Readers Respond: BDSI, MNKD, GNBT Print E-mail
By Vinny Cassano   
Tuesday, 16 March 2010 13:37

Vinny Cassano responds to reader comments about various small-cap biotech stocks in the news.

Vinny, What do you think about BDSI, I like the way it is rising, but what do you think about the volume is trading, I think we still didn´t see the big jump because I am not sure that the big boys are playing right now, I would like to know what are your thoughts about it.
I´m a convinced holder of BDSI.
Thank you.

Vinny's Take: Hi Alejandro, I'm still a believer in BDSI and I think that this company has a great future, as I most recently explained HERE.

It's my opinion that stocks like BDSI (DDSS is another recent example) are getting driven down after positive approval news from the FDA to let the big boys load up. It makes perfect sense because the risk is greatly reduced when it becomes clear that revenue growth is all but a sure thing.

In fact, I won't complain about that strategy because it benefits the small investor just as much as the big boys, although I think it's evident by the message board bashing that a few of those big boys get perturbed when you play their games instead of selling them your shares in state of panic, disarray and impatience.

I've actually got BDSI tucked away in my IRA so I may have a longer outlook than others, but when the stock moves - it could move quick, and that move could come this year if sales results for Onsolis look promising.

Sometimes the relatively long waits can get boring, but it's been my experience that patience pays off a lot better than impatience - and I'm confident that BDSI is going to pay off.

The most immediate influence on price should be the initial Onsolis sales results, in my opinion.

An anonymous comment regarding MNKD and GNBT:


News on Mannkind (MNKD)today: Complete Response Letter. On the one hand it would be good for Generex if MNKD opened the market, on the other hand the news limits MNKD's first to market advantage. Also, if GNBT is viewed as the superior product and delivery system, it further strengthens GNBT's competitive advantage because of lung concerns with MNKD. What do you think GNBT will be near term if they are successful in getting a partner for the vacine part of the business?

Vinny's Take: First some background info on Mannkind for those that might have missed it:

Shares of Mannkind dove to under seven dollars at one point on Monday after it was announced that the FDA had asked for additional information regarding the comapany's inhaled insulin product, Afrezza. After rebounded slightly towards the end of the day, MNKD closed at $7.89. There were no safety concerns cited by the FDA, according to publicly released information, but the administration is mainly interested in the commercial version of the MedTone inhaler that is used to deliver insulin.

Mannkind's Afrezza is inhaled via the MedTone inhaler and then absorbed into the system through the lungs. While the FDA has cited no safety concerns regarding absorption through the lungs, there has been some concern expressed by others in the medical field whom believe that the lungs could face long term damage as a result of the inhaled insulin.

Generex (GNBT) is currently testing Oral-Lyn, another oral insulin product, although with Oral-Lyn the insulin is absorbed through the inner lining of the cheek.

Shares of GNBT remained steady on Monday as MNKD plummeted, and I think that the bad news for Mannkind can, in turn, be very good news for Generex. Because it is not quite clear how long the FDA development will set Mannkind back, the FDA delay gives Generex some time to play catch up. This could become a very valuable turn of events for Generex, assuming that the product meets its Phase III endpoints and passes muster with the FDA.

Since the delay is mainly a result of the commercial version of the MedTone inhaler and not a concern with the insulin delivery, the Mannkind setback should be a non-factor for concern that the same thing could happen with Generex, and I'm guessing that the market feels the same since the GNBT stock held its ground on Monday.

As for the direction of the GNBT stock, I think that it will react in similar fashion to SIRI - when its ready to move up to a dollar, it's going to happen pretty quickly. Any further rises in price will be the result of a Phase III announcement, in my opinion.

I still like shares of GNBT in the sixty cent range.

Long GNBT and BDSI, no position MNKD.

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