, blood vessel cells and liver cells, as well as offering its iPSC skillset tailored to a client's needs. Yamanaka has ties to CDI (ICEL) as it's often called, as a member of the scientific advisory board of iPS Academia Japan, Inc. IPS was originally established to manage the patents and technology of Yamanaka's work, and is the distributor of several of Cellular Dynamics' products, including iCell Neurons, iCell Cardiomyocytes and iCell Endothelial Cells. In 2010, Cellular Dynamics was the first foreign company to be granted rights to use Yamanaka's iPSC patent portfolio.

    These human cells produced by CDI are used for in vitro and in vivo applications for drug discovery, toxicity testing, chemical safety, stem cell banking and other therapeutic research. In a highly technical and niche market, CDI has emerged as a global leader with the ability to generate iPSCs with specific disease-related genes that are invaluable to researchers across a broad array of indications.

    ICEL is some 7 plus years from these early stunning stem cell innovations and yet still trading $4 below the IPO price of $12 in 2013. Concerns and misconception over human embryo based stem cells weighed the stock down, most of that is due to lack of understanding and education though. Pluripotent Stem Cells are derived from human tissue, and not from Embryos, and hence the breakthrough and IPO.

    This is all about to change if we are right due to recent business developments and wider spread adoption of ICEL's manufacturing of cells for various indications, testing, trials and more and the kicker being the introduction and growing adoption recently of what we call Hepatocytes, which are emerging as cell usage for Liver related studies and diseases in various trials as well as testing (Malaria). If these emerge as the standard for testing, then ICEL stock will blast off at some point we think.

    Business Developments:

    Hepatocytes for liver study: Possible emerging standard for testing and also liver disease studies

    So what is starting to permeate the literature and starting to happen in pharma is they are seeing that our cells can be used to predict the therapeutic benefit of compounds. Data in the past has shown that you can show the toxicity profile, that's where the cardiomyocytes and FDA comes in but the upside is when the cells are useful in finding new therapies, they can be used in high throughput screening for that. And I'd just encourage everybody to watch what happens with our hepatocytes over the next year or two, because I think that's where we're going to see it first.- CEO on recent conference call

    Much better than cells from Cadavors and other current options, Hepatocytes can mimic actual human liver cells in vivo. iCell Hepatocytes are virally infectible. They support the entire lifecycle of hepatitis B and C. This makes them a unique model system for use in high throughput screening of drug libraries, particularly for their effectiveness in treating hepatitis B and C and other infections of the liver. Liver is the most difficult organ in the body for scientists to come up with solutions for disease, not to mention the punishment the liver takes during chemotherapy. This is therefore one of the most studied organs in the human body and therefore the likely demand for the use of ICEL's Hepatocytes could balloon. The opportunities for iCell Hepatocytes product continues to grow. Q4 hepatocyte revenue grew to $904,000 from $390,000 in Q4 2013, an increase of 132%.

    Malaria and other tests: Hepatocyte application out of MIT

    In February of this year in fact, ICEL announced they were able to develop Malaria in a dish using Hepatocytes to help test for Malaria in a study done out of M.I.T. This shows the expandibility of the ICEL platform. This is yet another example of utility of this product.

    Super Donor Lines

    Recently, ICEL also announced the manufacturing of initial "Super Donor " stem cell lines. "Cell therapy offers the promise for the repair and replacement of this damage and for the regeneration of healthy tissue. CDI is delighted to have produced two HLA superdonor iPSC lines that match 19% of the U.S. population, and over time we plan to build a bank that will match 95% of the U.S. population. We expect this bank to prove to be an excellent resource for CDI and others to develop HLA matched cell therapies."- Bob Palay, CEO February 2015

    Importantly, ICEL was also awarded a U.S. Patent in August 2014 covering automated production of all human pluripotent stem cells which covers research, cell therapy, and cell banking. Automation is essential to building large banks of stem cells and to the eventual banking of iPSCs for therapeutic use.

    Blood Cord Developments:

    First, in January 2015, we announced a research collaboration with Cord Blood Registry, CBR. CBR has stored over half a million cord blood samples for potential therapeutic use. Under the collaboration, CDI will demonstrate our capability to reprogram umbilical cord tissue into induced pluripotent stem cells. If successful, we believe this will open the door to working with cord blood banks and make CDI's iPSC products more widely available. CEO- Bob Palay 4th quarter conference call

    Clinical work:

    CDI has also seen steady progress in their work with academic collaborators in moving themselves toward the clinic. Efforts continue with academics on pre-IND animal studies of their DopaNeurons and cardiomyocytes for use in the treatment of Parkinson's disease and myocardial infarction heart attack.

    Macular Degeneration: October 2014: Massive market opportunity

    AMD is a common eye condition and a leading cause of vision loss among people age 50 and older. It causes damage to the macula, a small spot near the center of the retina and the part of the eye needed for sharp, central vision, which lets us see objects that are straight ahead. In some people, AMD advances so slowly that vision loss does not occur for a long time. In others, the disease progresses faster and may lead to a loss of vision in one or both eyes. As AMD progresses, a blurred area near the center of vision is a common symptom. Over time, the blurred area may grow larger or you may develop blank spots in your central vision. Objects also may not appear to be as bright as they used to be.- https://www.nei.nih.gov/health/maculardegen/armd_facts

    The company announced that the National Eye Institute (NASDAQ:NEI), a division of the National Institutes of Health (NIH), awarded the company a $1.2 million contract to manufacture clinically compatible induced pluripotent stem cells (iPSCs) and iPSC-derived human retinal pigment epithelial (RPE) cells. These cells will be manufactured from individuals suffering from dry age-related macular degeneration (NASDAQ:AMD) and will be used for investigational new drug (NYSE:IND) enabling studies. Once the IND is approved, the same procedures will be used to generate clinical-grade iPSC-derived RPE tissue for transplantation into AMD patients. This process, known as autologous cellular therapy, would be the first of its kind in the U.S. This alone is exciting as Regeneron has a 50 Billion market cap and has grown dramatically since getting FDA approval for an AMD indication.

    Revenues and Customer Growth:

    Regenerative Medicine is not just the future, but the present. Having industrialized iPSCs, CDI is unlocking an exciting potential product matrix, every cell type in the human body by every person on the planet. Over a 10 Billion dollar opportunity for ICEL alone according to company data. The first is the $3.5 billion market for the in-vitro use of cells in drug discovery, toxicity testing and chemical safety. The second market is the $1.3 billion market for stem cell banking. The third market is the $5 billion for in-vivo cell based therapeutics.

    CDI Customers have grown year over year from 150 to 200 in 2014 per a recent conference call. Revenues grew 40% year over year in 2014 vs. 2013 and accelerated in the 4th quarter to 57% growth. Q4 2014 revenue was $6.6 million versus $4.2 million the previous year. In addition, the CEO Bob Palay in the most recent earnings conference call hinted at new initiatives out of Japan. There is the potential for AMD (macular degeneration) applications, Cell Banking, Super Donors, Liver studies, Malaria and other tests, Parkinsons, Heart Failure, and the list continues. At 125 million market cap, SRP research thinks patient investors should be rewarded.

    Even returning to the IPO level of $12 would produce a 50% gain from here alone. Other companies in the regeneration Bioscience sector include INO, SGMO, BLUE, FCSC, BCLI etc. all of which are carrying much larger market caps than ICEL. In addition, all of them are presenting at an industry Conference on March 25th in NYC this week.

    The charts indicate the downtrend is over and a new uptrend is likely underway. We would expect the stock to trade up to the $12-$13 area this year from $8 levels for a 50-62% upside. The company has not issued a single share since the 2013 IPO which is quite amazing at this time, they have been very good stewards of shareholders cash.

    .

    Mar 30 8:05 AM | Link | Comment!
  • Trevena- An Emerging Threat To Morphine, Oxycodone And Heart Failure Indications!

    TRVN-Trevena Inc. $5.74 close of 3/11/15

    This is a research report by Stockreversals.com. You can opt in free at www.stockreversals.com or join our SRP Premium service at www.stockreversalspremium.com and get these reports as we send them out. Recent winners include CLDN, QURE, BLUE, CHRS, CNCE, BLUE, KITE and the list continues. We delve deep into undiscovered plays and hang on and add on dips.

    (click to enlarge)

    39 Million shares outstanding- 225 Million Market Cap

    9.25 Million issued at $7 in February 2014 IPO; 11 Million issued at $4 in December 2014 raise;

    Corporate Presentation (PDF February 2015)

    Pre IPO insiders bought 2.1 Million of the 9 million shares in the $7 offering, something we always look for.

    Shareholders: Actavis- 18% (ACT); RA Capital- 3 Million shares (Peter Kolchinsky, Harvard Grad with PH.D in Virology, one of the top Healthcare Hedge funds hands down since 2001); Several venture funds including Alta Partners, New Enterprise Associates, Polaris Ventures etc.

    Pre-IPO Shareholders stock basis ahead of the $7 IPO was actually $7.27 per share for 16.5 million pre-IPO shares. This happened because at the time of the IPO last year, the Biotechs and the market were under pressure. The IPO was postponed in November 2013 and then finally went off a few months later. So you can actually buy into this stock well below what insiders basis is... a very rare situation. We look to find PRE-IPO shareholders who have a reasonable basis in the stock and not $1 or $2 for example.

    Using its proprietary product platform, Trevena is developing four biased ligand product candidates it has identified - TRV027 to treat acute heart failure (Phase 2b), TRV130 to treat moderate to severe acute pain intravenously (Phase 2b), TRV734 to treat moderate to severe acute and chronic pain orally (Phase 1), and TRV250 for treatment-refractory migraine and other CNS disorders (Preclinical). The patient population for these indications is well over 30 million in total. Compare this to CLDN which is 350,000-525,000 for example.

    Trevena's drug discovery and development approach is to identify and develop therapeutics targeting established GPCRs while offering a differentiated and superior therapeutic profile compared to currently available GPCR-targeted drugs. More simply, Trevena is going after alternatives to the standard of care pain killers Morphine and Oxycodone, and Fentanyl. So far they have had impressive early stage results. This is a highly lucrative "pain management" post surgical area of medicine. In addition a phase 2b trial for Acute Heart Failure is progressing very well in partnership with Actavis.

    Their Founder, Robert Lefkowitz M.D., won the Nobel Prize in 2012 for Chemistry relating to his work in the GPCR field of science. The company has licensed the technology from Duke University where Dr. Lefkowitz is a professor in addition to his scientific exploits.

    "We believe that we are the first company to progress a GPCR biased ligand into clinical trials. The members of our executive management team have held senior positions at leading pharmaceutical and biotechnology companies and possess substantial experience across the spectrum of drug discovery, development and commercialization."

    Now you may need to read this passage a few times, but its worth your time:

    "Currently available therapeutics that target GPCRs, or GPCR ligands, are typically not signal specific, and therefore either inhibit both the G protein and b -arrestin pathways (an antagonist ligand) or activate both pathways (an agonist ligand). This lack of signal specificity often results in a suboptimal therapeutic profile for these drugs because in many cases one of the pathways is associated with a beneficial therapeutic effect and the other is associated with an undesirable side effect (see Figure 1). We use our proprietary Advanced Biased Ligand Explorer, or ABLE, product platform to identify "biased" ligands, which are compounds that activate one of the two signaling pathways of the GPCR and inhibit the other (see Figure 2). This signaling specificity is the basis for our drug discovery and development approach, which is to identify and develop therapeutics targeting established GPCRs while offering a differentiated and superior therapeutic profile compared to currently available GPCR-targeted drugs."

    Essentially the science here is TRVN operates a traffic light as it were, so it can turn on and off signals whereas current standard of care products such as Morphine and Oxicodone can't. This means better and more efficient efficacy, less side effects, and lower dosage requirements, less costs for hospitals etc.

    Lets look at some images to help out:

    This is what current Ligands have a problem with:

    (click to enlarge)

    Now this is what TRVN Nobel Prize Winning chemistry does that is different:

    Pipeline: (Heart Failure, Post Op pain, Acute and Chronic Pain, Parkinsons, Migraines and more)

    Trevena is taking this trade secret and proprietary technology and developing several initial targets in the clinical trials. Post Operative Pain (Intravenous), Acute and Chronic Pain (Oral), Parkinsons Disease, Depression, Pain (Oral), and Migraines (Oral). All of those are wholly owned by TRVN and as yet have not been licensed or partnered. They are also partnered with Forest Labs for Acute Heart Failure (Intravenous), and that is advancing rapidly with 620 patients currently enrolled in a phase 2b.

    (click to enlarge)

    Acute Heart Failure-With Forest Laboratories, now owned by Actavis after 2/2014 acquisition covering much of the costs. AHF indications include portions of some 20 million patients living with heart failure in the US and Europe. Actavis option: potential $65M exercise after delivery of data Additional potential milestones of $365M and 10-20% royalties. Top line data due out 4th quarter 2015.

    TRV027 as a first-line, intravenous, or IV, treatment in combination with standard diuretic therapy for AHF patients. We expect data from this trial to be available by the end of the fourth quarter of 2015. If subsequent Phase 3 development is successful and TRV027 is approved by regulatory authorities, TRVN believes TRV027 would be used as a first-line in-hospital AHF treatment. Also, TRV027 could improve AHF symptoms, shorten length of hospital stay in the short term, and potentially lower readmission rates and mortality rates in the long term.

    A recent UPDATE on this phase2b Trial was just released this week. "Trevena and Actavis have agreed to weight future enrollment toward the most promising dose and to increase target enrollment in the study from 500 patients to 620 patients. Actavis, which holds an exclusive option to license TRV027, will fully fund this expansion of the study via a $10 million payment to Trevena."

    Unlike current therapies, TRV027 has shown beneficial effects on the three key organ systems affected in heart failure, the blood vessels, heart and kidneys in our preclinical studies and Phase 1b and 2a clinical trials. In combination with standard diuretics, we believe these effects may translate into improvements in symptoms and outcomes such as hospital readmission rates, length of hospital stay and mortality rates if TRV027 successfully completes Phase 3 development and is approved by regulatory authorities. Safety studies have also been extremely impressive.

    Its important to note that Actavis (Forest prior to acquisition) has been granted an exclusive option to license TRV027, which may be exercised at any time before TRVN delivers Phase 2b clinical trial results to Forest and during a specified period of time thereafter. If activated, Activis will have an exclusive worldwide license to develop and commercialize TRV027 and specified related compounds. They would be responsible for subsequent development, regulatory approval and commercialization of TRV027 at their expense. TRVN could potentially receive up to $430 million in the aggregate, including an upfront option exercise fee of $65 million and milestone payments depending upon the achievement of future development and commercial milestones. TRVN could also receive tiered royalties between 10% and 20% on net sales of licensed products worldwide, with the royalty rates on net sales of licensed products in the United States being somewhat higher than the royalty rates on net sales of licensed products outside the United States. A U.S. patent directed to TRV027 has issued and is expected to expire no earlier than 2031.

    TRV130- Post Operative Pain indication:

    November 2014 phase 2a met endpoints and progressed to phase 2b (click to read PR)

    January 2015 Phase 2b begins (click to read PR) with top line due mid 2015 then on to phase 3 which is also setting up parallel with phase 2b work...Phase 3 expected to start in January 2016

    TRV130 is an intravenous G protein biased ligand that targets the mu opioid receptor. Trevena is developing TRV130 for the treatment of moderate to severe acute pain where intravenous therapy is preferred, with a clinical development focus in acute postoperative pain. 47 million scripts were written in 2013 for post op pain.

    In studies so far a patient can take a lower dosage of TRV130 vs Morphine and get equal or better effect with less side effects. At a slightly lower dosage, peak patient pain relief was dramatically better than Morphine. (Source: Page 14 Slide Investor presentation). Higher magnitude, faster onset, and better response rate vs. standard of care so far.

    "We believe that the management of moderate to severe, acute postoperative pain represents the largest opportunity for an intravenously administered µ-opioid therapy like TRV130. Accordingly, we plan to focus our clinical trials on the treatment of surgical patients. We believe avoiding the side effects typically associated with the activation of the µ-opioid receptor will position TRV130, if approved, to more effectively treat postoperative pain than currently available µ-opioid therapies, thereby expediting postoperative recovery and hospital discharge." (From IPO prospectus)

    Despite the development and adoption of guidelines for the management of postoperative pain and the extensive use of current treatments, significant unmet need remains. In a survey of 250 surgical patients in the United States, over 70% of the patients undergoing in-hospital procedures reported pain in the postoperative period before hospital discharge, of which almost 50% experienced severe or extreme pain. The dosing of the most effective class of analgesics currently available, m -opioid agonists, is limited by severe side effects such as respiratory depression, nausea and vomiting, constipation and postoperative ileus, which is a condition that most commonly occurs after surgery involving interruption of movement of the intestines in which the bowel enters spasm and stops passing food and waste. TRV130 showed superior analgesia compared to a high dose of morphine, while causing less respiratory depression, nausea and vomiting in a phase 1 trial.

    TRV734: orally administered follow on to TRV130 compound for the treatment of moderate to severe acute and chronic pain

    Opioid drug sales across the United States, Europe and Japan were almost $11 billion in 2012. Opioids are used to treat moderate to severe acute and chronic pain. However, these drugs are limited in their safety and tolerability by constipation, nausea and vomiting, and respiratory depression.

    TRV 734 is a small molecule G protein biased ligand targeting the µ-opioid receptor. "TRV734 takes advantage of a well-established mechanism of pain relief by targeting the µ-opioid receptor, but does so with enhanced selectivity for the G protein signaling pathway, which we believe, based on preclinical studies and clinical trials, is linked to analgesia as opposed to the b -arrestin signaling pathway associated with side effects. Subject to successful non-clinical and clinical development and regulatory approval, we believe TRV734 may have an improved efficacy and side effect profile as compared to current commonly prescribed oral analgesics, such as oxycodone." From IPO prospectus 2014

    We have completed full preclinical safety pharmacology, toxicology, genotoxicology and pharmaceutical development studies and have an active investigational new drug application, or IND, with the U.S. Food and Drug Administration, or FDA. We have completed enrollment in a second Phase 1 multiple ascending dose clinical trial and expect to report data from this trial early in the first quarter of 2015. We have retained all worldwide development and commercialization rights to TRV734. We intend to seek a collaborator with experience in developing and commercializing controlled-substance therapeutics in chronic care pain markets, thereby leveraging their expertise while retaining rights to commercialize TRV734 in hospital and specialist markets in the United States.

    d -opioid receptor program

    We are pursuing a research program to identify an orally bioavailable small molecule G protein biased ligand targeting the d -opioid receptor for the treatment of CNS disorders, of which we intend to initially focus on Parkinson's disease, pain or depression. We expect to complete IND-enabling preclinical studies in 2015. We intend to maintain flexibility on whether to develop and commercialize this product candidate in collaboration with a pharmaceutical company licensee depending on the clinical indications we ultimately decide to pursue, but we intend to retain meaningful commercial rights in any event.

    TRV250

    "We have identified a new product candidate, TRV250, a small molecule G protein biased ligand targeting the delta-opioid receptor. Based on the initial profile of TRV250, we anticipate focusing our initial development efforts on the treatment of treatment-refractory migraine headaches. According to Decision Resources, a healthcare consulting company, the acute episodic migraine market encompassed approximately 12 million drug-treated patients in 2013 in the United States, representing approximately $2.2 billion of sales. We estimate that approximately 20% to 30% of these patients either do not respond to or cannot tolerate the market-leading triptan drug class, and an additional 30% would benefit from improved efficacy compared to these drugs."

    (click to enlarge)

    So there is the pipeline, much of the info we took directly from the IPO prospectus filing from February 2014. What we can see our numerous indications getting deeper into the pipeline. The fact that the target populations are so large is what makes TRVN attractive for long term investors. 20 Million heart failure patients in the US and Canada, 30 million scripts per year for Post Op pain, and the list goes on. Migraines effect 10's of millions of people around the world. The fact the founder has won the Nobel Prize for this science and the early safety and tolerability and now efficacy studies are going well is very promising.

    We like to find undiscovered Biotech/Biomedical small to mid caps before they are being written about. We wrote up QURE, CLDN, CNCE, CHRS, BLUE and others way before they took off, some just recently in fact. Sometimes our research reports are met with no movement in share price for awhile, but in almost all cases we see huge percentage moves within weeks to months of our reports as the "A-Ha" moment finally kicks in with the masses. In the case of Trevena (NASDAQ:TRVN) we think there is little to no coverage in terms of people writing or talking about them. We also don't think anyone is really adding up all the math and the potential of the huge target populations they are going after with this chemistry. Reminds us of CLDN which is now nearing a 700 million market cap and was about 400 million when we were writing about it in January this year.

    The market cap for Trevena is still only 225 million. If we were to take 30 million POST Op pain management scripts per year and assign only 20% of those to TRVN future drug (If approved), that alone makes for a 100 million revenue potential on the very low end. 20 Million heart failure patients many of whom receive intravenous drugs via 2.1 million hospitalizations per year, could easily result in hundreds of millions of annual revenue to TRVN down the road. As it stands, an up front payment of 63 million would be payable to TRVN from Actavis as soon as 4th quarter of this year or earlier if they opt to fully license the heart failure indication. That would be reported as earnings and would result in about $1.50 per share in profits alone just on the payment potential.

    The company is cashed up with a recent 45 million raise in December along with the 50 million they raised in the IPO 13 months ago. This is enough to take them deep into 2016 and cover the costs of all their trials and more.

    Analysts current targets range from $13 to $21 for what its worth.

    The chart is building some momentum for a potential breakout in the weeks and months ahead. Consider that many of our research reports do not always result in immediate upside moves CHRS sat from 13-15 for many weeks then ran to 32. CLDN sat from 16-18 for 7 weeks than ran to 26 just recently and so forth. We like to buy while there is some resistance from sellers who have lost patience with the stock. Then we like to keep adding on dips if we continue to like the potential and the science. We have had multiple big winners lately at our SRP service like QURE, CLDN, ZIOP, CNCE, CMVLF and the list goes on by being patient. We buy stock while people are not paying attention, and then we add and wait patiently for the valuation to move up.

    The market cap here as we said is only 225 million and they have enough cash to take them deep into 2016 with multiple catalysts in 2015 as it stands. We estimate they have about 110 million in cash currently. We also would not be shocked to see Actavis consider a buyout of the entire company assuming the Heart Failure indication is doing well in phase 2b. This would make more sense than ACT paying them 65 million up front fee plus royalties, funding requirements, and milestones... but that is just our take.

    We see plenty of sellers from 6-6.50, so our thinking is we can accumulate the stock for awhile and then look to the catalysts to likely move this market cap much higher going forward. We have 3 catalysts between now and mid 2015 and another in the 4th quarter of 2015. This market cap could easily double, even to reach the analysts mean target of $14.33 there is a fair amount of upside potential from 6.50 and below.

    (click to enlarge)

    Mar 12 5:49 PM | Link | 1 Comment
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