Weekly thought on $AEMD, $CGC, $IBIO, $LRAD, $SOLOW

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.

With the help of the Fed raising rate, the bear took home the trophy this week. The downdraft took out the 3rd and 4th support and won the 2nd highest percentage drop at 7.05% since the bull market began in 2009.  The steepest percentage drop was 7.19% on the week of August 5, 2011. SP-500_weeklyAs you can see from the weekly chart above, this week red bar penetrated the 4th support which happened to be the lower band of the parallel (green) lines that contained most of the bullish uptrend since 2009.  The monthly chart below shows a much better picture of how the two green parallel lines contained most of the uptrend since 2009. SP-500_MonthlyBecause the containment of this bull trend has been around since 2009, it is my 2 cents that these two parallel lines are like two giant walls that are not easily broken.  Therefore, I’m expecting a bounce from here next week albeit a short week.  Notice that the monthly 79 & 89 MA supports still have some distance below the current closing price.  From the monthly chart perspective, the bull trend is still intact. All we are seeing is a much more violent price correction inside the containment field. However, if the bear continues to control the momentum and takes the price down to where the 79 & 89 MA supports are, then the bull should start to worry.

Well, I think it’s safe to say that almost everyone took a hit this week in the port.  Not only did I take a hit on the stocks I hold; but I also took a hit on my foray into $MU due to earnings disappointment.  I’m also sitting on losses on my $CGC call options betting on a rally from the expected signing of the Farm Bill by the President. Unfortunately, the rate hike and the prospect of government shut-down trumped the signing of the Farm Bill, and $CGC went down anyway.

$AEMD – This one held steady despite a horrible week in the stock market.  Well, when you have a sudden change of the CEO with an “interim” status and a substantial stock options (552,625) at $1.25 included, it is not too far-fetched to assume that something is definitely brewing in the background.  We, the investors, are going to have to wait it out to see what kind of surprise we may see.  With Aethlon Medical’s hemopurifier receiving two Breakthrough Device Designations from the FDA, I think it is safe to assume that the expected surprise is leaning on the positive side.

Below are the Aethlon’s hemopurifier two FDA breakthrough device designations:

  1. The Hemopurifier is a single-use device indicated for the treatment of life-threatening highly glycosylated viruses that are not addressed with an approved treatment
  2. The Hemopurifier is a single-use device indicated for the treatment of individuals with advanced or metastatic cancer who are either unresponsive to or intolerant of standard of care therapy and with cancer types in which exosomes have been shown to participate in the development or severity of the disease. Therapy with the Hemopurifier device should be an adjunct to standard of care for cancer.

$IBIO – This company has come a long way from the past, and I think it is about time it begins its trek to earn revenues,  This week, BioTuesdays featured an article, “iBio spearheading plant-based biopharmaceuticals at CDMO plant.” I believe “spearheading” is the perfect word to describe where iBio is going from here.  CC-Pharming, per my 2 cents, is a big catch that is going to change the course of iBio to a more profitable future.  But before I go on, let’s take a walk through memory lane here.  Take a look at the excerpt from an article released back in April 2018, “Therapeutic Proteins from Plants” below: IBIO_WhytheWaitLet me break it down in outline form below:

  1. Many early developers lacked the resources to take products through clinical testing. At the first sign of trouble their larger commercial partners, when they existed, walked away
  2. Commercial success will eventually occur… but it will depend on markets outside the United States and Europe.
    1. Developing countries are not wedded to mammalian cell culture
  3. Due to costly capitalization of the infrastructure for the mammalian cell platform, the U.S. and the European markets must put the mammalian cell platform to use.
    1. This is NOT the case in the rest of the world

Let start with #1.  Early developers lacked the resources, so they had no choice but to go outside their facility to supplement whatever was needed.  This kind of jumping in and out did not sit well with their larger commercial partners and was completely understandable.  Imagine you telling your commercial partner, “Uhh… I need to outsource your sample to another facility because we don’t have the tools to do it here.

Per the BioTuesdays’ article, IBIO_oneStopShop

iBio can now take a product from the earliest stages through preclinical and clinical support, and all the way to full-scale manufacturing, without going outside their CDMO.  This is a far cry from the early days!  Hence, issue #1 is being eliminated with iBIO CDMO setup.

Regarding #2 which stated, “it will depend on markets outside the United States and Europe.”  Well, iBio has spearheaded with CC-Pharming from China to kick-off the plant-based platform. Yay!

Regarding #3.1 which stated, “This is not the case in the rest of the world.”  What that means is that after CC-Pharming from China, other Asian countries, as well as South America, Africa, the Middle East, and Russia, are potential customers for iBIO’s plant-based technology. Don’t forget that China is a HUGE country, the revenue sharing of CC-Pharming can be enormous as they build out their own plant-based facility with the license from iBIO.  Not to mention other biotech companies in China may follow CC-Pharming footstep to use iBio’s plant-based technology.

From IBIO standpoint, they’ve modified their facility to handle the development of multiple products per BioTuesdays’ update below: IBIO_modifyFacility

The fact that iBio increased their staff in CDMO from 18 in 2016 to 46 in August 2018 spoke volume here.  You don’t increase your staff to sit around doing nothing; I believe they are busy working with new and potential new clients. Furthermore, with CC-Pharming coming on board, iBio’s deferred revenues have gone up to $3 million.  This is potential recognizable revenues in 2019 along with new businesses they may pick up.

To sum it up, it’s about time for iBio to shine.  Guess what, I’m not the only one saying that, check out this recent article released last Wednesday, “In Drug Discovery, It’s About Time” in which iBio is one of the three companies featured with the technologies and processes developed to save time in biopharmaceutical drug development.

$SOLO – This week, Electra Meccanica released an update, “Electra Meccanica Provides Production Update for Model SOLO EV’s From High-Volume Manufacturing Facility on the manufacturer in China” and I couldn’t be more excited!  Per the article, SOLO_1stQtr2019DeliverI think the 48 Solo EV in the first quarter of 2019 pissed off some people because you can’t produce 5,000 Solo by the end of 2019 making only 50 Solo per quarter.  But if you stop to think about it, it all makes senses. Let’s start with the facility itself. I copied and pasted the picture below from the video:

Solo_Zongshen facility

Solo_facility2From the look of it, it looks like Zongshen spent a bit of time to build a brand new facility (or remodeled an existing facility) to build the Solo EV.  This probably explained the delay in producing the EV in 2018.

As to only 48 Solo scheduled to be shipped in the first quarter of 2019, it is my 2 cents that Zongshen and Electra Meccanica are working together to test the initial batch of 50 Solo EV to make sure all the kinks are being ironed out before they order large quantity of Solo parts to begin high volume assembling of the Solo EV.  After all, you don’t want to order a large number of parts and then find out that you need to make minor modifications to the mold or any other Solo parts.  It would be a nightmare and time waste to have to modify all the pre-made Solo parts.  Therefore, it made sense to make sure all parts are in conformity to assemble into a perfect Solo before you order a large quantity of them.  Don’t forget you also need lead time to order the parts before they arrive at the facility for assembling.  In summary, I believe they will start ramping up the build-out of Solo EV beginning with the second quarter of 2019.

You can check out the video of their Zongshen facility here–> https://electrameccanica.com/2019-solo/

LRAD – Below is the summary I wrote last week which explained why I’m holding this for long-term:

  • 2019 Army order is looking good to exceed $11 million
  • Country-wide mass notification sales opportunities range from $1 million to $25 million with some on the extremes as well
  • City and county officials in Northern and Southern California are looking into LRAD’s mass notification systems with the possibility of federal funding

The above three gave us a taste of more to come than what investors usually see before. What I like about the new management is that they are proactively seeking opportunities.  Recent wildfire in California is a great example.  A lot of irons in the fire with LRAD as well.

CGC – I bought LEAP call options on this one, so I don’t have to worry about chasing it when it bounces eventually.  The recent signing of the Farm Bill by the President made it legal now to grow hemp and use CBD in the U.S.  CBD is a non-psychoactive compound that has a health benefit to the human body.  So, with Constellation bottling experience and marketing prowess, CGC should be able to come up with a CBD health/sports drink to market and sell in the U.S. quickly.

As explained earlier above, I took a hit in the port and is now reflecting a negative YTD.

Current positions (in alphabet order):

AEMD  CGC  IBIO  LRAD  SOLOW & cash (down 2.5% YTD)

My 2 cents

From my camera:

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Categories: Daily trading Journal, trading journal

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