Weekly thought on $AEMD, $AMRN, $CARA, $IBIO, $LRAD, TRXC

Before you read on, please be aware that the analysis below is my opinion only and may include flawed assumptions and inaccuracy of logic; therefore, caveat emptor applies here.  Furthermore, all emphasis (color-coded, boldness, and underlined) on the excerpts are my own.

This week was another down week for the SP-500, but there are signs the bear might be losing steam.SP-500_weekly See the green arrow pointing to the 15 MA line as well as the lower band of the parallel triple uptrend bands?  Price actually bounced off these supports on Thursday.  Nevertheless, the SP-500 is not out of the woods yet.  Price needs a solid green bar to show that the uptrend is still intact.

Due to broad market bouncing on Thursday, I became more aggressive and bought $AMRN and $CARA as well as adding to $TRXC.

On Wednesday, $CARA released news, “Cara Therapeutics Reports Positive Top-Line Data from Adaptive Phase 2/3 Trial of I.V. CR845 in Patients Undergoing Abdominal Surgery.”  This was surprising news because I was skeptical about its efficacy when the highest dose was eliminated from the trial.  With Wednesday positive news, along with previous positive results related to the treatment of chronic itching that hounds a large percentage of people with chronic kidney disease, I feel $CARA is de-risked enough for me to buy some for the long-term hold.  Since this is a long-term hold, I bought a standard size (instead of swing-for-the-fences) so that I have the stomach to weather the volatility.

$AMRN also released news, “Amarin Reports Last Patient Study Visit Has Occurred, an Important Step Towards Completion of REDUCE-IT™ Cardiovascular Outcomes Study.”  Price bounced, and I immediately bought some shares speculating that the news was the catalyst the market was waiting for before starting an upward trend to meet the trial result in the 3rd quarter.  Since this is a gamble on efficacy, it is also a standard size.

$LRAD has been bullish for the last four weeks.  Below is a monthly chart:lrad_monthly Price finally broke through the $2.58 resistance and closed above $2.60 on no news.  This can only mean one thing per my 2 cents, more people are expecting great news to come in the 2nd half of the year.  With the catalysts I mentioned in last week blog post, I’m quite excited as well.  While the breakout of $2.60 resistance is small for this week, any great news down the line may kick this one to over $3 in no time.

$IBIO finally has a nice little doji bar to close the week.  Doji bar at the extreme historical low point is also a potential turning point as well per my book.

Below is an outline list of why I believe iBio is ready to bounce to the upside.

  1. iBio, Inc. Closes $16,000,000 Public Offering on Tuesday, June 26th
    1. Not counting over-allotments shares, total outstanding is now 15.94 mil (11.59 mil + 4.35 mil). Preferred shares are excluded since they don’t add to the outstanding shares at this point.
  2. iBio market cap is now $14.35 million based on Friday closing price of 90 cents (15.94 mil x 90 cents)
    1. Meanwhile, iBio cash balance has at least $16 million (before fees)
    2. ALERT!!! iBio market cap is LESS than cash-in-bank!
  3. iBio float has actually shrunk from 10.84 million to 9.68 million! (10.84 mil is from Yahoo Finance)
    1. Eastern Capital now owns 48% of iBio by holding 8,933,512 shares (over-allotments  shares are included in the calculation of total outstanding shares since 8.933 million shares represented 48% of 18.61 million outstanding shares).
    2. 18.61 million outstanding shares minus Eastern Capital 8.933 million equaled to 9.68 million shares float.

In a nutshell, giving iBio market cap is less than cash-in-bank and the float less than before dilution, I believe the short-sellers are trapped.  And if they try harder to push iBio down even further, all they are doing is to make the stock EVEN MORE attractive because who doesn’t want to buy a bank-verified Benjamin Franklin $100 bill for less than $100?  And what even more attractive is that all the intrinsic value of iBio technology has NOT been included in the market cap YET!  Imagine someone selling you a bank-verified Benjamin Franklin $100 bill that also has an intrinsic value of being a “collection” item because it was the first 100 Benjamin printed and in perfect condition for less than $100?  I don’t need to tell you that a collection item for the first 100 Benjamin printed in perfect condition is worth a WHOLE LOT more than the $100 face value.  Needless to say, I gobbled up some more $IBIO under 90 cents.

What are the intrinsic values of iBio again?

Let me repost what I did last week below:

IBIO_2018Just by looking at the chart above, one could deduce that starting in July, we should hear news regarding new CDMO contracts, collaborative product development agreements, and/or expand business agreements in emerging markets since their bars on the above chart were drawn from the middle of 2018 to 2021+.  Meanwhile, initiation of Phase 1 clinical trial of IBIO-CFB03 bar appeared near the end of 2018, so I expect to hear filing of IND between the 3rd and 4th quarter of 2018.

And we haven’t even discussed the intrinsic value of the potential favorable legal settlement against Fraunhofer-Gesellschaft in Delaware Chancery Court. If we are to apply an ultra-conservative 10% of the relief sought by iBio for damages against Fraunhofer (including the U.S. unit, now exceeds $200 million), where is the intrinsic value of this $20 million ($200 million x 10%)?

Below is the summary of the intrinsic values of iBio beyond current financial status:

  • iBio plant-based protein expression technology patents
  • an integral part of DARPA’s (Defense Advanced Research Projects Agency) Blue Angel Program
  • CDMO contracts
  • collaborative product development agreements
  • expand business agreements in emerging markets
  • initiation of Phase 1 clinical trial of IBIO-CFB03
  • expected value (low end) of potential legal settlement from Fraunhofer-Gesellschaft

And what valuation has the market placed on the intrinsic values of $IBIO mentioned above?

Thanks to the short-sellers pushing iBio down, it is a BIG FAT ZERO!

At this point, ANY positive news (with revenue potential) will have the effect of a shock of a defibrillator.  In other words, the news will attract smart money because they will see the INSANITY of the short-sellers keeping this gem below fair market value!  With a smaller float than before dilution, the shorts may not even feel their arms being ripped off.  Do I feel sorry for the shorts when it happens?

A Big Fat NO!!!

My 2 cents is that it is all uphill from here!

$AEMD may as well be the shock of the defibrillator iBio needed when FDA gives their blessing to the hemopurifier.  It may come any day now.

$TRXC reached over $6 but is currently going through a healthy correction.  I posted my thought on $TRXC, and you can read by clicking–> here.

Thanks to rallies from $LRAD, $IBIO, and $AMRN, my port gained back slightly for the week.

Current positions (in alphabet order):

AEMD  AMRN  CARA  IBIO  LRAD  TRXC & cash (up 14.4% YTD)

My 2 cents

From my camera:

DSC02415

 

 

 

 

 



Categories: Daily trading Journal, trading journal

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  1. Weekly thought on $AEMD, $AMRN, $CARA, $IBIO, $LRAD, TRXC – Trading my two cents

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