NVAX - Sector: Healthcare --- Industry: Biotechnology & Drugs

[lucy5cents]

I sold 40% of my position on MONDAY around 4.18 so have mixed feelings -- happy I kept 60%. The reason I sold (reluctantly, because I've been listening to their recent presentations via their website and it all sounds amazing) is because of how high the stock had risen relative to it's 50DMA. At the time it was about 115% above, now 150% above! According to IBD research, "The average winning stock will rise only 50% above the line, and the top 10% of winning stocks will get 70% above the line. When your stock reaches those limits, consider selling or lightening your position." I watched my profits slip away on SVA. Still holding, but I'm tired of giving up my gains. I've discovered that knowing when to sell is a much more difficult thing than knowing when to buy. I know that's stating the obvious. But I'm trying to figure out what works best for me. I've had regrets both selling too soon and not locking in my profits on the way up. Hind sight is 20/20.

Anyway, since IBD doesn't pay attention to stocks under $10 or $12, I'm not sure if that rule is relevant with stocks under $10. Anybody else pay attention to the 50DMA on these up-and-coming but low-priced stocks?

Thanks.
Theresa

[defenderyou]

Well - this does not always happen:

Took the sell-off as an opportunity to buy back the shares I sold yesterday. Bought 5k at 4.99!! (yesterday I sold 5k at 5.57!)

Feeling smart so far

Best
Defenderyou

[kpusan]

CBMX .. I am sure most of you know this ... another flu play over .. big move today .. float is smaller than NVAX and HEB.

David any thoughts?

[LiveLife]

More accumulation activity by Institutional/money managers!  Could it be that $5+ restricted fund managers are now buying?  Anyway, this buying activity is a good indicator that these managers "anticipate" more gains.  Why would fund managers spend $millions to make pennies.  Like David mentioned, I believe managers buying at $5+ indicates that their target may be $10-$20 now.

Updated the Lycos I-watch charts for today.

[LiveLife]

Here's a "broader" picture of Institutional/money manager activity.  As you can see, the obvious profit taking "sell execution" buy a small number of managers was more than anticipated.  Most are on "hold" pattern probably monitoring market activity and calculating their "target sell" price.  More accumulation activity even after yesterday's "stellar" gains indicates the managers buying at $5+ expect more growth.  This is good.

[LiveLife]

Great CEO presentation at Life Sciences Conference in New York this morning!!!

Maybe that's why Institutional/Money Managers are buying/accumulating agains!!!

I am transcribing the presentation right now.

I'll post it as soon I am done...

[Terliso]

great run for NVAX i'm holding this one since Aug 29... it hits my limit order at $5.60 when i was away at my computer ..with 150.00% gain    ... LET'S PARTY BABY!! for now bye-bye for NVAX & i'll be waiting for pullback... goodluck for those who still hold.

Well, nice pullback 

[Lucas Scott]

So much for shorting. Tried shorting at $5.10 and Ameritrade said no shares available to short Will just have to make it a paper trade.  

CBMX - interesting play. I think we're getting to the stage of bird flu mania when questionable companies that have little to do with the sector put out press releases with "H151" and/or "bird flu" in them to get a pop in their stock price. Reading CBMX's profile on Yahoo, it looks like they want a piece of every momo play. Their profile includes "nanotechnology," "homeland security," "genetic analysis" (I think that's their 'in' if stem cells get hot again), and "biosensors" (that was their 'in' for the bird flu PR)      

[brandyjoco]

Ouch.  Where is everyone?

I sold half and then picked up a few thousand shares at $4.91 at the end of the day. Is the uptrend still in intact?

It is a good sign that SVA and HEB still moved up as the group is still strong.

P.S.  I don't know how to short...

[defenderyou]

Well everyone must have the flu;

so as I did just like some of you - sold half at 5.57 yesterday and bought back at 4.99 earlier for most of the day I was in the money - in fact we actually almost went green - at the end of the day we were taken down to the 4.90s again, and I could not resist picking up more at 4.92 around 3.44pm and then filling my quota (did not get completely filled at 4.92) after hours at 4.88.

The other thing I did was buy some more ARQL at 7.00 - the stock has been behaving nicely all week, rising from the dead at 6.40 to 7.40s. Today is traded between 7.30 and 7.50 most of the day UNTIL the last 30 minutes the bottom fell out and the pps fell to a low of 6.92 all on some nervous longie dumping 17k shares via market order - now I got some new cash in so I could not resist trying to buy 5k more at 7.00. Again I got partially filled and now having an order AH for 4k at 7.05.

Either I am a genious doing this or tomorrow am when they have their earnings call, I will be in serious trouble.

Now for those of you that dont know about ARQL here is a recent desc of checkpoint activation as published in a recent journal:

Basically, these guys have develoed a technique to identify cells that cause Mitotic Arrest. This induces cell proliferation defects in multiple cancer cell lines - so they kill the cancer: non-toxic and 99% accurate from what I have read. The problem with the stock is they had a chem delivery business which generated $40 mil in revenue for a 248 mm mkt cap company. NO real explanation but they decided to exit. The stock fell from low 8s to 6.40 when I started buying a bit more. The other (KEY) issue is they are supposed to get Phase 1b approval for  ARQ501, and it's clear that the phase1b and especially the phase2 are the crucial events when it comes to ARQ501 and it's success but the wait is excruciating - anyday any week any month now!! Tomorrow is earnings so this stock will rock or it will tank - I dont think there is an inbetween. But I am there

(Sorry to post this here but I started writing and here we are)


FROM ARQL MESSAGE BOARD ON YAHOO:

Looks like this may be the start of ARQ-450RP (mitotic checkpoint activators). No??

http://www.ncbi.nlm.nih.gov/entrez/query.fcgi?cmd=Retrieve&db=pubmed&dopt=Abstra ct&list_uids=16234339&query_hl=5

Identification of a Small Molecule That Induces Mitotic Arrest Using a Simplified High-Content Screening Assay and Data Analysis Method.

Wilson CJ, Si Y, Thompson CM, Smellie A, Ashwell MA, Liu JF, Ye P, Yohannes D, Ng SC.

Department of Chemical Genomics, ArQule Incorporated, Woburn, MA.

High-content screening has emerged as a new and powerful technique for identifying small-molecule modulators of mammalian cell biology. The authors describe the development and execution of a high-content screen to identify small molecules that induce mitotic arrest in mammalian cancer cells. Many widely used chemotherapeutics, such as Taxol(R) and vinblastine, induce mitotic arrest, and the creation of new drugs that also induce mitotic arrest may have tremendous therapeutic value. In their screen, the authors employed a simple DNA stain (DAPI) and a sensitive nonparametric statistical test to identify compounds from an internal collection of ~13,000 high-quality lead-like small molecules. Subsequent analysis of 1 active compound indicated that it induces mitotic arrest, assessed using a high-content phosphohistone H3 detection assay, and caused cell proliferation defects in multiple cancer cell lines. The active compound, a quinazolinone originating from a natural product-like subset of the screened compounds, is active in cells at ~500 nM and appears to act by inhibiting the polymerization of tubulin.

Note one of the authors is S.C. Ng who is Vice President of Drug Discovery Biology. This from the PR 10-13-04...."Dr. Shi-Chung Ng joined ArQule from Abbott Laboratories, where he was a founding member of Abbott oncology, a Senior Group Leader and a Volwiler Associate Fellow. He co-led efforts in the discovery and development of multiple oncology candidates in Abbott, including a Bcl-2 inhibitor, farnesyl transferase inhibitors, and novel anti-mitotics. Prior to his tenure at Abbott, Dr. Ng worked at Pfizer, Bristol-Myers Squibb and Harvard Medical School. He is currently adjunct Assistant Professor at the Chicago Medical School, and adjunct Faculty Member at Northwestern University. He served as a visiting Professor at Rutgers University, a visiting Research Staff Member at Princeton University, and an Instructor in Medicine at Harvard Medical School. Dr. Ng is a reviewer on a number of prominent scientific journals including Brain Research, Oncogene, Biochemical Pharmacology and the Journal of Pharmacology and Experimental Therapeutics. He has published over 180 scientific papers, abstracts and patent applications, and is the recipient of awards such as the Abbott Volwiler Society Award, Howard Hughes Research Fellowship, David Ross Scholarship and Marshall Scholarship. Dr. Ng received a Ph.D. in Biochemistry from Purdue University, and a Postdoctoral Fellowship from Harvard Medical School. "ArQule has a great opportunity to be a leader in oncology innovation, and I am excited to be part of it, I believe I am in the right place at the right time for oncology drug discovery," said Dr. Shi-Chung Ng."

Take a look

Defenderyou

[brandyjoco]

ARQL sounds pretty interesting. I hope their technique can save lives! I will read up on it.

I wonder if we are the only ones thinking that NVAX will go up tomorrow? Oh well, guess we have to be patient - I just hate giving up gains... as this is the first time in 6 months that my portfolio is starting to look good (thanks to 3stocksonfire).

NVAX has a market cap of only $200 million - that is hardly enough to cover the current products they have in the pipeline much less a possible bird flu vaccine contract.

VPHM headed down at the last hour also - the market was very weak.

[logocovet]

Thanks for keeping this thread alive, Livelife.  I problably wouldn't have bought NVAX without the great info you posted. 

I read in the paper today that scientists say that bird flu could travel to North America by next year.  This means possibly another year of media talk about Avian Flu. Even if the bird flu threat is an empty one for the U.S., the US govt must start funding research and stockpiling drugs.   

I think the runup in these bird flu stocks have just begun.  I will practice averaging up on NVAX and SVA.  Good luck all.   

[LiveLife]

Thanks and you are very welcome, logocovet!

As was indicated on previous posts, today's profit taking amidst a huge volume trading (37 million shares!) was "inevitable and overdue."  Buyers of pre $2 - $4, and even $5 needed to be "flushed" out while the longs watched (gotta love these holders!).   The continued volatility provided day and swing traders with fantastic trading opportunities (up to $1.00 swing!!! oh my!)

The good news is that after a quick and early sell, the Institutional/money managers returned their buy/accumulation again all day long without selling!  This is GREAT indication!   Managers will not buy a $5 stock to sell at $5.50.  No, they will buy because they "know" that gains of several dollars to tens of dollars are anticipated with this stock.  Also, there was a mention that certain fund managers have a $5 restriction.  If this is true, then our breakthrough past $5 have attracted new Institutional/money manager buyers.  And we certainly welcome them.

After yesterday, I am sure the entire market is watching NVAX now for certain.  As anticipated, NVAX continues to be the week and month volume leader, as also the month Institutional gain activity leader.

I spent this afternoon listening and transcribing the CEO's presentation at Life Sciences Conference in New York today.  It has many great news and many continuing confirmations of all the "right" things Novavax is doing as a company.  Since it is so long, I have split the transcript in two:  Current product line and Avian vaccine.

As David Randolph noted in previous (premium) NVAX posts , past and recent gain/volume activity, I believe is due to the company's existing and expanding product lines and NOT due to Avian vaccine.  I believe we have yet to see the Avian vaccine related gains yet.

I got clarification about Novavax Avian vaccine development.  They ARE using DNA process to develop the Avian vaccine matched to the current strain of H5N1.  They are using insect cell-culture process to mass produce high yield, low cost vaccines.  And they are working on a single dose "human" immunogenic Avian vaccine (current vaccine requires a second dose after 30 days), and they are "actively" seeking government/corporate partnership/merger!  WOW!!

For those who hate to read or can't wait, following is my favorite part of the CEO's presentation on Avian vaccine issue.  I'll post the "full" transcript in two following postings:

The whole story is that we can make a particulate vaccine using genetic engineering, and customize that vaccine to the emerging strain, and make it highly immunogenic because of its inherent properties of being a particle, and by combing with an adjuvant like Novasomes.

And the last piece is "Can we manufacture large enough of this?"  The current manufacturing processes are all made in eggs, and this is a 50 year old process.  There's a lot of problem with this.  There is no surge capacity.  You can't get enough egg to produce for a pandemic flu.  There is long lead time.  There's allergy associated with egg.

What we have done is gone to this bag technology which I mentioned to you collaborating with Wave BioTech where we are using insect cells that we can grow in these bags that are disposable, easy to commission, and we can scale them up to 500 liters, put them in production facilities that don't need to be fancy, grow the cells in these bags and inoculate them with our virus seed and BOOM, you got vaccine.

And this can be commissioned not only in US, but world wide.  So we believe that we can truly solve this world wide problem if we can combine this technology with our vaccine strategy both from immunogenicity stand point as well as matching of the vaccine to the strain.

So, I like to end by saying that as compared to what is out there, the solution that we have is egg-free, we don't have to worry about eggs, is rapid customization of the vaccine to the emerging strain, is highly immunogenic, we can rapidly commission large production, and we can get high yield and low cost, therefore we have a full solution to this problem.

Now, can Novavax as a small company solve this world wide problem?  Probably not, but we believe that this is such a compelling story that we will be able to attract, hopefully, somebody out there that will help us, whether it is government or corporate partner, to really solve this world wide problem, and I am looking forward to participating in that.

[LiveLife]

Here's the first half of CEO's presentation at Life Sciences Conference in New York this morning:


Novavax story –  "Evolving continuously over time"


Agenda:
Management team
New business strategy
Short-term driver – Drug delivery
Long-term driver - Vaccine
Dynamics of Avian Flu - Opportunity they are very excited about


Novavax – Been Public since 1995, Nasdaq (NVAX)

Two platforms of  technologies:
1. Drug delivery
2. Vaccines
Drug delivery, FDA approved product Estrasorb
Emerging pipeline with about 10 new products – drug delivery technology
Vaccine side – we have the biggest opportunity we currently have on Avian flu

Management Team - Relatively new management team
CEO - background in vaccine, with Novavax for 1 1/2 year,  worked for Merck 10 years
COO - Substantial experience with Eli Lily
CFO – With Novavax 5 years, seasoned accounting and financial professional
Head of clinicals - 26 years with Eli Lily
Rob Bailey? - Very excited to have him on board.   Joined this month. Critical for pharmaceutical development and drug delivery business
Dale Smith? Head of vaccine.   Baculovirus,  10 year with Novavax, chief scientist prior to Novavax
Craig Wright? Chief scientific officer, prolific Inventor of Nano-particle technology for the drug delivery of products

We have a very strong team- consisting with at least 5 of 7 people with advanced degrees in science & technology and this is in line with company transformation that's taking place.

Company recently transformed from a specialized pharmaceutical company that focused on women's health area to broad based product development company leveraging the companies for proprietary technology and also focusing on core competency.

We have eliminated the commercially failed marketing organization within the past three months . We have monetized many negative products, sold one for 2.5 million to barnell?

Recently announced Estrasorb licensing the drug to Esprit Pharma  for $12.5 million upfront, plus royalties with $2 million down payment .

We have strength in our Product Development functions and  we are focusing on developing licensing new products in addition to Estrasorb based on nano-particle technology.

And lastly but not least, we are focusing on Avian flu vaccine as long term goal driver for the company.

In terms of business strategy the value creation is developing new products and there are two ways to capture the value.

One is to direct sales of the product
Second is licensing and that's what we are focusing here, product based on our new technology

In terms of value driver short-term, we have products we developed based on nano particle technology
And the long-term driver is the vaccine, particularly the Avian flu

Estrasorb is the first commercial nano-particle product we licensed to Esprit Pharma.  We are very very excited about the deal because it really shores up our balance sheet in terms of bringing large amount of cash to the company, also giving us a cash stream with the royalties that we are going to get from this deal, as well as the large down payment.  It also validates the technology because of the size of the deal.  We believe this is going to bore well for our new products based on the new technology

The value proposition in terms of partnering obviously is that we can create new branches of the nano-particle technology.  We have a quick array of the licensing the product using the [FDA] 505B2 filing.  We can leverage the learning from Estrasorb, which by the way is very important because we have gone through the entire FDA process so we understand what it is necessary in terms of quality control, in terms of manufacturing, etc., which generally becomes the bottleneck to get a new product licensed.

And finally we have world-class production facility with excess capacity which can be used for any of our new product

So, over all, bringing new product to market using nano-particle technology can be very very quick because we can commercially bring to market very quickly.

In terms of our product development in the nano-particle business we have hormone products which we have demonstrated proof of concept, obviously, Estrasorb, which is estrogen replacement therapy.

The end result is a Testosterone product which we have done clinical trial, currently in negotiations with companies to license it out.  And we are getting some deal flow here in terms of getting some licensing opportunities.

We are trying to expand the technology beyond the topical delivery into oral product, such as oral immunosuppressant

We have a very well thought out product development strategy and it may look like we are working with large number of components, but because we can rapidly screen our formulations and we can rapidly do a proof of concept, we believe that this is the best way to harvest the potential of nano-particle technology and generate cash.

So, the business strategy with the nano-particle business is to generate cash by licensing these products.

[LiveLife]

Here's the second half of the conference presentation discussing Avian vaccine issue.  Really a must read!


At this point I am going to shift gear and talk about our vaccine opportunity, particularly the Avian flu vaccine.
As most of you know, there's a lot of visibility in the Avian flu area, and the full solution to this problem that we all face is three fold:

One is that, the Avian flu virus is rapidly mutating, as you know, and so whatever vaccine that we have to come up with has to have a good match with the strain that's out there.  So quick response to emerging strain is one of the key issues that technology has to answer.

Second thing is that you have to make enough of the product in a short amount of time, very quickly, so you have to have the surge capacity.

And the third thing is that you need to have immunogenicity of whatever vaccine you use.  In other words, you don't have to inject a large amount of antigen to achieve a neutralizing antibody response.

So you have to have all three of these components to have a full solution, and we believe that Novavax has all three of these elements in the company right now.

To address the first problem, which is "How do you customize your vaccine to the emerging strain?"  The answer there is that we work with genes rather then viruses.  In other words, as soon as there is an emerging strain, we can collect the strain and extract the genes out of it and use those genes to produce the vaccine.

In terms of surge capacity, we have gone to a scalable, but flexible manufacturing system of using the wave BioTech technology of disposable bags and we believe that that particular technology will be easy to commission and will be able to and help us produce large amounts of vaccine to satisfy any demand should the pandemic hit.

Lastly we are working with a vaccine that is very immunogenic because we are working with particles rather than soluble proteins, which is what most of currently available vaccines are or some of the newer vaccines are.  So we believe that by having a full solution, we can have an answer to this problem that is best in class.

The reason why we believe we are better off in terms of customizing our vaccine more rapidly to the emerging strain is because whenever there is a new strain of flu, you have to take the nasal swab from a person who has the flu, it goes to WHO, and WHO then produces the strain through reverse genetics (and that takes time) and provides the strain to the companies that make the vaccine which then grow them in eggs.  And it takes several months before they can produce a vaccine.

In contrast, what we do whenever there is a primary flu virus, we get the strain quickly from WHO, and extract the genes and from genes produce what we call Virus Like Particle (VLP) which is made through recombinant DNA technology, and that process is much shorter compared to the 6 month process the traditional vaccine process takes.

The genetic engineering that we do is we take the three key genes out of the flu virus and take those three genes and put into a baculovirus vector and these vectors can be infected into insect cells and when they express their own proteins, they also express the three proteins from the flu virus.  And these proteins assemble themselves in to structures that are like the actual influenza virus except that they do not contain any genetic material and therefore they are unable to infect the person taking the vaccine.  So they are inherently safe, but because they look like the true influenza virus to the immune system, they are very efficient at lifting the immune response.

So by making a particulate vaccine, and by using genes, we are addressing two of the key issues that I pointed out.  One that we can customize a vaccine exactly to the emerging strain and we can make immunogenic vaccine.  The other thing I want to point out why a particulate vaccines are good is that protection level produced by 1 micro gram of VLP vaccine is almost same as 10 micro gram of soluble protein vaccine.  The vaccine that Novavax is producing is more immunogenic than the soluble protein vaccine that is currently marketed or under development.

The second element that we are doing in addition to the particulate vaccine is that we have proprietary adjuvant.  We have a proprietary adjuvant called Novasomes when combined with a vaccine results in substantially higher immunogenicity.  Even after 1 week, shows substantially higher immuogenic response even with single dose of vaccine.  None of the current vaccines have been able to provide an effective level of protection with a single dose.  In a pandemic, it will be very difficult for people to come back after 30 days for a second shot.  Certainly we have more work to do here, but there's indication that that can be done.

The whole story is that we can make a particulate vaccine using genetic engineering, and customize that vaccine to the emerging strain, and make it highly immunogenic because of its inherent properties of being a particle, and by combing with an adjuvant like Novasomes.

And the last piece is "Can we manufacture large enough of this?"  The current manufacturing processes are all made in eggs, and this is a 50 year old process.  There's a lot of problem with this.  There is no surge capacity.  You can't get enough egg to produce for a pandemic flu.  There is long lead-time.  There's allergy associated with egg.

What we have done is gone to this bag technology which I mentioned to you collaborating with Wave BioTech where we are using insect cells that we can grow in these bags that are disposable, easy to commission, and we can scale them up to 500 liters, put them in production facilities that don't need to be fancy, grow the cells in these bags and inoculate them with our virus seed and BOOM, you got vaccine.

And this can be commissioned not only in US, but world wide.  So we believe that we can truly solve this worldwide problem if we can combine this technology with our vaccine strategy both from immunogenicity stand point as well as matching of the vaccine to the strain.

So, I like to end by saying that as compared to what is out there, the solution that we have is egg-free, we don't have to worry about eggs, is rapid customization of the vaccine to the emerging strain, is highly immunogenic, we can rapidly commission large production, and we can get high yield and low cost, therefore we have a full solution to this problem.

Now, can Novavax, as a small company solve this worldwide problem?  Probably not, but we believe that this is such a compelling story that we will be able to attract, hopefully, somebody out there that will help us, whether it is government or corporate partner, to really solve this world wide problem, and I am looking forward to participating in that.