Since the new front cover of Newsweek declares "the Recession is Over" and Nobel Economic Laureate Paul Klugman basically concurred on one of the Sunday political talk shows; I'm going with optimism and will agree.
With June new home sales rising 11%, and oil (a tried and true contrarian to the markets) rising up out of protest, Small Cap opportunities abound as money starts to trickle in from the sidelines. The major indices may see-saw around the flat line for a few days, but the confidence of buyers en masse has returned.
Acadia Pharmaceuticals (ACAD) http://www.acadia-pharm.com/ picked up $1.64 (a gain of 48.06%) on speculation the company would soon release test data on its drug Pimavanserin. ACAD is currently trading in $5 range with a new market cap of $187 million. The 3-Month average daily trading volume of ACADA is 446,711 shares and as of 11 a.m. EST, it had topped 6,497,107 shares. That's over 12 times its normal volume.
Buy on the rumor...
Last Friday, ACAD stock gained 44% to set a 52-week high as buyers thought the Company was going to release news about its late-stage clinical trials of Pimavanserin, its drug for psychosis brought on by Parkinson's disease. And the options market went crazy on the 44% gain. In all, about 15,000 calls and 1,635 puts traded, on combined daily volume 19 times the norm, according to option analytics firm Trade Alert.
San Diego-based ACAD focuses on the development and commercialization of small molecule drugs for the treatment of central nervous system disorders. Its pipeline, including Pimavanserin, has four major drugs being developed. The other three are a product candidate in phase II for chronic pain and a product candidate in phase I for glaucoma, each in collaboration with Allergan. ACAD also has ACP-106 in IND-track development for neuropsychiatry and sleep indications. Pimavanserin is also in a phase II trial as a co-therapy in schizophrenia and in a proof-of-concept clinical study for sleep maintenance insomnia.
At $5, ACAD will set a new 52-week high today. Its 52-week low is $0.72 set on 11-21-08. At $5, ACAD is above both its 50-day and 200-day moving averages. Like most Small Cap Pharma's, ACAD has little in the ways of revenues. It share out versus float ratio is near-parity.
Also capitalizing in the Nasdaq drug sector this morning is Cerus Corp., (CERS) http://www.cerus.com/ picking up 32.13% ($0.65) in anticipation of its Q2 release this Thursday after market. CERS is currently trading in the $2.70 range with a new market cap of $88 million. This morning by 11 a.m. EST, CERS had quadrupled its 3-Month average daily trading balance of 234,164 shares topping 1,239,330 shares traded.
CERS second quarter 2009 financial results will be released on July 30, and share buyers expect good news about the CERS INTERCEPT product. CERS INTERCEPT Blood System is designed to inactivate blood-borne pathogens in donated blood components intended for transfusion.
CERS markets the INTERCEPT system for platelets and plasma primarily in Europe, the Russian Federation, and the Middle East. CERS has collaboration agreements with Baxter International (NYSE:BAX), several other bio-tech/pharma firms and the United States Armed Forces.
At $2.70, CERS is below its 52-week high of $5.35 set on 07-28-08 and is above its 52-week low of $0.55 set on 12-17-08 (a good buy signal). At $2.70, CERS is ahead of both its 50-day and 200-day moving averages. CERS has $15 million in trailing twelve month revenues and its shares out versus float ratio is near-parity.
Our third pharmaceutical getting a nice bounce today on the Nasdaq is Vical Inc., (VICL) http://www.vical.com/ which picked up $0.25 (7.84%) in early trading on continuing news about its DNA cytomegalovirus vaccine. Now trading in the $3.44 range with a new market cap $138 million, VICL has a 3-Month average daily trading volume of 923,942 shares and surpassed 1,621,255 shares traded by 11 a.m. EST.
On July 8, VICL announced its TransVax therapeutic DNA cytomegalovirus (CMV) vaccine provided promising results compared with placebo across a broad range of clinical efficacy endpoints at the four-month interim analysis in an ongoing Phase II trial.
Successful in Phase II, this stock will jump when it enters Phase III (it will have two drugs in Phase III trials).
The VICL products pipeline is based on its DNA delivery technologies for the prevention and treatment of serious or life-threatening diseases. VICL develops DNA-based vaccines and therapeutics for the prevention/treatment of infectious diseases, cardiovascular diseases, and cancer, including Allovectin-7 cancer immunotherapeutic, a Phase III clinical trial product for the treatment of metastatic melanoma. VICL also has products in Phase I status that treat breast or prostate, colorectal, ovarian, or non-small cell lung cancer; melanoma; or carcinomas of the upper GI tract, colon, kidney, or bladder.
At $3.44, VICL is pennies below its 52-week high of $3.94 set on 07-25-08 and far above its 52-week low of $1.04 set on 12-01-08 (another good buy signal). At $3.44, VICL is ahead of both its 50-day and 200-day moving averages. VICl has trailing twelve month revenues of $8 million. I would like to see more shares in the float, but it isn't a red flag.
Finally, a quick note about consolidation. We've brought you a lot of regional banks in the last few months that have increased customer bases and even books that pass the 'stress test' of the Treasury.
I, for one, believe there will be a lot of M&A activity in this sector, so today's news on Harleysville National (HNBC) http://www.harleysvillebank.com/ that sent it soaring 38% this morning ($1.52) didn't come as a surprise. Now trading in the $5.50 range on the Nasdaq (and tripling its 3-Month average daily trading volume to over 755k), HNBC is being acquired by First Niagara Financial Group Inc., (FNFG).
Its second Pennsylvania acquisition in four months, FNFG operates 113 banks across Upstate New York. In April, FNFG agreed to purchase 57 branches in western Pennsylvania from National City. Harleysville operates 83 bank branches across the eastern portion of the state, including the Philadelphia area.
That gives FNFG over 250 branches and I wouldn't be surprised if a Mid Cap comes along and buys it as the consolidation continues.