MABVAX THERAPEUTICS - logoMabVax Therapeutics (MBVX) is a promising biotech company that recently uplisted to the Nasdaq Capital Market and received noteworthy investments from Dr. Phillip Frost and OPKO health (OPK).

The company presented at the Rodman & Renshaw Global Investment Conference earlier this week, and will be presenting in San Francisco at the BIO Investor Forum in October.

 

In the video below MBVX President and CEO, David Hansen, discusses the company’s exciting near and longer term drivers, as well as:

  • MBVX’s unique vaccination development capabilities
  • Focused on, but not limited to pancreatic cancers
  • Collaborations with Memorial Sloan Kettering, Rockefeller University, and Heidelberg Pharma
  • Promising early results from antibody therapy treatment
  • New diagnostic/imaging study beginning
  • Advantages of using a fully human antibody for new drug development
  • Pancreatic cancer and the unfortunate very rapid progression of the disease with extremely high mortality, despite the newest drugs on the market today
  • Strength of the MabVax intellectual property moat, and more

 

 


See also: MabVax Therapeutics (MBVX): A Compelling, Strong Buy with Multiple Near Term Positive Drivers

MabVax Therapeutics: Investor Presentation

Seeking Alpha: MabVax Therapeutics – Looking For A Needed Pancreatic Cancer Breakthrough

MabVax Therapeutics web site


MBVX will also be releasing new trial data on both the treatment drug and the imaging drug studies later this month. We will update subscribers as soon as the the data is public.


Best wishes for profitable investing!

GeoSpatial Corporation - GA siggy

MABVAX THERAPEUTICS - logoIn my previous article on MabVax Therapeutics (MBVX) last week, “MabVax Therapeutics (MBVX): Promising Early Results in Treatment of Pancreatic Cancer, I wrote about a near term positive driver in the upcoming release (expected  this month) of data from the Phase I trial of lead drug development candidates MVT-5873 (Therapeutic Agent Study) and MVT-2163 (Imaging Study).

In this article, I’ll share other considerations that make MBVX shares a compelling and STRONG BUY.

These include:

  • Recent NASDAQ uplisting
  • Cash position/no near term stock offering/dilution needed
  • Noteworthy investments from Dr. Phillip Frost and OPKO health (OPK)
  • Development pipeline
  • Strength of management team
  • Strong chart technical indicators

MabVax Therapeutics (MBVX) Share Information

Shares outstanding: 5.6 million
Approximate float: 3.8 million
Close on 9/6/16: $5.30
Market cap: ~ 29.7 million

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MabVax Therapeutics is developing novel human antibody based products for the diagnosis and treatment of metastatic solid tumor cancers. MabVax has created a platform technology to discover antibodies from patient immune responses against their cancers. The company has a portfolio of fully human antibodies that are being developed to address unmet medical needs in several difficult to treat cancers such as pancreatic, small cell lung, sarcoma, ovarian, and breast cancer.
MabVax Therapeutics’ lead antibody development program is HuMab-5B1 The company started two clinical trials this year with a therapeutic agent (MVT-5873) and as a new generation PET imaging product (MVT-2163). In addition, MabVax has identified a radioimmunotherapy agent (MVT-1075) and plans to file an Investigational New Drug Application (NDA) with the FDA later in 2016.

Nasdaq - MabVax TherapeuticsMabVax Therapeutics uplisted from the over-the-counter market to the Nasdaq Capital Market, effective August 17th. While the benefits of this uplisting are known to most investors, they bear repeating.

The listing opens MabVax Therapeutics up to an entire market of institutional investors that previously could not buy the shares. Some institutions won’t touch a stock trading below $5/share, regardless of the exchange. With MBVX trading at/near that $5 point, and an update on Phase I trials of two lead drug candidates, expect that participation to increase as more institutions discover the stock. It’s not hyperbole to say that pancreatic cancer pharmaceuticals are typically blockbuster drugs, and as MabVax progresses lead candidates in the FDA trials, institutional participation should ramp considerably. Additionally, there are many retail investors who won’t touch a stock trading under $5 as well.

The Nasdaq Capital Market requires higher standards of  corporate governance and transparency to be in place for listed companies, another obvious benefit for shareholders. The bottom line here is that the Nasdaq Capital Market listing is very positive for MabVax Therapeutics and shareholders going forward, and buying shortly after the uplisting, (as in right now), is just plain good old fashioned common sense investing.


MBVX is Well Capitalized Following Recent Raise

Pharma and biotech stocks are cash-intensive and the need for a near term capital raises is a consideration. Buying shares after a recent raise is often the best way to avoid a dramatic drop in share price, plus unwanted dilution.

Fortunately, MabVax just completed a capital raise of $9.4 million and (from my discussion with management) the company now has access to approximately $16 million in cash. The present cash burn is about $1 million/month, so chances of near-term dilution are slim to none. This is a time when I love to buy biotech and pharma stocks! I hate surprises and dilution…who doesn’t?


Noteworthy Investments from Dr. Phillip Frost

As many reading this are aware, Dr. Phillip Frost is a well known and highly respected biotech investor. Often referred to as “the Warren Buffett of biotech”, his investments in MBVX shares began back in April, 2015, See: “MabVax Therapeutics Catches Eye of Billionaire Investor Dr. Phillip Frost and OPKO Health“.

Dr. Frost and $5B market cap OPKO Health (OPK) added shares of MBVX in the just-completed capital raise. If you peruse the SEC filings from April 2015-present, you’ll discover that Dr. Frost and OPKO Health now have an approximate 15% stake in MabVax Therapeutics. As a shareholder of MBVX myself, I like that.


Ability to Develop Multiple Blockbuster Drugs with HuMab-1 Antibody

Due to the properties of MabVax’s HuMab-5B1 antibody, drug development is not limited to a single cancer type. The 5B1 antibody has demonstrated high specificity and affinity, and has shown potent cancer cell killing capacity and efficacy in animal models of pancreatic, colon and small cell lung cancers.

The antigen the antibody targets is expressed on more than 90% of pancreatic cancers making the antibody potentially broadly applicable to most patients suffering from this type of cancer.

HuMab-5B1 was derived from a patient vaccinated with MabVax vaccine licensed from MSKCC

  • Patients repeatedly vaccinated to drive immune response against cancer antigen
  • Patient samples obtained at maximal response
  • HuMab-5B1 chosen because of optimal characteristics
  • Patient outcomes
    – Seven Stage IV patients vaccinated in 4Q08 and six are still alive (median: 197 weeks post-vaccination)
    – Patient from whom derived the HuMab-5B1 antibody remained disease free at 5+ years

The HuMab-5B1 antibody has ideal characteristics that enable development of a broad commercial platform of cancer drugs:

Characteristic Technical Description Advantage of HuMab-5B1
Targeting cancer cell Specificity Exquisitely specific; only recognizes the target on cancer cell
Binds tightly to target cell Affinity Binds quickly to cancer cell and is slow to come off
Cytotoxicity ADCC and CDC Antibody has potency to kill cancer cells through normal cell killing mechanisms
Does not target normal cells Immunohistochemistry Ability to avoid on target off tumor activity that could raise undesirable side effects
Additive effect with chemotherapy Synergy Improves potency of standard of care chemo therapy by 50% in early studies
Ability to attach additional agents Conjugation Very easy to attach a radiolabel for PET imaging or a radioactive isotope to make a radioimmunotherapy product or to attach a toxin payload to make an antibody drug conjugate (ADC)
Benign side effect profile in animal toxicology studies Clear GLP Toxicology The infusion and activity of the antibody did not cause unanticipated or worrisome side effects in our pivotal toxicology studies in primates
Precision medicine platform Directive agent for multiple products Precisely targeting cancer cells allows for localization of immunotherapy, companion diagnostics, and molecularly targeted payloads for more potent therapies

Due to the positive characteristics of MabVax’s HuMab-5B1 listed above, the drug pipeline in chart below and collaborations with Memorial Sloan Kettering Cancer Center, the NIH, Heidelberg Pharma, and Rockefeller University could be just the beginning:

MabVax Therapeutics pipeline


Early Results Beat Blockbuster Drug Paclitaxel (Taxol) in Small Cell Lung Cancer

Early studies from the MVT-5873 trial, (which management will be giving an update on in September), show that doses of 25mg/kg and 50mg/kg of MVT-5873 resulted in a greater slowing of tumor growth than 10mg/kg of Paclitaxel alone.

Moreover, the combination of MVT-5873 with Paclitaxel demonstrated a strong synergistic effect on Paclitaxel alone in slowing lung cancer tumors.

  • Keep in mind that because MVT-5873 is based on MabVax’s HuMab-5B1, side effects to date have been benign/minimal.
  • Also keep in mind Paclitaxel remains a widely prescribed chemotherapy drug and the market capitalization of MBVX is a mere $29.7 million today.

 

MabVax Therapeutics vs. Placlitaxel

 

 


Early Results also Show Much Greater Slowing of Tumor Growth when Combined with Current Standard of Care Drugs for Metastatic Pancreatic Cancer

 

MabVax Therapeutics Pancreatic Cancer efficacy

 


Strong Patent Moat

The major claims of patents awarded to MabVax Therapeutics to date cover composition of the vaccine, methods of treatment, chemical modification of antigens, and synthesis.

11 issued patents and 3 pending applications in the U.S.
– Issued patents covering monovalent and polyvalent vaccines, methods of manufacture,
methods of use
– 2 pending applications covering monoclonal antibodies
14 international patents and 3 pending applications
– Issued patents covering monovalent and polyvalent vaccines, methods of manufacture,
methods of use
– 2 pending applications covering monoclonal antibodies
Orphan drug designation available for vaccine and antibody products
– Received U.S. FDA ODD in Sept 2014 for neuroblastoma vaccine


Highly Skilled, Veteran Management Team with Extensive Drug Development and Commercialization Experience

The management team’s experience in drug development, joint ventures, and drug commercialization/product launches adds exceptional value that will be realized by more institutions as the company continues to be discovered on the Nasdaq Capital Market.

 

Founder and CEO, J. David Hansen
David Hansen has more than 30 years of industry experience as a biopharmaceutical industry executive, having held senior management roles in both private start-up companies as well as small to mid-sized public companies. His senior level experience includes executive management, finance and accounting, corporate development, sales and marketing. During his career, Mr. Hansen has executed a wide variety of in and out licensing agreements, research and development collaborations, joint ventures, divestitures, and acquisitions. Mr. Hansen has expertise in the therapeutic areas of immunology, oncology, and infectious disease. Mr. Hansen gained executive management experience at several life sciences companies prior to co-founding MabVax Therapeutics that make him particularly suited for his leadership role. He was a corporate officer of Avanir Pharmaceuticals where he held the titles of Vice President of Commercial Development, Senior Vice President of Corporate Development, and President and Chief Operations Officer of the Avanir Subsidiary Xenerex Biosciences. Prior to Avanir, Mr. Hansen served in multiple roles at Dura Pharmaceuticals including National Sales Director, Director of Marketing, and Director of Business Development. He has additional management experience with Merck & Co. (Schering-Plough), Key Pharmaceuticals, and Bristol Myers Squibb.

Co-founder and Chief Science Officer, Philip Livingston, M.D.
Philip Livingston received his MD degree from Harvard Medical School and was Professor of Medicine in the Joan and Sanford Weill Medical College at Cornell University and Attending Physician and Member in Memorial Sloan-Kettering Cancer Center (MSKCC) where he treated melanoma patients and ran the Cancer Vaccinology Laboratory research lab for over 30 years until his retirement from MSKCC October 1, 2011. Dr. Livingston’s research focused on: identification of suitable targets for immunotherapy of a variety of cancers, construction of polyvalent conjugate vaccines specifically designed to augment antibody responses against these targets, and identification of optimal immunological adjuvants to further augment the potency of these vaccines. He has over 150 publications and 4 issued and 3 pending patents concerning cancer vaccines.

Co-founder and Vice President of Antibody Discovery, Wolfgang Scholz
Wolfgang W. Scholz, Ph.D. has extensive drug discovery experience in multiple therapeutic categories and has collaborated with major pharmaceutical companies on several projects. He was Senior Director at Avanir Pharmaceuticals, where he led research and development efforts for 8 years, and was a co-founder of Xenerex Biosciences, a subsidiary owned by Avanir Pharmaceuticals. Under his leadership, the antibody discovery group at Xenerex developed human monoclonal antibodies to multiple infectious disease targets using in vitro and SCID mouse technologies, and one antibody (AVP-21D9) was successfully out-licensed and recently passed Phase I safety testing. Prior to Avanir, Dr. Scholz held positions with increasing responsibilities at Tanabe Research Laboratories. Dr. Scholz is the principal investigator on multiple National Cancer Institute grants received by MabVax totaling almost $5 million. Dr. Scholz is an inventor on three pending and three issued antibody patents, three issued small molecule patents, and author on thirty-four peer-reviewed publications. Dr. Scholz earned his Ph.D. in Microbiology and Immunology from the University of Kiel, Germany in 1985 and completed his postdoctoral training at The Scripps Research Institute, La Jolla.

Vice President and Chief Business Officer, Paul F. Resnick
Dr. Resnick has an M.D. from The Medical College of Wisconsin and an MBA from The Wharton School of the University of Pennsylvania, and recently joined MabVax Therapeutics in April of this year. Prior to joining MabVax, Dr. Resnick was Senior Vice President, Business Development for Juventas Therapeutics, where he was responsible for business and commercial strategy and working with executive management overseeing corporate clinical development, and financial and business strategies. From January 2008 to January 2012 he was Vice President, Business Development for Intellikine, Inc. (acquired by Takeda Pharmaceuticals), responsible for managing alliances and leading the business development strategy that resulted in securing an acquisition by Takeda Pharmaceuticals. Dr. Resnick also held Senior Director positions for Worldwide Business Development, and for Strategic Alliances, at Pfizer Inc., where he was responsible for networking with leaders from biotechnology companies, universities, and research institutions to gain early insights into emerging technologies, and for leading technical and business diligence, negotiations, and alliance management of science and technology initiatives for Pfizer’s Biotechnology and Bio-innovation Center. Prior to Pfizer Dr. Resnick held Director and Senior Director positions at Rinat Neuroscience (acquired by Pfizer), Intermune, Inc. and Roche Pharmaceuticals.

Executive VP of Research and Development, Paul W. Maffuid, Ph.D.
Dr. Maffuid’s management experience includes global pharmaceutical organizations, developing biotechnology companies and contract development and manufacturing organizations. His senior level management experience includes leadership for product development, manufacturing and drug disposition. Throughout his career, Dr. Maffuid’s organizations were integral for research and development activities and represented by regulatory filings for biopharmaceuticals and small molecule therapeutics indicated for oncology, diabetes, CNS disorders and obesity. Dr. Maffuid served as Executive Vice President, Pharma Operations for AAIPharma Services Corporation and was a member of the Executive Team that transformed a declining business into a leading provider of integrated drug development services. His responsibilities included formulation, manufacturing, and analytical services for clients developing biologic and small molecule therapeutics. Prior to joining AAIPharma he was the founder and President of Biopharmalogics, Inc. a consulting company supporting the development of pharmaceutical products from 2008 to 2011. Earlier in his career Dr. Maffuid was Senior Vice President of Operations at Irvine Pharmaceutical Services, Inc., and Vice President of Pharmaceutical Development for Arena Pharmaceuticals. While at Arena Pharmaceuticals Dr. Maffuid was a member of the executive management team, was responsible for drug product and drug disposition research and development operations, and led the design and construction of a cGMP compliant pilot manufacturing facility. Dr. Maffuid’s management experience also includes Amylin Pharmaceuticals, Magellan Laboratories and Glaxo Research Institute (currently GSK).

Chief Financial Officer, Gregory P. Hanson
Gregory P. Hanson, CMA, has over 30 years serving as CFO/financial executive of both public and private biotech and hi tech companies. From January 2008 to February 2014 Mr. Hanson was Managing Director of First Cornerstone, a board and management advisory service to companies and executives in the areas of international corporate development, financing strategies, commercialization of technologies and products, and M&A advisory service. Since November 2009, Mr. Hanson has served as Advisory Board Member of Menon International, Inc. involved in commercialization of biosensor devices and assays, and renewable products. Since October 2011, Mr. Hanson has served on the Life Sciences Advisory Board of Brinson Patrick Securities, a boutique investment bank. He also serves as mentor and confidential advisor to several other tech and life sciences companies. Mr. Hanson is Past-President and 9-year Member of the Board of Directors of San Diego Financial Executives International (FEI), and a member of the Capital Formation Committee at BIOCOM since 2011.  Mr. Hanson served as Senior Vice President of Brinson Patrick Securities, where he opened up the San Diego branch and introduced at-the-market financing strategies to public life sciences companies. Prior to Brinson Patrick Securities, Mr. Hanson served as Senior Vice President and Chief Financial Officer of Mast Therapeutics (MSTX—NYSE MKT), and prior to Mast Therapeutics was Vice President and CFO, Chief Accounting Officer, Compliance Officer and Corporate Secretary of Avanir Pharmaceuticals, Inc. (acquired by Otsuka Holdings Co., Ltd.), the developer of the cold sore product Abreva™, and Neudexta™, for the treatment of Pseudobulbar Affect, a central nervous system disorder. During the course of his career, Mr. Hanson has completed approximately $1 billion in financing, licensing and partnering arrangements. Mr. Hanson was a founding and 6-year member of the Small Business Advisory Committee to the Financial Accounting Standards Board, and has spoken at various national conferences, industry organizations and panels on financing strategy and mergers and acquisitions, and twice spoken to the SEC’s Committee on Improvements to Financial Reporting. He has an MBA with distinction from the University of Michigan, and a BS in Mechanical Engineering from Kansas State University.


Chart Technicals

The MBVX chart looks strong here, with a notable increase in volume since the NASDAQ uplisting, accompanied by a rise in share price as recent lows bounced off the uptrend line.

MabVax Therapeutics stock chart

 

 

Keep in mind many institutions can not buy stocks trading below $5/share.  As MBVX continues to close above $5/share, investors can expect an increase in institutional participation.


Review of Near Term Forward Drivers

In addition to increased institutional participation following the Nasdaq uplist and low float (3.8 million shares), there are several positive drivers that should push MBVX shares higher during the remainder of 2016.  These are:

  • MVT-5873 (for treatment of pancreatic cancer) and MVT-2163 (a companion diagnostic) interim program milestones expected this month (with full Phase I readout mid-2017)
  • Plans to file IND for radioimmunotherapy program Q4 2016
  • Presentation and meetings with investors at the 18th annual Rodman & Renshaw Global Investment Conference in NYC 9/11-9/13/2016 (see brochure)

Conclusion

MBVX is a compelling buy here due to:

  • Recent NASDAQ uplisting leading to increased institutional and retail investor awareness and participation
  • Cash position/no near term stock offering/dilution needed
  • Noteworthy, repeat investments from Dr. Phillip Frost and OPKO health (OPK) for an approximate 15% stake in company to date
  • Strong drug development pipeline using HuMab-5B1
  • Strength of management team
  • Strong chart technicals
  • Near term positive drivers
  • Low float + tiny market cap ($28 million) with blockbuster pancreatic cancer drug development potential

 

I’ll be attending the Rodman and Renshaw conference in NY next week.  I look forward to meeting management of MabVax Therapeutics, and sharing more near term positive developments with subscribers!

Supplemental: August, 2016 Investor Presentation


Best wishes for profitable investing!

GeoSpatial Corporation - GA siggy

 

 


Disclosure/Disclaimer/Terms of Use

 

Part I of II: Expect Near Term Positive News on Lead Product Candidates from MBVX


MabVax Therapeutics (MBVX) Share Information

Shares outstanding: 5.6 million
Approximate float: 3.8 million
Close on 8/29/16: $5.00
Market cap: ~ 28 million

Repeat investments from Dr. Phillip Frost and OPKO Health (OPK) began in April 2015 and account for an approximate 15% stake in MabVax


Pancreatic cancers are extremely complex and, unfortunately, highly lethal.  According to the American Cancer Society the one-year relative survival rate is 20% and the five-year rate is 7% for all stages of pancreatic cancer combined. The 5-year survival rate for patients with metastatic pancreatic cancer is approximately 1 (one) percent.  This is a horrific disease in which survivability for the vast majority of patients is measured in weeks and months.

However, an area of research in pancreatic cancer treatment that shows initial and growing promise is in the development of immuno-oncology and cancer vaccines.  The American Cancer Society notes that:

“Immune therapies attempt to boost a person’s immune system or give them ready-made components of an immune system to attack cancer cells. Some studies of these treatments have shown promising results.”

and

“Several types of vaccines for boosting the body’s immune response to pancreatic cancer cells are being tested in clinical trials. Unlike vaccines against infections like measles or mumps, these vaccines are designed to help treat, not prevent, pancreatic cancer. One possible advantage of these types of treatments is that they tend to have very limited side effects. At this time, vaccines are available only in clinical trials.”


MabVax Therapeutics (web site) has shown early, promising results in clinical trials of immuno-oncology products developed from the human immune response to cancer, with an emphasis on pancreatic cancer.

MabVax’s HuMab-5B1 antibody is fully human and was discovered from the immune response of cancer patients vaccinated with an antigen-specific vaccine during a Phase I trial at Memorial Sloan Kettering Cancer Center. In preclinical research, the 5B1 antibody has demonstrated high specificity and affinity, and has shown potent cancer cell killing capacity and efficacy in animal models of pancreatic, colon and small cell lung cancers. The antigen the antibody targets is expressed on more than 90% of pancreatic cancers making the antibody potentially broadly applicable to most patients suffering from this type of cancer.
The HuMab-5B1 antibody has very good tumor targeting capabilities as well as being internalized by pancreatic cancer cells. These important attributes have allowed MabVax to use the HuMab-5B1 antibody as a tumor-targeting platform upon which we have created multiple products. The antibody itself is in a Phase I clinical trial as a therapeutic agent. This same antibody when combined with a radiolabel is a potentially new generation PET imaging agent and is also in a Phase I clinical trial. We are also developing more potent HuMab-5B1 based products such as a radioimmunotherapy product when the antibody is combined with a radioisotope and lastly, an antibody drug conjugate when combined with a toxin payload. While all of the mentioned products are based on the targeting capabilities of HuMab-5B1, each product has unique characteristics and potential uses for the treatment of multiple types of solid tumors.

Additionally, MabVax has:

  • an attractive, multi-pronged drug development pipeline
  • wide and expanding patent moat
  • recent (August 17th) NASDAQ uplisting 
  • low float (3.8 million shares)
  • significant and recurring investments from Dr. Phillip Frost and OPKO Health, Inc.
  • including recent capital raise, (closed August 22), MabVax Therapeutics can access $16M cash with a burn rate of ~ $1M/month
  • positive near term drivers- early data from promising Phase 1 studies of lead product candidates expected within 5 weeks

MABVAX THERAPEUTICS - logo

MabVax Therapeutics Holdings, Inc., a clinical-stage biopharmaceutical company, engages in the discovery, development, and commercialization of proprietary human monoclonal antibody products and vaccines for the diagnosis and treatment of various cancers. It has a pipeline of human monoclonal antibody products based on the protective immune responses generated by patients who have been immunized against targeted cancers. The company generates its pipeline of antibody-based product candidates from patients who have been vaccinated with propriety vaccines licensed from Memorial Sloan-Kettering Cancer Center (MSKCC). Its lead cancer vaccines targeting recurrent sarcoma and ovarian cancer are in proof of concept Phase II multi-center clinical trials. The company’s product candidates include 5B1 antibody program, 5B1 imaging program, and 5B1 antibody drug conjugate, which targets an antigen over expressed on metastatic pancreatic, colon, stomach, ovarian, breast, and small cell lung cancers. It also develops follow-on antibody products, including 1B7 and 31F9 antibody programs to the antigen GD2, which is over expressed on sarcoma, melanoma, and neuroblastoma. The company has collaboration agreement with Heidelberg Pharma GmbH, as well as a research collaboration agreement with Rockefeller University’s Laboratory of Molecular Genetics and Immunology. MabVax Therapeutics Holdings, Inc. was founded in 2006 and is based in San Diego, California.


Lead Product Candidates MVT-5873 (Therapeutic Agent) and MVT 2163 (Imaging Agent)

MVT-5873 (Therapeutic Agent Study)

The Phase I trial is evaluating the safety, tolerability and pharmacokinetics of MVT-5873 as a single agent or in combination with the current standard of care chemotherapy regimen in subjects with metastatic pancreatic cancer. The first group of patients will be enrolled in a traditional dose escalation regimen to assess safety, the pharmacokinetics and determine the optimal dose of the antibody. A second group of patients will establish the safety and optimized dose of the antibody when administered with a standard of care chemotherapy as a first line therapy for the treatment of patients with advanced cancer.

 

On March 21, 2016, MabVax announced the initiation of the Phase 1 trial of MVT-5873 in patients with pancreatic cancer. This is an open label, multi-center, dose escalation clinical trial with patient enrollment initiated at three clinical trial sites: Memorial Sloan Kettering Cancer Center (MSK) in New York as well as two sites within the Sarah Cannon Research Institutes network at the Tennessee Oncology site in Nashville, TN, and Sarah Cannon Research Institute at Florida Cancer Specialists in Sarasota, FL.

The initial cohort of patients will be treated with 1, 3, 6 or 10 mg/kg of MVT-5873 to determine the MTD. This dose will then be utilized in an expansion cohort of approximately 10 subjects to examine additional safety and PK parameters. For the combination study, the first cohort will be treated with one dose below the MTD with escalation up to the MTD. This dose will then be utilized in an expansion study where MVT-5873 will be administered alongside the standard of care chemotherapeutic agent gemcitabine.

See ClinicalTrials.gov for in-depth study information.


Positive Early Results Hinted at in 10-Q Filing on 8/11/16: 

On page 24 of the 10-Q filing for the quarter ending June 30, 2016, MabVax Therapeutics disclosed (in relation to MVT-5873) that:

“Of the nine patients who have been dosed to date, five have been treated for three or more months and investigator observations have noted stable disease for a subset of those patients. We are continuing to escalate the drug dose to assess safety and reach an MTD and anticipate initiating the second portion of the trial where our drug is dosed in combination with chemotherapy in the fourth quarter of this year.  We expect to have the preliminary results of this clinical trial later in the third quarter in 2016.”

Now, a “stable disease for a subset of those patients” (with late-stage, metastatic pancreatic cancer) could be a very positive near term driver.  Expect a press release on these exciting early results by end of the current quarter…within the next 5 weeks based on the SEC filing. 


MVT-2163 (Imaging Study)

As a bit of background, part of the reason pancreatic cancers are so lethal is because they typically cause no symptoms, or (at best) vague symptoms in the earlier stages. As a result, the diagnosis of pancreatic cancer is most often made at a very late, metastatic, stage IV disease.

Widespread screening, (analogous to mammograms for breast cancer or colonoscopy for colon cancer), is not practical for this less common cancer. However, improved diagnostic imaging tests can be extremely useful in high-risk groups, such as those with a strong family history of pancreatic cancer.

Simply put, the earlier this devastating  disease can be identified and aggressively managed, the better the chance for survival. Because of this, MabVax Therapeutics received a $1.75 Million contract for development of the HuMab-5B1/MVT-2163 Imaging Agent from the National Institutes of Health (NIH).

The Phase I clinical trial for MVT-2163 (see ClinicalTrials.gov)  was initiated in the second quarter of 2016 at Memorial Sloan Kettering Cancer Center for the Company’s new generation fully human immuno-PET imaging agent. In this Phase I trial, the safety, pharmacokinetics and biodistribution of MVT-2163 is being evaluated in patients with pancreatic and other CA19-9 positive cancers. The trial will determine the ideal dose and conditions for an optimal PET scan image.

MVT-2163 has demonstrated high-resolution images of tumors in xenograft animal models, potentially making it an important new tool to aid in the diagnosis, monitoring and assessment of patients with pancreatic cancer and an attractive companion diagnostic for the MVT-5873 therapeutic product.

 

Mabvax Therapeutics - study


Like the early results from the MVT-5873 study, MabVax Therapeutics plans to provide an update on MVT-2163 in the near term according to the August 11th 10-Q filing which states:

“Investigator observations showed scans potentially highlighting smaller metastatic sites not seen on standard CT scans.  These results are preliminary and require more patients to confirm.  We expect to have the preliminary results of this clinical trial later in the third quarter 2016”


Clearly there are exciting times ahead for investors in MabVax Therapeutics, and more significantly, some cause for optimism in the future treatment of pancreatic cancer.

 

See Part II: MabVax Therapeutics (MBVX): A Compelling, Strong Buy with Multiple Near Term Positive Drivers

See also: MabVax September Investor Presentation

 


GeoSpatial Corporation - GA siggy

 

 


See Disclosure/Disclaimer/Terms of Use

GeospatiaGeospatial Corporation logo - Copyl Corporation (GSPH), a 3D underground infrastructure mapping solutions provider and Google for Work Technology Partner, released video showcasing their cloud-based SaaS at GeoUnderground.

  • Loading stock data...

 


Geospatial Corporation CEO, Mark Smith, stated today that:

Geospatial continues to make substantive progress applying our underground mapping technologies and adding unique features to our powerful yet easy to use GeoUnderground Software Solution to accurately map critical underground infrastructure in both position and depth (3D). The strong interest in the country’s deteriorating infrastructure creates a growing need for Geospatial’s underground infrastructure services. As a Google for Work Technology Partner we are expanding our marketing efforts which should continue to yield promising results.


Geospatial Corporation - google logoGeospatial was selected by Google as the only Google for Work Technology Partner that offers 3 dimensional underground mapping solutions.

Since passage of the PIPES Act of 2016 which requires certification, data management, testing and mapping of all types of the more than 2.6 million miles of buried energy pipelines across the USA, Geospatial CEO Mark Smith informed me: “Inquiries have skyrocketed”.

 


Turning “Location” Only Competitors Into GeoUnderground Service Partners

Geospatial Corporation’s advanced 3D underground mapping technologies combined with GeoUnderground’s SaaS platform is a one-two punch to competitors. There is a world of difference between “locating” underground infrastructure in only 2 dimensions and 3 dimensionally mapping it. Location-only, 2 dimensional providers don’t convey depth of structures and accuracy is limited. This “location only” group would include engineering companies and companies that plant yellow flags and paint lines on streets prior to a construction project. It also over 60,000 conventional surveyors across the United States.

Between offering vastly superior data collection technologies for 3 dimensional mapping and being the only Google For Work Technology Partner for 3D underground mapping at GeoUnderground, Geospatial Corporation sees the thousands of 2 dimensional, location-only providers as future customers, not competitors.

It’s easy to see how the newly-launched Geospatial Partner Program could drive revenue growth going forward, especially as the PIPES Act of 2016 mandates the certification, data management, testing and accurate mapping of all buried energy pipelines in the USA.

 


Geospatial has collected many miles of infrastructure data for a wide variety of industries including Federal Agencies, Energy and Telecom companies and utilities, Municipal and Commercial clients, as well as, International clients.

Geospatial has worked for these pipeline operators and utilities who are among the largest in the world:

3D Underground mapping- GSPH partners


For more on Geospatial Corporation, see:

Geospatial Corporation Business Summary PDF

Article: New Federal Law Creating Big Demand for Geospatial Corporation (GSPH)

What Lies Beneath, by Geospatial CEO, Mark Smith


GSPH offers complete, precise 3D mapping solutions of our nation’s underground infrastructure.

With the PIPES Act now law, and with GSPH as the only Google for Work Technology Partner for 3D underground mapping, I look forward to writing in more detail on the accelerating growth at GSPH in the weeks ahead.

GeoSpatial Corporation - GA siggy

 

 


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22nd Century Group - logoThere’s no better time to jump on board a stock than when it’s breaking out above long term support on a flurry of positive news. This is especially true when additional good news and positive events are expected to drive volume and share prices higher. At MicrocapResearch.com, we believe that is the case with 22nd Century Group (XXII).


22nd Century Group, Inc., (web site), a plant biotechnology company, provides technology that allows for the level of nicotine and other nicotinic alkaloids in tobacco plants to be decreased or increased through genetic engineering and plant breeding. It develops smoking cessation products and modified risk tobacco products for smokers who are unable or unwilling to quit smoking and who may be interested in cigarettes, which reduce exposure to nicotine or to certain tobacco smoke toxins and/or pose a lower health risk than conventional cigarettes. The company’s products include RED SUN and MAGIC regular and menthol cigarettes; and SPECTRUM government research cigarettes. It is also developing X-22, a prescription smoking cessation aid, which is a tobacco-based botanical medical product for use as a smoking cessation therapy; and modified risk cigarettes, such as BRAND A, which has approximately 95% less nicotine than conventional tobacco cigarettes, as well as BRAND B cigarettes that contain low amount of tar per milligram of nicotine. The company was founded in 1998 and is headquartered in Clarence, New York.

 


 

Check out the increasing volume beginning this month for  the initial drive to $1,  followed by a consolidating pullback on lower volume to long term support,  and now charging above $1 again yesterday on increasing volume.

XXII chart

 

There are reasons for the chart above, mostly stemming from this very positive flow of recent news

There are other reasons why the stock is waking up here, reasons that we believe will push shares well above $1 in the near term… and we will be sharing those reasons with subscribers soon!

 


Best wishes for profitable investing,

GeoSpatial Corporation - GA siggy

 

 

Rapid sales growth on tap due to new requirements for 3D mapping of underground infrastructure.


Sometimes investors are fortunate enough to discover a company that is perfectly positioned to meet an urgent need that arises due to new state or federal legislation. Such is the case of Geospatial Corporation (GSPH), and I believe this stock may be one of the best performing in the small and microcap space during the remainder of 2016 and into 2017 due to reasons explained below.


Geospatial Corporation logo - Copy

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Geospatial Corporation at a Glance

Ticker: GSPH
Closing Price 8/12/16:  0.16
Market Cap: $23 million
Shares outstanding: 181 million
Insider ownership : 30%


Geospatial Corporation (web site) provides cloud-based solutions to locate and digitally map underground pipelines and other infrastructure in three dimensions in the United States. It provides data acquisition services to locate the exact position and depth of underground pipelines and conduits along with information on existing aboveground infrastructure. The company also provides data management services in which it manages clients’ critical infrastructure data through the licensing of its cloud-based GeoUnderground GIS (Geographic Information System) software. It serves contractors, municipalities, government agencies, utilities, telecoms, and engineering companies. The company was founded in 2007 and is headquartered in Pittsburgh, PA.
 


Huge Market, Urgent Need

Until recently, 3 dimensional mapping of underground pipes and infrastructure was a somewhat quieter, niche market. That changed dramatically on June 22 of this year when The PIPES ACT of 2016 was signed into law. This new federal law requires certification, data management, testing and mapping of all types of the more than 2.6 million miles of buried energy pipelines across the USA.

The law had major bipartisan support, and was in large part a response to the 2010 PG&E explosion in San Bruno, CA that tragically killed eight people, injured another 66 and destroyed 38 homes. PG&E was later fined a record $1.6 billion as a result of (among other deficiencies), a poorly maintained pipeline with faulty welding work that dated back to the 1950’s. A key problem was that PG&E did not have maps of the underground infrastructure organized and available to both the Company management before the incident nor for the Federal inspectors after the incident.

The lack of accurate maps of subterranean infrastructure is alarmingly common in the industrialized world, causing public service disruptions, project delays, cost overruns, property damage, injuries, and preventable fatalities that cost billions of dollars each year.  There is an urgent need for reliable data regarding the true locations of underground utilities as well as the need to effectively communicate this data to excavators.

“The United States has the most expansive network of energy pipelines in the world, and it powers nearly every facet of our daily activities. The network includes more than 2.6 million miles of pipelines, which transport 64 percent of the energy commodities consumed in the country. Therefore, ensuring that pipelines are a safe means to transport natural gas and hazardous liquids is essential.”

House Committee on Transportation and Infrastructure


Geospatial Corporation Solutions

It’s important to understand there is no single solution to address the underground infrastructure mapping, data collection/management, and data communication needs that oil and gas companies, electrical utilities, municipalities, and others are confronted with.

Geospatial Corporation utilizes a wide array of data collection technologies and has extensive experience with difficult and unique situations.

Geospatial CEO Mark Smith explains:

“There is no one technology or a silver bullet that will provide 3D mapping of every infrastructure for every industry. That is why it is crucial to have a strategic process in place that starts with assessing the situation and conditions of the area before determining which technology or combination of technologies to apply. As technological advances continue to progress, so will the feature-rich GIS management applications and the safety and security of our underground space.”
The state-of-the-art underground mapping technologies at Geospatial’s disposal are truly amazing and include:

  • in-line mapping systems
  • electromagnetic mapping systems
  • infrared & microwave technology systems
  • electromagnetic underground infrastructure location and mapping technologies
  • ground penetrating radar
  • vacuum excavation

Investors can read more about these technologies here.


The Only Google for Work Technology Partner for Underground Mapping

With the PIPES Act of 2016 now in place, an enormous competitive advantage for GSPH going forward is the fact that Geospatial Corporation is the only Google For Work Technology Partner that 3 dimensionally maps underground infrastructure. This needs to be stated again:

Geospatiol Corporation - google logoGeospatial Corporation is the only Google For Work Technology Partner that 3 dimensionally maps underground infrastructure.

 Geospatial Corporation recently launched an upgraded version of GeoUnderground (see web site). GeoUnderground is a mobile, lightweight, secure, and feature-rich web-based Geographic Information System (GIS) management portal providing a suite of tools that makes critical data available to customers in a user friendly platform.

GeoUnderground is a software-as-a-service (SaaS) model developed exclusively for web-based multi-users who need to manage and easily access critical infrastructure data. Customers gain two GeoSpatial Corporation- geounderground pickey benefits: their data is stored and accessible to authorized users via a secure centralized data repository, and it is delivered to them in an easy to use interface through their existing web browser.

Geospatial’s proprietary, cloud-based, 3-D mobile GIS mapping platform enables users to securely view, edit and share accurate x,y&z coordinates of buried pipelines, geo-referenced photos and mapping application. Users can view x,y&z coordinates of buried pipelines, geo-referenced photos and video of above ground attributes from a laptop, phone or tablet while in the field.

It’s important for investors to understand that the PIPES Act of 2016 not only requires accurate underground mapping of infrastructure, it also mandates secure information storage and information retrieval. I believe there is no company better prepared to meet this regulatory compliance than Geospatial Corporation.

CEO Mark Smith told me that:

Inquiries have skyrocketed since passage of the PIPES Act

and

 “As a Google for Work Technology Partner, our Data Acquisition Technologies and our GeoUnderground Solution is positioned for rapid growth.”

 


Turning “Location” Only Competitors Into GeoUnderground Service Partners

Geospatial Corporation’s advanced 3D underground mapping technologies combined with GeoUnderground’s SaaS platform is a one-two punch to competitors. There is a world of difference between “locating” underground infrastructure in only 2 dimensions and 3 dimensionally mapping it. Location-only, 2 dimensional providers don’t convey depth of structures and accuracy is limited. This “location only” group would include engineering companies and companies that plant yellow flags and paint lines on streets prior to a construction project. It also over 60,000 conventional surveyors across the United States.

Between offering vastly superior data collection technologies for 3 dimensional mapping and being the only Google For Work Technology Partner for 3D underground mapping at GeoUnderground, Geospatial Corporation sees the thousands of 2 dimensional, location-only providers as future customers, not competitors. It’s easy to see how the newly-launched Geospatial Partner Program could drive revenue growth going forward, especially as the PIPES Act of 2016 mandates the certification, data management, testing and accurate mapping of all buried energy pipelines in the USA.


Expect Strong Forward Sales Growth

Geospatial’s sales have been choppy from quarter to quarter and even year to year, but recent trend has been positive with sales of $181,000 in the most recent quarter more than double the sales for all of last year. I think investors can expect to see very strong sales growth going forward.

It would be difficult to overstate the significance of the combination of the passage of the PIPES Act, Geospatial’s cutting edge technology for 3D mapping, and the company’s enviable position as a the only Google for Work Technology Partner in the space.

Avenues for future revenue generation and growth include:

  • Gathering and accurately mapping subterranean data (required by PIPES Act of 2016)
  • Providing Software as a Service for access to data (required by PIPES Act of 2016)
  • Providing monitoring and change detection services in pipes
  • GeoUnderground partnership program & expansion to provide services on a global basis

Target customers include, but are not limited to:

  • Oil and gas companies
  • Municipalities (3D underground mapping of entire cities is an expected, near-term future trend)
  • Cable, telecom, water, and electric companies
  • Military bases, universities, airports, school systems
  • Global expansion potential (Geospatial has been approached by government agencies, national energy companies, water companies and domestic companies with international interests to discuss the implementation of infrastructure mapping and management projects in countries around the globe.)

 


Conclusion

Geospatial Corporation is an exciting company with best-in-class 3D underground mapping technology and a proprietary SaaS platform that looks like an ideal source for rapid revenue expansion as thousands of 2 dimensional, location only providers become GeoUnderground, 3D mapping data partners.  Being “the” Google For Work Technology Partner for underground 3D mapping at a time when federal law now mandates the certification, proper data management, testing and mapping of all of buried energy pipelines nationwide is competitive advantage that is unique to Geospatial Corporation.

Shares of GSPH are, for now, somewhat thinly traded and spreads can be wide. As a result, investors may prefer averaging into a position.

Having said that, nothing drives volume and share prices up like strong sales growth and improving fundamentals. Based on the evidence outlined above, that is exactly what investors should expect to see happen with shares of GSPH.

We will be following GSPH closely in the months ahead and expect a very strong and positive flow of information to come from the company that we look forward to sharing with our subscribers.


I highly recommend this additional reading: What Lies Beneath , by Geospatial CEO, Mark Smith.

See Also: Geospatial Corporation Business Summary


GeoSpatial Corporation - GA siggy

 

 

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Blue Line Protection Group logo


BLPG closed at .046 today
Market cap: 5.82M

The interview below is with Dan Allen, CEO of Blue Line Protection Group (web site) and covers:

  • Wide array of legal cannabis-related services provided by BLPG
  • New 12,000 square foot building with commercial walk-in vault
  • High caliber customers
  • BLPG anticipates “phenomenal growth over the next couple of years”
  • Cannabis sales growth in Colorado alone = 30%
  • Additional/new states coming on board
  • BLPG expansion plans  (Arizona, California, Nevada, New Mexico, Oregon, Washington)
  • Partnership with Hypur Inc. (see web site) for regulatory compliance services

Blue Line Protection Group - Hypur Inc.

 

See also: Banking The Cannabis Industry: A Groundbreaking Moment Comes Into Focus

BLPG revenue for the mrq was $651,831 compared to revenue for the year ago period (ending March 31, 2015) of $520,231 (SEC filing).

We expect those revenue numbers to continue to climb rapidly!


Blue Line Protection Group - coming up

Coming next week:

We will be releasing our report on a company that’s seeing a huge surge in demand coming from a very recent federal law that was passed.

The company (ticker: GSPH) is a leading provider of underground 3 dimensional infrastructure mapping solutions and underground infrastructure data access and storage.

Our nation’s underground infrastructure needs to be accurately mapped in 3 dimensions, (just like all above ground buildings and topography are mapped), and this little-known company is on the leading edge of this high-growth space. Stay tuned!

Blue line protection group - best microcap stocksTo get our free report next week, subscribe now!


Best wishes for successful trading and investing!

Matt Margolis - GA sig

Tech and Microcaps Lead The Way

Last week tech stocks led the way fueled by strong earning reports from Apple and Facebook, while the S&P 500 and DOW took a small breather and declined for the week. The NASDAQ and Russell 2000 extended the weekly winning streak to a 2016 high of 5 weeks with gains of 1.2% and 0.6% respectively. The S&P 500 closed down 0.1% for the week while the DOW finished down 0,7%.

2016 YTD Returns thru 7/29:

DOW: +5.8%
S&P 500: +6.3%
RUSSELL 2000: 7.4%
NASDAQ: +3.1%

Distance Below All-Time Highs thru 7/29:

DOW: Record 1.0%
S&P 500: Record 0.2%
RUSSELL 2000: 5.9%
NASDAQ: 1.3%

The VIX continues to trend downward and finished the week at 11.87 marking the lowest level since August 2015. A VIX level between 11 and 20 has proven to be a supportive level coinciding with broad market appreciation during the market expansion since the recent financial crisis.


Key Earnings Reports

Apple Tops Low Expectations

Apple (AAPL) reported earnings on Tuesday, which sent shares surging over 6% during Wednesday’s session. Apple’s Q3 EPS ($1.42A/$1.38E) and revenue ($42.4B A/$42.1B E) came in slightly above consensus estimates and the midpoint of Q4 guidance landed above analyst consensus estimates for Q4.
Apple’s iPhone unit sales declined 15% year-over-year, iPad unit sales declined 9% and Mac unit sales declined 11%. Revenue from other products declined 16% from a year ago.

Expectations were so low for Apple that despite a significant decline in product sales shares closed up over 5% for the week. Apple’s results sent RF filter shares of Qorvo (QRVO) and Skyworks (SWKS) higher last week.

Apple’s CEO Tim Cook was asked about augmented reality during the Q3 conference call and he had the following to say…..

“I notice there are people that want to call it a new computer platform, and we’ll see. I think there’s a tendency in this industry to call everything new the next computer platform. However, that said, I think AR can be huge. So we’ll see whether it’s the next platform. But regardless, it will be huge.” – Apple CEO Tim Cook

Despite the jump last week shares of Apple remain $30 or 22% below all-time highs reached April 2015.

 

Facebook Tops Estimates and Reaches New All-Time Highs

Facebook (FB) reported earnings on Wednesday, which sent shares to an all-time high of $128.53 on Thursday. Facebook’s market cap is now over $350B and currently ranks as the 7th largest US company ahead of Johnson and Johnson and just below Berkshire Hathaway.

Facebook’s Q2 revenue came in at $6.44B or $0.42B ahead of analyst expectations. EPS came in at $0.97 versus expectations of $0.82 for the quarter.

Facebook’s platform continued to show strength in numbers as the average of daily active users (DAUs) increased 15% year-over-year to 1.13 billion people. Monthly active users (MAUs) rose 15% to 1.71 billion people. Mobile users continued to outpace overall growth

growing by over 20% to 1.57 billion MAUs and 1.03 billion DAUs. Mobile users now account for over 91% of Facebook’s daily and monthly active user base. Strong DAUs and MAUs helped push total revenue up 59% year-over-year including advertising revenue growth of 63% to $6.2B.

Facebook’s CEO Mark Zuckerberg was asked about augmented reality and Pokemon GO during the Q2 conference call and he had the following to say…..

“Well, I, like everyone else, am enjoying Pokémon Go. And the biggest thing that I think we can take away from this as we invest in augmented reality in addition to virtual reality, is that the phone is probably going to be the mainstream consumer platform that a lot of these AR features first become mainstream rather than glasses form factor that people will wear on their face.” – Facebook CEO Mark Zuckerberg


Recent MicrocapResearch.com Picks

Our recent pick Cemtrex (CETX), which we covered Best Microcap Stocks Performance 2015at $2.26 on June 2, hit a high of $6.17 this week for a 173% gain in under 60 days

Our most recent pick, Dataram (DRAM), which we picked at $1.56 on 7/18 hit a high of $2.47, 58% higher than two weeks ago

American Brewing (ABRW) continues to consolidate in the 1.70-$1.90 range, following our initial report when ABRW was just .40/share

 

And by the way…if you’re reading this and are not yet a subscriber, it’s free!

subscribe to best microcap stocks

 


New contributor, Seth Golden, with new Cannabis Pick out Monday!

I’m pleased to announce that Seth Golden, a prolific and heavily-followed author on Seeking Alpha, is now contributing here at MicrocapResearch.com.

Seth will be introducing a very promising stock in the legal Cannabis industry on Monday, 8/1/16.  This relatively unknown company has recently signed a game-changing partnership that should successfully ramp sales very, very rapidly.

Seth Golden has served the financial industry as an advisor and research analyst since 2008. Prior to 2008, Seth was a highly effective executive leader with Target Corporation and Bed Bath & Beyond. After leaving the retail sector, Seth began his career in the financial industry with Goldman Sachs and furthered his career through co-ownership and operation of Capital Ladder Advisory Group. With Capital Ladder Advisory Group, Seth has published several hundred pieces of analytical research, which have led to multiple business development projects with Fortune 500 companies as well as start-up enterprises seeking product placement in the market. As a retail and CPG industry expert, Seth’s serves as an advisor and intermediary for several public and private companies.He serves as an advisory and consultant with efforts geared toward establishing strategic relationships in these respective industries.


Best wishes for profitable investing,

Matt Margolis - GA sig

Another Week and Another Record Close

Major indexes closed on a high note Friday extending record highs set the previous week.  The S&P 500 and DOW extended recent gains and finished the week up 0.6% and 0.3% respectively.  Tech and Micro Caps continued their recent hot streak, but remain below all-time highs with the NASDAQ and the Russell 2000 delivering weekly gains of 1.4% and 0.6% respectively.

 

2016 YTD Returns thru 7/22:

DOW: +6.6%

S&P 500: +6.4%

RUSSELL 2000: 6.8%

NASDAQ: +1.9%

 

Distance Below All-Time Highs thru 7/22:

DOW: Record High

S&P 500: Record High

RUSSELL 2000: 6.4%

NASDAQ: 2.5%

 

The VIX continues to trend downward and finished the week at 12.02 marking the lowest level since August 2015. A VIX level between 11 and 20 has proven to be a supportive level coinciding with broad market appreciation during the market expansion since the recent financial crisis.

Calendar Q2 earning’s season is now in full swing and the broader market will be looking closely at quarterly earning’s reports.  Calendar Q2 earning’s reports will be used to gage the fair value of the overall and reset investor sentiment over the remainder of 2016.

Skyworks (SWKS) reported earnings on Thursday, which sent shares down over 8% during Friday’s session.  Skyworks Q3 EPS ($1.24A/$1.21E) and revenue ($751.7m A/$750 $750.2m E) came in above consensus estimates, however guidance for Q4 was flat and sent shares tumbling.  Shares of SWKS ended Friday’s session at $64.81 or nearly $50 below all-time highs set in June 2015.

Microsoft (MSFT) reported earnings on Tuesday, which sent shares soaring to just under $57 per share behind strong top-line and bottom-line growth.  Microsoft’s revenue came in at 22.6B or 460m and EPS came in at $0.69 or $0.11 above estimates. Microsoft continues to see strong growth coming from the cloud.  Shares of MSFT are now within $3 of its all-time record high set in December 1999 at the peak of the tech bubble.

Intel (INTC) reported Q2 earnings on Wednesday that beat on the bottom line by $0.08 per share but missed on revenue by $40m.  Overall Intel reported EPS of $0.59 and quarterly revenue of $13.5B.  Intel’s PC business continued to slide declining 3% year-over-year while Intel’s Data Center Group, which was once a double-digit growth engine grew by only 5% year-over-year.  Unlike Microsoft, which is closing in on all-time highs Intel remains over $40 below its record high of just under $76 set during the tech bubble in August 2000.


 

Microcap Research Roundup

 

Last week was a very exciting week for several of our Microcap Research stocks with a few names reaching new highs in 2016.  Last week we introduced Dataram (DRAM), an undervalued precious metals stock destined for much higher price levels.  DRAM finished the week at our initiation price of $1.56 but did rise as much as 15% following our coverage this week.   Our detailed report outlines why we feel DRAM is fairly valued at 2 to 3 times current valuations based on comparable gold mining stocks.

 

Shares of Cemtrex (CETX) finished the week up 20% closing at $5.06 and are now up 124% since we initiated coverage on June 2nd at $2.26 per share.  Shares of CETX are now closing in on all-time highs set April 2015.  Cemtrex recently announced that the company received $12m of new orders in the month of June as well as a buyback program authorizing the purchase of 1 million shares.

 

Shares of Vuzix (VUZI) finished the week by rising 11% on record daily volume.  The introduction of Pokemon Go has put augmented reality front in center for investors and Vuzix has emerged as a leading player in this industry.  Vuzix announced last week that the company recently shipped its first developer M300 augmented reality smart glasses in North America.

 

Shares of Actinium Pharmaceuticals (ATNM) finished the week up 4.7% as investors continued to digest a continuous flow of positive announcements from the company.  Actinium Pharmaceuticals announced that the company initiated a pivotal Phase 3 trial for Iomab-B on June 29th.  This past week Actinium Pharmaceuticals announced that the company completed a successful investigator meeting with bone marrow transplant physicians, care providers and clinical research coordinators from current and prospective clinical trial sites related to Iomab-B.

 

We continue to keep a close eye on 22nd Century Group (XXII), a plant biotechnology company focused on tobacco harm reduction and smoking cessation products that we highlighted earlier this year.  Recently the World Health Organization (WHO) recommended mandated reductions in nicotine to minimally addictive levels.  As organizations such as the World Health Organization continue to push to change to Tobacco Product Reguluation towards lower nicotine products it will continue to benefit XXII.  22nd Century Group remains the only company in the world that is producing naturally grown tobacco with nicotine at non-addictive levels currently being recommended by WHO and former U.S. FDA Commissioner Dr David Kessler.


New Pick Next Week!

As we look ahead to next week we are excited to share an exciting Penny Stock with our subscribers.  This company focuses on the service end of the cannabis industry, which continues to grow and train traction as an up and coming viable business and investment opportunity.

subscribe to best microcap stocks

 

 

 


Best wishes for profitable investing and trading!

 

Matt Margolis - GA sig

Dataram DRAM US Gold Corporation

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Background

On June 14th Dataram (DRAM) will be acquiring US Gold Corp announced they would be entering into a merger agreement. Dataram intends to divest its existing memory hardware manufacturing business and issue a special dividend to pre-merger shareholders equal to their ownership interest in the company’s existing assets. Shares will be issued by Dataram as consideration for the merger with US Gold. The pre-merger shareholders of DRAM will own roughly 10% and the owners of US Gold will own roughly 90% of the merged company. The surviving corporation, US Gold, will own two main mining projects from which it expects to produce over 2 million in gold equivalent ounces.


Recommendation

Buy shares of Dataram prior to completion of the merger. This is a unique opportunity to invest in a company with tremendous upside. Dataram is still being valued as if it is a computer hardware manufacturer and as a result DRAM shares are trading at a steep discount to other gold miners based on its gold equivalent ounces. The post-merger gold assets are currently being valued at less than $20 per ounce…a steep discount to what will soon be the company’s new peer group.

In part this arbitrage is due to the fact that there are a number of conditions that must be met before the proposed merger is completed. I discuss these conditions and why they do not pose a threat throughout the article. I will also break down what the post-merger company will look like and why I believe DRAM shares are currently undervalued.


Summary

Many believe that Gold, or more broadly the entire minerals sector, is in the early stages of a long-term bull market. Gold is up roughly 30% YTD to $1,355/oz. It would need to increase another 35% from here to reach its prior peak of roughly $1,830 in 2011.

The majority of gold miners have doubled so far this year, and some junior miners have more than quadrupled from their lows last winter. DRAM closed at $4.20 the day it announced the merger and its plans to transition into a gold mining company. The stock has traded down roughly 65% since then, currently trading in the $1.50- $1.60 range.

US Gold Corp owns two very promising mining assets, the Copper King and Keystone projects. They also have an impressive and proven management team, starting with Director and CEO Edward Karr. Mr. Karr was a Founder and currently serves on the Board of Directors of Pershing Gold Corp. In 2004, he was named by Futures Magazine as one of the world’s Top Traders.


Management Matters

Mining is a very labor intensive industry. Not just anyone can start poking holes in the ground and hit gold. There is an intricate science to mining, and some managers are better than others when it comes to the exploration and discovery of mining assets. Lucky for US Gold, they have the help of Dave Mathewson, a geologist and explorer with over 35 years of experience in Nevada alone. Mathewson will be heading the Keystone project, which is located in Nevada in the middle of one of the country’s premier gold trends. In an interview from 2011 Mathewson said the following about his exploration and discovery process:

“Successful exploration is all about applying effective and often new ideas, basically geological concepts, in entrepreneurial ways to the rocks for the sole purpose of making discoveries.”

In other words, when it comes to mining, not all managers are equal. So one winning strategy that I have found to work over the years is to invest alongside the best and most experienced managers in the industry. Most of these managers believe in what they are working on and have a considerable amount of skin in the game. According to Karr, Mathewson will own roughly 5% of the post-merger outstanding shares of US Gold.

Dataram US Gold merger Dave Mathewson pic
Dave Mathewson on the Keystone Property in Nevada

Dave Mathewson has as impressive a track record as any in the mining industry, especially in Nevada. At Gold Standard Ventures, Dave recently struck gold after drilling only 8 holes in a similar Nevada mine. This is important because drilling costs money and empty holes are worthless. Here are some quick highlights of Dave’s Career leading up to now:

  • 1989 – 2001: Worked for Newmont Mining Company (NEM) in Nevada where he held several senior positions including Regional Exploration Manager
  • While head of Newmont’s Nevada exploration Team Mathewson made some notable discoveries including the Tess, Northwest Rain, Saddle and South Emigrant projects
  • 2001 – 2007: Independent Director, Head Geologist, VP Exploration at Tone Resources
  • 2008: Became Founder & CEO of Nevada Gold Holdings
  • 2009 – 2014: VP of Exploration and Director at Gold Standard Ventures

Dave’s latest project is working on the Keystone Project for US Gold. Unlike Copper King, there is a high degree of uncertainty when it comes to exactly how much gold Keystone will produce. Management’s initial target is 1 million but they believe the project has a potential for over 10 million gold ounces. Based on Dave’s history, I believe the high end of that estimate is more than possible.


Keystone Project

Dataram US Gold merger keystone details
click to enlarge

As one of the conditions of the Dataram merger, in June US Gold acquired 100% of the mining claims related to a gold development project in the Keystone district. The Keystone Project is located in Nevada within the Cortez Gold Trend, one of the world’s most lucrative mineral trends.

 

Keystone is just 10 miles southeast of Barrick Gold’s renowned Pipeline, Cortez Hills, and Goldrush deposits, which combine for over 50 million ounces and produce approximately one million ounces of gold per year. This project is smack in the middle of one of the top mining areas in the country. Over the past 50 years, the Cortez and Carlin Trends in Nevada have produced more than 245 million ounces of gold. As such, the company believes Keystone is a “multimillion ounce discovery opportunity” as it shares so many “geological and gold system similarities to the Cortez District just to the northwest.” The company is targeting over 1 million ounces of gold from Keystone and estimates a total project potential of over 10 million ounces.

 

But the best part of all is that a proven and experienced geologist in Dave Mathewson will be leading the project for US Gold. Here is what Mathewson had to say about the Keystone project in the June Press Release:

“Keystone is a true district-scale opportunity. In the past 40 years, I have been on and off various portions of the Keystone property. This is the first time that one company has controlled the entire Keystone District, and this control will be conducive to comprehensive, systematic, and modern-day exploration applications. We are looking forward to advancing the 2016 exploration program”  

Most recently, Mathewson was VP of Exploration at Gold Standard Ventures (GSV) where he helped consolidate the Railroad-Pinion district and the North Bullion & Bald Mountain discoveries. The Railroad Project was a blockbuster discovery for GSV.

When asked about Keystone, Dave Mathewson said it is “the best exploration project I have seen in my career… reminds me of the Railroad project on steroids.”

According to CEO Ed Karr, Mathewson has had his eyes on this project for years and believes it has the “potential for multiple world class deposits.” Mathewson believes that Keystone is a geological extension of Barrick’s Pipeline and Cortez Hills.

According to CEO Ed Karr, Mathewson has already begun working on the project and is using the same discovery plan that he used at Gold Standard Ventures.  Here is an illustration of the company’s planned timeline from their website.

dataram US Gold Corp business plans 2016-2017

 


Copper King Project

Unlike the Keystone project which is just in early stages of exploration and discovery, US Gold’s other mining property is more or less a “done-deal.” The Copper King project is an advanced exploration and development property located in the mining friendly location in the Silver Crown Mining District of southeast Wyoming. According to Karr, Copper King “has a prior completed Preliminary Economic Assessment (PEA) by Mine Development Associates (MDA) showing measured, indicated, and inferred resources of 1.1 million oz. of gold and 285 million lbs. of copper. Karr went on to explain that “the PEA was completed in 2012 at a lower gold price and shows a Net Present Value (NPV) of Copper King of $160 million at $1,100 gold.” I spoke to Karr about a month ago after the planned merger was announced and he estimated the NPV at that point was “$175 to $180 million.” Gold has increased a lot in the past month. Based on my estimates, at the current gold price of $1,360 today these resources have a NPV of roughly $200 million. The fact that the entire 1.1 million ounces are “indicated” means that they can be reasonably estimated with confidence. The fact that Copper King is an advanced stage project with a high probability of producing over 1 million ounces should provide investors some comfort.


Transition from Technology to Precious Metals

Let’s spare ourselves the argument as to whether or not DRAM’s existing business, that of memory hardware manufacturing, is a growing industry or not. All we need to do is focus on gold which right now has a number of fundamental factors working in its favor. I will name a few below:

  • Global political and economic uncertainty continues to increase the demand for Gold
    • Worries over Brexit and the global economy are creating a risk-off trading environment
  • Market expectations for tightening by the Federal Reserve have died down, which tends to underpin gold.Now rate hikes are not expected until next year
  • Low to negative interest rate policy from Central Bankers around the world will continue to weaken global currencies and investors will turn to gold as an alternative store of value
  • Exchange Traded Funds are incredibly underrepresented by the precious metals sector
    • According to Citi, ETF holdings of gold are increasing by about 100 tons per month and they expect this growth to remain “robust” throughout 2016
  • Uncertainty about economic growth and lofty asset valuations will continue to support the price of gold as a hedge

Smart Money Moves into Metals

Many big money managers including George Soros are taking bearish stances on the equity market and building their gold positions as a hedge for uncertainty. Stanley Druckenmiller recently said at an investor conference to “get out of the stock market,” blaming the fed’s continual dovishness for creating a “myopia” that “causes reckless behavior.” Druckenmiller recommended owning gold and stated it is his funds “largest currency allocation.” Druckenmiller has averaged annualized returns of over 30% during his investment career. His advice may be worth listening to. Especially considering he is just one of many renowned managers echoing the same rhetoric.


Merger Details 

The merger is still subject to DRAM’s shareholder approval as well as the closing of a financing of roughly $3 million by US Gold. Neither of these are intended to be an issue for the proposed merger to be completed. Management expects the proxy to be filed the first week of August and is targeting the end of September for the close of the deal. Current DRAM shareholders will own roughly 10% of the post-merger company. This means current DRAM shareholders will own 210,000 ounces or 10% of the 1.1 million ounces from Copper King plus 1 million initial target from Keystone.


Valuation

DRAM has roughly 2.5 million outstanding shares and a market capitalization of about $3.75M. This means the post-merger gold assets are currently being valued at less than $20 per ounce based on DRAM’s current stock price of $1.56. Even if you only take the 1.1 million of indicated ounces from Copper King, the gold is still valued at just $34 per ounce. It is often difficult to compare miners based on their gold equivalent ounces because the quality and grade of gold deposits as well as the probabilities of producing the estimated amounts can vary widely among companies. Nonetheless, this table should paint a better picture of the potential value US Gold offers relative to some of its junior miner peers.

dataram valuation vs gold peers

Keep in mind that this does not take into consideration any of the 9 million-plus “potential” ounces from Keystone.


Conclusion

Based on the valuations of other gold miners, DRAM is trading at a significant discount per ounce of gold. Instead of paying $50 to upwards of $100 per indicated ounce of gold, which is the valuation range most junior miners trade at, DRAM is only being valued at $34 per indicated gold ounce. Not to mention you have the added bonus of up to 10 million potential additional ounces from the very promising Keystone project.

I believe the market is significantly undervaluing DRAM’s post-merger gold assets and as a result, DRAM represents a special opportunity to buy some gold on the cheap.


Matt Margolis - GA sig

 

 


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