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.
The SP500 got a bullish week to counter last week red bar, and that is a great start!
Now we need to see if the SP500 can climb back above the uptrend line next week. There are two resistances at the moment- the blue line with two down arrow pointing at the resistance level, and the uptrend line. If the SP500 can take these two resistances out, a new high before the year is possible.
More volatility hit my port again this week with new information coming into $IBIO.
iBio released another PR on Monday, “iBio and CC-Pharming Expand Business Collaboration in China.” The news is exceptional, and yet, the sellers overwhelmed the buyers. All the selling, I presumed, was related to the expectation of a dilution revealed on the S1 filing on Wednesday 08-28-2019.
iBio is planning to raise $30 million in the offering through Common Stock and Series C Preferred Stock and warrants. The amount of common stock, Series C Preferred, and warrants, and the offering price will determine the price action when announced. Both the buyers and sellers placed their bets.
My opinion is that iBio asked for $30 million because they have buyers waiting.
I remain long on iBio for the following three reasons:
1st reason: CC-Pharming MSA expansion agreement
Let’s start with Monday news regarding the iBio and CC-Pharming expand business collaboration in China. Unlike the first CC-Pharming deal announced last July 2018, CC-Pharming completed its 8,000+ square foot pilot plant-based factory in Beijing using iBio’s Factory Solutions. It is now in the process of building a large-scale facility. The speed of CC-Pharming’s progress indicated to me that CC-Pharming is getting a lot of supports from the political machinery in China. Please read Marc Keiser’s blog to find out more about CC-Pharming. Marc’s due diligence included news and update from China.
Below is an excerpt from Monday news:
I do not know China’s policy regarding biosimilar or bio-better for an approved biologic drug. However, CC-Pharming may have already received (or in the middle of receiving) approval from China for iBio rituximab using production from its pilot factory. Otherwise, the news would not state “toward commercialization in the NEAR TERM.” In other words, the path to revenues sharing with iBio may come sooner than most of us think.
The CC-Pharming expand collaboration included other business opportunities that investors may find exciting. They are:
- research and clinical reagents
- non-pharmaceutical skincare products
- botanical derivatives
- developing additional biopharmaceutical products
- metabolic disorders
- fibrotic disease
In a nutshell, CC-Pharming is iBio’s foot in the door to China massive population for AFFORDABLE treatments. The BIG PICTURE here provides POTENTIAL massive revenues stream that can only grow bigger and bigger as years pass.
2nd reason: United Therapeutics MSA agreement
Before I discussed UTHR MSA agreement, let’s take a look at United Therapeutics past dealing with iBio.
Based on the article, “Plant Transient Technology Expedites Scale-Up,” United Therapeutics had been testing iBio in the past to validate the plant-based technology. Below is an excerpt:
The result of the challenge:
Giving the positive result of the challenge, I think iBio deal with United Therapeutics for the production of CollPoint’s rhCollagen is a well-earned MSA agreement. With all the facts available, my logical deduction is that Thomas Isett has been hired to prepare iBio CDMO to mass-produce CollPoint’s rhCollagen in the near future. The inclusion of the sterile Fill-Finish was part of the preparation. Let’s go over the MSA agreement.
The Master Services Agreement (MSA) involves the following:
- development of a scalable purification process for rhCollagen tailored to the biofabrication of lung scaffolds that United Therapeutics licensed from CollPlant Biotechnologies ($CLGN)
- develop cGMP supply of the material for clinical trials
- anticipate the need for commercial quantities of rhCollagen-based bioinks
- additional projects focused upon process optimization and capacity expansion
- Capacity expansion will employ iBio’s Factory Solutions capabilities
I bet that #1 is either completed or to be completed. Number 2 may have already started to prepare for clinical trials. To start a clinical trial, United Therapeutics needs to show the FDA that the supply of rhCollagen is available. Hence, I won’t be surprised the production of rhCollagen by iBio is already in progress.
3rd reason: IBIO-CFB03 fibrosis drug development
With $30 million in the bank and two revenues stream on the way, I think it is time for iBio to brush the dust off the IBIO-CFB03 and file the IND to begin a clinical trial. So far, pre-clinical trials on mice and human skin proved to yield a positive result with the possibility of reversing fibrosis.
Here is an article that best summarizes IBIO-CFB03, “Fibrosis Treatment Candidate IBIO-CFB03 to Be Further Developed, iBio Announces.”
Below is an excerpt:
First and foremost, IBIO-CFB03 worked in human skin model, and it showed E4 could block and REVERSE SKIN FIBROSIS. While we need to wait for clinical trials to prove the claims from pre-clinical trials, my logical deduction tells me the odds of success increase exponentially when it showed to work on HUMAN SKIN!
Below are two YouTube videos that showed the presentations by Carol Feghali-Bostwick, Ph.D.
Dr. Carol Feghali-Bostwick- Speaking at Scleroderma Foundation SEFL Chapter”s Patient Education Day, June 2019
The Fab Lab Tour- Carol Feghali-Bostwick, Ph.D.- 2017 Patient Education Conference. The video below has better quality in the presentation.
The current battle between the buyers and sellers over the offering is short-term in nature. But once the funding is finalized, I expect to see the price to resume its upward trajectory from the following scenarios:
- Close with a better than the anticipated offering price, with the majority of the funding from the Series C Preferred Stock.
- When revenues from both CC-Pharming and United Therapeutics begins to stream in.
- iBio announces the filing of IND for IBIO-CFB03.
In a nutshell, from a LONG TERM perspective, $IBIO Friday’s closing price is a BARGAIN that we may never see again, in my opinion.
This week, I came upon LRAD’s newsletter that provided treasure of information regarding deployment of LRAD systems. Please click here -> “June 2019 Newsletter” to read.
The month of August is a correction bar. The good news is that price closed at the previous high of the handle (the top edge of the green box.) If the price can climb back above $4 next month, the long-term trend will be VERY BULLISH, in my opinion.
Let me summarize what we expect to hear from LRAD from the earnings conference call:
- FEMA (Federal Emergency Management Agency) is well aware of LRAD technology. It won the FEMA award to provide LRAD tech to Puerto Rico. The company anticipates further FEMA funded business opportunities.FEMA
- The new VP of Software Sales (Paul) is currently overseeing several SaaS only proposals pending in the U.S. and two other countries. The proposals include city, regional, and national installations.
- LRAD is well-positioned to compete for the EU alert directive & the global unified critical communication market. The EU mandates all 31 economic zone countries to establish emergency warning alert systems to protect citizens and travelers by June 2022. The company’s divisional staff at Madrid are also engaged in pursuing these EU country opportunities.
- LRAD is working on several other public safety and emergency warning opportunities in California. The company expects new orders from cities in the next fiscal year.
- LRAD is expecting
a second LRAD 450XL army order under the program this quarter andincreased sales to the army and other branches of the U.S. military in subsequent fiscal years.
- LRAD has visited the two Asia Pacific countries (previous orders got delayed) as recent as two weeks ago. The company expects the two customers to come back with even bigger orders in FY 2020.
- LRAD is working with the Navy Yard in Washington to establish a program to replace the older LRAD products systematically.
There are a LOT of irons in the fire for LRAD. The fiscal year 2019 may be a pivotal point for LRAD to grow out of its micro-cap status and embark on exponential growth in 2020 and beyond. In my opinion, of course.
Due to correction on $IBIO, my port gave back some more this week.
Current positions (in alphabet order):
Stocks = $AEMD $IBIO $LRAD
Call Options = $TRXC
Up >20% YTD
My 2 cents
From my camera: