Sunday, October 08, 2006 Stay KOOL with Thermogenesis! Little California medical company Thermogenesis (KOOL) has caught the attention of BioHealth Investor (BHI). While BHI usually steers clear of smaller unproven stocks, we do love companies on the verge of their first profit, which usually means great investment gains. The last couple of years have positioned Thermogenesis to take advantage of the blood stem cell cryopreservation industry for many years to come. The company's flagship products are the BioArchive and the AutoXpress systems. The BioArchive System is a liquid nitrogen based storage unit that is designed to cryopreseve umbilical cord blood. The AutoXpress System is a semi-automated instrument that can be utilized by cord blood banks for harvesting hematopoietic (blood related) stem cells, from the preserved blood. These stem cells are capable of differentiating and maturing into the different cells of the immune system, which can theoritically be used in patients following chemotherapy. The business of preserving a new born baby's blood has exploded in the last few years, and is expected to gain as parents become more aware of the potential health benefits. While some argue that the odds of needing the preserved stem cells in the future are remote and believe donating them to public banks is the moral choice, many parents choose to pay the hefty costs for many years as insurance against future potential maladies. As the business grows, so does the competition. Cryopreservation banks are a dime a dozen, as many public, private, institutional, and hospital cord blood banks continue to emerge all around the world. This is where Thermogenesis stand to profit. Instead of entering this overcrowded arena, it caters to the players. It provides the necessary tools to preserve and harvest the stem cells to the banks! The idea can be lucrative enough to catch the eye of the ever hungry healthcare unit of giant General Electric (GE). Last year, GE Healthcare entered into a global distribution agreement with Thermogenesis to market the AutoXpress and BioArchive systems! As soon as the agreement was announced, GE was already selling the AutoXpress system to cord blood banks, including the New York Blood Center. GE was not Thermogenesis's first foray into sales and marketing. The company had already been distributing the BioArchive System globaly. In its fiscal 2006 report, it noted the sale of 135 units in over 29 nations. The sale of the sytems is not the major source of the potential profits, it is the sale of the disposable instruments that cord blood banks using the systems must continue to buy. One sold BioArchive or AutoXpress system will bring Thermogenesis a lifetime of recurring sales. This is were the true revenue and earnings potential can be realized. But the company is not relying on the stem cell business alone. It also boasts a long list of blood processing instruments and wound care treatments that can make any investor's mouth water. These include: - Thrombin Processing Device (TPD): a hand-held device capable of harvesting thrombin from a patient's own blood in the surgical room. Biomet (BMET) and Medtronic (MDT) initiated distribution of the divice in Canada and Europe. Asahi Medical has filed for approval in Japan. - Cryoseal Fibrin Sealant: company awaits an FDA decision on the marketing of this product in liver ressection surgeries. If approved, this would be the very first FDA cleared fibrin sealant produced from a patient's own blood for wound repair. - Clotalyst: a custom thrombin processing device to be used exclusively with Biomet's Gravitational Platelet Separation System. The most interesting observation regarding the above list is that all the events occured or were initiated during the last fiscal year! Now you see why BHI is excited about the near future of Thermogenesis. But it does not end there. While the company had not made a profit yet, its last fiscal year results were impressive. Yearly revenues improved by 18% and net loss decreased by 33%. It is not expected that Thermogeneis will make a profit next year, but should show its first positive net earnings during fiscal year 2008. As soon as the company comes close to that fatefull day investors will be fighting for its stock. The balance sheet is also favorable as the company holds cash and equivalents of $39 million and only $26 thousand in debt as last reported on Yahoo! Finance. Also, company insiders bought $300,000 worth of company stock in May of 2006. Philip Coelho purchased 25,000 shares and Hubert E Huckel, MD purchased 50,000 shares at around $4. As the stem cell preservation business expands, the marketing agreements with biotech and healthcare giants continue, and the road to profitability gets shorter Thermogenesis stands to become a highly respected medical equipment company. The future looks bright for Thermogenesis. And at the current price of $3.86, one can get a better deal on the stock than what company insiders paid for it. note: the author holds a long position in Thermogenesis stock. _

Friday, November 03, 2006 NovaDel's Oral Spray Delivery Technology Looks Promising Little known biotech company NovaDel Pharma (NVD) is primed for great gains both financially and medically in the coming two years. NovaDel announced early Friday the company's NitroMist had recieved marketing approval from the FDA. NitroMist is an oral spray developed using NovaDel's oral drug delivery technology for relief of acute or prophylactic attacks of angina pectoris. NitroMist is licensed to Par Pharmaceutical Companies (PRX) for commercialization i North America. There is one main reason why NovaDel might make a great investment; It provides an alternative method of delivery of drugs already on the market. It is a generics pharmaceutical company, but with a twist. Its oral spray delivery technology provides faster absorption and onset of action of drugs currently on the market in tablet form. This in effect makes it easier for NovaDel to bring a drug candidate to market as it does not have to go through the same expensive and time consuming clinical trials as other biotech firms. NitroMist is the company's first approved product based on this exciting technology. Chances now look good that the company's other candidates will also recieve FDA approval, and there are plenty of promising pipeline candidates; Zensana - Ondansetron Hydrochloride spray indicated for nausea and vomiting in patients recieving chemotherapy. The drug is partnered with Hana Biosciences and the FDA is currently reviewing a New Drug Application (NDA) filed in June of 2006. If approved, Zensana could hit the market during the first half of 2007. Ambien - Zolpidem Tartrate oral spray for relief of insomnia. A recent pilot pharmacokinetic study was completed and showed a statistically significant difference in drug absorption between patients using Ambien spray versus those using tablets. NDA is expected to be filed during first half of 2007. Ambien is a trademark of Sanofi-Aventis (SNY). Imitrex - Sumatriptan Succinate spray for migraine relief. The company is very excited about this candidate, and it should be. A recent pharmacokinetic study showed that patients using Imitrex had an upwards of 30 times absorption of the drug as opposed to those taking Sumatriptan tablets. An NDA is expected to be filed during second half of 2007. Imitrex is a trademark of GlaxoSmithKline (GSK). Zanaflex - Tizanidine spray for plasticity, and is currently in pre-clinical characeterization. Zanaflex is a trademark of Acorda Therapeutics (ACOR). Requip - Ropinirole spray for Parkinson's disease, currently in pre-clinical characterization. Requip is a trademark of GlaxoSmithKline (GSK) Insiders have been buying NovaDel stock on a regular basis since December of 2004 and as recently as June of 2006. A new and exciting drug delivery technology, the relatively quicker and cheaper method of brining a drug to market, a promising pipeline, and consistent insider buying makes NovaDel an attractive little medical company. The company has over $10 million in cash and less than $150 thousand in debt. At $1.30 a share and a market cap of less than $70 million NovaDel looks cheap, and we have no problem making it a BHI Stock Pick. _

Sunday, November 19, 2006 Pain Therapeutics: Is it Worth the Risk? These days it seems doctors have more to worry about than practicing medicine. One big issue, other than lawsuits of course, is the increasing number of drug abusers jumping from one doctor to the next seeking the wonderful effects of oxycodone, one of the best painkillers around. The euphoric highs experienced when taking oxycodone can be addictive to a certain number of susceptible patients. But doctors have little choice, as some of the most popular pain killing formulations on the market include oxycodone or some variant of it. This is where Pain Therapeutics (PTIE) hopes to hit it big. The company's lead drug candidate is Remoxy, which includes a reformulation of the active ingredient in oxycodone that has been shown to have substantially lower addictive effects. Remoxy is currently in phase III trials, and chances look good that the FDA will approve the drug for the market. An FDA decision could come as soon as 2007. The catch however, and there is always a catch, is that Pain Therapeutics will have to show that Remoxy has a statistically higher pain killing effect than oxycodone. The phase III trial is critical. In essence, investing in Pain Therapeutics for the near future is betting on that one trial's results. The company's FDA approval history is, with no pun intended, painful. In 2005, one of the company's phase III trials for a drug treating irritable bowel syndrome failed to meet one of the FDA's primary endpoints. I usually do not like such risks. None of BHI's stock picks so far have been unproven biotechs with significant interest in clinical trial results. But Pain Therapeutics tempts me a little for various reasons. The company has over $200 million in cash and no debt as last reported by Yahoo!Finance. A large part of that cash is the first $150 million payment recieved from King Pharmaceuticals (KG) as the two companies entered into a collaborative agreement to co-develop Remoxy and other pain killing opioid alternatives . King will owe Pain Therapeutics $400 million in upfront payments and royalties pertaining to the development of Remoxy. Oxytrex is the second phase III drug candidate being investigated as a treatment for chronic pain, such as osteoarthritic and lower back pain. In a recent phase III trial patients reported over 50% less dependence on Oxytrex as compared to oxycodone. Company insiders hold 33% of the outstanding shares, and have been continually buying shares since April of 2005, which is a huge sign of confidence and one parameter that is critical when evaluating biotech stocks. Back in October Jason Shade, writing for SeekingAlpha.com, and Brian Lawler, for Motley Fool, both made their cases for Pain Therapeutics. Mr.Shade especially did a great job pointing out that shares of Pain Therapeutics could be trading at 4x the current price levels if Remoxy alone is approved. Just recently the company announced it had found a novel way of altering metastatic melanoma using antibodies. The company intends to enter clinical trials in 2007, thus adding to its already impressive pipeline. So is Pain Therapeutics worth the risk? Well, keeping in mind the previous failure in 2005 we need to be a little cautious. But Remoxy's chances of approval look good, and coupled with all the other reasons mentioned I would not hesitate to recommend the stock as a BHI Stock Pick, albeit with a smaller position. Disclosure: the author does not currently have any interest or hold a position in any of the stocks mentioned in this article. The author is not a professional or certified financial analyst. All opinions are that of the author and should not be used as professional recommendations. The author and BioHealth Investor are not responsible for any financial loss or damage relating to any investment activities motivated by this article. __

Tuesday, December 19, 2006 Geron's Research Arsenal: Stem Cells, Cloning, Cancer by H.S. Ayoub BioHealthInvestor.com Shares of Geron Corp (GERN) gained over 3% on Tuesday after the company announced positive early preclinical data. The company's telomerase inhibitor GRN163L had positive synergistic effects in mice expressing human breast cancer when used along with chemotherapy. This is the first study to show GRN163L as a radiation sensitizer in cancer treatment. Geron is best known for its world leading intellectual property portfolio of stem cell and nuclear transfer (cloning) technology. In fact, Geron holds key patents in the isolation and harvesting of human embryonic and germ line stem cells. It also holds world rights to the nuclear transfer technology that had produced the famous Dolly the Sheep. Although there has recently been various other cloning methods developed by other organizations that have arguably lowered the strong value of the Dolly nuclear transfer technique. But the company also holds key patents related to telomerase research and its application in cancer treatment. Telomeres are short strands of DNA that have been shown in studies to be implicated in cellular aging. In fact, the data has shown that as the cell ages telomeres become smaller in size. Telomerase is an enzyme that apparently plays a role in cancer progression. Specifically, it delays the shortening of telomeres in cancer cells, and thus, making those cells theoretically immortal. Geron's telomerase inhibitor candidates, as the name implies, aim to block the activity of the enzyme and thus, rendering cancer cells mortal, and in essence, killing them. What makes the company's cancer program so exciting is that studies have shown telomerase is universal; almost all kinds of cancer can be theoretically treated. Geron's stem cell programs are various, including research aimed at treating spinal cord injuries, Heart Disease, Diabetes, Osteoarthritis, Osteoporosis, Hematology and other conditions. With about $175 million in cash, no debt and a market cap of only $600 million, Geron looks tasty as a takeover target. But the company is a fighter, and would probably vote down any offer deemed even a little low. Geron has legally protected its patent portfolio vigorously in the past, so much so that it has been regularly criticized. It could be possible that regulatory bodies could get involved and loosen the company's patent claims, but this is unlikely. The company is getting better at providing cell lines and working with other organizations, while protecting the underlying claims of their key patents. Geron closed trading on Tuesday at $9.16, and just recently the company sold $40 million in stock for $8 a share. This makes it current worth on the market only 14.5% above the recent stock offering. The life science conference season heats up again late winter early spring. Geron should have a multitude of study results to announce during the next few months. Also, Considering the company had traded as high as $12 back in May of 2005, the current stock price seems at least 30% cheap. Geron Corp has been chosen as a BioHealth Investor Stock Pick. __________

VIVUS Looking to Profit from Obesity and Sexual Dysfunction by H.S. Ayoub BioHealthInvestor.com Unless you have been under a rock, and not under a bed cover, you have probably heard of Pfizer's (PFE) Viagra and ICOS's (ICOS) Cialis, the erectile dysfunction blockbuster drugs that have been part of the prime time acts of many comedians. But it is not too late for small investors to jump in on the ground floor for the next line up of blockbuster drugs catering to sexual dysfunction and obesity in both men and women. VIVUS Inc. (VVUS) is a small biopharmaceutical company focused on the growing need for sexual dysfunction and obesity drugs that have become a regular part of the lives of millions of baby boomers. Back in 1997, VIVUS was granted marketing approval by the FDA for a novel treatment for erectile dysfunction in men, called MUSE, which is quite an interesting treatment to say the least. While Viagra and Cialis are oral treatments, MUSE is a pellet smaller than a grain of rice that is administered through the penis! It is thus not surprising that MUSE has not garnered the attention necessary for huge profits. VIVUS cleverly initiated a clinical program aimed at developing an oral therapy for erectile dysfunction in men, to compete with Viagra and Cialis. Avanafil is currently being readied for phase III clinical trials as an oral treatment for erectile dysfunction. Previous phase II studies have shown that 84 percent of Avanafil doses resulted in erections, and Avanafil's 20 minute onset of action was comparable to Sildenafil, the active ingredient in Viagra. One more very important and potentially lucrative observation was that Avanafil had less effect on blood pressure and heart rate than did Viagra. But VIVUS is also very aware of the health needs of women. How about Female Sexual Dysfunction, or FSD? Could drugs tailored to FSD be the next round of blockbuster treatments? According to the American Urological Association about 40 million women in one way or another suffer from FSD in the United States. That could make a very large and lucrative pool of consumers for VIVUS which is tackling the problem with Testosterone MDTS, a transdermal spray that delivers a dose of the hormone through the skin. Testosterone MDTS is being investigated through late stage clinical trials for the treatment of hypoactive sexual desire disorder (HSDD), a condition in women characterized by low sexual desire. Just recently VIVUS announced that the FDA had accepted its New Drug Application (NDA) for EvaMist, a transdermal spray treatment for menopause. If accepted for marketability this could at least provide a confidence booster for the spray technology used in Testosterone MDTS, and EvaMist itself could also bring in substantial revenue for the company. VIVUS's true blockbuster potential could rely on Qnexa, a two drug formulation that could potentially supress the apetite and burn fat through a once-a-day tablet! The size of the potential consumer market cannot be over-exaggerated. Phase II trial results of Qnexa showed an average weight loss of 20 pounds by 24 weeks of treatment. To put this data in perspective, patients taking Sanofi-Aventis's (SNY) Acomplia lost only about 10 pounds after 52 weeks! Also, the weight loss did not reach its peak after 24 weeks, which has been shown in studies of other drugs. VIVUS continues to show lower sales and revenue year after year for the last few years. The company also carries cash of only $26 million and debt of more than $10 million as last reported by Yahoo!Finance. But the company did sell shares back in November of 2006, generating more than $30 million in additional fundings. The company burned more than $20 million in cash last fiscal year. So the more than $50 million in cash the company currently holds should be more than enough for VIVUS to continue the development of its strong pipeline through 2007, and to launch EvaMist following the expected FDA approval. Being a small company, with a market cap of less than $200 million and a strong pipeline filled with late stage candidates tailored towards billion dollar markets, VIVUS could very well end up being acquired by a larger drug company keen on competing with Viagra and Cialis. 2007 looks to be a very promising year for VIVUS. VIVUS is now a BioHealth Investor Stock Pick. __________

Monday, October 23, 2006 The Biomedical Industry In One Stock! H&Q Life Sciences Investors (HQL) is not actually a stock, but trades like one. HQL is a close-ended fund managed by Hambrecht and Quist Capital Management LLC, and trades on the Amex just like a stock. What really gets us excited about HQL is that it invests in both public and private companies, large and small. An investor of HQL does not only hold a broad diversified position in the biomedical industry, but also carries financial vehicles not commonly available to small investors. HQL invests in convertible securities and warrants in addition to common stocks. As of June 2006, about 19% of its assets were made up of non-common stocks. HQL, initiated in 1992, is the younger sibling of H&Q Healthcare Investors (HQH), which began trading back in 1987. According to the company’s website HQH holds a broader position in the healthcare industry, while HQL focuses more on exciting new biotechnology startups, although we fail to differentiate between the two when looking at their holdings. So why are we recommending HQL right now? The fund just recently completed a public 1 to 3 rights offering that netted more than $70 million in cash. HQL is excited to take advantage of what it believes is a great time to find bargains in the biotechnology and medical industry, and according to the prospectus for the filing it plans on investing in those bargains. The subscription price of the filing was $12.82 a share. Almost immediately, the Chief Executive Officer purchased more than $20,000 worth of stock at the same price. While all biotech indices, including the NASDAQ Biotech Index (NBI), saw gains over the last few weeks, HQL has lost ground, dropping down near the rights offering price of $12.82. The price closed on Monday at $13.67 a share. Another reason for investing in HQL is the dividend. Let us repeat that last sentence just in case you missed it; a biotech investment that pays dividend! The fund pays out 2% of assets in dividend on a quarterly basis. The last distribution paid out to investors was $0.29 a share. If a sound, broad, and exclusive investment in the biotechnology and medical industry is hoped for, HQL is not only the safest bet, it is the only such investment. And at $13.67 a share, we have no hesitation in recommending it. The following are some highlights of HQL’s holdings as of June 2006: Common Stocks and Warrants Biopharmaceuticals 26.3% Drug Delivery 2.5% Drug Discovery Technologies 5.3% Emerging Biopharmaceuticals 17.8% Generic Pharmaceuticals 4.3% Healthcare Services 4.5% Medical Devices and Diagnostics 15.2% Largest Holdings (Common Stocks) Gilead Sciences (GILD) Conor Medsystems (CONR) IDEXX Laboratories (IDXX) Cubist Pharmaceuticals (CBST) Theravance (THRX) Lexicon Genetics (LEXG) Genzyme Corp (GENZ) United Therapeutics (UTHR) Exelixis (EXEL) Epix Pharmaceuticals (EPIX) Largest Convertible Securities (private companies) Concentric Medical CardioNET Matritech PHT Corp. Agensys _

Wednesday, March 07, 2007 Bruker BioSciences: Earnings Growing, Insiders Buying by H.S. Ayoub BioHealth Investor.com Bruker BioSciences (BRKR) seems primed for a great performance in 2007. The maker of mass spectrometry and x-ray detection systems for both the life science and security industries continues its strong earnings growth over the last couple of years. This is not surprising, as both industries continue to see strong growth world wide, and Bruker is more than happy to provide the necessary tools. Bruker is the parent of the following divisions: Bruker AXS Developer and provider of life science, materials research and industrial X-ray analysis. Bruker Optics Developer, manufacturer and provider of research, analytical and process analysis instruments and solutions based on infrared and Raman molecular spectroscopy technology. Bruker Daltonics Developer and provider of innovative life science tools based on mass spectrometry, and also offers a broad line of chemical, biological, radiological and nuclear (CBRN) detection products for homeland security. On February 22nd, the company announced an increase of 80% in net income per diluted share for 2006 over the prior year, and expects earnings growth of 40% for 2007. This is the type of growth that drives small caps to mid-cap status. As of Wednesday, March 7th, the company had a market cap of less than $1 billion, with a little over $50 million in cash and an operational cash flow of more than $40 million during 2006. The relatively low level of cash on hand is primarily due to recent acquisitions. Revenue has seen a tremendous surge as well. For each of the last four years revenue has increased, going from $260.679 million in 2003 to $435.800 million in 2006. But the largest jump was just last year, as revenue jumped from just less than $297.569 million in 2005 to $435.8 million in 2006. No doubt, the recent acquisitions have helped in that revenue jump as company CEO Frank Laukien explains, "The acquisition of Bruker Optics, as well as the other important acquisitions we completed over the past 15 months, continued to strengthen both our traditional research systems business and our newer industrial and applied analysis business". What really makes this stock attractive is how closely it is held. According to Yahoo!Finance, insiders hold about 57% of outstanding shares, and institutions hold close to 34%. This leaves a relatively short supply of shares available on the open market! The company's CEO, Mr.Laukien, continues his buying frenzy with the purchase of about $1 million worth of company stock over the last couple of weeks in a price range of $8.69 to $9.30. The stock closed trading on Wednesday at $9.42 a share. While Bruker stock has been on a tear over the last couple of years, it seems that with the continued surge in growth and the tight hold Mr.Laukien has on his shares, the stock should still continue to perform well in 2007. There is one point to keep in mind however; with such a high percentage of shares held by institutions coupled with a relatively risky small cap, investors must be careful as one earnings miss could send the price of the stock plummeting as fund managers would follow each other and jump over the cliff. This could be exaggerated even more so with an expected downturn in the market. An investor in Bruker is betting on continued strong growth, and with high insider buying activity recently it seems that the risk is marginalized. Disclosure: Author does not currently hold any position in Bruker BioSciences stock. Source: BioHealth Investor.com ___________________

Wednesday, February 07, 2007 Follow Along with Dr. Frost and Invest in Continucare by H.S. Ayoub BioHealth Investor.com One strategy that I like to follow when looking at smaller capped stocks is to keep an eye on company insiders, especially those whose investing history is almost perfect. One such investor is Phillip Frost, M.D. of South Florida, whose hot hand has turned almost anything he touches into gold. Numerous financial articles have showcased his great investing prowess over the last couple of years. In fact, the Wall Street Journal Online named him as the insider with the second best returns for 2006, and Fortune magazine ranked him at #645 on the World's Richest People list. He invested heavily in Ladenburg Thalmann Financial Services Inc (LTS) a couple of years ago. Shares of LTS have surged over that span, and yours truly followed along and bought stock of the company last fall at $1.09. Shares closed on Wednesday at $2.49! The founder of Ivax Corporation (IVAX), which he later sold to Teva Pharmaceuticals (TEVA), continues his great streak by investing in healthcare related companies. One of Dr. Frost's more attractive investments is Continucare Corp (CNU). The company provides primary care physician services to patients, and practice management services to independent physicians. The company is based out of Miami, Dr. Frost's neighbourhood. While he has been an investor in Continucare for some time now, just last October he purchased another $100,000 worth of company stock at a price range of $2.34-$2.45. While it is advantageous to follow company insiders' moves, it is also imperative to practice due dilligence when considering an investment into smaller capped stocks. Insiders buy and sell stocks for a variety of reasons some of which might not be correlated with expected future returns. Looking at Continucare's financials at Yahoo!, one could see a pretty picture indeed. Low debt and high cash levels overshadow the tiny market cap of $200 million. The company has had a rising trend in both revenues and profits over the last 3 years. The company however, will release its financial results this week, expecting to have a lower amount of cash due to its October acquisition of Miami Dade Health Centers in South Florida. With the expected launch of its Continucare ValuClinic this upcoming spring, the bottom line and revenue numbers should continue to increase substantially over the next couple of years. Shares of Continucare closed trading on Wednesday at $2.97, which is about 20% more than the highest price paid for by Dr. Frost. Looking at his investment track record, that premium might be considered a bargain. Continucare Corporation is now a BHI Stock Pick.