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I am part of a small investment group that combines significant business experience in product marketing and communications with legal analysis and interpretation. My partners and I combine for over 50 years of experience in these fields.
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    Jan 31, 2014 10:21 AM | about stocks: PLUG, IGXT

    A week or so ago I was asked what stocks we were investing in lately and why. Since some are not primarily driven by patent enforcement I wasn't necessarily planning to talk about them but for those interested here is what we are dipping our toe into. There is much more information available on these stocks and our attempt here is simply to state our quick thoughts and impressions. This is by no means to advocate anyone following suit only what we have been drawn to. (Repost from Blog

    PLUG Power (PLUG): This is a company that we intend to own (perhaps trading around a core position) throughout the year and that happens to have quite a large stable of patents. In recent days and weeks PLUG has traded as high as $4.90/sh on news of new customer orders and positive guidance for 2014 and as low as $2.22, in large part on the basis of a news vacuum and perhaps the overall market downdraft. The companies that are becoming PLUG customers are best of breed...companies like Kroger, Fed-Ex and Walmart and PLUG has telegraphed new orders to come, some are to be announced this quarter. PLUG is in the hydrogen fuel cell business which was thought to be gaining steam many years ago but turned out to be a bit of hype and wishful thinking, clearly a bit ahead of its time in terms of adoption. It appears that the interest in and adoption of PLUG products has now turned the corner and the market is obviously beginning to pay attention. We think that PLUG will have trading volatility throughout the year since it is such a heavily followed stock and the expectations for revenue growth and profitability have been ramped up. On March 13th CEO Andy Marsh is again expected to address investors in one of a series of investor updates expected throughout the year. He has stated that in that he will guide for the remaining 2014 quarters in terms of both revenue and EDITDA. Should make for an interesting call.

    IntelGenx Technologies (IGXT): This little company has a PDUFA date of February 3, 2013 (obviously not much time to take advantage of this if you are so inclined) for it's anti-Migraine drug which is based upon the underlying agent in Merk's Maxalt Drug which achieves approximately $650M in U.S. sales. The bigger issue here, and the reason we bought the stock and will be holding a significant position through the FDA decision Monday, is that they have developed a patented technology called Versafilm. Versafilm basically allows them to put already approved drugs onto orally dissolving film strips that are apparently (among other benefits such as convenience, not needing water and so on) fast acting. The thing we like about this is that approval in our opinion validates the platform and makes this company a solid takeover target. They already have agreements with big Pharma and there is every reason to believe that dozens of high profile drugs could be applied to this technology. Since they have taken the 505(b)(2) path to regulatory approval (and is the path that would be used in future approvals) which is a far less costly and time consuming path, it is pretty easy to see a bigger pharmaceutical wanting to take these guys out at some point after approval. One interesting thing to note is that the Ex-CEO and his wife recently sold 10% of their holdings (they still hold 9M shares) which caused a major shakeout in the stock. What made us even more bullish is the way the stock immediately popped right back up on strong volume after the shakeout. Those buyers who bought on the way back up are obviously not the day-trader crowd. While we expect approval given the results of the required FDA safety and bioequivalence studies we certainly have no crystal ball and FDA approval can sometimes be a tricky thing. Given what we have seen speculated we put the downside risk at about .50 and the upside opportunity as much as $2. We note an NDA for the next drug in this company's pipeline, based on the underlying agent in the blockbuster ED drug Cialis, is likely to be filed later this year. IGXT closed trading yesterday at .90.

    These are our opinions only. Do your own due diligence or consult with a trusted financial adviser before investing in these or any other equities.

    Disclosure: I am long PLUG, IGXT.

    Stocks: PLUG, IGXT
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Comments (5)
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  • RhodeNav
    , contributor
    Comments (258) | Send Message
    Agree on IGXT. We would bet it $2.2-2.6 by the end of 2014.
    31 Jan 2014, 11:08 AM Reply Like
  • SlimmyHendrix
    , contributor
    Comments (192) | Send Message
    Hope PLUG can make more than $70mil this year in profits so they can post a profit. Other than their $30mil offering, it points to still not a profit this year. And remember, profits are not realized until shipments are delivered. Just because they got an order doesn't mean they have been paid for it.
    2 Feb 2014, 06:00 PM Reply Like
  • EDVA
    , contributor
    Comments (116) | Send Message
    Author’s reply » No question about it but only those who are willfully ignorant about what appears to be a significant move toward adoption of PLUG products on the part of many major companies are naysayers here. I see plenty of backward looking data points used as current factoids which is clearly inappropriate in assessing what this company is all about. They surely need to translate orders to revenue (everyone gets that or should) but I think anyone willing to guide for all quarters as early as March 13, 2014 is pretty confident in the kind of year they are having. I see major opportunity here and am investing. Whether anyone follows suit is their own business and once again should be made on the basis of their own due diligence not on anything we say or do. Thanks for your comment.
    3 Feb 2014, 06:18 AM Reply Like
  • Orchids
    , contributor
    Comment (1) | Send Message
    1. IGXT did not pick the best commercialization partner for FORTIVO.
    2. TEVA, in my view, seems to be a good fit for IGXT, given its focus on CNS & repurposing biosimilars.
    3. TEVA’s Global R&D CEO Michael Hayden, based in Canada, is acutely aware of the significance of drug delivery platforms, in a risky world of oncology trials & R&D in general.
    4. TEVA outbid ENDO for NuPathe’s migraine patch & acquired PATH’s patch tech in the process. Additionally, it also acquired a spray last month & continues to invest in in-house drug delivery platforms. AGN, btw, acquired MAP Tech’s migraine spray before FDA approval.
    5. TEVA’s drug delivery tech portfolio is missing the thin-film platform, & there are very few players in this area. ENDO, however, has an agreement w BDSI for its thin-film products. BDSI, btw, has been successful in resolving patent issues thus far, which bodes well for IGXT’s pipeline.
    6. IGXT partner, RDHL’s Director, Dan Suesskind, also serves on TEVA’s board & can serve as an interlocutor btwn TEVA & IGXT.
    7. I am less familiar with PAR & the details of its agreements with IGXT.
    8. Full disclosure: My father has been a TEVA employee for the past 15 yrs, & so I may be partial to TEVA out of loyalty. Either way, bottom line: I would like to see IGXT acquired.
    9. I expect IGXT is working hard to PROMPTLY & THOROUGHLY resolve the manufacturing CRL.
    10. IGXT’s balance sheet is very good & the possibilities encouraging. It can use the cash infusion to diversify & develop its R&D pipeline with greater speed. Speed is key (joke).
    7 Feb 2014, 05:34 PM Reply Like
  • EDVA
    , contributor
    Comments (116) | Send Message
    Author’s reply » I appreciate the comments Orchids. It seems quite logical that IGXT would be bought out and I think there may be some level of leverage that could be used by a suitor during this waiting/resubmission period. One interesting near term thing will be the class designation of the resubmission. It would be terrific to see this back up for consideration by mid-year but you never know.
    9 Feb 2014, 09:20 AM Reply Like
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