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

[David Randolph]

First, I want you to carefully read this news article:

Bush summons drugmakers to ramp up flu vaccine

This is important for HEB and NVAX: «The meeting will also discuss product liability issues surrounding experimental vaccines, McClellan said.»

Now, look at the companies mentioned on the article, there are 7 of them: Wyeth (WYE), Chiron   (CHIR), GlaxoSmithKline (GSK), Merck (MRK), Sanofi-Aventis (SNY), MedImmune (MEDI) and Vical (VICL).

Considering their market cap, we have WYE with $61.79B, CHIR with $8.13B, GSK with $149.8B, MRK with $58.91B, SNY with $117.29B, MEDI with 8.25B and finally, VICL with $104.89M !!!

Now, what in the world is VICL doing on that league? It says:

«To date, three drugmakers have been given federal grants to develop vaccines against H5N1: Sanofi-Aventis, MedImmune and niche vaccine maker Vical»

Of course, revenue coming from sales of a Bird Flu vaccine will have much more impact on a small cap than on a large or giant cap.

Reading some more about VICL, we find this:

Vical Receives Grant From NIH for Development of Human Vaccine Against Pandemic Avian Flu

I guess all barriers to entry on this market will be diminished because of political pressure and real danger. Like someone said: «who cares if it is FDA approved or not if it can save your life?»

Technically the stock is practically dead but I bet it will get a lot of attention after this article and a nice rally tomorrow. I'm buying it at tomorrow's open for the 3 Stocks on Fire Portfolio, I have to place several bets because I don't want to miss the big winner, and there will always be underlying demand each time a news item gets released about the Avian Flu.

[KCScott]

David,

Based on strong fundamentals, combined with tonight's news on their cervical cancer drug:

http://biz.yahoo.com/rb/051006/merck_cervical.html?.v=5

in addition to the White House invitation, wouldn't MRK also be a good play for this group?

[ScottishTrader]

VICL broke the descending resistance line this morning, but failed to hold.  To confirm a breakout of the pattern, we need to close above 5.07, as far as I can tell. 

My only concern is Volume is higher, but not as high as I would expect it to be

If we don't get the breakout today, it may pull back a little before testing again.  I may wait and see on this one for now.

Good luck all who went in this morning 

[bigdogs99999]

Seems that the OnFire list is becoming very undiversified.   Stocks like HEB and NVAX ... and now VICL (the other two are unknown to me, I have tracked VICL for a couple of years and it is a snoozer).   SVA too.  Gotta question that logic  - bird flu is a popular thing to talk about this week ... but I cannot fathom owning all of these stocks with a large portion of the portfolio, especially since another chunk is in "garbage" stocks (the crap that no one would buy during the bull run like JDSU).  What is the logic given that diversification is good at some level?

[SmartWrasse]

According to that stockta.com site, resistance was at 4.78.  But it looks more like Scottishtrader said closer to 5 for support resistance line?

[Prfsr Hal]

I've owned Crucell for some years.  If you want to own a good biotech stock, that's the one to have.  (IMHO)  Several whackoid VICL pumpers regulaly post messages on the yaloo CRCL board, and to tell the truth they sound like morons.  It may be unfair to judge a stock by its holders, but I'd be very wary of this one.  Chedck out CRCL

Prfsr Hal

[Stocksquire]

Articles like the following will help bring new speculators to VICL as the media focuses more and more on the potential for an Avian Flu pandemic:

BIOTECH STOCKS

Drug stocks mixed, Merck slides on trial setback

By Val Brickates Kennedy, MarketWatch
Last Update: 5:13 PM ET Oct. 7, 2005   
 

BOSTON (MarketWatch) -Drug stocks finished the session mixed on Friday as Merck slid on reports that its first defense witness had been struck in its on-going Vioxx liability trial.



The Amex Pharmaceutical Index slipped 0.4% to close 317.94, dragged down by index component Merck in late afternoon trade.

Biotechnology issues fared slightly better, with the Amex Biotechnology Index creeping up 0.3% to 618.03.

Shares of Merck skidded 4% to $25.85 on Friday afternoon. According to reports, the testimony of Merck's first witness in its on-going personal injury case in New Jersey was struck by the presiding judge for giving misleading testimony. Merck is being sued by a former user of its now-recalled drug Vioxx who claims he suffered a heart attack after taking the pain reliever.

The N.J. case is Merck's second Vioxx suit to come to trial. In August, a Texas jury awarded the widow of a Vioxx user $253 million in damages. Merck faces over 4,500 lawsuits relating to Vioxx.

On the biotech side, Gilead Sciences (GILD:
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FinancialsMore GILDnews, chart, profile) and niche vaccine maker Vical (VICL: VICL
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FinancialsMore VICLnews, chart, profile) both gained as the White House hosted a meeting of major drugmakers to discuss how the government can prevent a pandemic of the avian flu.

Gilead is the developer of antiviral drug Tamiflu, marketed by European drug conglomerate Roche, which the government has been stockpiling as a hedge against a major outbreak of the avian flu.

Biotech index component Gilead jumped 4% to close at $47.51.

Vical, meanwhile, has been working an avian flu vaccine under a grant from the National Institutes of Health. Vical shares hopped 9% to $4.88.

Losing ground was biotech group Vasogen (VSGN:
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FinancialsMore VSGNnews, chart, profile) , sliding 13% to $2.34. The company said it had privately placed $40 million in senior convertible notes with institutional investors.

Human Genome Sciences (HGSI:
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FinancialsMore HGSInews, chart, profile) , another biotech index component, shed 5% to close at $8.78. The company stock's has been spiraling downwards since it reported disappointing Phase II clinical results for its drug LymphoStat-B in the treatment of lupus.


Val Brickates Kennedy is a reporter for MarketWatch in Boston.



 
   

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[REALDEALS21]

David, did you buy this stock Friday ?? I did not see it in the open trades. Thanks !

[David Randolph]

We have some questions, great 

David,

Based on strong fundamentals, combined with tonight's news on their cervical cancer drug:

http://biz.yahoo.com/rb/051006/merck_cervical.html?.v=5

in addition to the White House invitation, wouldn't MRK also be a good play for this group?

It really doesn't look like KCScott ! The stock broke badly to new lows on that news, I hope you didn't buy it, if you did you should probably get rid of it quickly (when a stock goes down on bullish news that tells you it will continue to go down).

MRK's market cap is too big to be a Bird Flu play, the sales from any medicine related to Bird Flu probably wouldn't impact the overall revenue and profit numbers all that much.

VICL broke the descending resistance line this morning, but failed to hold.  To confirm a breakout of the pattern, we need to close above 5.07, as far as I can tell.

My only concern is Volume is higher, but not as high as I would expect it to be Huh

If we don't get the breakout today, it may pull back a little before testing again.  I may wait and see on this one for now.

Good luck all who went in this morning  Wink

I agree ScottishTrader  But volume was high indeed, volume must be seen on a relative, not absolute basis. I hope VICL gives you a reason to buy in the near future.

Seems that the OnFire list is becoming very undiversified. Stocks like HEB and NVAX ... and now VICL (the other two are unknown to me, I have tracked VICL for a couple of years and it is a snoozer). SVA too. Gotta question that logic - bird flu is a popular thing to talk about this week ... but I cannot fathom owning all of these stocks with a large portion of the portfolio, especially since another chunk is in "garbage" stocks (the crap that no one would buy during the bull run like JDSU). What is the logic given that diversification is good at some level?

Diversification is wise, but on a bear market pretty much everything will head down, except for specific stories or themes. That's what I'm looking for here. Risk is controlled since I have just 53% of the Portfolio invested, remember that, 47% is still in cash.

According to that stockta.com site, resistance was at 4.78. But it looks more like Scottishtrader said closer to 5 for support resistance line?

On my chart resistance for today is $5.06 and support stands at $4.24.

I've owned Crucell for some years. If you want to own a good biotech stock, that's the one to have. (IMHO) Several whackoid VICL pumpers regularly post messages on the yaloo CRCL board, and to tell the truth they sound like morons. It may be unfair to judge a stock by its holders, but I'd be very wary of this one. Check out CRCL

Prfsr Hal

Lol, judging a stock by its owners is a funny thought  I couldn't find CRCL on my database or on stockcharts.com database, what's wrong?

Thank you Prfsr Hal !

Thanks for the article mentioning VICL Stocksquire 

David, did you buy this stock Friday ?? I did not see it in the open trades. Thanks !

Yes I did, as planned, at the open, price $4.64. You can see it now on the 3 Stocks on Fire Portfolio. Because I've received some personal messages and e-mails from some subscribers complaining about the information provided on the 3 Stocks on Fire link, now I will wait at least 24 hours before I put the trades on the portfolio, what do you think about this?

Thank you !

Well, now let's go to the update on VICL. I bought the stock, now, as usual, I will let the market tell me if this was a good move or not.

We have a simple technical setup on the chart, an ascending trendline and a descending one, so the pattern is a triangle. A stockholder doesn't want to see the stock break the ascending trendline, which for today is standing at $4.24. Resistance is at $5.06.

I will continue holding VICL for as long as it closes above the ascending trendline.

[LiveLife]

David, another good call!   

When the bearish market trend started last week, I sold all of my positions to cash.  I was going to sit out and research a group of stocks to buy when the market rebounded, but got your alerts on HEB, NVAX and now VICL.

Sold HEB on a nice trade and bought more NVAX with a really nice gain today.

As you stated, we now sit and wait for the market on VICL too.

By the way, as long as I am watching the market closely, I don't have too much problem being not as diversified as before.  I now watch my precious basket of a few stocks really closely!

I used to split my positions 5-8 ways, only to see my daily gains negated by losses.  I now trade with 1-3, up to 4 positions daily.  I don't daytrade, I buy on dips and sell as stock price peaks on limit sells (for someone who has a full-time day job, limit buy/sell has been working well for me).

Thanks to all the supporters of 3StocksOnFire and David/Frederick, keep up the great work!

[David Randolph]

Thanks for your support LiveLife  And good luck on your trading, you know you need to have tight stops if you're not diversified enough.

VICL shot up 10% today, on volume above average, breaking through a resistance zone. The technical target of today's breakout is $6.88 

With the market going down I'm very pleased to own these specific theme stocks, and I will continue holding them without a doubt.

[Prfsr Hal]

Sorry for all the typos the other day when writing about Crucell.  I was using somebody else's fingers.  Anyway, the symbol is CRXL (not crcl as I had mistakenly written).  They made a big deal with Merck today.  Their technology is leased to many companies to aid in the manufacture of vaccines.

[ScottishTrader]

Good call on the breakout today, David

I expected it to happen, but was fully invested, so didn't want to break one of my other plays to get in, which is a shame, as it was a very good run today and should go higher.  Perhaps I will have the opportunity to buy in on profit taking in the next few days, as I am sure it is likely to happen.  However, I doubt it will retrace back to resistance now support again in the short term.

Congrats to all holding this one, it certainly looks like its bird flu season stock-wise

the Scotsman

[elliemae]

VICL is a low float stock and depending on the bird flu hype, this stock could really take off.  Look at IPIX back in March/April of 2004.  It ran from $2.00 to $27.00 on hype of security cameras!! 

[basanlas]

David,

Did you sell today? I see it hit $6.98 and and passed your target. I didn't put in my limit order to sell cause I thought I had a few days before it would get there. Wish I would have caught it on the upswing. Maybe we'll get another pop tomorrow.