Weekly thought on $CARA, $IBIO, $KGJI, $PI

This is the week where I’m getting my mojo back.

And it all started when the SP500 bounced right back on Tuesday.

SP-500_Daily

As shown in daily SP500 chart, the late day bounce on Monday reversed the gap-down at the open. From then on, the market rallied onward the rest of the week but ran out of air by Friday.

SP500 Monday gap-down at the open spooked me silly that I did not add more $CARA I originally planned for. Thus, I missed out the gap up on Tuesday due to favorable result on the pruritus trial.  With the positive trial result, I immediately added more $CARA to accumulate a stake. Unfortunately, I overestimated the market ability to rally above $20 and spent the morning soaking in red until price bounced back up to mid-$19 where I unloaded some of the added shares to reduce my exposure.  However, I did buy back some later. And by the end of Tuesday, I ended up with 70% of my morning position size and considered them to be my core size.  Then the dilution news came on Wednesday after market close but I held onto my position on Thursday ’cause I believed the dilution will not affect the uptrend rally in the long run.  In fact, I wanted to add more but held off doing so due to lack of information on the offering price during Thursday trading hours.  With an announcement of $18 offering price on Friday morning, I knew I could just add at $18 or better and I would be fine.  By the end of Friday, my total position size on $CARA is large enough to be labeled as swing-for-the-fences per my portfolio.

Despite my new $CARA position size, I’m quite at peace and have no fear.  This is all because the result for the pruritus trial is so favorable even at the lowest dose that I believe the odd of success for the coming trial results on the other two pain indications is very high. The coming trial results on the pain indications are below:

  1. A phase 3 trial of 450 patients for IV CR845 for post-operative pain
  2. A phase 2 trial of an oral formulation for arthritic pain

Let me post some excerpts from Motley Fool’s article titled “Cara Therapeutics Is Scratching the Itch for Promising Biotechs” below for better clarity about the size of the market for the three indications mentioned above:

Itching, or pruritus, is a minor annoyance for most of us, but for many patients with chronic kidney disease (CKD) it is a serious condition that degrades the quality of life and is associated with increased morbidity and mortality. It affects over 60% of patients with CKD who are on dialysis — from 200,000 to 300,000 people in the US — and about 30% of the 4 million non-dialysis sufferers of the disease in this country. There are currently no approved therapies for the condition, as conventional treatments for itching such as antihistamines and steroids are ineffective for uremic pruritus.

*****

More news on the way
Investors can now look forward to more news coming up soon. The big prize for Cara is approval for pain indications, and two such trials will be reading out in Q2. A phase 3 trial of 450 patients for IV CR845 for post-operative pain could be a major milestone for the company when results are announced in the next three months. The other is a phase 2 trial of an oral formulation for arthritic pain, which has potential to address a major market need for a powerful pain drug that does not contribute to the growing opioid abuse problem.

I googled “market size for post-operative pain” and found the following article titled “Postoperative Pain Market – Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2016 – 2024”.  Below is an excerpt:

Postoperative Pain Market: Trends and Dynamics
According to National Center for Health Statistics, approximately 100 million surgeries are carried out in United States each year. It’s been perceived that at least 50 million procedures require postoperative pain medication. The major concern with prescription painkillers is that opioids or narcotic drugs tend to obtain habit in patients if not monitored by physician may also result in death due to drug overdose. Hence, the opioids are preferred in severe pain and the dose is decreased over the course of treatment withdrawal.

Next, I googled “market size for arthritic pain” and found the following article titled “Arthritis Drug Market – WIKI ANALYSIS”.  Below is an excerpt:

According to the CDC, over 46 million Americans suffer from arthritic symptoms, and 19 million are physically limited by their condition.[2] The pharmaceutical market for arthritis generated $15.9 billion in revenues in 2008.

Below is a summary of the market size potential for the three indicators Cara Therapeutics CR845 is breaking into:

  1. Itch (pruritus)-> CKD who are on dialysis — from 200,000 to 300,000 people in the US — and about 30% of the 4 million non-dialysis sufferers of the disease in this country
  2. Post operative pain-> at least 50 million procedures require postoperative pain medication
  3. Arthritic pain-> over 46 million Americans suffer from arthritic symptoms

Of course, Cara Therapeutics may not be able to steal ALL the patients from the above three markets; but don’t you think that if Cara Therapeutic can capture 100% of the pruritus market and about 30% or more of the other two pain markets mentioned above, the market cap will be WAY more than current market cap at $19 buck?

If the coming trial results for the two pain indicators are positive, I’ll be more inclined to buy even more $CARA shares.

Technically speaking:

CARA_daily

Although the daily chart reflected a correction due to dilution news, price bounced off the 50% Fib retracement with a green bar on Friday.  To me, price is ready to bounce higher from here.

Next, I bought $KGJI this week to add to my port.

KGJI_weekly

Although price did not close above the 79 & 89 MA supports, I’m betting that it will get over them soon.

The company is filing FORM 12b-25 for late filings but I’m satisfied with the earnings conference call and believe that Kingold is an excellent indirect way to play the gold market which I believe will soon rally hard.  Per the conference call, it seemed like Kingold bought plenty of gold as an investment as well.  This is purely a speculative play on the gold market so I’m aware of the risk involved.  This is a standard position size only.

I unloaded a big chunk of $PI to lock in gain this Friday.

PI_daily

There are two reasons why I did it. First, the SP500 reflected a tiring bull on Friday.  Second, $PI price mirrored the SP500 but with the additional 89 MA resistance above it. I’m inclined to trust the 79 & 89 support and resistance technical indicators and don’t mind using them as a signal to take preemptive action.  My taking profit on $PI is such preemptive action.  However, if price is to take out the 89 MA to the upside, I’ll definitely buy back the $PI shares I sold.

What more can I say about $IBIO except to say that I’m looking forward to development in 2017.

IBIO_weekly

Although a red weekly bar, it is still a bar with a higher high and a higher low compared to last week.  Watch the video again:

Despite a correction on $CARA after I loaded up, gain from $PI helped offset the unrealized losses; thus my port did not change much from last week.

Current positions:

Main port (no margin): IBIO  CARA  KGJI  PI  and 51% cash. (up 5.1% YTD)

Trading port (with margin): MENXF IBIO  CARA (I sold GRWG to cut my losses due to unfavorable political climate on cannabis from the federal level)

My 2 cents

From my camera:

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Categories: Daily trading Journal, trading journal

Tags: , , , ,

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