Penny Biotechs Now Set To Run Print E-mail
By M.E.Garza   
Monday, 04 April 2011 10:30
rated bullishAs we told our premium subscribers this morning, there are two penny biotech stocks which we believe are set to break-out much higher and may continue to climb on positive pending news catalysts.

These two penny stocks are TapImmune Inc. (OTC:TPIV) and Northwest Biotherapeutics, Inc. (OTC:NWBO).

TapImmune is one that I was calling "undervalued" when it was trading at around $.18 just a few weeks ago. I did. however, warn our readers back in February that we would not alert on them until I saw their "overhang situation" clear up. That certainly seems to be the case now that the stock has started to break-out.

TapImmune is a biotechnology company specializing in the development of therapeutics and vaccines in the areas of oncology and infectious disease and their work with some of the leading doctors at the Mayo Clinic (they have research and licensing agreements in place there) caught my attention because they were only one of several organizations that have been signing up to work with these guys since new management took over and started pushing the pipeline very nicely in the last 12 months.  While their cancer technology is elegantly impressive and set to move into human clinical trials (after some recent meetings with the FDA we are anticipating that announcement in the days ahead), my sources and research tell us that many of the original SIGA and CBLI investors are looking even more excitedly at the company's MVA-TAP technology-- described as a prophylactic vaccine adjuvant for the protection against Smallpox and has applications as an adjuvant against numerous infectious diseases. We are anticipating some important news about that "game changing" Smallpox technology as well.  We are told shares could go much higher on that news because there are so many people excited that this could be developing into an attractive bio-defense play which could see funding and research from government sources. 

Already TapImmune's partners include: Aeras Global TB Vaccine Foundation, Crucell N.V, Mayo Clinic, National Institute of Allergy and Infectious Diseases, National Institutes of Health, The U.S. Department of Health and Human Services, The University of British Columbia, WuXi AppTec, Inc. (formerly AppTec Laboratory Services, Inc.) and WuXi PharmaTech (Cayman) Inc. I reached out to management about the possibility of an interview and they told me that they will be willing to speak more freely after they release some news. That tells me, something is cooking here. This stock only has around 21 million shares in the float in total and it should return to previous $1+/share levels if it breaks some minor resistance at $.50. Even higher on any of the good news items.

Same thing can be said about Northwest Biotherapeutics, and perhaps to an even greater extent. That stock is ready to move much higher on multiple news items which should play out in the next couple of weeks- if not sooner.

Since my coverage of their presentation at Bio-Ceo, I have been reporting rumblings involving the company's DCVax®-Brain; a dendritic cell vaccine for treatment of newly diagnosed Glioblastoma multiforme. Sources are telling us that the treatment of cancer, which has shown the ability to significantly delay disease progression, in addition to prolonging patient survival may be headed to market very quickly in Europe via a compassionate use exemption and some pending licensing agreements with at least two European groups.

No matter what the bashers say, that news would be historic, since as far as we can tell only Dendreon (Nasdaq:DNDN) has ever been able to monetize a personalized dendritic cell vaccine. This type of European partnership and compassionate use news would push NWBO ahead of just about all other Cancer Immunotherpy Stocks out there. As I said in my February report, now that the management team has been rectifying the company's financial ledgers; working hard to eliminate most of their debt, the stock is set to react.

We are anticipating that we will first see one or two news items that will set the table for European compassionate use very shortly. With the overhang issues in this stock gone, and with unsuspecting shorters holding about 2-3 million shares that will have to be covered, this one is also primed to move much higher. I am hoping this provides our readers who jump in at these penny levels with some nice returns over the next couple of weeks as the stories develop and we do more coverage and reports in the days ahead.

As I explained over the weekend, I'm anticipating some nice moves here because these stocks have had their prices pushed significantly lower due to financings that created "overhang." In other words, some of the individuals and funds that financed the companies and received stock (paper) for those financings had been been selling a majority of their shares just to reduce their initial risk in the investment- while at the same time holding on to the convertable warrants which were issued as part of the deal as their long term as investment in the firms. This type of action happens all the time in biotech and you'll hear me talking about "overhang" and how you may want to stay away from stocks that have "too much overhang" from time to time.

 

Disclosure: I have been long both of these stocks for some time




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