When an entire sector - or the broad market as a whole - decides to take a dip, that's when I like to go on a buying spree and as investors of the biotech/small pharma sector well know, it's been a rough few weeks. The shorts have jumped on board and taken control after the previous run-up gave many biotech stocks a liftoff earlier this year.

There's no doubt that it's tough to sit there and look at your portfolio during the pullbacks, as the stocks that you've been accumulating for the long term will lose much of the unrealized profit value - or dip into overall negative territory; sometimes pretty significantly into negative territory.

Q3 2009 Earnings Call

October 29, 2009 11:00 AM ET

Below is a 10-stock BioMed Momentum Index that I have created along with related financial data from Google Finance as of 10/28/09, including the stock price, 52-week change, average daily trading volume, and market cap. I have screened for small and micro-cap stocks with market caps of approximately $500 million (M) or lower with stock price increases of at least 50% in the past year and average trading volume of at least 1M shares per day.

1.) Antigenics (AGEN) ($1.07) +60%, 2.5M shares / day, $95M

A comment from Kenneth regarding a pullback in the biotech sector:

Hi VFC,

I noticed that the biotech sector seems to be retracing downwards after its recent run. Recent press releases from several biotech companies have not garnered much response in terms of upward price movement (for eg. AGEN's glioma trial results and Peregrine's breast cancer trial results to name a few). I have not been investing in biotech stocks long enough to know if this is just an expected retracement and that the biotech sector will recover soon or that the bubble for small biotech companies has burst and won't recover for some time. Would appreciate your input.

An email from David regarding investments in stocks trading at various price levels:

As a separate, but interesting aside, I'm curious as to your record of success with various price levels of stocks; for example, do you find more success in the $1 to $5 range, or in the .10 to $1 range, or in the under .01 range? Is there a difference in the percentage of winners among your picks in these respective ranges?

As a follow up to my article on FDA Calendar stocks for October, ImmunoCellular Therapeutics (OTC: IMUC.OB) presented additional data at the Congress of Neurological Surgeons Annual Meeting in New Orleans which demonstrated that the Company's cancer stem cell therapeutic vaccine product candidate ICT-107 extends progression-free survival (PFS) by more than one year among patients with glioblastoma multiforme (GBM is the most common and aggressive form of brain cancer).

The new data presented is an update to preliminary data that was presented at ASCO 2009 in late May. It included a median PFS survival time (defined as the time between surgical tumor removal and tumor recurrence) in the 16 newly diagnosed patients enrolled in the trial of 19 months, which is over 12 months longer than the historical PFS of just 6.9 months. In addition, seven of the 16 patients continue to show no signs of tumor recurrence while three of the patients have gone more than two years without disease progression.

After last week's forty percent drop in price, Antigenics (AGEN) issued an early morning press release on Monday announcing promising results for the company's Phase II trial that will measure the effectiveness of Oncophage in treating patients with recurrent high grade glioma (brain cancer).

Data from the first twenty patients treated with Oncophage demonstrated a median survival of 10.1 months, well above the historic average of 6.5 months, and slightly better than Avastin's 9.2 months. However, Oncophage gets a leg up in terms of 'quality of life' (side effects), according to the press release - an important issue for patients, as we learned from the powerful patient lobby that came to the forefront during the Provenge trials.

News that the European advisory committee will adopt a negative opinion next month on Antigenics’ (AGEN) kidney cancer vaccine candidate, Oncophage, not only hurt their shares by 42% Wednesday, but raised questions over where the biotech company can go from here.

Although Oncophage has been approved in Russia, that was 18 months ago and the vaccine has yet to be released onto the market. In addition, the FDA has requested additional clinical trials be conducted before they would consider approving the vaccine. Established in 1994 and having spent $293 million on R&D since the company went public in 2000, and with 17 pipeline candidates already on the scrap heap, Antigenics is clearly experiencing desperate times, which may call for desperate measures.

In an early Wednesday press release, Antigenics (AGEN) announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMEA) has verbally notified the company that a negative vote should be anticipated in November, when the European regulators will meet to officially cast their votes.

As a result of that press release, the AGEN stock tumbled by over 40% before settling in at just above $1.20 during mid-day trading.

On 6/1/09, Antigenics (AGEN) announced results of an interim analysis from the Company’s ongoing global patient survival registry, which showed that patients with kidney cancer at intermediate risk of disease recurrence demonstrated an approximately 46% lower risk of death when treated with Oncophage (vitespen) cancer vaccine compared with observation (n = 362; P = 0.036; hazard ratio [HR] = 0.54). The interim analysis from the patient registry, INSPIRE, reflects a median follow-up of 4.5 years from the largest, randomized Phase 3 kidney cancer trial ever completed to date in the adjuvant setting. The patient registry was launched in order to confirm encouraging overall survival trends observed from the Phase 3 non-metastatic kidney cancer study. Final results from INSPIRE are expected mid-2010.

Shares of Dendreon (DNDN) traded higher by nearly eight percent during early trading on Monday after it became apparent that the company had recently appointed two new members to its Board of Directors, one being the Chief Executive of Genentech, Ian Clark and the other being Pedro Granadillo, a one time executive for Eli Lilly & Co.

The appointment of Clark has fueled speculation that a partnership deal (with Roche) is imminent since Genentech is wholly-owned by Roche after a recent merger between the two companies. The DNDN stock price has now approached the thirty dollar level, most likely the result of speculation after the board appointments - in my opinion.

In an absolutely boring trading day, there were a few stocks that were worthy of mention on Monday:

CPST: Capstone Turbine, the maker of low-emission microturbine energy systems, opened the trading week by releasing news that the company has received $3 million in follow-on orders from two of its large oil & gas customers; Aquatec-Maxcon Pty Ltd and Pumps & Service.

Nothing has changed with the potential of Antigenics (AGEN) and its stock. If anything, the longer it trades for a price of near two dollars, the better buy it becomes because the closer news is to being released.

Investors have heard nothing that would lead us to believe that the fourth quarter Oncophage launch in Russia is not moving along as planned - it's still only a final decision on the Russian Government reimbursement that we're waiting on.

Dendreon (DNDN) released an update on Thursday that outlined the path that the company is taking to advance its prostate cancer treatment Provenge to market.

In a mid-day PR, the company announced that they will file an NDA with the FDA in November and that the FDA would then be expected to act on the application by mid 2010. It is expected that the FDA will rule to approve Provenge, based on previous comments by the regulatory agency after mid term results were released last year. Keep in mind, however, that nothing is a sure thing both with regard to the stock market or the FDA. While indications point to an FDA approval, it is also good to realistically temper the enthusiasm by remembering that members of the FDA are humans - government officials, at that - and are just as likely to change their minds or ask for more information as anyone else out there.

Here's a rundown of how I personally apply timeframes to my short, mid and long term picks.

Quite simply, I consider a short term pick to be any stock that I feel will pay off fairly significantly within six months; mid term is six months to two years and long term I consider to be two years or more.

From a reader's comment on Antigenics (AGEN):

VFC,

Why do you think there are 16.5 Million shares short on AGEN? Worries me.

In response to a number of requests that I've received via email or comments asking for 'VFC's Take' on numerous stocks that readers have found, I'll do my best to address as many as I can, as long as everyone takes a few things into account while reading:

• I have not thoroughly researched all of the stocks that I'm about to comment on. I've done the initial due diligence, but my opinions are mostly based on my first impressions of the stock. I'm merely providing VFC's Take, as requested. Use that as a starting point to do your own due diligence.
• Don't get testy if I don't like your stock. Remember, this is just my initial impression and I take into consideration some variables that other people don't, that's why VFC's Take is not always the mainstream impression.
• I appreciate all the recent feedback, and keep the stock tips coming; this is a great forum for all investors of all levels to share tips and insights. There's a whole lot of stocks out there, but there's only a few gems. Let's keep trying to find those gems.

Antigenics (AGEN)

A comment from Lenny:

I've spent plenty of time discussing the potential of Antigenics (AGEN) as one of a few candidates to become the next Dendreon (DNDN) and I once again could not refuse adding to my position for just under $2.

As I've also mentioned before, AGEN is one of only a few stocks in which I'm willing to 'average up' in my position and this latest buy brings my average to just around the $1 level.

Shares of Antigenics (AGEN) have traded with increased volatility during Monday's and early Tuesday's trading sessions which could be an indicator that news is pending.

The company's Russian launch of its kidney cancer vaccine Oncophage is set to take place in the fourth quarter of this year, according to previous announcements by the company, and news of Russian government reimbursement should hit the wires before that time.

I've received a few emails and comments regarding Cell Therapeutics (CTIC) and why I haven't discussed it much, if at all.

The stock has already enjoyed a huge run this year and was surrounded by a lot of hype, that is the reason that I shied away from it - I don't like chasing stocks and since I missed out on the huge run, I wasn't about to jump in on the high.