Wednesday, September 24, 2008


Osiris Therapeutics Inc. (OSIR)
  • A biotech based in Maryland which specializes in bone marrow stem cell products that treat inflammatory, orthopedic, and cardiovascular areas of medicine.
  • On Tuesday, September 23, OSIR announced that they enrolled 62 patients in the Phase 2 trial to treat pulmonary disease through its Prochymal product formulated from adult mesenchymal stem cells.
  • On Thursday, August 7, OSIR reported a Q2 loss of $0.48 per share or $15.4 million on $2.5 million in revenue vs. a loss of $0.37 per share or $10.5 million a year ago. Analysts expected a loss of $0.51 per share on $1.6 million, beating both earnings estimates and revenue targets. If a stock makes new highs, it doesn’t mean the company is profitable.
  • The most recent analyst action came from Jefferies & Co which downgraded OSIR to “Underperform” from “Hold” and set a target price of $11 on August 1. The close as of Tuesday, September 23 was $19.12.
  • Technically, OSIR looks like it will go higher but on a pullback. $17 is the target pullback level and the 50-day MA is the guide. This is a common “stair-step” pattern which is characterized by long consolidation periods (1-2 months) with forceful breakouts.
  • This is a low volume stock and should be traded with caution.

NPS Pharmaceuticals Inc. (NPSP)

  • A biopharma based in New Jersey that specializes in gastrointestinal and endocrine disorders.
  • On Tuesday, September 16, NPSP reported positive interim data from the hypoparathyroidism Phase 2 study.
  • GATTEX is currently in Phase 3 development, NPSP558 is in Phase 2 development. PREOS completed a Phase 3 study and NPSP156 is still in its preclinical stage.
  • Reported positive earnings in 12 out of the last 13 quarters.
  • No analyst actions in 2008, even though four firms cover NPSP (Credit Suisse, Goldman Sachs, Jefferies & Co, Lehman Brothers. Unknown if LEH still covers the stock)
  • I don’t expect either GATTEX or NPSP558 to be commercialized until 2011. Therefore, there are few short to intermediate-term catalysts to prop this stock up.
  • Up 115.9% year-to-date, outperforming nearly all peers in the pharmaceutical sector.
  • Technically, NPSP may be forming a “bump-and-run” reversal. Any penetration of the support line below on heavy volume indicates a major trend reversal. NPSP may go higher, but it’s too extended for any short- or intermediate-term long position.

Aceto Corp. (ACET)

  • A multi-segmented business based in New York that specializes in heath sciences, agricultural bio drugs, chemicals, and crop protection. And distributes over 1,000 pharmaceuticals and chemicals throughout the world.
  • On Friday, September 5, ACET reported Q4 earnings of $0.32 per share or $8 million on $104.7 million vs. $0.17 per share or $4.2 million on $87.2 million a year ago. Profit grew 90% and revenue grew 20% for the quarter.
  • The health sciences unit grew 34.9% and the crop protection unit grew 19.5% helped by the global demand in the agricultural/fertilizer and animal testing industries.
  • ACET is covered by 2 firms (Buckingham Research Group and Sidoti & Co. Neither has issued a rating since 2003.
  • ACET’s chart is “choppy” and numerous support levels are violated during the uptrend making ACET a difficult short-term trade. Instead, ACET should be considered for an intermediate trade. A long position can be placed around $9 and a short position can be placed around $8.50 if such opportunities exist.

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