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More bottoms for the bottom-grabber and a GBMB portfolio update



January 28, 2010 – Comments (3) | RELATED TICKERS: ADLR.DL , ANDS.DL

If you have no idea what I mean by GBMB, look here.

Adolor (ADLR) - market cap 72M, share price 1.55. Cash 94M, debt 0, burn 11-16M. They were on a long decline since approval of Entereg for post-operative ileus, apparently justified since no one appears to be buying it. It would seem bowel movements are overrated. The share price hasn't moved much in six months so it appears that the failure of Entereg has been absorbed. The recent all-time daily low was 1.34. Adolor does have a pipeline, most notably the delta opioid antagonists that are in phase III trials through collaborator Pfizer. Even if the next quarterly statement doesn't bring any positive catalysts and the burn is at the high end of recent range, the market cap will still be less than cash on hand. The stub has been unratable on CAPS for months, so no recent Top Fool activity. Consider GBMB buy below 1.45.

Anadys Pharmaceuticals (ANDS) - market cap 75M, share price 2.01. Cash 25M, debt 0, burn 7-9M. In early 2009 the stock enjoyed a run as high as 7 on the strength of strong data from a phase Ib trial of the hepatitis C drug ANA598. After several months, the share price crashed back to current levels on reports of a rash side effect from ANA598. The stock now seems priced for ANA598 failure, but there is a phase II trial of ANA598 well under way using the lower dosages. At the interim analysis only mild rashes were reported, none of which led to discontinuation of treatment. Important safety and efficacy data is expected later in Q1. The stock has historically exploded on mildly positive developments, oftentimes with huge disparities between intraday high and close. This is a stock that needs to be watched very carefully when it moves. The six-month low was in November when the price briefly dipped below 1.8. This stub is also unratable, so no recent Top Fools activity. GBMB buy <1.9.

I've recently initiated the GBMB program, thus far with unimpressive results.

BDSI - 5000 shares at 3.95, now 3.6.

MYGN - 1000 shares at 22.3, now 22.19.

MIPI - 5000 shares at 1.95, now 1.63.

So the GBMB portfolio is already down about 3 grand. I guess bottom-grabbing isn't as easy as I hoped. Pretty easy to get slapped. But I haven't seen any change in fundamentals that would cause me to second-guess my positions. I'm not going to grab any more (except possibly ANDS) until I feel more confident we're not headed back to March 2009 in biotech. For the medium term I'm still comfortable with my positions.




3 Comments – Post Your Own

#1) On January 28, 2010 at 2:41 PM, Tastylunch (28.72) wrote:

I guess bottom-grabbing isn't as easy as I hoped. Pretty easy to get slapped.

Well to be fair the market is in correction. Hard to be long anything when the winds are against you.

time will tell what size this correction will be.

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#2) On February 05, 2010 at 4:46 PM, sirwanksalot (< 20) wrote:

Took a position in MIPI today @ 1.28

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#3) On March 16, 2010 at 5:15 PM, sirwanksalot (< 20) wrote:

Dumped out of MIPI after hours @ 1.52 = Looks like company may go belly up

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