Weekly thought on $AEMD, $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.

As I explained last week, this giant wall (lower parallel line of the two parallel lines that contained most of the bull trend since 2009) is a tough wall to break. SP-500_weeklyWhat remains to be seen is whether this bounce will continue upward next week as we move into January 2019.  Don’t forget the famous January effect that has the potential to propel the stock market back to the higher ground when investors who sold for tax losses return to the equity to buy the bargain.

Due to the initial downdraft early in the week, I decided to buy some LEAP call options for the following stocks:

  • $NOK – betting on imminent adoption of 5G technology that is going to be much bigger than 4G
  • $MU – betting on adoption of Micron’s next generation memory-> 3D XPoint technology
  • $CARA – betting on positive results from IV and oral Korsuva™ late-stage readouts coming in 2019 for treating pruritus (chronic severe itching)
  • $TRXC – betting on more uptakes on the adoption of TransEnterix’s Senhance robotic-assisted surgical device (RASD) in 2019
  • $CGC – betting on the company making giant headway with CBD health/sports drink in the U.S. and global cannabis sales
    • I bought this before last week, but I include it here to complete my list of LEAP call options I’m holding

Due to the downdraft in December, these LEAP options became cheap enough for me to make bets with lower risk than before the market downdraft.  I won’t be including these LEAP options on my weekly thought title heading since they are pretty straightforward as to why I’m holding them, and I won’t be spending much time going over the weekly thought process on them except to mention how they affect my YTD number.

Due to a nice bounce from the broad market, I’m glad to see my port follows the same path as well thanks to uptake on $IBIO, $AEMD, $LRAD despite more downdraft from $SOLOW.

$AEMD – The rally on this stock this week is no big surprise to me since the stock price is holding well over the last two weeks despite the broad market downdraft. Therefore, on a bounce week in the broad market, logic dictates that the probability of $AEMD going higher is better than 50/50.

While we don’t know the real reasons for the uptakes on $AEMD since it hit bottom in September of this year, I can deduce two possible causes (aka my 2 cents), and they are as follow:

  1. From last week blog post> sudden change of the CEO with an “interim” status and a substantial stock options (552,625) at $1.25 exercise price 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 the 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.
  2. Thanks to other contributors at Stocktwits, I’m reminded of the following:
    1. Aethlon Medical Announces First Hemopurifier® Shipment To Support the Treatment of Ebola in the United States
      1. Below is an excerpt from the above news release:
      2. AEMD_EbolaExpandedAccess
    2. In other words, despite the dated news release (2014), Aethlon’s hemopurifier is a recognized medical device for treating patients infected with the Ebola virus.
    3. Giving the current status of the ongoing Ebola crisis that is extremely difficult to contain due to the war zone and political instability at Democratic Republic of Congo (DRC), the fear of the Ebola spreading to city limits from the villages is becoming more pronounced.
    4. Since Aethlon’s hemopurifier requires a dialysis machine to treat the patients infected with the Ebola virus, it is essentially an important treatment option for the infected population in the city limit. But to have enough hemopurifier available, iBio will need to mass-produce the bio-materials inside the hemopurifier.  I, for one, do not think DARPA will sit idly watching the Ebola crisis unfolds without executing some action plan to prepare for the possibility of the Ebola reaching the city limit.  Seriously, it will be too late to mass-produce the hemopurifier if we are to wait for the Ebola to enter the city limit first without incurring an unacceptable loss of lives which could also create a pandemic due to the massive transportation infrastructure available inside the city limit.  The ease of traveling inside the city limit is also a significant hindrance in controlling the spread of the Ebola virus especially if there is not enough vaccine to go around.

Technically speaking: AEMD_WeeklyFrom the weekly chart above, $AEMD is breaking out to the upside from the two parallel lines that contained most of the uptrend since September.  Furthermore, the continued uptrend confirmed the double-bottom on the September low (1st bottom happened in November 2017).  What I really like about the weekly chart is the fact that this week breakout penetrated the weekly 79 MA (thick blue dash line).  Another penetration of the 89 MA (thick brown dash line) will be a strong confirmation of a possible long-term path to the upside.  Giving the essential utility of its hemopurifier in two fronts- treatment of patients exposed to deadly viruses and metastatic cancers, this upward path looks quite promising I dare say.

$IBIO – Last week, I discussed iBio spearheading the plant-based tech to manufacture protein expression with CC-Pharming from China, and then the rest of the world outside U.S. and Europe.  With 3 million dollars in deferred revenues that are recognizable in coming quarters, this is serious revenues streams comparing to the company history.  This week, I like to share some data that support the graduate adoption of plant-based tech around the world outside U.S. and Europe.

Africa – Let’s start with Africa with an old news release from October 30, 2017, “iBio CDMO President to Co-Chair South African Molecular Pharming Conference.”  Below excerpt provided some highlights: IBIO_AfricaNotice that at the end of the third paragraph it mentioned, “African horse sickness virus.”  Now, check out the latest news dated November 26, 2018, “New hope in fight against African Horse Sickness.” IBIO_AfricaHorseSicknessWell, what do you know, the actual application of plant-based protein expression is developing in Africa already!

Japan – Here is another old news from the past on August 14, 2014, “iBio Forms Marketing Collaboration With Kanematsu Chemicals Corporation to Target Japanese Market.”  Below is an excerpt from the news release: IBIO_JapanMktReachNotice the key phrase, “Kanematsu Chemicals Corporation will market the novel iBioLaunch platform in Japan.”

Now check this recent news from Japan dated November 7, 2018, “Japanese flu vaccine maker taps tobacco plants for fast output.”  Below is an excerpt from the article: IBIO_MitsubishiTababe

Although there is no mention of iBio in the article, I’m speculating that there is a possibility that Kanematsu Chemicals Corporation succeeded in marketing the plant-based tech to Mitsubishi Tanabe Pharma.  Regardless of whether Mitsubishi Tanabe Pharma sub-licenses the plant-based tech from Kanematsu Chemicals Corporation or not, the key takeaway in the article is that Mitsubishi Tanabe Pharma plans to file for U.S. approval of production and sales of the new vaccine to bring to the U.S. market in fiscal 2019.  If this is approved by FDA, this will validate the plant-based tech as a viable vaccine manufacturer and become a game-changer to open the door wide-open for plant-based protein expression.  In other words, the horse-drawn vehicles will have to eventually give way to the more efficient T-Ford low-cost automobile so to speak.  To keep this post from running too long, I’ll stop at Japan today.

When I think about it, we should all be thankful to DARPA for having the foresight to believe in the plant-based protein expression technology and funded the development of the plant-based facility that is currently operated by iBIO-CDMO.  This tells me that DARPA is very aggressive in doing its job to protect the public from potential pandemic attack either by bioterrorism or natural pandemic situation like the current Ebola crisis.  Giving their aggressiveness in protecting the public, I’ll not be surprised that DARPA has already requested iBio to start preparing for the worst. This, per my 2 cents, could be the reason why iBio’s own drug work product of IBIO-CFB03 for the treatment of systemic scleroderma, idiopathic pulmonary fibrosis, and other fibrotic diseases is being delayed.  Remember, this is just my pure speculation, so take it with a grain of salt.

LRAD – This is a waiting game for the development of the following significant catalysts:

  • 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

I’ve no problem waiting here.

SOLO – This is also a waiting game for the Solo to come en masse to California in the 2nd half of 2019.  Once it is proven that Zongshen is capable of delivering the Solo en masse to California, I believe the stock price will eventually climb back up when the arriving Solos are being sold quickly.

As explained earlier above, thanks to the uptake on $AEMD, $IBIO, and $LRAD, it is more than enough to offset more downdraft from my $SOLOW to take my port back to positive territory.

Current positions (in alphabet order):

Stocks = AEMD  IBIO  LRAD

Call options and warrant = CARA  CGC  MU  NOK  TRXC  SOLOW

Plus cash (up 4.4% YTD).  There is still one more day left (tomorrow) before the year is up so my 2018 YTD may still have a chance to move higher if fortune blows my way.

My 2 cents

From my camera:

007

 

 

 



Categories: Daily trading Journal, trading journal

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