M. E. Garza's  Instablog

M. E. Garza
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M.E. Garza is one of the founders of the biotech and healthcare sector news portal BioMedReports.com. He believes in getting the news from credible sources on the street and often reaches out to CEOs and newsmakers directly for interviews and discussions about their companies. Since he began... More
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  • Update: NewCardio, Inc. and Rexahn Pharmaceuticals 0 comments
    Apr 16, 2010 10:17 AM | about stocks: RNN, ORCL, PFWD

    I know many of our readers are keeping an eye on NewCardio, Inc. (OTCPK:NWCI). In addition to last week's announcement that Clinilabs signed an agreement with the company, we continue to anticipate more revenue generating contracts to be announced shortly. Today's news that Software maker Oracle Corp (NasdaqGS:ORCL) is set to buy drug data management software company Phase Forward (NasdaqGS:PFWD) for about $685 million, shows that more buyers are entering into the health sciences business.

    Oracle will pay Phase Forward $17.00 per share in cash, the companies said on Friday, a 30 percent premium over Thursday's closing price of $13.08. Phase Forward shares jumped 29 percent to $16.89 in premarket trading.

    NewCardio's technologies and vast patent portfolio alone still make it an undervalued play at these prices. The fact that more players are looking to get into the automation of clinical trials bodes very well for the company as NWCI's own pending partnership/investment deal is getting closer to reality as well.

    As predicted earlier, the millions of naked shorts are starting to buy back in to RNN after the erroneous reports about the company's "failed clinical trials." In addtion, there are several milestone payments and a forward looking news item next month that continue to push the stock price higher.  In the opinion of many of us who follow the company and have spoken to management, RNN is a $15 stock waiting to happen.

    As I said in my previous article, The company has stated that they have been receiving warrant exercise money and that they now have more than $10 million in cash. Keep in mind that they will also be receiving $3.5 million from Teva in June in a further private placement at 20% above the stock's market price. This is in addition to the $4 million in milestone payments that they'll get from Teva by year end.

    Don't forget, also, that next month the company will have some important Zoraxel data to present and we believe they will make a deal with one of the six interested major pharmas for Serdaxin. Sources told us that they anticipate that partnership (worst case scenario) by year's end.

    Disclosure: Long NWCI, RNN
    Stocks: RNN, ORCL, PFWD
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