By Robert J. and Brian D.  Flaherty

 

Widening the value gap between them, large- cap stocks as a group have surged upwards  while many small caps are still  falling.  But which tiny tots are truly bargains?

As a group the presenting Rodman & Renshaw conference presenters were high in quality, judged by financial backing, management and the scope of what they were trying to achieve. All the CEOs made a case on why their company was undervalued. Win or lose we saw serious entrepreneurial efforts which could change the world.

 

Taking on the superbugs! As the song goes let's start at the very beginning. At Rodman & Renshaw's fall conference CEO Julia P. Gregory gave the first public presentation for Yonkers, NY -based ContraFect Corporation. (NASDAQ: CTRX-4.29) as a public company. Fresh from its $41.3 million August IPO, the start- up now has separately traded performance warrants which could ultimately attract  another $40 million. "We are bringing an entirely new paradigm of disruptive anti-infective technologies and a new approach," she announced. "We would like to change the way the field is delivering medicine."

ContraFect is a biotech focused on discovering and developing therapeutic protein and antibody products for life-threatening, drug-resistant infectious diseases. Already hospital acquired infections are the fourth leading cause of death in the U.S., following heart disease, cancer and stroke.

If unchecked, superbugs will become a pandemic. A British study found drug-resistant infections already kill hundreds of thousands a year and could exceed 10 million by 2050. Worse, with the rise of superbugs many drug companies are backing away from trying to develop new antibiotics in favor of other ventures.

ContraFect's lead program is CF-301, which was licensed from The Rockefeller University and developed at ContraFect. It is the first novel approach to the treatment of dread drug-resistant Staphylococcus aureus infections including deadly MRSA. On Dec. 22 The FDA approved the commencement of a Phase 1 clinical trial.

Also promising is CF-404, a universal influenza treatment covering all strains. In September ContraFect received a $3.3 million Advanced Technology Fast Track Small Business Innovation Research grant to fund preclinical development. ContraFect also entered into an important  collaborative research agreement with China's National Institute for Viral Disease Control and Prevention to advance CF-404. Most pandemic strains of influenza emanate from China so this link is vital.

ContraFect's novel lysins are enzymes that are produced in the life cycle of a virus that infects and kills bacteria. Lysins digest the bacterial cell wall and are different than antibiotics in that they kill bacteria immediately on contact. In addition, ContraFect is using monoclonal antibodies that block and disarm virulence factors of bacteria and viruses, rendering them vulnerable to the natural immune balance of the body.

With a total stock market cap of $87 million CTRX's recent share price was 4.29, 78% of its 12 month high of $5.50.

For more information please visit: www.contrafect.com.

 

Critters live on 24 million American's eyelids and maybe yours too! Being a journalistic pays a psychological wage. If you are lucky and love what you do, you learn something every day. At an eye exam a doctor noticed that I had critters living on my eyelashes. "Not to worry", she advised. "Just gently brush them away with baby shampoo".

So I paid attention when founder Dr. Ramin (Ron) Najafi, Chairman and CEO of Emeryville, CA -based NovaBay Pharmaceuticals, Inc. (NYSE: NBY-0.61) mentioned 24 million other Americans have bacteria and microorganisms growing on their eyelids. (Great to have company, I thought.) Even better, NovaBay's i-Lid Cleanser with Neutrox can handle these pests. With the new name, Avenova, this prescription product comes in a glass bottle with a pump. Suffers can spray the solution on a cotton ball or gauze and just wipe their eyelids.

NovaBay's pure stable version of hypochlorous acid (HOCI) is a natural compound produced by white blood cells as a first defense against microbial invaders. This is a new non-antibiotic anti-infective treatment option for blepharitis. That is a big word for a $500 million potential market condition afflicting over 23 million Americans. Mild cases just cause dry eye. In more advanced cases bacteria build colonies on your eyelids, causing swelling, redness, inflammation, irritation and a yellow crusty build-up.

Over 70% of senior citizens over 65 have some form of it, especially in states with warm climates like Florida and Arizona. Often it is detected as patients are prepped for cataract surgery. Your pets also need a version since most dogs and cats also suffer from dry eye. In January NovaBay announced a new business strategy focusing on products for eye care.

First  it is worth noting its breakthrough in another market. As its Christmas gift to people worldwide suffering from "flesh eating" disease NBY and the National Necrotizing Fasciitis Foundation will offer new life and limb saving treatment at no charge to patients worldwide. NBY's products also have been successful helping to treat diabetic foot ulcers.

The refocusing on the eye  will concentrate on three parts. First will be revenue growth by expanding expand its sales and marketing team for Avenova daily-use prescription eye care product with more than 50 U. S. direct medical sales representatives to be in place in 2015. Second will be innovation by adding new eye care products currently in development over the next 12 to 18 months. Third is developing strategic alternatives. While remaining committed to its foreign partnerships, NovaBay intends to seek additional sources of revenue and reduce expenses by licensing or selling select assets in urology, dermatology, wound care and plastic surgery.

"Following a comprehensive review of our assets, competitive positions, markets and market dynamics we have determined that focusing on eye care affords NovaBay the best opportunity for near-term revenue growth and, ultimately, profitability and positive operating cash flow," says CEO Ron Najafi.  

With a total stock market cap of $32 million NovaBay's recent share price was 0.61, 44% of its 12 month high of $1.47.

For more information please visit: www.novabay.com.  

 

Diabetics, take control of your life. Wear your own NeuroMetrix pain reliever.  Waltham, MA- based NeroMetrix, Inc.'s (NASDAQ:NURO-1.83) newest unveiling is a wearable, over-the-counter pain-relief medical device called Quell Wearable Pain Relief technology. By using electrical stimulation to raise levels of a natural painkiller called enkephalins the product helps patients suffering from diabetes pain to make it through another day.

Light weight, Quell can be worn during the day while active and at night while sleeping. Founder, Chairman, President and CEO Shai Gozani notes suffers have the option of using their smart phones to automatically track and personalize their own pain therapy. Quell will be sold in the spring initially online and through physician's offices.

At the R&R conference Senior Vice President, CFO Thomas T. Higgins was the speaker. Why is pain management a big opportunity? About 1/3 or the U.S. population - 100 million people- suffer from chronic pain. About 45 million suffer from pain derived from nerve deterioration. Further down is NURO's target - pain related to nerve disease from diabetes.

Diabetic Pain Neuropathy, also known as DPN, afflicts 6 to 8 million in the U.S. In spite of spending over $3 billion annually on pain medication drugs around than 50% of patients complain they do not get adequate relief. Also side effects from the drugs range from unpleasant to debilitating. "This is a market we feel has real potential for an alternative," says Higgins.

And it is big. Just  look globally. Besides 5 to 10 million Americans who at $200 annually for a medical pain relief device create a market of over $1 billion, an even larger size market exists in the wealthy western European countries and Japan. A relationship is being developed to penetrate Japan and China.

Why the new OTC device? To go after the market NURO needs besides prescription devices an easier to market more flashy entry. NURO also is working on devices to detect DPN earlier, before the pain starts. That makes so much sense.Earlier treatment would lower health care costs and  improve quality of life for millions.

A development stage company with a market cap of $15 million, NeroMetrix's recent share price was $1.83, 58% of its 12 month high of $3.15.

For more information please visit: www.neurometrix.com.

  

A  CEO's Personal Crusade. Will his novel vaccines replace cancer treatments like chemo which kill as they cure?  Founder, Chairman and CEO Jeffrey Wolf of Chapel Hill, NC-based Heat Biologics, Inc. (NASDAQ:HTBX-4.53) has a personal mission. His dad suffered from liver cancer but probably died from the side effects of chemo. This son's mission is  developing cancer immunotherapy which will be more effective with less deadly drawbacks. "Immunotherapy represents a much better way," says Wolf.

In December Heat expanded its product development team to move forward its two exciting lead candidates HS-110 for non-small cell lung and HS-410 for   bladder cancer. The team will help execute its Phase 2 strategy and prepare for Phase 3 delivery.

Heat is a clinical-stage bio-pharmaceutical company focused on its novel "off-the-shelf" impact therapeutic vaccines to combat a wide range of cancer. It is designed to deliver live, genetically-modified, irradiated human cells which are reprogrammed to 'pump out' a broad spectrum of cancer-associated antigens together with a potent immune adjuvant called "gp96" to educate and active a cancer patient's immune system to recognize and kill cancerous cells.

Heat's goal is to include all the features for an ideal cancer vaccine in its products. Multi-antigen to attack more than one kind of cancer cell, less toxic than current treatments and easy to use and administer. Just a needle prick in your arm. Wait two minutes and it is done.

If trials go well, the platform based on living cancer cells can be expanded to treat other types of cancer speedily and inexpensively. The company is well financed after its IPO. "In summary, we believe this is transformational technology platform that really does represent the next generation in immunotherapy," says Wolf.

With a total stock market cap of $29 million Heat Biologics's recent share price was $4.53, 47% of its 12 month high of $9.59.

For more information please visit: www.heatbio.com.

 

ONCS's Electroporation Immunotherapy Focus.  Chairman Dr. Avtar Dhillon and his nephew President and CEO Punit Dhillon are focusing this San Diego-based electroporation pioneer OncoSec Medical, Inc. (ONCS-0.44) on immunotherapy. That is because it is the bigger of two spectacular opportunities. ONCO is a spin off from Inovio Pharmaceuticals (NASDAQ:INO-9.49), whose mission is to develop vaccines for cancer and other major ills. That is the right path for INO but left electroporation used for other purposes other than vaccines on the shelf.

As we reported in the past, Avtar saved Inovio from bankruptcy and over the years helped Blue Bell, PA-based to develop and pioneer electroporation. This is a technique where an electrical pulsing device opens up the protective outer shell membrane of a cell, for example a cancerous cell, to let in a larger than usual does of highly toxic cancer fighting drug or a DNA immune stimulant before the cell immediately snaps closed again.

This is a revolutionary adjunct and alternative to surgery. Its use permits 1,000 times more of a drug or DNA adjuvant to be delivered directly to the cancer cell area, while less of its toxicity travels through the rest of the body first doing harm to healthy tissue. Think about that. Isn't it a shame that so much toxic cure travels through healthy parts of the body then get mostly blocked out by protective shells from entering the cancer cells where the drug is needed? Electroporation is a promising alternative.

A tiny company can't do everything so CEO Punit must focus ONCS on the biggest opportunity. That is using the electroporation device to deliver DNA-based drugs to strengthen the immune system. It can also stimulate cells not reachable safely today. Immunotherapy is where the action is.

Besides continuing to evaluate its ImmunoPulse system in its current indications such as skin and neck cancer, ONCS is also focused on identifying and developing new immune stimulation targeting agents, investigating additional cancer tumor immune response indications and evaluating combination-based immunotherapy approaches.

With a total stock market cap of $107 million ONCS's recent share price was 0.44, 45% of its 12 month high of $0.97.

For more information please visit: www.oncosec.com.

 

Applied DNA Sciences takes on global counterfeiting. "Counterfeiting , at over $1.7 trillion, -10% of trade- has become the global crime of the 21st century" begins the final conference presenter Dr. James A. Hayward , Ph.D. , Chairman , President and CEO   of Stony Brook, NY -based Applied DNA Sciences , Inc. (NASDAQ: APDN-2.73). "It affects everybody one way or another."

Really?  Over 80% of consumers regularly purchase counterfeit products. It spreads from the tip of South Africa where quinine at 9 cents a dose is counterfeited so people die from a very curable disease up  as  far as  Iceland where Icelandic wool in sweaters you buy often isn't Icelandic.

In the U.S. alone $100 billion annually in electronics goes for counterfeits. About 30% of U.S. electronics purchases are  touched in some way. Fake components used in your medical exam   may alter test  results. Counterfeit parts can result in car accidents or military plane crashes.

"Here is where it starts to get really worrisome," Hayward continues. "Counterfeit prescription drugs run at $75 billion and represent 10% of all drugs worldwide. There are many markets where counterfeits represent 50% to 75% of that local market. The Internet drug market is easily 50% counterfeit. Those substitutions unfortunately are often sold in combination with perfectly legitimate drugs entering back into the U.S. This is after the real drugs had been sold to third world nations at a discount. Some of the imitations are not just drugs, but are outright toxic."

Naturally there are many solutions to try and prevent this growing global crisis. "There is no single anti-counterfeiting technology that significantly reduces or eliminates across a product's end- to- end supply chain," Hayward claims. "That's a fact."

That's where APDN comes in as the catalyst for change. The challenge is to create a simple 100% reliable solution that will have stamina into the future. "There is one," he says. "DNA."

APDN's plant-based DNA security markers in products and authentication solutions can change the status quo. Its presence or absence can identify the fakes so they can be removed from the supply chain or be the basis for legal action by famous brands suffering lost business or lost reputations from shoddy imitations. APDN's SigNature DNA markers are  embedded  into a wide range of products like inks, dyes, textile treatments, glues, threads, varnishes and metal coatings. It offers a patented security system for stores, warehouses, banks, pharmacies and ATMs as well as protection of valuables. Their Counterfeit Protection Program empowers end users to verify the originality or provenance of parts. Solutions are used for microcircuits and other electronics, cash-in-transit, homeland security, textiles and apparel, identify cards, law enforcement, pharmaceuticals, wine and luxury goods.

"Our vision is to become the undisputed global leader in forensic marking, identification and authentication technologies," summarizes the CEO. "Our mission is to create the ultimate DNA solutions to provide the highest level of  security and assurance to combat the global challenges or counterfeiting and physical property protection."

APDN with 36 patents issued and 34 pending has highly qualified DNA scientists. The reason is their location. They work in Stony Brook University in a commercial building. APDN has access to the University staff when it needs to employ DNA people. It  is also only 15 minutes away from Cold Spring Harbor, another center for DNA research with James Watson, the co -discoverer of the structure of DNA. Fifteen minutes in the other direction is Brookhaven National Laboratories. APDN is  in perhaps the densest population of DNA people in the U.S.

While the counterfeit protection market is huge and growing, APDN itself is still a tiny developmental company. For the trailing 12 months, APDN lost $13 million on   growing revenues of $2.7 million. The good news  it is getting new contracts in many important and new fields.  But until  APDN grows revenues, reports  a profit and repeats it, this  developmental DNA  marking pioneer must be classified as a concept company. 

APDN has come a long way in a short period. After a 1-for-60 reverse stock split the base now only has a very sane 16.7 million shares outstanding. Trading liquidity has improved after an up listing of its shares on to NASDAQ. A $9.1 million offering has provided new financial clout. The stage is set to show what it can do solve a  growing global  crisi. May success be in its DNA.

With a market cap of $46 million APDN's recent   share price was 2.73, 25% of its 12 month high of $10.80.

For more information please visit: www.adnas.com.

 

Be Kind to yourself. Generations ago grandparents died before they reached 30 or 40. Few traveled 100 miles from the spot where they were born. Today many of you will see 90 or 100. How lucky we are to have so much extra time. We can travel all over the world. We can use new hand held screens or smart phones to witness weekly breathtaking scientific discoveries in space or simply to learn how to improve our lives.

With all the stress of the accelerated rate of change being constantly intensified by invasive media, we can feel bombarded by problems. Pundits make money by keeping us upset or constantly buying things we don't always need. They hurt instead of help. We become oblivious to our steady unnoticed progress.

Remember America is still the best place on earth. That is why we attract so many foreigners who want to be free and to grow. Take a deep breath. Live as fully as you can. May the New Year be kind to you. Above all, remember to be kind to yourself. -RJF

 

If you have a good company or overlooked fund or idea
which only needs more exposure to become better known, we know how to make enterprises come alive. We can put your activities and products into perspective. We will use  words  ordinary investors can understand.

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