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June 2008

Recs

5

Closing TELK (Telik) underperform

June 24, 2008 – Comments (4) | RELATED TICKERS: TELK

I still think Telik is headed for the dustheap of history, but I don't see collecting any more points in the near term and the stock is trading at cash level. Telcyta and Telintra are still in clinical trials and you never know when management will release some BS that will cause the price to double overnight. If it happens, I'll be there to short again.

Recs

2

Closing ARQL (Arqule) underperform

June 18, 2008 – Comments (0) | RELATED TICKERS: ARQL

The E2F-1 inhibitor program still looks really bad to me, but it doesn't appear that the company is going to voluntarily discontinue it in the near future as I predicted. Instead, they're rolling out a new E2F-1 (ARQ761) which is simply a pro-drug that reverts to ARQ501 in plasma. My assumption has been that ARQ501 has weak efficacy, explaining its disappearance from the quarterly statements. So ARQ761 seems like a placeholder to maintain share price until better data comes out for ARQ197. However, I suspect that Roche will force the issue by dropping the E2F-1 collaboration at the end of 2008 when the current agreement lapses, rather than picking up the 2009 extension. Regardless, the gap down I was expecting from the loss of the E2F-1 program won't happen this year, and the share price has shown significant support at the current level. In fact, I'm going to reverse and take a hopefully brief bullish position for a recovery to the 4.2 range before positioning myself for the inevitable E2F-1 related plunge.  [more]

Recs

2

Closing NVGN (Novogen) underperform

June 13, 2008 – Comments (0) | RELATED TICKERS: NVGN

Well, what was that all about? That steep climb, a choppy plateau, and now a dizzying descent? Us lowly retail investors will likely never know. But it does illustrate the advantages of keeping a close eye on the market to pick up some low-hanging fruit. I may be exiting the red thumb party early, but I'll remember these guys and jump in on the next irrational upswing.

Recs

2

Closing POZN (Pozen) underperform

June 13, 2008 – Comments (0) | RELATED TICKERS: POZN

I got my downtick, no thanks to the dropping market which negatively impacted my score. I think it's wise not to linger too long as Pozen does now have a marketable drug and will start booking some revenue in the near future. You never know when people are going to start getting excited.

Recs

2

Closing VRUS (Pharmasset) outperform

June 13, 2008 – Comments (0) | RELATED TICKERS: VRUS.DL

Pharmasset is now up 30% over recent lows with the same fundamentals. I'm not seeing any short term catalysts with no significant data expected for the remainder of the year. I see the current upward move as high tide in a range-bound stock and expect a pullback to the 15-16 range before long. In general I try to avoid picks that go against my long-term prospects for the company so I won't drop a red thumb. But I'll be back in below 16 for sure.

Recs

2

Closing VPHM (Viropharm) outperform

June 13, 2008 – Comments (0) | RELATED TICKERS: VPHM

The share price took a nice little jump over 10 which seems like a good place to exit and stand on the sidelines for a while. Overall things still look good but the price is at the high end of the recent range without clear positive catalysts and will likely drift back down before 9, where I plan to re-enter.

Recs

2

Closing ENZ (Enzo) outperform

June 13, 2008 – Comments (0) | RELATED TICKERS: ENZ

The justification for the recent rise seems to be improving revenues and narrower losses, but I don't see that much of a difference from the last two or three quarters. Revenues especially seem to be flat and certainly haven't cracked the 20M mark. After reporting in 12/07 that the phase II trial of Alequel was nearing completion, they most recently project that the trial will not be completed before the end of 2008. At best this represents poor management, at worst they know the data will be bad and they're planning a dilutive financing before the negative data tanks the share price.  [more]

Recs

2

Closing SGMO (Sangamo) underperform

June 06, 2008 – Comments (0) | RELATED TICKERS: SGMO

That was a nice little score in less than a month. I don't even know what's driving the stock down so sharply, although I also don't know why it was so high to begin with. Anyway, I don't think Sangamo is headed for the Nastech wastebasket quite yet. I'm hoping for one more upward run before SB-509 flops and drives the company permanently into the toilet. It's still overpriced, and I won't get caught green thumbing another overpriced biotech. Learned that lesson at the beginning. But I'll red thumb it again over 12.  [more]

Recs

2

Closing TRCA (Tercica) outperform

June 05, 2008 – Comments (0) | RELATED TICKERS: TRCA

Boom! That's my second buy-out in a week, after Kosan. How quickly the winds of fortune can change. From a score in the negative 300's to nearly 200 in a couple of weeks, just when I was on the verge of giving up my dream of differentiating the players from the pretenders in biotech. I know, I didn't predict the acquisition, but the bottom line is identifying value. Whether the value is eventually realized by the market or another company is irrelevant.

Recs

2

Closing SSRX (3S Bio) outperform

June 05, 2008 – Comments (0) | RELATED TICKERS: SSRX.DL

No specific reason for ending the pick except that the stock price has risen a decent amount in a short period of time, and it's difficult to follow the company's news and numbers due to its location. I'll never get a three bagger, let alone a ten bagger, selling out just because a stock gained. But in real life a lot of small gains will outweigh one or two big ones, even if that rule doesn't apply in CAPS.

Recs

8

Closing ACOR (Acorda) outperform

June 05, 2008 – Comments (0) | RELATED TICKERS: ACOR

Acorda stock has responded very well to the positive Fampridine-SR results, as I predicted. However, I do expect a pullback below 28 during the ensuing quiet period prior to the NDA filing and PDUFA date. The overall market weakness and biotech pessimism have had this effect on numerous other small cap biotechs achieving drug approvals this year. Ending my Acorda pick now may ultimately have a negative impact on my CAPS score, due to the artifactual inflation of points in outperforms that were initiated at low prices. Intuitively this seems appropriate, but in fact it does not reflect the actual market. For example, if I now rate Acorda as underperform, pick it up as an outperform again if it drops to 28, and then ride it back up I will gain points in the short term but eventually become relatively negative once the price hits about 40. That's because my outperform points only reflect my most recent start price, not the original one. That's how I lost my score leader position in Progenix despite having three strong picks so far. However, I think it's better that I approach CAPS with my actual investment strategies rather than as an attempt to inflate a meaningless score which is only a weak reflection of the positive predictive value of a pick.  [more]

Recs

3

Closing OMPI (Obagi) outperform

June 05, 2008 – Comments (0) | RELATED TICKERS: OMPI

I'm sure I'm giving up lots of potential points, but I was never really comfortable having this in my portfolio. I'm glad to get out with a positive score and I think I'll stick with pure biotechs for the time being.

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