As stated many times before, I like to trade in small and micro-cap biotech stocks. My reason is that as a biologist and physiologist, and the fact that I worked my way through graduate school as a pharmacy technician, I understand the processes involved better than other sectors. I have also stated that this is a risky practice and emphasize anyone doing the same should always do their own Due Diligence.
That being said, I would like to introduce an interesting article on the risks/benefits of investing in small- and micro- cap stocks, written by James K. Glassman, executive director of the George W. Bush Institute in Dallas, Texas, published on Kiplinger.com . In it he acknowledges that one of the rules of investing is that the riskier the bet, the higher the payoff (should you win), and in the stock market, risk is typically measured by volatility. He goes on to state that it is natural to assume that if a particular group of stocks is more volatile than the market as a whole, then that group should return more than the market average. He defines small cap stocks as those with a market value of $1.5 billion or less.
Glassman uses the work of economist Rolf Banz, who in 1981, documented the propensity of riskier small-caps to outperform the overall market. However, Banz has been challenged by other economists and analysts, who argue that this propensity may simply be a transitory phenomenon. Glassman disagrees and provides compelling support for his argument that, over the long haul, the smaller the companies, the greater the returns, on average. .
Make no mistake, these stocks are very volatile and Glassman provides statistics to illustrate that fact. He also recommends instead of buying small cap stocks individually invest in a solid small- or micro-cap fund (I prefer to pick my own stocks). He also recommends you limit your exposure to micro- and small-caps to 10% of your portfolio, at most (I trade more like 25%, but that is an individual preference, as I am closer to retirement age and got a late start in the world of investing and trading).
He finally gives reasons for this small cap effect. The first is simply that little companies have more opportunity to grow. “If you choose well, you can score a ten-bagger with a company that has a market cap of $100 million, but choose poorly, you can lose all of your money.”
In explaining the second reason he references James O'Shaughnessy, author of What Works on Wall Street, who wrote that small-caps outperform "not because of market capitalization alone, but because the stocks in this category are least efficiently priced."
(I too find this to be true, but it can work in either direction, so be careful!)
This post is but a short summary of a long article, to read the article in its entirety go to: http://www.kiplinger.com/columns/openingshot/archives/micro-stocks-big-payoff.html
Happy trading!
Tuesday, June 22, 2010
Thursday, May 13, 2010
Factors in Today's Market Confidence
Steve Goldstein, London bureau chief at MarketWatch.com reported today that U.S. stock futures are lower as the US market is still nervous over EU Nation’s debt burdens among other news, such as the unemployment claims report and Dubai’s debt repayment.
Today the Euro continued its downturn from the $1.31 level reached in the aftermath of the EU-IMF 750 billion euro aid package, retreating below $1.26. To make matters worse, a $980 million payment that the Dubai property developer must make today is also bringing the sovereign debt crisis back into the spotlight, the British pound also moved lower after the U.K. reported a widening trade gap, oil futures dropped below the $75 a barrel, and even gold was mildly impacted, with futures falling $4 to $1,239 an ounce. The entire MarketWatch article can be read here.
In an article written by Madelina Iacob, Forbes.com, she states that EU debt problems could cut US company’s profits. The prolonged period of slow economic growth that most analysts are predicting for Europe could also have a major impact U.S. companies with heavy exposure to the Euro zone. The austerity programs used to cut fiscal deficits in Greece, Spain and Portugal will reduce growth in those countries and limit demand from consumers and businesses. Since direct sales in Europe account for approximately 10% of overall revenues for S&P 500 companies, this could in turn have an impact on second half earnings.
Companies with the largest exposure to Europe are the most vulnerable. Industries such automobile manufacturing and materials, consumer durables, services, semiconductors, insurance and capital goods, food, beverage and tobacco are likely the most susceptible to this decrease in demand. Others sectors like household and personal products, pharmaceuticals and biotechnology would not be spared either. However, U.S. banks, telecommunications services, and transportation and utilities have less exposure to Greece, Portugal and Spain, putting them in far better shape to withstand a drop in sales overseas.
Perhaps even more worrisome than the negative impacts on U.S. corporations is that the austerity measures made necessary by the severe debt levels in the EU may be a preview of what's to come for the US. The entire Forbes.com article can be read here.
Associated Press writers Stephen Bernard and Tim Paradis reported on the U.S. job market. The stated that this week’s jobs report showed that gains in the job market are proceeding slowly. First-time claims for jobless benefits dipped to 444,000 last week from an upwardly revised 448,000 the previous week. This is the fourth straight week of decline in claim; however, it hasn't been enough to signal sustainable job growth. Economists estimate weekly initial claims need to fall below 425,000 to show employers are consistently adding workers. Claims have stalled around the 450,000 level throughout the year.
High unemployment remains a major obstacle to a strong recovery. The unemployment rate jumped to 9.9 percent last month, even though employers added 290,000 jobs. Investors want to see consistent job creation as well as regular declines in claims for jobless benefits before becoming confident that the labor market is healing. The AP article can be read here.
Today the Euro continued its downturn from the $1.31 level reached in the aftermath of the EU-IMF 750 billion euro aid package, retreating below $1.26. To make matters worse, a $980 million payment that the Dubai property developer must make today is also bringing the sovereign debt crisis back into the spotlight, the British pound also moved lower after the U.K. reported a widening trade gap, oil futures dropped below the $75 a barrel, and even gold was mildly impacted, with futures falling $4 to $1,239 an ounce. The entire MarketWatch article can be read here.
In an article written by Madelina Iacob, Forbes.com, she states that EU debt problems could cut US company’s profits. The prolonged period of slow economic growth that most analysts are predicting for Europe could also have a major impact U.S. companies with heavy exposure to the Euro zone. The austerity programs used to cut fiscal deficits in Greece, Spain and Portugal will reduce growth in those countries and limit demand from consumers and businesses. Since direct sales in Europe account for approximately 10% of overall revenues for S&P 500 companies, this could in turn have an impact on second half earnings.
Companies with the largest exposure to Europe are the most vulnerable. Industries such automobile manufacturing and materials, consumer durables, services, semiconductors, insurance and capital goods, food, beverage and tobacco are likely the most susceptible to this decrease in demand. Others sectors like household and personal products, pharmaceuticals and biotechnology would not be spared either. However, U.S. banks, telecommunications services, and transportation and utilities have less exposure to Greece, Portugal and Spain, putting them in far better shape to withstand a drop in sales overseas.
Perhaps even more worrisome than the negative impacts on U.S. corporations is that the austerity measures made necessary by the severe debt levels in the EU may be a preview of what's to come for the US. The entire Forbes.com article can be read here.
Associated Press writers Stephen Bernard and Tim Paradis reported on the U.S. job market. The stated that this week’s jobs report showed that gains in the job market are proceeding slowly. First-time claims for jobless benefits dipped to 444,000 last week from an upwardly revised 448,000 the previous week. This is the fourth straight week of decline in claim; however, it hasn't been enough to signal sustainable job growth. Economists estimate weekly initial claims need to fall below 425,000 to show employers are consistently adding workers. Claims have stalled around the 450,000 level throughout the year.
High unemployment remains a major obstacle to a strong recovery. The unemployment rate jumped to 9.9 percent last month, even though employers added 290,000 jobs. Investors want to see consistent job creation as well as regular declines in claims for jobless benefits before becoming confident that the labor market is healing. The AP article can be read here.
Tuesday, May 4, 2010
PIIGS Get Slaughtered, Impacting US Markets
Stocks sank this morning after European debt problems sent another wave of pessimism through the market. European markets fell in response to uneasiness over whether a $145 billion bailout package for Greece will be approved by the 15 European Union members that would shoulder much of the cost. One concern among traders is that the size of the Greek bailout package could make it harder for the EU to rescue other countries that might need help.
How does this affect the U.S. Market? When the euro falls against the dollar, traders avoid the currency, which is used by 16 EU members including Greece. The euro hit its lowest level in a year. The U.S. investors are concerned that a stronger dollar would cut into profits for U.S. companies that heavily rely on foreign operations. When the dollar is up over the euro, overseas profits translate into less money.
The Greek debt problem is making a big impact on the markets this week, and the fallout is still far from over. There is a concern that the Greek contagion is beginning to spread to the other PIIGS. Last week, Standard & Poore’s (S & P) announced a cut to Portugal’s sovereign credit rating from A+ to A and cut Greece’s bond rating to BBB+. Following that, Spain saw its credit rating slashed, too. The Greek debt crisis has been described an economic virus, spreading among the PIIGS and triggering the euro's slide.
Day to day it's hard to keep track of all the commotion related to Europe's economic problems. Greek labor unions balk at a bailout; German politicians are stalling on their role in approving a bailout based on domestic political pressures; and some market economists argue in favor of allowing Greece to default rather than seeing through an expensive bailout package.
All the fluctuation in the markets related to the euro and the Greek debt crisis may be far from over, too, even though the EU is talking in terms of the "finishing touches" on a bailout package. On Thursday, Barclay's Capital wrote "We believe the move toward a Greek rescue package will remain a slow grind and a weight on the euro." One of the reasons given to expect more ups and downs was the political situation in Germany. Of course, the looming debt crises in Spain and Portugal have not helped, either. It's still an open question this week whether after months of back and forth over the path forward for Greece, the EU will be able to pull together and bring Greece back from the unplanned-for crisis in 2010.
Some are asking the critical question. Will the euro collapse in 2010? No one can say what exactly will happen going forward. Government structures stay in place for a long time, the US is still on its feet, for the time being. Other countries have defaulted on their loans and are still here. In the highly developed West, that is almost a given. So while the EU may not dissolve, when all this is said and done, its governmental structures will have definitely been altered.
How does this affect the U.S. Market? When the euro falls against the dollar, traders avoid the currency, which is used by 16 EU members including Greece. The euro hit its lowest level in a year. The U.S. investors are concerned that a stronger dollar would cut into profits for U.S. companies that heavily rely on foreign operations. When the dollar is up over the euro, overseas profits translate into less money.
The Greek debt problem is making a big impact on the markets this week, and the fallout is still far from over. There is a concern that the Greek contagion is beginning to spread to the other PIIGS. Last week, Standard & Poore’s (S & P) announced a cut to Portugal’s sovereign credit rating from A+ to A and cut Greece’s bond rating to BBB+. Following that, Spain saw its credit rating slashed, too. The Greek debt crisis has been described an economic virus, spreading among the PIIGS and triggering the euro's slide.
Day to day it's hard to keep track of all the commotion related to Europe's economic problems. Greek labor unions balk at a bailout; German politicians are stalling on their role in approving a bailout based on domestic political pressures; and some market economists argue in favor of allowing Greece to default rather than seeing through an expensive bailout package.
All the fluctuation in the markets related to the euro and the Greek debt crisis may be far from over, too, even though the EU is talking in terms of the "finishing touches" on a bailout package. On Thursday, Barclay's Capital wrote "We believe the move toward a Greek rescue package will remain a slow grind and a weight on the euro." One of the reasons given to expect more ups and downs was the political situation in Germany. Of course, the looming debt crises in Spain and Portugal have not helped, either. It's still an open question this week whether after months of back and forth over the path forward for Greece, the EU will be able to pull together and bring Greece back from the unplanned-for crisis in 2010.
Some are asking the critical question. Will the euro collapse in 2010? No one can say what exactly will happen going forward. Government structures stay in place for a long time, the US is still on its feet, for the time being. Other countries have defaulted on their loans and are still here. In the highly developed West, that is almost a given. So while the EU may not dissolve, when all this is said and done, its governmental structures will have definitely been altered.
Wednesday, April 28, 2010
Jim Cramer and "TheStreet" Under Fire
There is an article posted on “The King of all Trades”, a financial blog, about Jim Cramer and “TheStreet.com.” In this article, author Steve Garcia makes allegations stating “any time specific companies gain headwind, in this case Sirius XM Radio, old or simply negative press items conveniently get recirculated from the same conspicuous sources.” This technique is called by Cramer himself as fomenting. Fomenting was a tactic used by the former hedge fund manager to elicit a specific market response.
The author goes on to say that it is unethical to release old or tailored news at critical points in a company’s history to affect a specific stock reaction. He uses Sirius XM Radio as one example. To read how the author alleges that Cramer/TheStreet.com manipulated Sirius XM Radio, go here.
According to a Reuters article published March 18, 2010, the investment news website TheStreet.com was being investigated by the SEC. The probe, was related to how revenue was recorded at one of TheStreet’s subsidiaries. The probe arose after the company announced on Jan. 25, 2010 that it was restating its financial results for 2008 and 2009 due to "certain inaccuracies". You can read more about that article here.
Now all of the above was news to me. However, on March 19, 2010, Adam Feuerstein, reporter for “TheStreet.com” wrote an article about a small biotech company named Generex. Generex is in the developmental stages of producing a diabetes treatment, an insulin product that is taken orally and is absorbed through the inner lining of the mouth. The drug, in trial stages, is called Generex Oral-lyn(TM). Feuerstein’s article made numerous defamatory statements about the Generex, its management, and Generex Oral-lyn. The article made several statements that were misleading or outright misstatements; furthermore, they seemed to be made with the intent to hurt the company and/or the experimental product. If that were not enough, on March 26, 2010, Feuerstein wrote another article defending the first and it was just as obnoxious and derogatory as the first. These articles I knew about because I own Generex stock.
More recently, according to GlobeNewswire, on April 6, 2010, Generex launched a lawsuit against TheStreet.com and Adam Feuerstein in the Supreme Court of the State of New York seeking $250,000,000 in damages for business defamation, product disparagement, and injurious falsehood. Mark Fletcher, Generex’s Executive Vice-President & General Counsel stated “Feuerstein and TheStreet.com have abused their public forum by spreading categorical falsehoods about Generex and Generex Oral-lyn (TM) when a modicum of due diligence would have revealed the truth, an injury then compounded by unfounded and libelous allegation and innuendo. We are now seeking to hold Feuerstein and TheStreet.com accountable for the damage they have unjustifiably inflicted on Generex and its stockholders.”
Garcia stated toward the end of the King of all Trades article, “It is my intent to notify as many people as possible to be extremely careful about what they read and who they believe with regard to financial news. Jim Cramer is no friend to the common investor, in my opinion.”
In another article cited by Garcia, Cramer has gone as far as to describing illegal activities used by hedge fund managers to manipulate stock prices. You can read about that here.
The reason I posted all of this is to make a point. The point is aimed mainly at beggining investors, but even seasoned investors sometimes need to be reminded: Do your own Due Diligence! Do not take Jim Cramer’s or anyone else’s advice without first checking out their so called “facts”. After I read Garcia’s article, I left this comment on the page:
Great article! Everyone who has an audience should be writing about the way “TheStreet” has used unethical and most likely illegal tactics to ruin a company. I do not own SIRI, but I do own GNBT, and Adam Feuerstein outright made up his own “facts” to do harm to this stock's price.
I do not know if Cramer had anything to do with the GNBT articles, but as founder, he is responsible for the articles on his site. To make things worse, he did not even issue a statement or fire Feuerstein! Adam Feuerstein was even allowed to write another article bashing GNBT and defend his first article. I know I will never read another article from “TheStreet”.
The author goes on to say that it is unethical to release old or tailored news at critical points in a company’s history to affect a specific stock reaction. He uses Sirius XM Radio as one example. To read how the author alleges that Cramer/TheStreet.com manipulated Sirius XM Radio, go here.
According to a Reuters article published March 18, 2010, the investment news website TheStreet.com was being investigated by the SEC. The probe, was related to how revenue was recorded at one of TheStreet’s subsidiaries. The probe arose after the company announced on Jan. 25, 2010 that it was restating its financial results for 2008 and 2009 due to "certain inaccuracies". You can read more about that article here.
Now all of the above was news to me. However, on March 19, 2010, Adam Feuerstein, reporter for “TheStreet.com” wrote an article about a small biotech company named Generex. Generex is in the developmental stages of producing a diabetes treatment, an insulin product that is taken orally and is absorbed through the inner lining of the mouth. The drug, in trial stages, is called Generex Oral-lyn(TM). Feuerstein’s article made numerous defamatory statements about the Generex, its management, and Generex Oral-lyn. The article made several statements that were misleading or outright misstatements; furthermore, they seemed to be made with the intent to hurt the company and/or the experimental product. If that were not enough, on March 26, 2010, Feuerstein wrote another article defending the first and it was just as obnoxious and derogatory as the first. These articles I knew about because I own Generex stock.
More recently, according to GlobeNewswire, on April 6, 2010, Generex launched a lawsuit against TheStreet.com and Adam Feuerstein in the Supreme Court of the State of New York seeking $250,000,000 in damages for business defamation, product disparagement, and injurious falsehood. Mark Fletcher, Generex’s Executive Vice-President & General Counsel stated “Feuerstein and TheStreet.com have abused their public forum by spreading categorical falsehoods about Generex and Generex Oral-lyn (TM) when a modicum of due diligence would have revealed the truth, an injury then compounded by unfounded and libelous allegation and innuendo. We are now seeking to hold Feuerstein and TheStreet.com accountable for the damage they have unjustifiably inflicted on Generex and its stockholders.”
Garcia stated toward the end of the King of all Trades article, “It is my intent to notify as many people as possible to be extremely careful about what they read and who they believe with regard to financial news. Jim Cramer is no friend to the common investor, in my opinion.”
In another article cited by Garcia, Cramer has gone as far as to describing illegal activities used by hedge fund managers to manipulate stock prices. You can read about that here.
The reason I posted all of this is to make a point. The point is aimed mainly at beggining investors, but even seasoned investors sometimes need to be reminded: Do your own Due Diligence! Do not take Jim Cramer’s or anyone else’s advice without first checking out their so called “facts”. After I read Garcia’s article, I left this comment on the page:
Great article! Everyone who has an audience should be writing about the way “TheStreet” has used unethical and most likely illegal tactics to ruin a company. I do not own SIRI, but I do own GNBT, and Adam Feuerstein outright made up his own “facts” to do harm to this stock's price.
I do not know if Cramer had anything to do with the GNBT articles, but as founder, he is responsible for the articles on his site. To make things worse, he did not even issue a statement or fire Feuerstein! Adam Feuerstein was even allowed to write another article bashing GNBT and defend his first article. I know I will never read another article from “TheStreet”.
Thursday, March 25, 2010
IS THIS A BULL MARKET OR NOT?
The answer varies acording to who you ask. Two well respected authorities on investing give two different answers.
According to Steven Goldberg, D.C. investment advisor, many investors have simply stood by and watched during this bull market, which began on March 9, 2009. He has stated that $4.8 trillion is invested in stock mutual funds. But, as a group, investors have been selling, not buying, during one of the most powerful rallies in history. The fear of more losses has been a more potent consideration for most investors.
Furthermore, the investors who rushed into bond funds have made a poor choice because the Fed, by sustaining short-term interest rates near zero and pumping money into our Nation’s dilapidated economy, may be setting the country up for a significant jump in inflation in the near future. At which time, bond yields will likely rise, thus, pushing down bond prices.
He also states that “over time, two-thirds of actively managed mutual funds fail to match the returns of the index they’re trying to beat.” Earning fund investors a lot less than what this bull market offers.
He offers some advice on how to improve your returns. Goldberg states that for the most part, casual investors should use common sense. “Keep your costs low, invest small amounts regularly, and shy away from investments you don’t understand.” If you have to invest in mutual funds, he recommends you “stick to a portfolio of index funds, and most importantly, do not try to time the market, especially in the short term because no one can.” I will add my own bit of wisdom here “if someone tells you they can time the market they are either a fool or a liar.”
http://www.kiplinger.com/columns/value/archive/investors-are-missing-the-bull-market.html
On the other hand, Todd Harrison, founder and CEO of Minyanville has written a commentary that was published on Yahoo: finance. He gives 10 reasons why he believes that most investor think this is a bull market but in reality “we are witnessing a cyclical bull market in the context of a prolonged and painful secular bear stretch”. Harrison states that it his opinion that the tide is about to turn.
His 10 reasons are (and I summarize)
"Questions remain on a Greek aid package in front of 20 billion euros in debt that comes due in April and May.
New health care legislation could add hundreds of billions of dollars to already yawning budget deficits.
State budgets are cracking and unfunded pension liabilities have reached $452 B.
Societal acrimony has evolved into social unrest in some parts of the world, and economic hardship is pointing towards geopolitical conflict.
Complacency abounds, as measured by traditional volatility measures such as the Volatility Index.
Protectionism in the US, China, Greece and many other countries continue to grow. Protectionism is on the opposite end of "globalization" on the prosperity spectrum.
The official unemployment rate is just below 10%, but nearly 1/5 of Americans is underemployed for various reasons.
Interest rates have one way to go, and PE ratios never dipped and debt-to-GDP ratios will approach or exceed 100% in all G7 countries by 2014, with the exception of Germany and Canada.
The Congressional Oversight Panel warns that commercial real estate losses at banks alone could reach $300 billion starting in 2011.
and Most have even forgotten about the housing crisis. There are still massive amounts of toxic residential mortgage backed securities that remain on the private and public balance sheets."
He also states “If you asked me for my near-term opinion, I would offer that the tape tops out before quarter-end under S&P 1200, consistent with the path of maximum frustration as fund managers reach for performance.”
http://finance.yahoo.com/banking-budgeting/article/109164/the-falcon-and-the-snowman
According to Steven Goldberg, D.C. investment advisor, many investors have simply stood by and watched during this bull market, which began on March 9, 2009. He has stated that $4.8 trillion is invested in stock mutual funds. But, as a group, investors have been selling, not buying, during one of the most powerful rallies in history. The fear of more losses has been a more potent consideration for most investors.
Furthermore, the investors who rushed into bond funds have made a poor choice because the Fed, by sustaining short-term interest rates near zero and pumping money into our Nation’s dilapidated economy, may be setting the country up for a significant jump in inflation in the near future. At which time, bond yields will likely rise, thus, pushing down bond prices.
He also states that “over time, two-thirds of actively managed mutual funds fail to match the returns of the index they’re trying to beat.” Earning fund investors a lot less than what this bull market offers.
He offers some advice on how to improve your returns. Goldberg states that for the most part, casual investors should use common sense. “Keep your costs low, invest small amounts regularly, and shy away from investments you don’t understand.” If you have to invest in mutual funds, he recommends you “stick to a portfolio of index funds, and most importantly, do not try to time the market, especially in the short term because no one can.” I will add my own bit of wisdom here “if someone tells you they can time the market they are either a fool or a liar.”
http://www.kiplinger.com/columns/value/archive/investors-are-missing-the-bull-market.html
On the other hand, Todd Harrison, founder and CEO of Minyanville has written a commentary that was published on Yahoo: finance. He gives 10 reasons why he believes that most investor think this is a bull market but in reality “we are witnessing a cyclical bull market in the context of a prolonged and painful secular bear stretch”. Harrison states that it his opinion that the tide is about to turn.
His 10 reasons are (and I summarize)
"Questions remain on a Greek aid package in front of 20 billion euros in debt that comes due in April and May.
New health care legislation could add hundreds of billions of dollars to already yawning budget deficits.
State budgets are cracking and unfunded pension liabilities have reached $452 B.
Societal acrimony has evolved into social unrest in some parts of the world, and economic hardship is pointing towards geopolitical conflict.
Complacency abounds, as measured by traditional volatility measures such as the Volatility Index.
Protectionism in the US, China, Greece and many other countries continue to grow. Protectionism is on the opposite end of "globalization" on the prosperity spectrum.
The official unemployment rate is just below 10%, but nearly 1/5 of Americans is underemployed for various reasons.
Interest rates have one way to go, and PE ratios never dipped and debt-to-GDP ratios will approach or exceed 100% in all G7 countries by 2014, with the exception of Germany and Canada.
The Congressional Oversight Panel warns that commercial real estate losses at banks alone could reach $300 billion starting in 2011.
and Most have even forgotten about the housing crisis. There are still massive amounts of toxic residential mortgage backed securities that remain on the private and public balance sheets."
He also states “If you asked me for my near-term opinion, I would offer that the tape tops out before quarter-end under S&P 1200, consistent with the path of maximum frustration as fund managers reach for performance.”
http://finance.yahoo.com/banking-budgeting/article/109164/the-falcon-and-the-snowman
Tuesday, March 23, 2010
Stock Alert for A.P. Pharma Inc. (APPA)
This story is a great example of how investing in small cap biotech stocks can be unnerving and sometimes very risky. It takes a strong stomach to weather the ups and downs that come with getting a new drug to market. A.P. Pharma Inc. (APPA) is a specialty pharmaceutical company focused on developing pharmaceutical products using their Biochronomer polymer-based drug delivery technology. Their primary focus is on their lead product candidate, APF530, which had completed a pivotal phase III clinical trial for the prevention of chemotherapy-induced nausea and vomiting and had already been submitted with a New Drug Application (NDA) to the FDA.
I was deep into this stock, believing approval was just around the corner, when last week they received a Complete Response Letter from the FDA regarding APPA's NDA. After the FDA's review of APPA's file they had several questions that precluded the approval of the NDA in its current form. APPA's stock had closed on Thursday March 18, 2010 at $2.06 per share, before the announcement of the Complete Response Letter. On the news, many shareholders bailed out in the pre-market or at the open of the regular session and the stock price plummeted approximately 57% to $0.88 where it opened the next day. I thought that none of the concerns were drastic and all of them could be addressed with moderate to relative ease, thus, I decided to hold on to the stock and see where it was going. I had bought in at $1.76 per share and after a few hours the initial shock wore off and the stock started back up again, so I doubled my position at $0.96 per share. Today APPA closed at $1.10 per share, climbing $0.22 in 3 market days. I still think this is a great stock; they just have a few issues to work out. The success of this company is hinged on the approval of this drug; however, I have no doubt that A.P. Pharma will meet FDA standards for approval. Nevertheless, this did set the timeline back; it will probably be 2011 before they will be in position to resubmit the NDA. Yesterday, Stockpreacher.com published a stock alert for APPA:
Stock Alert for A.P. Pharma Inc. (APPA)
I was deep into this stock, believing approval was just around the corner, when last week they received a Complete Response Letter from the FDA regarding APPA's NDA. After the FDA's review of APPA's file they had several questions that precluded the approval of the NDA in its current form. APPA's stock had closed on Thursday March 18, 2010 at $2.06 per share, before the announcement of the Complete Response Letter. On the news, many shareholders bailed out in the pre-market or at the open of the regular session and the stock price plummeted approximately 57% to $0.88 where it opened the next day. I thought that none of the concerns were drastic and all of them could be addressed with moderate to relative ease, thus, I decided to hold on to the stock and see where it was going. I had bought in at $1.76 per share and after a few hours the initial shock wore off and the stock started back up again, so I doubled my position at $0.96 per share. Today APPA closed at $1.10 per share, climbing $0.22 in 3 market days. I still think this is a great stock; they just have a few issues to work out. The success of this company is hinged on the approval of this drug; however, I have no doubt that A.P. Pharma will meet FDA standards for approval. Nevertheless, this did set the timeline back; it will probably be 2011 before they will be in position to resubmit the NDA. Yesterday, Stockpreacher.com published a stock alert for APPA:
Stock Alert for A.P. Pharma Inc. (APPA)
Seattle Genetics Adds Patent to 2025
Seattle Genetics (SGEN) is the developer of antibody treatments for cancer. Today it has received a new patent which will extend its proprietary rights to its lead drug brentuximab vedotin, indicated for Hodgkin’s disease until at least 2025.
Seattle Genetics Adds Patent to 2025
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Seattle Genetics Adds Patent to 2025
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