Weekly thought on $AEMD, $IBIO, $LRAD, $SIGO

To say this week was volatile is an understatement. Huge drop for whatever reason is speculators’ worst nightmare and is unavoidable if we speculated long enough.  I had plenty of big drop exposures in my years of speculation and my recent big drop exposure before $IBIO this week was $DMRC back in 2015 when it dropped over 36% in one week while I was swinging-for-the-fences.  It was ugly and my port took a huge hit; however, my conviction in its tech at the time allowed me to hold on for the eventual bounce. It did and my port recovered.

This week, $IBIO dealt me a similar blow and while a bit surprise, I felt quite calm and undisturbed at the lower price.  In fact, I decided to add to my already overweighted position size.

Why?  Isn’t it kind of increasing your risk in a downtrodden stock?

I think it’s a matter of perspective.  Biotech stocks, especially those still in early developmental stage with no revenues stream, are essentially risky speculation and secondary offerings are expected sooner or later.  On the other hands, on the backdrop of this dilution risk, speculators are also looking at the high reward from the “eventual” success of the science in question.  “Eventual”, of course, is a loaded word in the world of biotech speculation.  Its eventual success is depended entirely on passing the toughest trials established by the FDA.  Until then, all speculators have is their own probability assessment of the eventual success in the biotech companies they speculated in.

When I first speculated in $IBIO, I was fortunate to make the bet at the time of ebola scare in  2014.  I bought at about 80 cents and sold at the range from $1.50 to $2.50.  What brought me back to start speculating in the “long-term” is its plant-based technology that has the ability to produce vaccine cheaply, quickly and efficiently. The rumor that Caliber Biotherapeutics (licensee of iBIO plant-based technology) could be called upon to help produced ZMapp was what caused the speculative spike to the high of $3.48 back in 2014.

From my perspective, the ebola scare confirmed the value of plant-based vaccine production at the time of fear generated by unexpected early stage of pandemic attack.  From this point alone, I knew I’ve to hold some $IBIO for the next unexpected pandemic attack.  I don’t have a time limit because I don’t know when the next pandemic attack will come.  BUT when pandemic is to hit the human population in my lifetime, $IBIO will skyrocket like no one have ever seen.  While a long shot, the exponential reward is definitely worth the risk of holding shares regardless of future dilutions.  Of course, this reward can only be enjoyed if I’ve not succumbed to the unexpected pandemic attack itself.

My speculation, at the time, was still nominal and nothing heavy until I learned about Dr. Carol A. Feghali-Bostwick’s discovery-  how IBIO-CFB03 worked on human skin with the possibility of reversing the fibrosis disease that contributed to a major portion of human mortality. That was when I started to accumulate $IBIO and never looked back.

I knew the risk but I also know that the reward can be exponential if IBIO-CFB03 is successful.  IBIO-CFB03 provided the possibility of realizing exponential gain independent of any future unexpected pandemic attack.  While there are no guarantee of IBIO-CFB03 success, the risk is definitely worth taking.  Here is a surprising good news from the latest video from Dr. Carl A. Feghali-Bostwick (from Sept 2017 The Fab Lab Tour- Carol Feghali-Bostwick, Ph.D.- 2017 Patient Education Conference)

Go to 26:10 minutes on the video and you could see Dr. Bostwick discussed testing on human lung as well.  Dr. Bostwick’s team took the diseased lung from a lung-transplanted patient and tested it like they did with human skin and saw good result.  Go to 32:30 and listened to what she said, “we tested it in the human skin we tested in the human lung and we show it improves fibrosis it reduces collagen it reduces other features or hallmarks of fibrosis…” (copied from closed caption so please listen to it yourself for 100% accuracy)

Per my intuition, I trust Dr. Bostwick and hence began my process of accumulating $IBIO.  Last Wednesday, despite an ugly downturn, simply gave me opportunity to add more.

What do you think is the reason for the delay in filing IND for IBIO-CFB03?

Here is my 2 cents (remember, it’s my opinion so take it with a grain of salt!) At Murphy’s Law sometimes showed up at unexpected time, it visited $IBIO in the form of screwed up by ibio’s former production partner, Caliber Biotherapeutics.  In January 2016, iBio formed Joint Venture CMO for large-scale pharmaceuticals manufacturing by taking over the facility previously owned by Caliber Biotherapeutics LLC and its affiliates.  It was only later through shareholders’ update that I learned that a lot of time and money were spent to restore IBIO CMO’s FDA compliance status.  Basically, without an FDA compliance production facility to support the production of IBIO-CFB03, the company simply could not move forward with the filing of IND.

Although iBIO finally got the CMO in compliance with FDA regulation, it burned much of its cash flow so the necessity of another secondary offering was called for.  And because of lost time which caused speculators to be disenchanted, the offering was at the low price of 20 cents.

Some might ask if IBIO CMO is really in compliance now.  Well, I believe recent contracts with TheoremDx, Inc and Aethlon Medical, Inc confirmed that they are.

So what now?

Yes, it was unfortunate that the secondary offering was done at 20 cents; but the plant-based technology, patents, and the prospect of IBIO-CFB03 remain unchanged. In fact, I think the prospect of IBIO-CFB03 is even better now that Dr. Bostwick tested it on human lung as well.  The TRUE risk that I’m betting on (the validity of the plant-based protein expression technology and the “eventual” success of its IBIO-CFB03) is still on trial and the verdict has yet to be issued.  In other words, there have been NO INDICATION of possible failure as of yet.

Thus, it’s my 2 cents that while the turtle is going a bit slower than the hare in the race where everyone win if they reached the finish line, there is no indication that the turtle is dying so I expect it to reach the finish line eventually.

Recent contract with Aethlon Medical ($AEMD) literally opens another door for $IBIO to gain momentum upon AEMD success of gaining FDA clearance for its hemopurifier.  Not only that, the prospect of AEMD’s hemopurifier success can add substantial price appreciation in the next unexpected pandemic attack because the hemopurifier has the ability to filter out a broad range of viruses (known and unknown) which included the deadly ebola.  And guess what, it has proven to treat an infected ebola patient with multiple organs breakdown and in coma.  If this doesn’t validate the hemopurifier, I don’t know what will?

My port is balanced with other speculations so I’m not worried at all about the current price drop while the catalysts are still alive and well.  I believe those who sold because of the dilution is missing the bigger pictures.  It reminded me of Roy Raymond who sold Victoria Secrets to Leslie Wexner and lost out of its gigantic success.  Another famous example is Ronald Wayne who sold his AAPL stock for $800 before Steve Jobs took AAPL public with the success of its Apple II personal computer.  Roy couldn’t live with his mistake and ended in tragedy while Ronald accepted his fate as part of life experience.

Of course, everyone has to deal with their own risk tolerance and fear.  By focusing on the science and ignoring price action, I get to remain calm and unfazed.  This allow me to spend most of my time searching for other speculations and managing my portfolio.

Speaking of managing risk, I dropped $TRXC, $PI, and $CARA from my portfolio due to political uncertainty which caused a temporary severe drop on Friday.  So, my other remaining speculations are the following:

$AEMD

Below is an excerpt best explained the “goal of the Aethlon-iBio collaboration (from October 23 article):

On October 16th, the company announced the establishment of an agreement with Aethlon Medical, Inc. to support the potential large-scale production of the Aethlon Hemopurifier® blood purification device. Aethlon Medical is a therapeutic technology company focused on unmet needs in global health and biodefense.

The goal of the “Aethlon-iBio” collaboration is to advance large-scale production of a recombinant form of Galanthus nivalis agglutinin (GNA), a plant-derived lectin that is immobilized within the Hemopurifier® to bind infectious enveloped viruses. Aethlon further disclosed that it completed a feasibility study with iBio researchers that has confirmed the ability to produce highly active recombinant GNA through the use of iBio’s plant-based technology.

Notice that once the “goal” mentioned above is achieved, it will bring a revenue stream to $IBIO.  The shining light on this collaboration is that “Aethlon Medical Receives Expedited Access Pathway Designation from FDA to Accelerate U.S. Access to the Hemopurifier® as a Treatment for Life-Threatening Viruses.”  This designation has the potential to speed up the FDA approval process for the hemopurifier.  Per my “probability assessment” I see the odd of an approval from FDA being better than 50%.  Of course, since it is my personal probability assessment, you should take it with a grain of salt.

$LRAD

The order is starting to roll in again.  Last week, “LRAD(R) Corporation Announces $1.1 Million Follow-On AHD Order from Southeast Asia.”  I expect to hear more announcement as we roll into 2018.

LRAD also “announced plans to release financial results for its fiscal fourth quarter and fiscal year ended September 30, 2017 after the market close on Tuesday, December 12, 2017.”  I expect strong performance due to five orders totaled $10 millions they received in September.

$SIGO

Price spiked up this week and I’m not surprised since we are inching closer to 2018 when California opens it door for recreational cannabis.  This one will be a fun ride to watch.

Due to major drawdown from $IBIO, my port suffered setback from last week.

Current positions:

Main port: LRAD  AEMD  IBIO  SIGO & cash (up 14.5% YTD)

Trading port: MENXF IBIO

My 2 cents

From my camera:

082

 



Categories: Daily trading Journal, trading journal

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