SVA

[harristime]

18 here :-)

crap i lose

You'd have lost anyway.  I'm 19.

[Michael]

I promised a fundamental write up on SVA this weekend but I am a bit lazy so let me instead quote from a Venture Capitalist newsletter (I guess nobody would believe me anyhow if I talked about 9000% return  ):

Venture Capitalist Situation No. 1: Make 15-90 Times Your Money and Crush SARS, Hepatitis and the Flu

Virtually unknown in the United States, this small company is beloved in China. You see, there's a colossal epidemic of hepatitis in China, with more than 200 million Chinese estimated to be infected with one strain or another.

Not surprisingly, China is the third highest consumer of hepatitis medicine in the world. However, 90% of that medicine is a dangerous vaccine, sometimes causing liver, spleen and lung damage to the patients receiving it. The other 10% is a much safer variety.

China is about to mandate a change to the safer vaccine. And our small biotech company makes half of the output of it. This policy change alone will instantly increase the company's hepatitis market 10-fold.

But it gets better. You see, our little prize company is the only Chinese pharmaceutical manufacturer that meets the stringent European GMP (good manufacturing practices) for drugs. That makes it the go-to company when a vaccine absolutely must work.

Millions of Dollars From Ending Flu Vaccine Shortages

Remember our unfortunate lack of conventional flu vaccine during the 2004-2005 flu season? Any major flu outbreak could have been catastrophic.

This company could make that situation a thing of the past.

Its conventional flu vaccine has been approved by the Chinese State Food and Drug Administration, and the company has just built a production facility for this vaccine. That facility can already crank out 2 million doses a year. At $5 a dose, that's future potential revenue of $10 million right there.

Not bad, considering the company's market cap is only $100 million!

But this new facility will soon be able to produce up to 20 million doses. During the 2003-2004 flu season in China, 20 million doses were consumed, and about 10-20 million more could have been used had they been available.

Assuming full production, this would equate to $100 million of revenue for this small company. Not only that, but the company is planning a second facility, at a construction cost of a measly $4 million.

Think about it: Where else in the world but China could you build a full-scale vaccine manufacturing plant to world quality standards for a measly $4 million?

But it gets even better...

How to Make Boat Loads of Money When SARS is Destroyed

Most everyone in the world remembers the terrifying outbreak of SARS. We were on pins and needles for a few weeks. We were very lucky on that one. Fortunately, the SARS virus was contained. But there's no assurance that another strain of SARS won't break out somewhere else at any time.

Guess who's the world leader in SARS vaccines? Our little biotech company. In fact, it's the only company in the world that has received official approval to conduct human clinical trials on a SARS vaccine. It passed Phase 1 with flying colors. Phase 2 has already started.

This tiny company has the full backing (and funding) of the Chinese government to get this vaccine to market as fast as possible. That should happen in the next year or two. In a new epidemic situation, however, the vaccine would  be approved on an emergency basis. This would cause an immediate explosion of revenues for the company. This alone could easily make you 10-15 times your money.

And this is still just the beginning of the story...

Unfortunately, a new virus is developing that will make SARS look like a bad cold. This one could literally threaten the life of everyone on Earth, wiping out 5-10% of the human population.

Sound like a bad science-fiction novel? Believe me, this one's for real. This super-flu has wiped out 72% of the known cases of human infection. It's the greatest threat facing the world today, according to a top epidemiologist at the University of Minnesota.

Currently, there is only one drug that stands a chance of blocking this horrible virus. And it's in very short supply. No way could it stop a worldwide epidemic.

The good news is this minuscule company is already developing a vaccine against this super-flu, in a unique partnership with the Chinese Center for Disease Control and Prevention.

Given the company's total focus on epidemic prevention, backed by the massive power of the Chinese government, this company could lead the way and will ultimately bring a successful super-flu vaccine to market.

When that happens, our tiny biotech company could own the world commercial rights to that vaccine. Let's take a few minutes to discuss the potential.

All known cases of this super-flu are currently contained in Southeast Asia. But that may not always be the case. If it somehow gets out of this area, it could spread like wildfire. Klaus Stohr of the World Health Organization's global influenza program recently declared, "It will go around the globe, and nothing will stop it."

Remember, no human immunity to this virus has been found. In a worldwide epidemic, everyone on the planet would potentially need this vaccine in a widespread epidemic. That's a potential market of 6 billion people. At a conservative estimate of $5 a dose, that's $30 billion in revenues to our tiny company.

Of course, it's not realistic to say that everyone in the world will need the vaccine. After all, we have the ways and means to control an epidemic, containing it to certain areas.

But part of that containment process involves creating buffer zones against the spread of the infection. That would lead to at least 5-10% of the world's population being chosen for the vaccine. In that scenario, about $1.5 billion in revenues would be generated for our company.

So what does all this mean to potential investors?

If things go as we suspect they will, taking into consideration just the hepatitis vaccine, the conventional flu vaccine and the SARS virus vaccine, conservative estimates for this little medical dynamo show a 1,412% return over the next year, or over 15 times your money.

But the wild card is the super-flu vaccine.

In the conservative scenario discussed above, $1.5 billion in revenues would easily equate to $300 million in net profits for this little company. This would create a situation where you would realistically make 90 Times Your Money - or More!

This is no amateur-hour, pie-in-the-sky company.

Meet the Brilliant Masterminds and Prestigious Financial Advisers Behind This Company

The CEO is a man voted by the American Biographical Institute as one of the world's 500 most influential leaders. This brilliant professor of biochemistry heads several other highly influential commissions and associations steering the medical industry in China.

The president has been involved in hepatitis research and development for over 20 years, and was the inventor of the safer variation of the hepatitis vaccine. The Chinese government placed him in charge of researching the development of the SARS vaccine.

These well-connected, well-respected men have just executed a brilliant maneuver to further set this company apart from the usual Chinese company. They have employed the services of the world-renowned Credit Suisse, one of the world's largest and most respected investment banks, to act as the company's exclusive financial adviser.

For Credit Suisse to even be bothered with this company speaks volumes. After all, in this age of financial scandal such as the Enron and Arthur Andersen collapses, a company as prestigious as Credit Suisse cannot afford to mar its reputation by being associated with a substandard company.

The worst part of this company, by far, has to be its investor relations section. Otherwise, the stock price would be much, much higher.

But even that is about to change.

The company has just hired a prestigious U.S. firm to provide public and investor relations services in North America. And the president of this company did a highly unusual thing.

He personally flew to China to check this company out. He got completely up to speed on the major areas of business and technology operations, agreements and strategies. He toured the company facilities. He went over everything with a fine-toothed comb.

And then he immediately bought 550,000 shares of this company. This is one investor relations executive who puts his money where his mouth is!

Bottom line: With the incredible research and development facilities of this company, with the products already in the commercial pipeline, with the full backing and funding of the Chinese government, with the influential management in place and with world-renowned companies heading its financial advisory and investor relations departments, this tiny biotech company could easily make you...10-90 Times Your Money in the Next Few Years!

To be honest I am not sure we will see a 9000% return on our investment but less can do (at least for me  )

Mike

[valueseeker]

I am thinking about buying next week. It may dip a bit more next week so I will look for a good entry point.

[AussieTrader]

I am thinking about buying next week. It may dip a bit more next week so I will look for a good entry point.

Thanks for the fundamental angle Michael. Well Valueseeker, I think you might be right on that entry. A convergence of moving averages, potential 50 thru 200ma cross, uptrend support line, declining volume on the pullback all signal this strong performer is about to go for continuation. There is a LOT of technical support just under $3, if it bounces before then then all the better for the strength of the future moves.

[David Randolph]

Michael gave us a pleasent fundamental background of SVA and I have a trading plan that makes sure I'm on board for as long as the market responds to the fundamental expectations and facts.

But for now I'm losing 18% in just 5 days, so this stock is a fast mover, and it is moving down. So I've read only part of the Venture Capitalist newsletter, I don't want to fall in love with the fundamental story of the company. I'll just stick to my trading plan which is to hold for as long as it closes above the TEMA indicator.

The TEMA indicator (red line on chart) now stands at $2.79.

[small_investor]

Nice start of the week .. , and David spoke the right words: this stock is a fast mover!

Now let´s have a look if we will see some new highs..

[valueseeker]

I bought SVA this morning, waiting for a pull back that never came. I think it's at least a 2-3 baggers from here, based on its hep-A/B and flu alone, while SARS vaccine will keep it in the spotlight. It is a long term investment like AOB. This company almost showed a profit if you take away the stock compensation. In fact, the revenue # they have in 20K is from end of last year, and they might be already profitable by now. I also saw that the President of China and head of chinese FDA visited the company, which is a very good indication of their connections with the top government officials.


-Louis

Except:
------------------------------

Biotech research investment advocated
By Wu Chong (China Daily)
Updated: 2005-09-05 08:35

China can become the world's leader in biotechnological applications in agriculture, medicine and industry over the next five to 10 years, according to one industry insider. This can be achieved with an investment of 100 billion yuan (US$12.3 billion).

"At least 30 billion yuan (US$3.7 billion) must come from the central government," Wang Hongguang, director of the China National Centre for Biotechnology Development, told China Daily yesterday.

In his eyes, biotechnology can become a driving force behind the country's economy, and the world's, if the government pays it due attention.

Between 2001 and 2005, the State has plunged 12 billion yuan (US$1.5 billion) into biotechnology development and application, and now the sector boasts 600 billion yuan (US$74 billion) in terms of both its total investment and fixed assets.

"The figure, although 10 times as much as a decade ago, must be at least doubled in the next five years to maintain the current high momentum," Wang said.

Breakthroughs are expected in the fields of life research, environment and energy, but, Wang warned, the country is "suffering from a brain drain and a lack of funds."

These remarks were made as a prelude to the International Bio-economy Symposium slated for September 13 and 16 in Beijing.

More than 3,000 related international officials and experts from up to 20 countries, regions and organizations are expected to participate in this high-profile conference, which will cover various topics concerning basic life science, energy-related biotechnology and biological security.

China has amazed the world with several outstanding achievements in genetic therapy, vaccination and food fermentation. Some of its well-funded projects, such as therapeutic vaccines against AIDS and hepatitis B and transgenic plants, are expected to yield results.

[David Randolph]

That's the way, the way, I like it 

Nice retest and cool bounce from the breakout zone. I can only see new highs for the short term on SVA. Anyway, I want to be disciplined here (I want and need to be disciplined ALWAYS), so let me take a look at the TEMA indicator. Is price above it? Yes, so I'll continue to hold SVA.

[Michael]

It is always a strange feeling to write a post recommending a stock because it might benefit from other peoples misery. But another way to look at it is that unless somebody was willing to risk their money preparing for pandemics even more people would die. So read this with that in mind:

WHO is out again today to warn about the risk of a Bird Flu pandemic:

Bird flu pandemic a question of when, not if -WHO
07 Sep 2005 14:07:59 GMT

Source: Reuters

We may be at almost the last stage before the pandemic virus may emerge," Dr. Jai P. Narain, Director of WHO's communicable diseases department told a news conference on the sidelines of a Southeast Asia health summit in the Sri Lankan capital.

"Whether the avian influenza pandemic will occur, that is not the question any more, (but) as to when the pandemic will occur," he added.

SVA is currently running a pre-clinical test of a vaccine against the Avian Flu (Bird Flu)

Sinovac is currently advancing its Inactivated New Human Influenza (H5N1) vaccine (also referred to as Pandemic Influenza Vaccine) through the various stages of pre-clinical studies.

On March 25 2004, Sinovac received a reassortant influenza strain (NIBRG-14) for developing a Pandemic Influenza Vaccine (H5N1) from the British National Biological Standard and Control (NIBSC), which is the WHO International Laboratory for Biological Standards. The WHO distributed this virus strain to major vaccine manufacturers all over the world and recommended them to use it to develop a Pandemic Influenza Vaccine, since they considered that this strain will be the epidemic strain in the next potential outbreak caused by avian flu virus H5N1.

Sinovac completed a research protocol for developing an avian flu vaccine in April 2004 after receiving the reassortant influenza strain for bird flu H5N1 virus from the World Health Organization network.

In December 2004, Sinovac signed a major co-development agreement with the Chinese Centre of Disease Control and Prevention (China CDC) to accelerate the development of an avian flu vaccine for which Sinovac will own commercial rights. The Center for Disease Control and Prevention (China CDC) is the main government institution in China involved in the field of disease control and prevention.

The SFDA has stated that it is fast-tracking the drug approval process for Sinovac's potential avian flu vaccine. Sinovac is currently progressing through the pre-clinical stage - the first step of this process.

The last Vaccine SFDA approved took just under four years from start of pre-clinical trials to approval. Having in mind that the Avian flu vaccine is fast tracked it should hopefully be ready in 2007

Lets hope there will be no market for the product but according to WHO that is unlikely.

[valueseeker]

I own IDBE (a flu vaccine company in Canada), which was bought by GSX today for ~US$1.3B today.

SVA's market cap is $130M with both flu vaccine and hep-A/B vaccine approvals in China. I don't think SVA is for sale. I hope it's going to be a money generating machine soon. :-)


-Louis

[valueseeker]

Honestly, I think if we are looking at 5-10 yrs from now, it won't be GSX buying IDBE today, it will be SVA, at US$1.4B. This is how I look at SVA's potential. If you rewind the history 5 years back, who would think chinese buying IBM's PC division and paying US$4B for a Canadian/ex-Soviet oil company?

[David Randolph]

Nice posts and long term thinking on SVA and the Bird Flu, thanks  . Even here in Portugal the newspapers are starting to talk about that disease. I hope nothing happens, but we (the World) need to be prepared for the worst case scenario.

But even without this dread speculation SVA has great value.

Technically that white marubozu that I was so excited about (sometimes I don't like my comments when I read them later, sometimes they have just too much enthusiasm when we're just talking about stocks, stocks that need to be analyzed with a cold attitude) needed stronger volume to have continuation.

Yesterday we've had a minor correction and SVA wasn't able to break to new highs. Anyway, the trend is clearly bullish and the trend is my friend. I will hold this stock for as long as my good old friend trend says «Hold».

He is talking through the TEMA indicator on the chart. For today it stands at $2.86, so I'll continue holding the stock.

[la-onda]

seems to be that 50 day moving average approaching 200 day moving average. A cross over of the 200 day moving average by the 50 day moving average would be very positive from TA .


chart:

[AussieTrader]

A convergence of moving averages, potential 50 thru 200ma cross, uptrend support line, declining volume on the pullback all signal this strong performer is about to go for continuation. There is a LOT of technical support just under $3, if it bounces before then then all the better for the strength of the future moves.

Hey La Onda, you are thinking in exactly the right direction

[David Randolph]

I agree, nice candlestick on SVA yesterday. The technical picture looks rosy and the fundamentals are great. Besides, this is the kind of stock that I want now, on a defensive sector but with projected high revenue growth.

Price = $3.61 > TEMA = $2.90 => Hold SVA.