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Going it Alone: Not in a Global Market: BIOS, LAVA, SCLN

|Includes: BioScrip, Inc. (BIOS), LAVA, SCLN

BioScrip (NASDAQ:BIOS) Rises on AmerisourceBergen Deal; Magma Design Automation (NASDAQ:LAVA) Picks Up Speed on Product Launch; SciClone (NASDAQ:SCLN) Drug Works with Focetria from Novartis.
By Dennis Askew

Three SmallCaps Climb on Partnerships and Alliances

BIOS: Co Amends and Extends with Prime Vendor

LAVA: Partners with GLOBALFOUNDRIES and Virage Logic

SCLN: Co’s ZADAXIN Helps Boost Immune System for 6-weeks

First up this morning we have BioScrip Inc., (BIOS currently trading in the $5.43 range on a 3-Month average daily trading volume of 376,962 shares. BIOS has a 52- week high of $9.84 set on 04-16-10 with current trailing twelve month revenues of $1.34 billion and a positive, corresponding diluted EPS of +$1.09. BIOS provides medications and management solutions for chronic and other healthcare conditions in the United States. It operates through two segments, Specialty Pharmacy Services and Traditional Pharmacy Services. The Specialty Pharmacy Services segment provides specialty pharmacy distribution and therapy management services. Specialty pharmacy services distribution occurs locally through community pharmacies, centrally through mail order facilities, and through its infusion pharmacies for patients requiring infused medications in the home or infused at various sites, including the company’s ambulatory infusion sites. As of December 31, 2009, it owned and operated 43 specialty pharmacies comprising community, mail order, and infusion pharmacies. At a little over half its high and with those revenues and over a $1 in earnings, BIOS is a long-term (1 Yr) ‘Buy’ consideration for me. Infusion sites keep people away from the traditional hospital and this is the wave of the future in the U.S. In late June BIOS filed an 8-K Material agreement saying in essence its acquisition of Critical Homecare Solutions would fit in with its deal with prime vendor AmerisourceBergen Drug. This second amendment to the contract runs through December 31, 2014.


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Next up this morning we have Magma Design Automation Inc., (LAVA) currently trading in the $2.93 range on a 3-Month average daily trading volume of 704,056 shares. LAVA has a52-week high of $3.88 set on 04-21-10 with current trailing twelve month revenues of $123+ million. In mid-June LAVA, GLOBALFOUNDRIES and Virage Logic announced the availability of a proven, Unified Power Format (UPF)-compliant RTL-to-GDSII reference flow. What’s that? It is an automated, comprehensive solution that streamlines the design and manufacture of ICs that incorporate Virage Logic's intellectual property and are manufactured in GLOBALFOUNDRIES' 65LPe 65-nanometer low-power process technology. Come again… "Creating a comprehensive low-power flow that delivers good performance is a challenging task," said Premal Buch, general manager of Magma's Design Implementation Business Unit. "The Magma-GLOBALFOUNDRIES-Virage Logic collaboration will help (chip and integrated circuit) designers address these challenges by enabling them to quickly implement their low-power designs within Magma's Talus flow and take advantage of the low-power performance of the GLOBALFOUNDRIES 65LPe process." Low power and ease-of-use is a big plus in the semiconductor industry. I like that LAVA partners up to sell its wares. LAVA is a short-term (6 Mo) ‘Buy’ consideration for me.

Finally this morning we have SciClone Pharmaceuticals Inc., (SCLN) currently trading in the $2.86 range on a 3-Month average daily trading volume of 500,730 shares. SCLN has a 52-week high of $5.33 set on 09-01-09 with current trailing twelve month revenues of $75+ million and a positive, corresponding diluted EPS of +$0.33. I like those earnings.  SCLN develops drugs for the treatment of cancer and infectious diseases in the People’s Republic of China and internationally. SCLN’s principal product is ZADAXIN for the treatment of hepatitis B and hepatitis C viruses, and certain cancers, as well as for use as a vaccine adjuvant or as a chemotherapy adjuvant for cancer patients with weakened immune systems. ZADAXIN has approval in approximately 30 countries, primarily in Asia, Europe, the Middle East, and Latin America. At the end of June SCLN and its partner Sigma-Tau announced the final results from a clinical study evaluating the potential of ZADAXIN to enhance immune response to the H1N1 influenza vaccine Focetria from Novartis. It worked. The data indicates that the enhancement effect of ZADAXIN, while significantly higher in the critical first six weeks following vaccination, was reduced at later time points and no longer significantly different compared to the vaccine alone. It worked for the first six weeks (when an outbreak could affect a mass population). SCLN is really getting some mileage from ZADAXIN. Approximately $2.50 off its high and considering its ttm earnings, SCLN would also be a short-term ‘Buy’ consideration for me.

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Disclosure: No position