Price Changes on Common Stock of life science equipment companies over the last three months.

Curious to see how your company stock has fared in the last three months as compared to your competitors? We were wondering who had done well and who hadn’t, so we decided to do a comparison. I wouldn’t lose too much sleep if one of your competitors beat your company out by a few percentage points. But if your company is on the bottom of the list, and your competitors are on the top, then that is not a good sign. Companies are arranged by percentage of change, with the companies gaining value the most at the top and the companies losing value at the bottom.

Keep in mind that the biggest increase does not necessarily mean the best company. Over the long run, stock prices do tend to represent fair value, but in the short term, prices can get out of whack.

A good example on this list is Helicos. They are up near the top, but I have heard nothing but bad news out of them lately. Their first customer returned a machine claiming it wasn’t up to standard, and they sold another machine but at a large discount. And they have been laying off people. I did take a quick look and discovered that they are very thinly traded, meaning very few shares of the stock are normally bought on a daily basis. But recently there were a couple days with much higher than normal volume and that caused the spike in price. I don’t know who did the buying on those days, but I would guess either an insider who knows something we don’t, or perhaps a company buying up their stock gradually as the prelude to a buyout. Time will tell.

Following is the listing–just don’t get heartburn if your company hasn’t done as well as others. Possibly it is just a temporary glitch. If it becomes a long term trend, then you can start to worry. (more…)

They must be doing something right at Abbott.

I just took a quick peek at Abbotts recently released financial numbers for last year. Outstanding.

They report double-digit growth in both sales and earnings for 2008. They are also predicting a very strong earnings outlook for FY 2009 as well.

Overall Worldwide sales were up 10.1%. Adjusted earnings per share was up 14%. They had double digit sales growth in each major business line last year. They ended 2008 with 9 new major Regulatory Approvals. A breakdown of total sales was as follows: Total US sales up 8.9%, but International Sales up a whopping 20.3%. Broken down by product mix, Nutritional sales up 12.2%, Diagnostics up by 13.2%, Vascular up by 34.7% and Misc other sales up 0.3%. Pretty healthy numbers.

They also state that their pharmaceutical pipeline has increased in size, novelty and number of phase transitions. In 2008 Phase I and Phase II trial initiations were nearly double 2007 levels.

As a result of all this good news, the company declared a new quarterly dividend of 36 cents per share, an increase of 10.8% over the previous year. This marks the 340th consecutive dividend paid by Abbott since 1924.

Despite all this good news, their stock has not been spectacular of late. In mid-September the stock peaked at $59.81, and at the worst of the crash in early October they were down to a low of $49.45, a drop of about 17%, which when compared to the rest of the stock market wasn’t that terribly bad. After the low the stock started climbing again, getting up to $55.99 a couple weeks later, then after closing at a high of $56.57 on November 18, two days later on November 20, the stock dropped over 5 points in a single day, to $50.35 and has trended slightly downward since. In the few days since their new fiscal numbers have come out, the stock has done pretty well again. Last Wednesday the stock closed at $49.22. At the end of the day on Friday, the stock had risen to $52.81, a gain of about 7.3%. Not bad for two days work.

But if you are considering investing in them, you would need to check out why the big drop of over 5 points on November 20. I would assume some kind of bad news came out that day. But if the problem that caused that drop is behind them, then it could be clear sailing for Abbott.

It certainly sounds as though Abbott is poised for a good year in 2009. However, before investing in Abbott stock, check with a trusted financial investor first.

FDA moves on Geron’s request for trials much more quickly than expected.

Back on January 11, I had written an article on Geron Corp and the possiblilty that the FDA would give them the OK to begin clinical trials. In the article I had mentioned that Geron would be a good company to invest in, but that I didn’t expect the FDA to rush things along. Well, I was right about Geron being a good investment, but I was way off on the timing.

On Friday, January 23, Geron Corp was approved by the FDA to start the world’s first trial of a therapy derived from human embryonic stem cells. They had developed these nerve progenitor cells as a potential treatment for spinal injury.

This early stage trial is not designed to have immediate success. Nobody is expecting the patients to jump out of their wheelchairs and start running marathons. Instead, Geron will be injecting small amounts of the cells into the spinal cords of about 10 recently injured patients whose nerve damage is severe enough to cause paralysis in the lower half of the body.

The Trial Investigators will be looking for things like infections, cancerous growth and immune system rejection. They will also be watching for signs of improvement, such as a return of any feeling to the lower extremity of the body such as the toes or legs, or an improvement in bowel and bladder control. If signs of improvement were to be much greater than expected, Geron would try to move the treatment through clinical trials much more rapidly.

As you might imagine, Geron stock went for quite a ride on Friday. It had closed at $5.21 per share at the end of the trading day on Thursday. Friday morning it immediatly screamed upward and peaked at $8.17 per share just before lunchtime, a gain of almost 57%. After lunch the stock settled down a bit and closed the day at $7.09, still up 36% for the day. If only I had taken my own advice and bought the stock on the 11th when I was writing about it. But I had never dreamed the FDA would have moved so quickly.

Here’s a company you might want to look at investing in with your “mad money.”

Geron Corp out of Menlo Park, California is, to the best of my knowledge, the first company to be on the verge of being approved by the FDA to do clinical trials on a stem cell derived treatment for spinal injury.

When the Bush Administration went after funding for stem cell research several years ago, most companies turned tail and started swimming downstream. Geron management and their employees decided not to take the easy way out and decided to continue swimming upstream towards their common goal. A gutsy call. But it looks like with time and a little luck, they could reach their target in the next year or so.

They have been working on this project for about ten years. In 2008 they submitted an FDA investigational new drug application, a document that was reportedly in excess of 20,000 pages long. It is currently hidden somwhere deep in the bowels of the FDA, waiting to be approved. I would expect that getting approval is going to be a slow process, because they are entering uncharted waters. Nobody has ever done clinical trials involving stem cells before. And you can also expect religious groups to weigh in on the ethical issues as they see them.

Before you rush out and buy their stock, I checked to see how thay have done over the last year. On January 10, 2008 the stock was at $5.31 per share. As of last Friday, January 9, 2009 the stock stood at $4.98. Not a glorious return, but surprisingly, much better than the DJIA or Fortune 500 has done in the last twelve months. My guess is that the stock will probably trade sideways to slightly upward until the FDA decides if they are going to allow the clinical trials to start. If they allow the trials, I would expect the stock to scream upward. Should the FDA disallow clinical trials I would expect the stock to tank. 

Investing in Geron stock would be a gutsy call as well right now, but taking the easy or safe way out is rarely rewarded. I’m not going to recommend to anyone that they buy the stock. You need to talk to a trusted financial advisor first. But I am considering seriously putting in a little of my “mad money” in the near future. It would be money that I could afford to lose if things went against me.

Big biotech stocks were a safe haven in 2008.

While big pharma has done fairly well overall, the medium to large biotechs were a good place to be in 2008.

Because many of the products made by biotechs are viewed by both patients and doctors as being lifesaving technologies, demand was less affected by a poor economy. Plus, unlike the big pharma companies, who must contend with generic medicines, most biologics don’t face that generic onslaught.

Big biotechs like Amgen and Genentech were both up over 20% last year.

The Dow Jones US Biotech Index was up last year by 3%, dwarfing returns on US stocks as a whole. The Dow Jones Total Market Index was down 40% for the same time period.

Part of these gains were due to buyouts. It is well documented that the large pharmaceutical companies are actively searching for smaller biotechs to buy out. This trend is not expected to slow down in 2009. In fact, many analysts expect this trend to accellerate.

So while past performance is certainly no indicator of future performance, investing in medium to large biotechs could be a wise move. Smaller biotech companies might have more difficulties, especially with getting additional funding from Venture Capitalists and other groups.

As always, consult with a trusted financial advisor before making any investing decisions.

First trading day of 2009 a good one for the stock market. Only 363 more days to next New Years Eve.

In reality, one day in the life of the stock market means very little, but we might as well start off the New Year with some good news.

The Dow was up today 258.30 or 2.94% to 9,034.69. It finished the week up 6.1%. The last time the Dow closed over 9000 was back on November 5.

Since hitting its low on November 20, the Dow has gone up 19.6%, while the S & P 500 has gone up 23.8%. It is within the relm of possibility that history will put down November 20 as having been the bottom for the 2008 market crash. My guess is that those who have been holding off to catch the low have missed the bus. Adding to the moderate amount of optimism on Wall Street is the knowledge that there is about $9 trillion sitting in free cash waiting to be invested in the United States right now.

Biotech equipment company stock prices mixed for December

At the beginning of each month, GenomeWeb has an interesting piece describing how the stocks of the major biotech tools companies did the previous month. December was a mixed bag, with the stocks overall being up slightly.

The two best performers in the market were Pressure Biosciences up 45.83% and Monogram Biosciences up 31.31%. Sequenom was also up a bit, increasing by 18.73%. There were however several company stocks that hit the skids. The worst of the group by far was Rosetta Genomics, which was down 45.62%. Several other organizations were bunched together, doing better than Rosetta but still not stocks you would be happy owning. Compugen was down 28.33%, Cepheid down 23.56%, PerkinElmer down 22.98%, which is in my mind a big hit for a large company like that to take. Rounding out the poorer producers was Orchid Cellmark, down 22.09%.

The total group in alphabetical order is as follows:

While CRO’s as a whole are doing well, there are some exceptions

Recently I had touted CRO’s as doing well. And, as a group they are. But like any grouping of companies, there are always a few dogs in the pound.

PharmaNet Development Group, based out of Princeton, New Jersey recently put out a press release stating that they are working with a Financial Adviser from USB in an effort to explore strategic alternatives, which could include the sale of the company.

Their stock had peaked at $39.19 last January, and at the last close was selling for 90 cents per share! You would have been better off owning shares of General Motors over the last year.

Another CRO to keep your eyes on is MDS Pharma. Their revenues last quarter were $112 million, down 9% from the same Quarter last year. They are probably not as bad off currently as PharmaNet, but MDS is another company I would not put my money into. Nor would I be too enthused about taking a job offer from either company unless I was currently unemployed and was in “any port in a storm” mode.

Pharma industry investment opportunities changing.

In the past, investing in the pharmaceutical industry was pretty easy. Pick a couple of major drug makers and watch your investment grow. Due to market conditions and political considerations, things are changing.

Overall growth globally for the pharmaceutical industry is predicted to be in the 4 to 6% range. This is due to many factors. The cost and difficulty of bringing new drugs to market has risen in recent years. There are numerous patent expriations coming up, and especially with a Democratic administration in the US, a bigger emphasis on cost containment and reduction is on the horizon.

The Generic drug industry is expected to gain from these trends with double-digit growth predicted for the next several years. Within 2 years, generic companies are expected to become about 25% of the pharmaceutical indusry. Generics accounted for 63% of medications dispensed in 2006, which represented a 22% growth rate for generics.

The National Association of Chain Drug Stores estimated an average reatil price of just over $30 for generics in the United States and $110 for brand prescription drugs.

Another up and coming growth area is in the Contract Research Organizations. CRO’s are predicted to grow by about 28% per year on average, due to pharmaceutical companies attempting to lower costs and increase their profitability.

So if you are looking for areas in the life science arena to invest in, CRO’s and generic companies look to be a good bet.

Looking for people with money to invest in start-ups? Call Pappas Ventures.

Pappas Ventures announced they have raised $96 million for their 4th fund, and they are expecting the total to exceed $200 million. Current investors include the Indiana Public Employees Retirement Fund and North Carolina Department of State Treasurer.

They invest in early to mid-stage companys throughout North America. They will invest anything from $100K for a seed deal to over $6 million for a later stage mezzanine transaction. They are based in Durham, North Carolina and can be reached at 919-998-3300 and their website is at www.pappasventures.com. I’m sure they are itching to invest some of that money.