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  • BARDA, AOLS, EBS, SIGA, NVAX 3 comments
    Jul 30, 2012 12:06 PM | about stocks: AOLS, EBS, NVAX, SIGA

    Weapons of mass destruction in war torn countries are terrifying. The need for a response to the many chemical biological and nuclear threats that could be unsecured is something that governments are scrambling to address. Recently, Syria acknowledged that it not only has chemical and biological weapons, but also would be willing to use them to combat external aggression during its internal uprising.

    I have recently become familiar with the Biomedical Advanced Research and Development Authority (BARDA). Under the Pandemic and All Hazards Preparedness Act (PAHPA) BARDA is charged to support innovation to reduce time and cost of medical countermeasures and product advanced research and development. Over time, BARDA has become a decisive and agile entity that invests quickly in strategic initiatives forwarding the advancement of innovative strategic countermeasures. BARDA has doled out contracts to Novavax (Nasdaq: NVAX), SIGA Technologies (Nasdaq: SIGA), Emergent BioSolutions (NYSE: EBS), and Aeolus Pharmaceuticals (OTCBB: AOLS), to name a few, and in many cases have provided significant anti-dilutive funding to advance their projects.

    Looking at these companies stock performance, I'm curious as to when and how this will make a difference, because the risk profile on many of these companies appear to be far less, but the attention they receive doesn't seem to match the potential. While these Companies aren't all trading at their low, SIGA is at $3.00 with a $154 million market cap while having traded at over twice that, EBS is trading at 2/3rds it's 52 week high at $14.48 with a market cap of $523 million, and Aeolus Pharmaceuticals is trading at half its 52 week high at $0.27 with a market cap of $16.4 million. Some of these make sense: SIGA has run afoul other companies in competition for BARDA money and has been on the receiving end of what appears to be bureaucratic arguments slowing down development and additional funding. EBS had an earnings miss with confusion as to whether their BARDA money was figured in. AOLS is truly confusing because it has received money, continues to develop additional indications for their compound, yet it trades near its lows, when it trades. NVAX, with its recently awarded contract is up near yearly highs trading millions of shares a day.

    Taking a closer look at AOLS and its contract leaves me even more puzzled. The risk profile should be far less, because having succeeded pre-clinically, the Company's compound AEOL 10150, under a $118 million BARDA contract to be developed as a countermeasure for Acute Radiation Syndrome (NYSE:ARS) must pass safety and tolerability before being in line for approval. Human efficacy is unnecessary, because the Company has consistently met or exceeded BARDA objectives, received money from BARDA on a cost-plus basis (meaning that they receive the contract award plus expenses). A grant from the National Institutes of Health (NIH) resulted in another study to evaluate neuroprotective effects of AEOL 10150 against Chemical Threats has demonstrated benefits against nerve agent exposure.

    One key difference between AOLS and the other small companies with BARDA contracts is that AOLS is on the OTCBB instead of a major exchange. Their ability to continually deliver on their milestones make it an interesting company to follow, especially due to the non-dilutive nature in which they have thus far financed their drug development. With the recent unrest in Syria, and the revelation that Syria has and is willing to use chemical agents, countermeasures such as AEOL 10150 become more important to those invested in the space.

    Stocks: AOLS, EBS, NVAX, SIGA
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Comments (3)
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  • Falco
    , contributor
    Comments (15) | Send Message
    Glad to see someone finally giving some exposure to the Aeolus story. Lots happening in the next 12 months with a potential procurement from the government in about a year!
    31 Jul 2012, 07:54 PM Reply Like
  • jmrosa0610
    , contributor
    Comments (2) | Send Message
    Agreed, thanks for this post. I'm also confused seeing AOLS trading at its low with so much positive feedback and potential.
    28 Aug 2012, 11:26 AM Reply Like
  • skewb
    , contributor
    Comments (9) | Send Message
    i like what i have been reading about AOLS. the depressed stock price is giving me time to load up, and i have been doing just that.
    24 Sep 2012, 03:53 PM Reply Like
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