DarioHealth Corp. (DRIO) picked at $3.86 (see 2/21/17 report), and  MassRoots Inc. (MSRT) picked at .81. (see 3/16/2017 report) have significant news out this morning.

 


dariohealth-logoDarioHealth Launches Insurance Coverage Option for U.S. Consumers

This morning, DarioHealth announced that it is now offering a 3rd party insurance coverage option for U.S. consumers who want to have their DarioHealth products reimbursed by insurance.

According to the press release, DarioHealth has signed strategic alliance agreements with partners across the U.S. who will be able to verify insurance coverage benefits, and if approved, will supply and bill the customer’s insurance for their Dario™ Blood Glucose Monitoring System and test strip supplies. During DarioHealth’s pilot phase of this insurance coverage option, partners were able to verify benefits for customers covered by Aetna and various Blue Cross Blue Shield plans.

 

Erez Raphael, Chairman and CEO of DarioHealth, stated:

“We are extremely excited with this new opportunity and will continue seeking out partnerships to expand our insurance coverage reach. Our customers asked about this, and we are happy to be able to provide this option to them. Many of these customers are already paying significant out of pocket cost for a variety of healthcare needs, so lowering their financial burden is tremendously gratifying and a big win for everyone in our community.”


Until now, U.S.-based customers paid out of pocket for DarioHealth’s products. Despite that fact, DRIO grew sales by 172% during Q4 of last year, with 67% of quarterly revenues derived from recurring sales of test strips and other consumables.

Insurance coverage is a major win for DRIO and should rapidly accelerate growth in the Company’s major market, the U.S.


About DarioHealth Corp.

DarioHealth Corp. is a leading global digital health company serving tens of thousands of users with dynamic mobile health solutions. We believe people deserve the best tools to manage their treatment, and harnessing big data, we have developed a unique way for our users to analyze and personalize their diabetes management. With our smart diabetes solution, users have direct access to track and monitor all facets of diabetes, without having the disease slow them down. The acclaimed Dario™ Blood Glucose Monitoring System all-in-one blood glucose meter and native smartphone app gives users an unrivaled method for self-diabetes management. DarioHealth is headquartered in Caesarea, Israel with a regional office in Burlington, Massachusetts. For more information, visit http://mydario.investorroom.com/.

 

See also:

DarioHealth February 2017 Investor Presentation

Rodman and Renshaw Report: DarioHealth BUY $12 PT

Joseph Gunnar & Co. Report: DarioHealth BUY $8 PT

 


massroots-logoMassRoots Launches New Website and Accelerates User Acquisition

On the heels of last week’s announcements that MassRoots has registered more than one million users on its platform (press release), and that Google Play has approved its mobile application for distribution to Android devices (press release), the Company has launched a new web site at MassRoots.com.

 

Powered by more than one million registered users, MassRoots enables consumers to rate products and strains based on their efficacy (i.e., effectiveness for treating ailments such back-pain or epilepsy) and then presents this information in easy-to-use formats for consumers to make educated purchasing decisions at their local dispensary. Businesses are able to leverage MassRoots by strategically advertising to consumers based on their preferences and tendencies.

MassRoots Chairman and CEO, Isaac Dietrich stated:

“MassRoots’ new website enables us to broaden our audience and more effectively monetize our users and web-traffic. We are already seeing hundreds of thousands of unique page views per month and are confident that the significant functionality and SEO improvements in MassRoots’ new website will enable us to accelerate our user and web-visitor growth. At the same time, we have greatly expanded the inventory and targeting options available to MassRoots’ advertisers, which will have an immediate and direct impact on our revenue.”

As the 4/20 holiday season rapidly approaches, MassRoots is committed to rapidly growing its market share of cannabis consumers and effectively monetizing them to further drive shareholder value.


About MassRoots


MassRoots is one of the largest technology platforms for the regulated cannabis industry. The Company’s mobile apps enable consumers to make educated cannabis purchasing decisions through community-driven reviews. MassRoots is proud to be affiliated with the leading businesses and organizations in the cannabis industry, including the ArcView Group and National Cannabis Industry Association. For more information, please visit MassRoots.com/Investors.

See also:

MassRoots in the media

MassRoots December 2016 Investor Update


DRIO

Disclaimer/Disclosure/Terms of Use


Vuzix Corporation (VUZI) is a company I know well and have followed closely for two years, (recommended at closing price of $4.21 in January 2015).

I believe 2017 will be the company’s breakout year in for both revenue generation and share price appreciation.

This article will look at the market for augmented reality, (AR), the leading edge AR products Vuzix is launching, competitors in the AR space, why VUZI shares have underperformed in the last few months, and why shares are now on the verge of a rebound.


At a glance:

Vuzix Corporation (NasdaqCM: VUZI)
Shares outstanding: 19.6 million
Insider & institutional ownership: 33%
Public float: 14.3 million
Shares shorted: 3 million, or ~ 25% of float
Closing Price 2/3/2017: $6.15
Market Capitalization: $120 million
Current Ratio: 2.5

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vuzix logoVuzix Corporation (web site) is a leading supplier of Smart-Glasses, Augmented Reality (AR) and Virtual Reality (VR) technologies and products for the consumer and enterprise markets. The Company’s products include personal display and wearable computing devices that offer users a portable high quality viewing experience, provide solutions for mobility, wearable displays and virtual and augmented reality. Vuzix holds 49 patents and 43 additional patents pending and numerous IP licenses in the Video Eyewear field. The Company has won Consumer Electronics Show (or CES) awards for innovation for the years 2005 to 2017 and several wireless technology innovation awards among others. Founded in 1997, Vuzix has offices in Rochester, NY; Oxford, UK; and Tokyo, Japan.


The Augmented and Virtual Reality Market

Augmented Reality (AR) superimposes graphics, audio and other sensory enhancements over a real-world environment in real time, and blurs the line between what’s real and what’s computer-generated by enhancing what we see, hear, feel and smell. Virtual Reality (VR) in comparison, generates realistic images, sounds and other sensations that replicate a real environment, fully immersing the user in that environment. For a concise overview of the differences between AR and VR technologies, check out “Virtual vs. Augmented Reality” on Augment.com.

The market for AR is expected to catapult to $117.4 billion by 2022, at a CAGR of 75.72% between 2016 and 2022. The future of the VR market is smaller, and is expected to reach $33.9 billion by 2022 at a CAGR of 57.84% between 2016-2022 according to research from MarketsandMarkets.

Tim Merel, a leading AR/VR market expert spoke with Bloomberg in November, and estimates the ability of AR to disrupt smartphones and tablets will reach an inflection point by 2018, and that by the middle of the next decade, AR will actually cannibalize smartphones. I can say that I would not have believed that AR glasses could one day replace my much-loved iPhone 7S…but having recently tried on a working pair of Vuzix Blade 3000 glasses, I think the possibility is very, very real. 

Vuzix has products in the both the VR and AR space, but it’s AR that I believe will be game-changing for VUZI in 2017, based on the Blade 3000 AR glasses the company is about to launch vs. what the competition has to offer.


Vuzix Blade 3000: Wearable Computing That Looks Great

Vuzix Blade 3000 glassesVuzix has a huge competitive advantage as the company rolls out the Blade 3000 series of AR glasses in the second half of this year. That advantage is the Company’s heavily patented, advanced waveguide technology that provides best in market functionality in a set of glasses that are actually stylish and can be worn comfortably all day long. While no firm pricing is available yet, the Vuzix Blade 3000 is expected to begin selling somewhere under $1,000.

I had the pleasure of test driving a working pair of the Vuzix Blade 3000 AR glasses two weeks ago and was thoroughly impressed with the vibrancy and clarity of the display, the best-in-class functionality, and the stylish looks. The glasses were surprisingly light weight and were as comfortable as my regular reading glasses. And in case you’re wondering, Vuzix can easily put your own prescription inserts into the Blade 3000 for a nominal charge.

A tiny projector embedded in the Blade 3000’s side powers a display affixed to the right lens, driven by a quad-core Intel Atom processor.  An internal 64GB storage module (expandable via MicroSD card) files away the Blade 3000’s software and apps, and a Bluetooth 4.1 chip provides connectivity. Myriad sensors, meanwhile, track the wearer’s gaze and location. The Blade 3000 sports a built-in GPS and directional sensors including a gyroscope, accelerometer, and hull sensors.  And a touchpad, replete with haptic feedback in the form of vibration, handles navigation, as does a built-in noise-canceling mic capable of voice recognition.

Blade 3000 Specifications

Optics and Electronics

  • Waveguide based see through optics
  • Cobra II DLP based display
  • Right eye monocular
  • Quad Core ARM CPU
  • 8 Megapixel camera with 1080p video
  • Android 5 OS

Voice control – multilingual

  • Touch pad with gesture
  • Head motion trackers
  • Haptic vibration alerts
  • Remote control app for Android & iOS device

Audio

  • Micro USB ear-phone jack
  • Full BT functionality
  • Noise canceling microphone Battery
  • Internal LiPo rechargeable batteries

Versatile Eyeglass Options Available

  • Prescription inserts
  • Multiple lens color choice
  • Transitions
  • All lenses standard with UV protection

Connectivity

  • MicroSD expansion slot
  • Wi-Fi and BT wireless
  • Micro USB

With this best in class functionality using ultra-thin 2.0 mm glass and good looks, it’s not surprising that the Blade 3000 won four CES 2017 Innovation Awards in the categories of Computer Accessories Product, Gaming Product, Virtual Reality Product, and Wireless Handset Accessories Product.

 

Here’s a look at the 3000 Series at CES 2017:

What do competitors have in the AR space? Nothing that comes close to the Vuzix Blade 3000 in either functionality or style.

Ask yourself, which AR glasses you would choose when comparing the competitors below, and you’ll see why the Blade 3000 will be a game-changer for Vuzix Corporation when deliveries begin this year.

Vuzix Blade 3000 comparisons

 


Large Short Position + Increasing Institutional Participation + Strong Demand Following (delayed) M300 Launch = BUY

Over the last 3 months, VUZI shares have drifted lower on low volume while 25% of the trading float has been shorted.

VUZIX chart

I’ve shorted many stocks myself over the years, and I understand why shorts have jumped on VUZI shares: There was a delay in launching the company’s M300 glasses last year due to design validation testing and manufacturing delays that weighed heavily on the Company’s Q3 results. Such is the nature of cutting edge technology, and VUZI shares have paid the price. However, M300 shipments have now begun, and according to CEO Paul Travers, demand is strong:

“As it currently stands, the 2017 sales demand pipeline is very strong for the M300 and although I cannot share specifics here, I can say that demand is significantly greater than it was for the M100 upon launch. The application and developer ecosystem we have now didn’t exist for the M100 and as a result we’re starting added gates with more orders for long shipments. We are also in discussion with companies with potential needs ranging from hundreds of units, in some case tens of thousands of units.”

CEO Paul Travers from Q3 conference call transcript.

At the same time shorts increased their positions following the Q3 results, institutional participation in the company has actually increased, albeit modestly.

VUZIX institutional shares increasing


Timing IS Everything

Given the current level of support in the low $6 range, this looks like a great time to start of add to a position in Vuzix Corporation for the following reasons:

  • Large short position has taken shares to support levels in low $6 range.  Any substantive, positive news from the Company will cause shorts to exit in order to maximize their profitable positions
  • M300 glasses now in full launch with “very strong demand” that is “significantly stronger than the M100 upon launch” per CEO, Paul Travers. Look for improving financials as a result.
  • M3000 glasses on track for launch this year are something the AR market has been dreaming of- ultra high performance wearable computing that actually looks great
  • Recent institutional participation shows a moderate increase, which may also accelerate now since the reconstituted LD Micro Index from 2/1/2017 also includes VUZI

VUZIX was a strong performer when the news flow was positive in the summer of 2016 and, (unsurprisingly), has underperformed due to the M300 launch delay.

My original recommendation for VUZI was 2 years ago at $4.21 and shares more than doubled to $9.69 in September of last year.

Expect the current downtrend in VUZI shares to reverse when the company is running on all cylinders again, which…. is right…..about now.


See also:

Vuzix January 2017 Investor Presentation
Barron’s: In Vuzix Vs. ODG AR Battle, Edge Goes to Vuzix in Consumer Style
Review: Vuzix Blade 3000 smart glasses hands-on: Spectacles’ less-dorky cousin
Video: Vuzix Flight Test & Drone Show at CES 2017
Video: Vuzix (VUZI) Hits CES 2017 With Strong Balance Sheet and Solid Product Lineup


Best wishes for profitable investing,

Vuzix - gary siggy

 

 

Disclosure: I am long shares of Vuzix Corporation.  I have not been paid in any form by any company or third party for this article.


Towerstream Corporation (NADSAQ: TWER)

towerstream-logo

Towerstream Corporation (web site) provides fixed wireless broadband services and delivers high speed Internet access to commercial customers in the United States.  Its wireless broadband service supports bandwidth on demand, wireless redundancy, virtual private networks, disaster recovery, bundled data, and video services.

The company offers services to business customers in New York City, Boston, Chicago, Los Angeles, San Francisco, Seattle, Miami, Dallas-Fort Worth, Houston, Philadelphia, Las Vegas-Reno, and Providence-Newport.  Towerstream Corporation was founded in 1999 and is headquartered in Middletown, Rhode Island.


Towerstream currently has about 3,000 customers and $28 million in revenue. Just recently the businesses “turned the corner” delivering positive Adjusted EBITDA of >$400K in 2Q’16.

Towerstream is disrupting its landscape by offering business customers internet access for 40% below competitors.

Management sees $70 million in revenue by 2020.


Closing price 10/21/2016: $1.15
Shares Outstanding: 7.6 million
Float: 3.6 million
Market Capitalization: $8.8 million


Products & Services

Towerstream currently has 175 Major Points of Presence (POPs). POPs are located on the top of buildings such as the Empire State Building and Met Life in NYC (as shown in the picture below); the Hancock Building in Chicago, and the AON Building in Los Angeles. These POPs create a high-speed internet network in the sky. Currently, the company is working to build out networks in the 12 major US cities.

View From Towerstream’s Metlife POP In NYC

towerstream-1


Technology

Towerstream has a strong competitive advantage in technology. Today’s advanced microwave is faster than fiber and just as stable. It is a fraction of capex cost at $15,000 versus possibly as high as $200,000 for fiber. It takes a fraction of the time to deliver the service. Below is an illustration of the high-speed wireless connection in the sky created by the technology.

 towerstream-2

In an October 13th press release, CHIEF Operating Officer Arthur Giftakis explained:

“Fixed-wireless technology inherently provides a competitive advantage. The speed at which we can add buildings at our low cost also gives us a superior advantage over fiber and cable.”


On-Net Initiative Brings Path to $70+ Million Revenue

Towerstream installs high-cap radio and antenna on the roof, then an inexpensive, quick, wire run to install each customer. Towerstream can then sell aggressively to all customers in the building typically 40% below market pricing. The On-Net initiative enables all tenants in a building the potential to have access to Towerstream’s carrier-class high speed internet services with a simple cable run from a common room. Towerstream is able to leverage equipment that previously would serve only one customer to now serve many.

By year end, 440 buildings are expected to be On-Net, with 785 planned for by the end of 2017, and 1,060 likely by the end of 2018. The current average is 31 tenants per building. With a target 30% penetration and $250 ARPU (Average Revenue Per User), there is revenue potential for $2,325 per building per month. On-Net churn is typically 1%, which is half the telecom average. In summary, it is not hard to see the path to attractive future revenue potential.


Thousands of Buildings in Towerstream Network Footprint

towerstream-3

 


Mistakes by Previous Management Decimated Shares

In early 2015 Towerstream was a beloved business trading over $40/share,  invited to present at all the major investment conferences from Jefferies to Citi. Unfortunately, a lack of transparency, high cash burn, and other issues caused investors and analysts to run.

The company has since undergone major restructuring including replacing top leadership. The restructuring lasted into the first part of this year and Towerstream is in a much more stable place. Admittedly, however, it could take another 3-4 quarters for many investors to regain confidence.


New Business Model Brings Improved Transparency

The new business model is called On-Net. The old model HetNet is now shown as a discontinued operation. Under the new model, investors will receive more disclosures, such as ARPU (Average Revenue Per User) , number of customers, number of buildings, and sales productivity.


Switch to More Flexible Pricing to Achieve Desired ARPU

Towerstream is now offering a fully symmetric 100 Mbps service for as little as $450 per month, or in some cases only $300. Previously, pricing was a firm $699 for the 100 Mbps service. Moreover, Towerstream isn’t limiting itself to 100 Mbps service. Now the company is providing both larger and smaller pipes depending on customer demand. The drive is to develop a full-building ARPU in the $3,000 range monthly. This desired outcome is now build around the calculus that pricing per customer mix may float around varying levels. Increasingly Towerstream is becoming known for offering customers “offers they can’t refuse”.


Testimonials Highlight Customer Satisfaction

 “Please know that I’m a long time CIO and have had plenty of experience working with nearly all of the telecom companies in America.  I must tell you, I have never seen a more focused, competent, and coordinated team in my entire career, you were nothing short of brilliant. I was kept up to date at least daily and sometimes 2 or 3 times a day. This is extremely rare in today’s telecom world where a lot of people just go through the motions. Towerstream demonstrated the exact opposite and the Penn Virginia installation is living proof.  This was the best I’ve ever seen in my 30 years of leading and managing IT functions regarding the telecom discipline.”

Gary W. Bailey, Vice President IT, Penn Virginia Corporation

 

“Ever since the Towerstream High Speed Network service has been integrated to the Wiltern Theatre’s Corporate and Artists Network Segments the Venue can now consider itself as having contemporary Network access. The Venue for many years has had to endure slow DSL type of speeds as well as the continued failure of these types of circuits. Constant DSL modem resets caused grief to our Production and Tour Managers. Due to the Towerstream service along with an upgraded Wireless Network, the Wiltern now has a much better Network access experience. I have not once called in Towerstream Technical Support for any issues with service here at the Wiltern.”

Danny T. Speth, Manager of Global Corporate Office and Venue Technology, Live Nation/Ticketmaster

 

“In these very competitive economic times, Towerstream’s Internet connections allow us the flexibility to easily increase bandwidth as a selling point to our guests.”

Joan Rowland, Director of IT,  The Palms Hotel & Spa, Circa 39 Hotel


Digging Into The Palms Hotel & Spa Case Study Offers Deeper Insight

Offering enough bandwidth during peak season, at an affordable price, to meet traveler’s Internet needs is a must in the hotel business. Each year, the demand for Internet continues to spike. Today travelers require more bandwidth. At one time guests were using the Internet connection to check e-mail messages and web surfing. Guests are now streaming video, logging into chat rooms, and connecting to their home office putting more of a demand on bandwidth. During peak weeks, employees and guests often experienced Internet gridlock ultimately maxing out bandwidth and slowing down speed.

The time had come to install additional bandwidth, but finding affordable service with scalable features for peak weeks was a challenge. Initially, the decision was made to upgrade the property’s fractional T service to 3Mbps. The intention was to move to a full T1 connection, but the 3Mbps solution caught everyone’s attention. The price was a far better deal than most other companies T1 rates. Impressed by the service that would be received, it was an easy decision to make the switch to Towerstream.

When both hotels – Circa 39 and Palms – were up and running on Towerstream’s network, the connection between the two properties and their consultant management company was seamless. More recently, the Palms had Towerstream provide high-speed Internet for all their guest rooms. This guaranteed a reliable, fast and secure connection for all vacationing and business travelers. More importantly, Towerstream’s service featured the desired scalability. Bandwidth can be increased with just a phone call during high-occupancy periods. Initially the hotel was attracted to the low price that Towerstream offered, but the features of their 4G technology have given the Palms a competitive edge.


Conclusion

Towerstream reported $400K of EBITDA in 2Q’16, up from a negative figure in the preceding quarter unveiling “the turn”. Fundamentals are improving rapidly.

The business model of adding hardware to the top of a building then leveraging costs to deliver 40% below market price is a game changer.

At the current enterprise value of ~$35 million, we see compelling value considering the potential for the business to be $70+ million of revenue in several years, not to mention at one point shares traded for $40!

As Towerstream Corporation continues to improve transparency as well as top and bottom line numbers, we expect shares to rise accordingly.
Towerstream will report Q3 on November 9th, (press release).


Best wishes for profitable investing!

towerstream corp gary

 

 


See Disclaimer/Disclosure/Terms of Use

I love finding stocks that meet glaring needs within a particular industry…companies with technology that can dramatically improve efficiencies and even open new markets by expanding applications within an industry.

I especially love finding these stocks when the company has heavily patented the game-changing technology and is on the verge of commercializing it with top-tier partners.


nanoflex-power

Meet NanoFlex Power Corporation (OPVS)

NanoFlex Power Corporation (web site) researches, develops, commercializes, and licenses advanced configuration solar technologies that enable thin-film solar cell implementations. The company has worldwide license and right to sublicense intellectual property resulting from its sponsored research programs. Its research programs have yielded two solar thin film technology platforms, which include Gallium Arsenide thin film technology for high power applications; and organic photovoltaic technology for applications demanding high quality aesthetics, such as semi-transparency, and tinting and ultra-flexible form factors.

NanoFlex Power targets applications comprising mobile and off-grid power generation, building applied photovoltaics, building integrated photovoltaics, space vehicles and unmanned aerial vehicles, semi-transparent photovoltaic windows or glazing, and ultra-thin solar films or paints for automobiles or other consumer applications. It has developed laboratory feasibility prototypes that demonstrate key building block principles for these applications. NanoFlex Power Corporation was founded in 1994 and is based in Scottsdale, Arizona.


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Share Information

Shares outstanding: 58.8 million
Closing price 10/4/16:  .91
Market capitalization: $53.5 million
Approximate float: 21.5 million
52 week high: $3.00
52 week low: .31


NanoFlex Power (OPVS) is Commercializing Two Solar Technologies of the Future:  

  • Ultra-High Efficiency Gallium Arsenide (GaAs) Solar Cells

  • Organic Photovoltaic (OPV) Solar Cells


Ultra-High Efficiency Gallium Arsenide (GaAs) Solar Cells

Gallium arsenide (GaAs) based solar cells hold the record when it comes to the efficiency. GaAs-based solar cells also produce far more energy in high heat conditions as well as low light conditions. Simply put, the chemical and physical properties of GaAs make it the undisputed choice for high efficiency solar cells. As a result, virtually all satellites and space-bound vehicles are powered by GaAs solar cells.

So what’s kept GaAs solar cells from being the go-to technology here on earth?  Cost. Despite its ultra-high efficiency, the manufacturing process for gallium arsenide solar cells has been prohibitively expensive for terrestrial use, and this is where NanoFlex comes in.

NanoFlex Power’s Patented Technology Can Dramatically Slash Manufacturing Cost for GaAs Solar Cells

NanoFlex Power has a patented process that dramatically reduces the cost (> 90%) of GaAs solar cell production.

The production of the parent wafer is by far the most expensive part of the manufacturing process for GaAs solar cells. By using what NanoFlex refers to as “Non-Destructive Epitaxial Liftoff” (ND-ELO), the parent wafer in the manufacturing process is recycled and used again and again to make hundreds of lifted-off, flexible, thin films. NanoFlex Power has demonstrated that the GaAs cells produced from subsequent cycles maintain the same ultra-high performance characteristics as those from the initial cycle. The process also enables ultra-high performance GaAs solar materials to be available on flexible and lightweight thin-film materials for use in a much wider variety of applications.

nanoflex-power-corp-gaas

 

nanoflex-power-opvs-thin-film

 

NanoFlex’s cost breakthroughs in GaAs solar cell production creates the highest performance, flexible solar solution at the lowest cost per Watt.


A leading provider of solar cells and solar panels to satellite and spacecraft OEMs has taken notice of NanoFlex Power’s patented low-cost GaAs production process.

nanoflex-power-solaero-technologies

In August of 2015, NanoFlex Power signed a Joint Development Agreement with SolAero Technologies for “development of Gallium Arsenide (“GaAs”) solar cells utilizing NanoFlex Power’s proprietary manufacturing processes.”

 

There are three things investors need to know about this agreement:

  1. SolAero Technologies (web site) is a leading provider of solar cells and solar panels to satellite and spacecraft OEMs and has powered >170 space missions
  2. The agreement validates NanoFlex’s low cost GaAs solar cell production technology as it moves from R&D to commercialization
  3. The agreement provides a low-risk, rapid path to commercialization

SolAero has a team of engineers working on implementing NanoFlex technology in their manufacturing process & in their production-configuration solar cells.

The commercial applications arising from NanoFlex’s low-cost GaAs solar fabrication method are mind-boggling. Combine an ultra-high efficiency solar power source that’s highly flexible, extremely thin, can be used use in high heat and low light situations, and is now (thanks to NanoFlex Power) cost effective to manufacture, and it becomes easy to see why the leading provider of solar cells and solar panels to satellite and spacecraft OEMs is teaming up with them.

 


Organic Photovoltaics (OPV)

The second game-changing solar technology NanoFlex Power is developing is in organic photovoltaics (OPV).

First generation solar technologies are predominantly composed of silicon based, inorganic materials. These thick, inflexible, solar cells currently account for around 80% of all solar panels sold globally. Inorganic solar cells have lower absorptivities than organic materials, requiring thicker absorbing layers, and high purities (and high costs) to insure efficient operation.

OPV solar cells use carbon-based polymers in an aim to provide an Earth-abundant and low-energy-production photovoltaic solution. OPV has the theoretical potential to provide electricity at a lower cost than first- and second-generation solar technologies. Because various absorbers can be used to create colored or transparent OPV devices, this technology is particularly appealing to the building-integrated solar market.

According to the U.S. Department of Energy, OPV solar technology promises the following benefits:

  • Low-cost manufacturing: Soluble organic molecules enable roll-to-roll processing techniques and allow for low-cost manufacturing
  • Abundant materials: The wide abundance of building-block materials may reduce supply and price constraints
  • Flexible substrates: The ability to be applied to flexible substrates permits a wide variety of uses

nanoflex-power-opvs-comparisons

 

The Most Extensive Patent Portfolio of OPV Technologies in the World + Top Tier Research Partners

NanoFlex Power claims the most extensive patent portfolio of OPV technologies in the world, holding exclusive rights to over 130 issued and pending U.S. patents, plus foreign counterparts, which cover architecture, processes and materials for high efficiency solar technologies and flexible, thin-film organic photovoltaics.

OPV is still a developing technology, and has some efficiency limitations as well as less long-term reliability than silicon-based cells. As a result, research focuses on increasing device efficiency and lifetime. Substantial efficiency gains have been achieved already by improving the absorber material, and research is being done to further optimize the absorbers and develop organic multijunction architectures. Improved encapsulation and alternative contact materials are being investigated to reduce cell degradation and push cell lifetimes to industry-relevant values.

NanoFlex’s approach has been to advance all dimensions of OPV technology, including the development of new materials (some of which are now being sold in small quantities by materials suppliers), new high efficiency device architectures, and ultra-high-speed, energy efficient production processes such as organic vapor phase deposition developed in the company’s research partner’s laboratories, and solar cell modulization.

NanoFlex’s research partners at the University of Southern California and the University of Michigan are world leaders in OPV research. These sponsored research agreements provide NanoFlex Power with the exclusive worldwide license and right to sublicense any and all intellectual property resulting from the related research and development.


Opening New Applications for Present and Near Future 

NanoFlex has been able to form the basis for exciting new products, applications, and capabilities with patented developments in both Organic and Inorganic Photovoltaics. By redefining the materials, architectures, and fabrication processes to radically decrease cost while enabling a far more flexible and lightweight form factor, new products and markets are on the horizon.

nanoflex-power-space

 

NanoFlex’s patented, low-cost GaAs production method will dramatically reduce the cost of high performance solar arrays for aerospace applications.

SolAero Technologies and NanoFlex’s joint development agreement validates the patented NanoFlex production technology and opens multiple pathways for near term revenue generation from licensing.

 


 

nanoflex-power-flexible-filmThe combination of GaAs’ high efficiency with a lightweight thin-film form factor and competitive cost (due to NanoFlex Power’s patented technology) opens off-grid and mobile power markets to solar. The versatility and cost of this new process will enable some incredible new applications and products that would not be possible with the current constraints of solar technology.

 

 

Lightweight and flexible solar mats and sheets can be used in remote areas to provide power. These solar mats can be used by emergency response teams, in disaster situations, and in a multitude of military applications.  Moreover, emerging markets often lack access to reliable electricity. For these people, solar power can provide them with a basic need to support their lighting, heating, and communications needs.


 

nanoflex-power-solar-buildingGone will be the large, rigid, cumbersome solar panels and in their place will be windows and glass surfaces of buildings. Tinted semi-transparent OPV photovoltaic films could be used to coat all of the windows of a building, which will in turn generate electricity that will ultimately be used within the building.

NanoFlex’s technology lowers the cost of higher efficiency technologies and introduces flexible form factors that reduce installation costs and provides a more aesthetic look.

We’ve all seen solar panels on buildings, but imagine an entirely solar-powered building. You could witness this in the not too distant future, thanks to NanoFlex Power’s breakthroughs in organic photovoltaics technology.


nanoflex-power-solar-bug

 

Imagine if by simply painting a car, you could allow it to convert the sun’s energy to power its electronics or charge its battery.

Photovoltaic paints are a possibility using OPV technology.

NanoFlex Power’s proprietary organic materials can be produced at the molecular level, which enables them to be applied to highly flexible and non-planar surfaces through the application of an ultra-thin solar coating.

 

 

 


World Class Research Partners, Management, and Development Partners

It’s always exciting to catch an ultra high-tech company as it’s moving from R&D and into commercialization and revenue generation, which is where NanoFlex Power is now.

With some of the world’s best research partners, a strong, experienced, superbly qualified management team, and a top tier joint development partner in SolAero Technologies, I’m really looking forward to following the company closely.

I’ll be sharing new developments with subscribers in the coming weeks and months as NanoFlex Power (OPVS) moves from R&D to revenue generation.


 

Supplemental: NanoFlex (OPVS) August, 2016 Investor Presentation

 


Disclaimer/Disclosures/Terms of Use

Best wishes for profitable investing,

nanoflex power - gary sig

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.

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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

 

 


See also: Disclaimer,Disclosure,Terms of Use

 

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

 

 

See disclosure/disclaimer/terms of use

Top Recent Developments

  • March 11, 2016: Actinium  Initiates Pursuit of EU Orphan Designation for Iomab-B

  • March 30, 2016: Actinium Receives Orphan Drug Designation From FDA for Iomab-B in Treating Refractory and Relapsed Acute Myeloid Leukemia in Elderly Patients

  • June 1, 2016 Actinium Provides Positive Actimab-A Phase 1 Results and Announces Timing for Phase 2 Clinical Trial

  • June 2, 2016: Acute Myeloid Leukemia (AML) is beginning to gain mainstream attention after CancerCare made June 2016 the first ever  (AML) Awareness Month

  • June 29, 2016: Actinium Pharmaceuticals Initiates Pivotal Phase 3 SIERRA Trial (Iomab-B)

Actinium Pharmaceuticals has had a flurry of positive developments over the last several weeks including Phase 2 trial planning and the initiation of a Phase 3 clinical trial.  We believe Actinium Pharmaceuticals Inc. (ATNM) is a STRONG BUY based on recent positive developments and the reasons discussed below.


ac·tin·i·um
akˈtinēəm
noun
defin: the chemical element of atomic number 89, a radioactive metallic element of the actinide series. It is rare in nature, occurring as an impurity in uranium ores.


Actinium Pharmaceuticals logo

Founded in 2000 and based in New York, Actinium Pharmaceuticals Inc. (www.actiniumpharma.com) is a public biopharmaceutical company specialized in the development of cancer drugs. The Company’s product candidates are based on its patented technology co-developed with Memorial Sloan Kettering Cancer Center (MSKCC) for combining the cancer targeting precision of monoclonal antibodies (mAb) for targeting specific types of cells with the power of alpha emitting radioisotopes, the most potent cancer killing agents in existence. ATNM’s first drug for the treatment of acute myeloid leukemia (AML) has been administered to 49 patients with promising results and the second generation drug candidate is currently in clinical trials with 28 patients treated to date. In addition to leukemia drugs, ATNM’s technology has been used to produce drug candidates for treatment of metastatic colorectal and prostate cancers, antiangiogenesis (prevention of blood supply to and growth of many solid cancers) and bone marrow ablation, part of a curative treatment for leukemias, lymphomas and multiple myeloma.


ATNM Share Structure

Shares issued and outstanding: 46.95 million
Market cap: $84million as of close 7/5
Insider & 5% owners: 11%
Trading float: 41.66 million


Strong Balance Sheet
ATNM13
One of the first things investors in development stage pharma/biotech stocks should consider is the balance sheet in order to minimize risk of experiencing near term dilution. In the

case of Actinium Pharmaceuticals, the balance sheet (SEC filing
link) is exceptionally strong with over $23 million in cash and current assets and only $3.3 million in liabilities.  The current ratio is an extremely healthy 7.1.

Risk of near term dilution is minimal given the company’s balance sheet with over $22 million of cash or approximately 4 quarters worth of cash to fund operations.

 


Increasing Institutional Participation

Increasing institutional participation is always a good sign in a stock.

In the most recent quarter 13 institutions increased positions in Actinium and 11 institutions held their positions. Institutions now hold just under 6% of shares in Actinium Pharmaceuticals.

ATNM15

In the most recent quarter institutions opened new positions in Actinium. 
ATNM16

Source: Nasdaq.com


In Good Company

In addition to increasing institutional buying, investors should know that Actinium’s largest shareholder is a subsidiary of Memorial Sloan Kettering Cancer Center, widely considered to be the nation’s #1 ranked cancer research facility.Memorial Sloan Kettering Cancer Center Actinium’s largest shareholder controls over 5 million shares of 10.6% of total shares outstanding.


Drug Pipeline

ATNM17

Actinium Pharmaceuticals has multiple drugs in the pipeline which address extremely large patient populations as the graphic below shows.

Actinium Pharmaceuticals Pipeline Market Potential

Leading drug candidates are Actimab-A and Iomab-B, which I’ll discuss below.


Actimab-A Overview

Actimab-A is currently in Phase 1/2 multicenter trials for the treatment of Acute Myeloid Leukemia (AML) in patients over the age of 60. Unfortunately, more than 18,800 new cases of AML were diagnosed last year and there were over 10,000 deaths from AML in 2014 according to the American Cancer Society estimates.

After receiving clearance from the FDA the Company started Phase I/II multi-center AML trial with fractionated doses of Actimab-A.  ATNM has concluded contracts with and provided training to 6 participating trial centers (Baylor University Medical Center, MSKCC, Johns Hopkins Medicine, University of Pennsylvania Health System, and Fred Hutchinson Cancer Center).  The Phase I (dose escalating) portion of the trial is ongoing. For the proposed Phase I/II study, patients are eligible if they have previously untreated newly diagnosed acute myeloid leukemia according to World Health Organization criteria, are age 60 years or older, and are unfit for or decline intensive chemotherapy, or are 70 years or older with newly diagnosed AML.  This target population has had better outcomes than relapsed and refractory patients who have been most of the patients in ATNM’s previous trials.

On June 1, 2016 Actimab-A Announced That Phase 2 Trial Set To Begin in 2H 2016

Actinium Pharmaceuticals announced that the analysis of clinical trials from Actimab-A portion of Actinium’s HuM195-Alpha program show low peripheral blast burden results in improved patient responses.  The company expects Phase 2 trial to begin enrolling patients over the second half of 2016 with revised protocol incorporating latest findings.

The Company announced that it will proceed with a Phase 2 trial with Actimab-A at 2 µCi/kg/fractionated dose, the highest dose level from the Phase 1 trial. For the Phase 2 trial, modifications will be made to the protocol including the removal of low dose cytarabine, which has already been agreed to with the FDA, and the mandatory use of hydroxyurea, which can be used per the current protocol, to reduce PB burden with the goal of accelerating patient enrollment and improving patient outcomes.

Iomab-B Overview 

Iomab-B (BC8-I-131 construct) has already been successfully used as a myeloconditioning/myeloablative agent in over 250 patients with incurable blood cancers. In both Phase I and Phase II trials Iomab-B has led to effective cures in patients with no options left. The only potentially curative treatment option for those patients is bone marrow transplantation (BMT), also known as a hematopoietic stem cell transplant (HSCT), but vast majority of patients over the age of 50 are either ineligible for myeloablative conditioning due to concomitant conditions or have a high burden and/or very resistant disease that makes reduced dose conditioning futile.

On June 29, 2016 the pivotal Phase 3 SIERRA trial was initiated by Actinium Pharmaceuticals.

The Phase 3 clinical trial  is a multi-center, randomized, controlled study that will enroll 150 patients and it is designed to evaluate if Iomab-B followed by a bone marrow transplant can increase durable Complete Remission (dCR) rates at 6 months compared to physician’s choice of chemotherapy followed by a bone marrow transplant or other treatment modaltiies with curative intent.

The Phase 3 clinical trial will feature 75 patients will be treated with Iomab-B and bone marrow transplant while 75 control patients will be treated with current therapy. The primary endpoint is durable complete remission rates. Because the trial includes patients who had relapsed or had refractory refractory AML, a cross-over aspect to the trial will be in place where if a complete response cannot be achieved for the standard of care arm, the patient will be allowed to crossover to the Iomab-B study arm. This underscores the seriousness of the disease state in the patient population for which Iomab-B may be the only real hope that can be offered. Additionally, there is no generally recognized, successful standard of care for these patients. This was illustrated last year during this panel discussion on Iomab-B and its positive clinical results.

Actinium Pharmaceuticals crossover Ioamab-B

Actinium plans to develop Iomab-B through a regulatory approval via a pivotal registration trial in AML refractory/relapsing patients. This could provide a potentially curative treatment to patients who currently have little or no chance of achieving remission, (let alone a cure), and could also result in a faster pathway to commercialization.

Additionally. Iomab-B has demonstrated strong potential for other indications as well- including Myelodysplastic Syndrome, Acute Lymphoblastic Leukemia, Hodgkin’s Disease and Non-Hodgkin Lymphoma. These follow-on indications could greatly expand Iomab-B’s ultimate market opportunity.

ATNM18


Why Actimab-A and Iomab-B Could be Game-Changing Cancer Drugs

Actimab-A and Iomab-B are a new class of “Targeted Payload Cancer Therapeutics” that act as a guided missiles that effectively kill cancer cells without the side effects experienced from chemical toxins and external radiation therapies currently in use. 

In the video below, Dr. Philip Cohen discusses the technology utilized, as well as the benefits, initial trial results, and broad market implications for both Actimab-A and Iomab-B. The discussion is easy to follow and extremely informational. In 15 minutes you will completely understand the blockbuster drug potential that Actinium Pharmaceuticals has in the pipeline.

 


2.9 Billion Reasons to be Bullish

Investors should understand that there is no approved treatment for Iomab-B targeted patients, implying blockbuster drug potential. Moreover, targeted alpha radiation-delivering drugs like Actimab-A are that are extremely cancer-cell selective are both expensive and rare.

Bayer bought the rights to commercialize the targeted alpha-radiation delivering drug Xofigo (formally called Ahparadin) for $2.9 billion (see Reuters) and we believe as Actimab-A and Iomab-B progress further through clinical trials, Actinium’s flexible strategic partnership platform could result in a significant joint or strategic partnership.


Analyst Community Continues To Be Bullish 

Actinium Pharmaceuticals is followed by FBR & Co, H.C. Wainright, Laidlaw & Company and LifeSci Advisors. The current consensus analyst price target is $10 or over a 400% premium over the current share price.

FBR & Co. Vernon Bernardino
H.C. Wainwright Andrew Fein
Laidlaw & Company Yale Jen, Ph.D.
LifeSci Advisors


Conclusion

Actinium Pharmaceuticals is coming off recent lows and we believe shares are on the verge of a strong move to the upside. This conclusion is based on:

  • Initiation of Phase 3 trial of Iomab-B
  • Actimab-A set to move into Phase 2 trial over the second half of 2016
  • Large addressable patient populations and/or populations where there is currently no approved treatment underscore the blockbuster drug potential of the pipeline
  • Awareness of Acute Myeloid Leukemia (AML) cancer is beginning to gain mainstream attention
  • Actinium Pharmaceuticals is well-funded, has a strong balance sheet, and risk of near term dilution is minimal
  • 7 new institutions opened positions during the most recent quarter
  • Memorial Sloan Kettering Cancer Center controls over 5 million shares or 10.6% of total shares outstanding

We see Actinium Pharmaceuticals as a STRONG BUY at current prices, and have a 12 month price target of $10/share. We believe this is a very realistic and conservative target, and we look forward to following Actinium’s developments closely in the coming months and sharing them with our subscribers.


MOKO - sig

 

 

Read Also: Disclaimer


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Goldman Sachs research believes that augmented reality (AR) and virtual reality (VR) have potential to become the next big computing platform and that AR/VR will become an $80 billion industry by 2025.  Forrester research estimates that enterprise customers will adopt 400,000 smart glasses in 2016 alone.  In 2015 the industry witnessed smart glass pilot program across a production line, but over the second half of 2016 commercial rollouts will expand and encompass an entire factory.  Google brought the hype to the industry in 2014 with the introduction of Google Glass, but one company’s smart glasses have outperformed Google Glass time in and time again in the enterprise field where it matters most.

 

The company that outperformed Google Glass in the enterprise field with its first generation augmented reality smart glasses was Vuzix (VUZI).  Vuzix has sold thousands of smart glasses to enterprise customers over the past few years and the company is planning a commercial rollout of its next generation smart glasses this summer.  Vuzix’s second generation smart glasses (M300) were developed based on the feedback from thousands of users.  The M300 smart glasses will continue to expand the performance gap between Vuzix’s smart glasses and the competition within the enterprise marketplace.


Market Overview: Enterprise Adoption of Augmented Reality Smart Glasses Will Be Massive

  • “Over 14 million US workers will use smart glasses by 2025Forrester
  • “8 % of all US workers will use smart glasses in their jobs by 2025” – Forrester
  • “Augmented reality is expected to generate $80 billion in revenue (excluding hardware) by 2020 and become the backbone of immersive journalism where readers can experience a story and be part of it.” – Manatt Digital Media
  • “Enterprises will spend over $30 billion on smart glasses hardware through 2025” – Forrester
  • “You’ll start seeing them (smart glasses) used on a much larger scale than they were in 2015: Moving from one line to the whole factory, or from one factory to the whole bullpen of factories that support a process” – APX Labs via Washington Post

vuzi-1

Forrester estimates that enterprise customers will adopt 400,000 smart glasses in 2016, with the total adoption of smart glasses expected to reach 14.4 million by 2025. The 2025 estimate assumes that 8% of US workers will wear smart glasses as part of their jobs.  New smart glass device unit sales are expected to make up a majority of unit sales through 2021 until sales of replacement units eclipse new units.

vuzi-2

Forrester identified 264 jobs in the US that are most likely to benefit from smart glasses including the most jobs such as technician, repairer, operator and nurses.  Other jobs that are less common that made the list include museum curators and surgeons.  GE’s aviation engineers use APX Labs’ skylight software and smart glasses to power real-time, first person collaboration.  General maintenance and repair workers are expected to adopt a large number of smart glasses.

Forrester interviewed 13 vendor and user companies to compile its most recent report on enterprise smart glasses.  Vuzix works closely with more than half of the companies referenced in Forrester’s industry report including Intel, Boeing, General Electric, APX Labs, Atheer, Kopin and Salesforce.

Boeing, Airbus and General Electric are early users of smart glasses and have active smart glass pilot programs with Vuzix.  General Electric is expected to do a large commercial rollout of smart glasses in 2016 based on commentary provided by APX Labs in a November 2015 interview with Tech Crunch.

Vuzix partners with key software developers including APX Labs, Atheer and Salesforce, which are developing software to support the deployment of enterprise smart glasses.  These key relationships are yet another key confirmation why Vuzix is a leader amongst leaders in the augmented marketplace.

In addition to the companies named in the Forrester report Vuzix has partnerships with SAP, Lenovo, XOeye, Pristine Labs, AMA, NTT Data, HP, IBM, Augmate, Sony, AirWatch as well as several other around the globe.  Vuzix is also working closely with key smart glass integration partners including Accenture, who specializes in effective implementation of large-scale mobile technology deployments for clients such as Airbus.


Vuzix logoOverview

Vuzix Corporation (VUZI) is an award winning, leading developer and supplier of smart glasses and video eyewear products in the consumer, enterprise and industrial markets.  The company has won 20 Consumer Electronics Show Innovations awards and holds over 40 patents and 23 additional patents pending along with numerous IP licenses in the Video Eyewear field.

The major shareholders of Vuzix are the founding management team and Intel Corporation, which collectively own approximately 40% of Vuzix Corporation.  Intel Corporation invested $24.8 million in Vuzix in January 2015 and owns 24% of the company.  Founded in 1997, Vuzix is a NASDAQ listed company with offices in Rochester, NY, Oxford, UK and Tokyo, Japan.

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Shares outstanding: 21.02 million
Recent price: 
$5.06
Market cap: 
$ 106.36 million
Insider ownership:
 29%
Float: 
12.45 million
Institutional ownership: 
4%


The Next Big Thing: Augmented Reality

Augmented reality is often times referred to as mixed reality, superimposes information or images on top of the real world through glass or a display of a device.  Virtual reality on the other hand provides a view of computer-generated scenes and is totally immersive. Augmented reality allows users to see what’s going on around us, whereas virtual reality users are restricted to a small area.  This is one of the prime reasons why augmented reality will have a more immediate practical applications for business according to a BBC News interview with industry leaders published earlier this year.

Google’s Glass project brought an incredible amount of media attention to the smart glass industry and augmented reality.  However, Google learned quickly that the company’s smart glass design was ill suited for consumers so the company decides to market the product to enterprise customers.  Enterprise customers were excited to have a hardware offering that could improve efficiencies and drive up productivity in manufacturing, warehouses for order picking and receiving as well remotely supporting service technicians.

Unfortunately for Google the company’s experiment to serve enterprise customers with a consumer designed product resembled a square peg being jammed into a round hole.  Google’s customers were left with a disappointing taste in their mouth and yearned for  augmented reality hardware offering that could deliver on Google’s initial promises.

In January 2015 Google announced that the company ended the sale of Google Glass under its explorer program. Google’s smart glass product simply didn’t live up to expectations.  The battery life was exceptionally short lived, the processor suffered from overheating due to inadequate tech specifications and to make matters worse the head worn device shorted out frequently from perspiration.   Google Glass failed to deliver real-time video stream, which makes any attempt at remotely delivering field service advice nearly impossible.

Google cared about its enterprise customers and instead of bailing on those customers Google picked up the phone and called the leading augmented reality manufacturer in the marketplace.  The industry leader that was on the other end of the phone call from Google was Vuzix, a company that was founded in 1997 in Rochester, NY that has been building a foundation in optics and wearable displays for nearly 20 years.

Vuzix introduced the M100 smart glasses in 2013, which were dubbed as the “first true competitor to Google Glass” by the Examiner.  Enterprise customers learned just a few years later that Vuzix’s M100 smart glasses were not simply a competitor to Google Glass, but the augmented reality hardware device that Google itself would recommend to its customers.

vuzix-3

 

Vuzix has sold thousands of M100 smart glasses across a variety of industries including warehousing, logistics, biopharma, oil & gas as well as telemedicine industries since 2013.  Vuzix has worked with hundreds of companies that have evaluated the company’s smart glasses and provided critical feedback and user experiences.  Vuzix listened to the feedback provided by the company’s vast and diverse customer base, which led to the design of the M300 smart glasses.

Vuzix’s M300 smart glasses will address critical and necessary feedback from customers that will increase the value proposition for enterprise customers.  The ergonomic design of the M300 results in a sturdier, tougher and lighter device versus the first generation M100 smart glasses.

The M300 will feature a hot swappable battery that allows users to swap out an existing battery with a fully charged battery without skipping a beat.   The M300 will be waterproof, which is critical for the HVAC and other industries that may encounter wet environments.  Vuzix partnered with a leading US based Tier-1 contract manufacturer (Jabil Circuit) to produce the M300 smart glasses. The M300 will list for $1,499 or an increase of $500 over its predecessor the M100.

The M300 is set for commercial launch over the summer and industry researchers are expecting enterprise smart glass demand to hit full stride over the second half of 2016.  Vuzix’s known customer list includes DHL, General Electric, Airbus, Boeing, Tesla, Daimler, Volkswagen, Bosch, Bechtle and many more.  In total Vuzix has well over 100 customers including over 40 of the Fortune 100 companies.


A Close Look Into Vuzix’s Current Products and Pipeline

Vuzix M100 smart glasses for enterprise customers will soon be replaced by the M300, which is an all-around more impressive device in terms of design, functionality, features and component upgrades.  The “M” in front of Vuzix products stands for monocular and any product that begins with a “B” is a binocular based product.  The M300 will be the hit of the year for Vuzix beginning this summer, but the company’s current product offerings and pipeline does not end there.

vuzi-4iWear Video Headphones:

Vuzix currently generates limited revenue from sales of its iWear video headphones, which are immersive headphones best suited for gamers, drone owners, medical/dental facilities and other markets around the globe.  The iWear video headphones sell for $499 and the iWear’s direct competitor is the Avegant Glyph.  Vuzix encountered some manufacturing and supplier quality issues over Q4 2015 and the first half of 2016.  However, over the next month the company is expecting to reach full production levels.  The company recently launched an initiative with market leading companies such as GoPro to enhance iWear sales opportunities.

vizi-5M3000 Smart Glasses

Vuzix is currently working on the company’s first waveguide based product for enterprise customers.  The M3000 features all of the advantages of the M300, but utilizes the latest optics to deliver a 1.4mm thin see-through display that will enable more advanced AR applications.  The M3000 is expected to begin shipping in the fall of 2016, shortly after the commercial launch of the M300.

 

 

vuzix-sunglassesVidWear B3000 Series Sunglasses

Vuzix is working on augmented reality sunglasses that resemble fashion-based sunglasses for enterprise customers and prosumers.  The VidWear B3000 waveguide sunglasses blend fashion and technology and is expected to be one of the world’s first sunglasses with integrated video.  The B3000 allows for full see-through capabilities in fashion glasses.  The B3000 VidWear products are targeted for introduction into the marketplace sometime in 2017.

The AR3000 waveguide augmented reality sunglasses will be Vuzix’s first binocular augmented reality smart glasses viewer.  These sunglasses are expected to feature two HD cameras with one for gesture support.  The wearer will be able to reach out and manipulate 3-D objects overlaid in the real world.  The AR3000 is being developed to provided advanced operator support for enterprise, industrial and medical uses.


Waveguides and Display Engines

Vuzix holds over 40 patents and 23 additional patents pending along with numerous IP licenses in the Video Eyewear field.  Vuzix has developed waveguide displays that use complex displays engines to enable image and video viewing through a microscopic display.  Vuzix is now producing display engines at the diameter of a large pencil with optical displays that are as thin as reading glasses.

During the FY 15 Q4 conference call Vuzix indicated that the company is actively sharing the company’s new waveguides and display engines with the public.  The display engines are mini projectors built into the wearable displays that beam an image into the waveguide displays for users to view.  Vuzix generated over $200,000 of revenue from waveguide sales to Intel in Q3.

The Tier-1 customers that Vuzix is working with are believed to be on par with the likes of Apple, Samsung and LG, which are all actively pursuing, augmented reality smart glasses for the consumer marketplace.  Other PC OEM manufacturers including HP and Dell are anticipated to enter the consumer augmented reality marketplace as well.

The augmented reality arms race occurring behind closed doors to introduce consumer centric smart glasses is in full swing.  The arrival of the first generation of smart glasses for consumers will hit the market within the next 6 to 18 months and Vuzix is well positioned to be a key player within the consumer smart glass marketplace.


Why Intel Corporation Invested $24.8m in Vuzix

In January 2015 Intel Corporation invested $24.8m (30% stake that currently sits at 24%) in Vuzix to advance Vuzix’s waveguides for fashion based wearable display products for the consumer marketplace.  Intel’s investment provided Vuzix with the financial resources to build a 30,000 square foot manufacturing facility to manufacture waveguides for the company’s next-generation wearable display products as well as the company’s strategic partners.

Intel has been providing silicon expertise for Vuzix behind closed doors for Vuzix’s next generation augmented reality smart glasses.  Intel and Vuzix are also working together on a secret augmented reality project led by Intel.  In December 2014, Intel partnered with Luxottica, the owner of Oakley fashion sunglasses on a collaborative research project to bring fashionable smart glasses to consumers.

The Wall Street Journal reported in March 2016 that Intel was developing an augmented reality wearable headset. According to the Wall Street Journal Intel’s augmented reality wearable headset is a reference design that will ultimately end up white labeled and sold through a leading OEM.

According to a recent SEC filing Vuzix has supplied Intel (a related party) with over $200,000 worth of waveguides that are believed to be inside of Intel’s augmented reality smart glasses reference.  Vuzix’s waveguides are super thin (1.4mm thick), high quality, relatively inexpensive compared to competitive offerings and ideally positioned for fashion based consumer smart glasses.

Intel has acquired a handful of augmented reality companies and technologies over the past two years.  Intel’s acquisitions and investments in augmented reality exceed $500m and are closing in on $1 billion.  Intel typically collaborates with a company and acquires them or makes and initial investment and acquires the company within a 24-month period.  Intel’s initial $24.8 million investment in Vuzix occurred 16 months ago, which makes Vuzix a potential takeover target within the next 6 to 12 months.


Management Team

Paul J. Travers, CEO, President and Director (Holds 2.55 million shares or 12.1% of shares outstanding)

Paul J. Travers was the founder of Vuzix and has served as the President and Chief Executive Officer since 1997 and as a member of the board of directors since November 1997. Prior to the formation of Vuzix, Mr. Travers founded both e-Tek Labs, Inc. and Forte Technologies Inc. He has been a driving force behind the development of our products for the consumer market. With more than 25 years of experience in the consumer electronics field, and 15 years of experience in the virtual reality and virtual display fields, he is a nationally recognized industry expert. He holds an Associate degree in engineering science from Canton, ATC and a Bachelor of Science degree in electrical and computer engineering from Clarkson University.

Grant Russell, CFO, Executive Vice President, Treasurer and Director (Holds 0.9 milion shares or 4.2% of shares outstanding)

Grant Russell has served as the Chief Financial Officer since 2000 and as a member of the board of directors since April 2009. From 1997 to 2004, Mr. Russell developed and subsequently sold a successful software firm and a new concept computer store and cyber café. In 1984, he co-founded Advanced Gravis Computer (Gravis), which, under his leadership as President, grew to become the world’s largest PC and Macintosh joystick manufacturer with sales of $44,000,000 worldwide and 220 employees. Gravis was listed on NASDAQ and the Toronto Stock Exchange. In September 1996, Gravis was acquired by a US-based Fortune 100 company in a successful public tender offer. Mr. Russell holds a Bachelor of Commerce degree in Finance from the University of British Columbia and is both a US Certified Public Accountant and a Canadian Chartered Accountant.

Key Stakeholders

Intel Corporation investing $24.8 million in January 2015 and currently owns 24% of Vuzix Corporation.  Intel has an option to secure two Vuzix corporate board seats and also has the right of first refusal to match any strategic investment made by another company in Vuzix.

Analyst Research

Vuzix is current covered by two sell-side analysts Chardan and H.C. Wainright with an average rating of buy and a price target of $10.00. Both sell-side analysts expect revenue FY17 revenue to double compared to FY16 due to new product rollouts commencing in FY16.

Chardan maintains a buy recommendation for Vuzix and a $10.00 per share price target.  Chardan’s price target is based on 10-12 times Q4 2017 revenue run rate of $19 million.

H.C. Wainright maintains a buy recommendation for Vuzix and a $10.00 per share price target.  H.C. Wainright’s price target was based on a DCF analysis to arrive at a $10.00 price target.


Why We Are Watching Vuzix Closely

Vuzix is well positioned for a major uptick in business activity in the second half of 2016 driven by the commercial launch of the M300 smart glasses.  Vuzix is working closely with Intel on a secret project focused on consumer fashion based smart glasses that provides additional upside for investors. Vuzix’s product pipeline is market leading and extensive, which positions the company for rapid market penetration and growth for years to come. Vuzix (VUZI) shares are trading at an incredible discount to fair value and now might be a good time to take a closer look at Vuzix, a market leader that has all the markings of being The Next Big Thing in Augmented Reality.


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While the stock market is getting off to a rocky start in 2016, 22nd Century Group (XXII) has all the ingredients in place to make a major move this year…a move which we believe will begin soon based on reasons discussed below.

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Share Structure

Shares outstanding: 70.6 million
Recent price: $1.40
Market cap: $ 98.8 million
Insider ownership: 40%
Float: 43 million

Institutional ownership: 5%


22nd Century Group - logoOverview

22nd Century Group (XXII) is a plant biotechnology company focused on tobacco harm reduction and smoking cessation products produced from modifying the nicotine content in tobacco plants through genetic engineering. 22nd Century Group owns or exclusively controls more than 200 issued patents and over 50 pending patent applications worldwide.


FDA Submission News

Yesterday, 22nd Century Group announced they filed a “Modified Risk Tobacco Product” application with the FDA for the world’s lowest nicotine cigarettes. So why is this a big deal? Because big tobacco has been given notice by the U.S. government that they can no longer use words like “light” or “ultra-light” in their advertising.

Specifically:

“A manufacturer who seeks to claim that a product poses fewer risks than other tobacco products may submit a modified risk tobacco product (MRTP) application to the FDA with scientific evidence to support that claim. To date, the FDA has not issued any orders permitting the introduction of modified risk tobacco products into interstate commerce.”

And the U.S. government is actively enforcing this regulation. Last year RJ Reynolds, among others, received warnings on this issue- see: “FDA warns 3 tobacco product makers over labeling.”

We believe XXII is the only cigarette company with the patented product capable of satisfying the FDA’s guidelines for a modified risk claim.

President and Chief Executive Officer of 22nd Century Group, Henry Sicignano stated:

“The scientific testing conducted in support of our submission to the FDA shows conclusively that BRAND A, as compared to conventional tobacco cigarettes, provides smokers with drastically reduced exposure to nicotine. We believe that the public health implications of a virtually nicotine-free tobacco cigarette are enormous and 22nd Century is excited about the prospect of introducing BRAND A into the U.S. market.”

It’s important for investors to know that the U.S. government has been buying XXII’s Spectrum Government Research Cigarettes (over 18 million of them in fact) over the last 2 years for their own studies.  Additionally, XXII’s application to the FDA includes a comprehensive overview of the many independent clinical trials that have found that smoking 22nd Century’s VLN cigarettes delivers the sensory and behavioral experience associated with conventional cigarettes while providing only minimal exposure to the most addictive component of tobacco.

According to research done by JP Morgan, 90% of smokers would also be willing to try a new brand if it were “safer” than their usual brand. In fact “light” cigarettes had 83.5% of the market prior to the Tobacco Control Act in 2009 that banned the use of that term. Roughly 45 million American’s smoke and retail sales of cigarettes in the U.S. were approximately $75 billion in 2014.

A product that appeals to 90% of a $75 billion/year market (from a $98 million market cap company) is just one reason why we believe XXII will have a breakout year in 2016, regardless of short term market turmoil. 


The Holy Grail of Smoking Cessation Products?

I try to avoid hyperbole when writing about stocks, but the potential to be the only company in the U.S. allowed to label their cigarettes as a “light”, “low nicotine” or “reduced nicotine exposure” product is huge…it would be worth hundreds of millions of dollars to big tobacco…and that’s not hyperbole. 

But here’s where it gets even better.

22nd Century may have in their wide, 200+ patent moat, what could become the holy grail of smoking cessation products.

Watch the video below on a study from the prestigious New England Journal of Medicine and know that:

  • the study included six styles of 22nd Century’s SPECTRUM research cigarettes (and only 22nd Century’s cigarettes)
  • the study was funded by the National Institute on Drug Abuse (NIDA) and the U.S. Food and Drug Administration (FDA)
  • the study concluded that reducing nicotine makes people less addicted to cigarettes and might make them more likely to quit
  • as compared with cigarettes of conventional nicotine content, 22nd Century’s proprietary Very Low Nicotine content cigarettes were “associated with reductions in smoking, nicotine exposure, and nicotine dependence, with minimal evidence of nicotine withdrawal, compensatory smoking, or serious adverse events
  • 22nd Century is the only company in the world capable of growing tobacco with such low nicotine content


More on this groundbreaking study using XXII’s cigarettes which resulted in both reduced cigarette consumption and an increased desire to quit by smokers of very low nicotine cigarettes is here. The same research team is currently conducting a Phase III clinical trial with 1,250 participants using XXII’s cigarettes to assess whether an immediate reduction or a gradual reduction in nicotine levels is most effective.

According to the U.S. CDC, approximately 50% of U.S. smokers attempt to quit smoking each year, but only 2% to 5% actually quit smoking in a given year. It takes smokers an average of 8 to 11 “quit attempts” before achieving long-term success. Approximately 95% of “self-quitters” (i.e., those who attempt to quit smoking without any treatment) relapse and resume smoking.

There are limited options of FDA-approved products to help smokers quit. These include Pfizer’s Chantix and Glaxo’s Zyban. While Chantix has been the best-selling smoking cessation aid in the U.S., the FDA slapped a “black box” warning on the drug for serious neuropsychiatric events, including suicidal ideation and increased risk of harmful cardiovascular events. As a result, Chantix sales dipped to $648 million by 2014, down significantly from the $846 million record set in 2008.  In March of 2015, the FDA decided to keep the black box warning on Chantix, plus they added a new warning about the controversial drug and its potential for negative interactions with alcohol.

Other options like hypnosis, acupuncture, new low-level laser therapy, and magnet therapy have not been shown to have positive effects in smoking cessation according to the American Cancer Society.  Moreover, e-cigarettes have ingredients in them that aren’t labeled and the amounts of nicotine and other substances a person gets from each cartridge are unclear and uncontrolled.  An analysis of 18 samples of cartridges from 2 leading e-cigarette brands found cancer-causing substances in half the samples. The FDA even found toxins such as diethylene glycol, (a poisonous compound in antifreeze) in some e-cigarettes!

Philip Morris, Reynolds America, British American Tobacco, Japan Tobacco, and Imperial Tobacco, will no doubt be watching for approval of the Modified Risk Tobacco Product application later this year.  The strong clinical data backing up claims of reduced smoking and improved odds of quitting if the modified risk application is approved would resonate with 90% of a $75 billion market, and big tobacco knows that.

For these reasons, XXII may indeed be holding the holy grail of smoking cessation products, and an eventual bidding war between big tobacco and big pharma (see below) is not out of the question.


The World’s First Prescription Cigarette

22nd Century Group also has a phase 3-ready clinical trial asset in the X-22 Smoking Cessation Aid, designed to be the world’s first prescription-brand cigarette. Big pharma would jump at the opportunity to offer a prescription cigarette that has been clinically shown to significantly increase the desire to quit smoking while having zero side effects of drugs like Chantix and Zyban. Recent SEC filings indicate that 22nd Century Group has “Identified and met with several potential strategic partners towards funding Phase 3 clinical trials for our X-22 prescription smoking-cessation aid in development.” As such, we believe the potential for a phase 3 trial funding deal to be struck with a noteworthy pharmaceutical player is ever-present and that a deal during 2016 is entirely possible, if not probable.


Revenue Ramping with Niche Products

22nd Century Group is positioned for significant growth in 2016. Commercialization of niche cigarettes (Red Sun in the U.S. and MAGIC in Europe) is tarting to take off. In the U.S., Red Sun is being distributed at premium tobacco outlets with more than 800 locations around the U.S. while MAGIC brand is building momentum in Europe. Financial results for the three previous quarters have exceeded expectations, and forecasts for 2016 have doubled over the past year according to Chardan Capital.

In the most recent quarterly results, sales for the first nine months of 2015 were $5.6 million vs. $0.5 million for the first nine months of 2014.  The bottom line improved by .05/share from a net loss of ($0.17) per share for the nine months ended September 30, 2014 vs. a net loss of ($0.12) per share for the nine months ended September 30, 2015. Management has guided for over $8 million in revenue for 2015.


The Bottom Line

There are only a handful of small cap stocks each year where everything is in alignment for a sustained move of 150% or more and we at MicrocapResearch.com believe 22nd Century Group (XXII) is one of them.


 

Gary Anderson sig.

 

 


Disclosure: Long XXII shares
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