Companies featured in this edition of the newsletter: ACCP, CNLG, CVM, DKAM, ENZ, ICLK, IMUC, ITUI,
Investors paused this week, skimming profits from the aggressive three month rally that has seen markets post impressive gains from the March lows. All of the major indices finished in negative territory for the first time since early May, with the Dow leading the way with a 2.9% decline, surrendering 259 points to end the week at 8539, down 2.7% on the year. The Nasdaq finished down 1.7%, closing at 1827, up 15.9% on the year, while the S&P 500 and Russell 2000 finished down 2.6% and 2.7% respectively, up 2.0% and 2.7% on the year.
Speculation surrounding reports that G-8 ministers have begun to consider ways to unwind stimulus spending as recovery begins to take hold helped lead markets lower Monday, as the S&P declined 2.4% amidst a strengthening dollar and corresponding declines in commodities. The selloff continued modestly on Tuesday as negative economic data in the form of worse than expected Industrial Production figures helped fuel the bearish bias. Stocks traded mixed for the rest of the week, but the early losses proved too much to recoup, leading to nine of the ten sectors in the S&P finishing in negative territory led by Energy with a 6.5% decline and Materials with a 6.4% loss.
It was a relatively quiet week for economic indicators, but some good news was extrapolated from the housing market as Housing Starts came in at 532,000, besting consensus estimates of 485,000, and Building Permits beat expectations of 508,000, coming in at 518,000.
What should investors look for this week? Keep a close eye on the economic calendar as there are several key reports on the health of the economy, including final readings for Q1 GDP, the FOMC’s Rate decision, Existing Home Sales and Durable Goods Orders.
Notable companies reporting earnings this week include on Monday before the bell results from Walgreen (NYSE: WAG), followed on Tuesday morning by supermarket operator Kroger (NYSE: KR) and software developer Oracle (NASDAQ: ORCL) after the bell. On Wednesday before the bell Monsanto (NYSE: MON) and Rite Aid (NYSE: RAD) will report, followed that afternoon by Bed Bath & Beyond (NYSE: BBBY), and Nike (NYSE: NKE). ConAgra (NYSE: CAG) reports Thursday morning with Palm (NASDAQ: PALM) rounding out the week Thursday afternoon.
Economic reports for the week begin with Existing Home Sales for May due out at 10:00am Tuesday. Durable Orders for May will be released at 8:30am Wednesday, followed by May New Home Sales at 10:00am and weekly crude inventories at 10:30am. The highlight of the week will be the FOMC’s rate decision which is expected Wednesday afternoon at 2:15pm. Final Q1 GDP, and weekly initial jobless claims will be released in tandem at 8:30am Thursday morning, with May Personal Income and Spending and PCE Core for May due out together at 8:30am Friday. Revised Michigan Sentiment for June finishes up the week at 9:55am.
Conference schedules will be light for the week, but Wachovia will hold its two day Mid-Year Equity Conference in Denver beginning on Tuesday. First Solar will hold an analyst/investor meeting in Tempe Wednesday, which is available via webcast. The week finishes up on Thursday with the New York Society of Security Analysts Micro-cap Investment Technology Innovators Conference in New York.
Enzo Biochem (NYSE: ENZ), a leading vertically integrated biotechnology company engaged in the research, development, manufacture and licensing and marketing of innovative health care products, technologies and services based on molecular and cellular techniques, announced record third quarter results for the three months ended April 30, 2009 last week. Enzo managed to increase total revenue by 22%, generating revenue of $23.1 million, compared with $18.9 million in the corresponding year-earlier period. The strong revenue growth is most readily attributed to a 50% gain in product revenue and a 20% increase in royalty fees generated by the company’s Life Sciences division. Gross profit increased 8% to $10.1 million in the fiscal 2009 third quarter from $9.3 million in the fiscal 2008 third quarter. The net loss, including $1.3 million of non-cash expenses as a result of acquisitions, was ($4.2) million or ($0.12) per share, compared to a year ago net loss of ($2.1) million, or ($0.06) per share, which included $0.5 million of comparable non-cash expenses. As of April 30, 2009 working capital was $64.2 million and cash and short term investments were $55.3 million with no debt. Shares lost a dollar on the week to close at $4.45.
Conolog Corporation (NASDAQ: CNLG), an engineering and design company that provides digital signal processing solutions to global electric utilities, announced results for the nine months ended April 30, 2009 last week. Among the highlights was a 40% increase in product revenues generated during the period, mostly resulting from increased orders from North American customers and new orders garnered from expansion into South American and European markets. The company was also able to reduce operating costs by 26% over the period, leading to a reduction in net loss of over 60%, or $3.2 million, compared to the same period in the previous year. Shares gained a penny on the week to close at $1.20.
CEL-SCI Corporation (AMEX: CVM), a company engaged in research and development of drugs and vaccines, announced that its Senior Vice President of Research and Manufacturing, Eyal Talor, Ph.D., accepted an invitation to be a featured speaker at the 5th Annual Aseptic Processing of Sterile Drug Products Conference in Arlington, Virginia last week. At a workshop entitled, “Aseptic Facility Design Fundamentals – Cold Fill/Finish Design for a Biologic, Liquid Injectable,” Dr. Talor discussed the company’s plans to launch a unique manufacturing process that could allow drugs using stem cell technology and other biological products to maintain their biological activity and potency through the entire manufacturing process, in addition to enhancing the shelf life of the drugs in the process. The availability of this unique aseptic filling process developed by CEL-SCI may also significantly accelerate the time to market by eliminating complicated, costly and time consuming validation studies and tests required when these products are filled at room temperature. CEL-SCI’s new state-of-the-art manufacturing facility near Baltimore, Maryland, where the company plans to manufacture its lead cancer product Multikine, will be offering this service to outside companies on a contract basis. Shares gained four cents on the week on strong volume to close at $0.49.
Access Pharmaceuticals, Inc. (OTCBB: ACCP), an emerging biopharmaceutical company that develops and commercializes propriety products for the treatment and supportive care of cancer patients, announced that it has signed evaluation agreements with two pharmaceutical companies for its Cobalamin Oral Drug Delivery Technology. Both companies plan to evaluate Access’s technology as a precursor to entering into licensing discussions. The agreements are the result of high levels of interest in the Cobalamin delivery system generated at the recent BIO 2009 conference in Atlanta, where the company’s delivery system was showcased along with several other products in its line. The Cobalamin technology works by utilizing the body’s own natural B12 oral uptake system to transport pharmaceutical molecules into the body via a Trojan Horse mechanism. The technology is sufficiently flexible to act as a transport module for many types of pharmaceutical compounds and has had its efficacy validated in preclinical models, the results of which Access presented at a major scientific meeting in 2008. Shares remained unchanged at $2.20 on the week.
Drinks Americas Holdings (OTCBB: DKAM), a company that develops, owns, markets, and nationally distributes alcoholic and non-alcoholic premium beverages associated with renowned icon celebrities, announced last week that it has entered into a partnership with Meridian Street Beverage, a distributor of luxury spirits that specializes in distribution in urban liquor markets. Meridian Street has begun distributing DKAM’s products in Chicago and plans to expand its offerings into other key urban population centers; since entering into the partnership, DKAM has already seen a significant increase in business in the Chicago market. Meridian was a natural choice for the partnership due to its strong background and understanding of the link between music and spirit consumption, and plans to tailor its distribution efforts to the nuances of the urban demographic environment which should translate to higher sales for DKAM’s award winning product line. Shares remained unchanged at $0.15 on the week.
ImmunoCellular Therapeutics (OTCBB: IMUC), a clinical-stage company that is developing immune based therapies for the treatment of brain and other cancers, announced last week that it has filed a provisional U.S. patent application relating to its novel vaccine technology targeting cancer stem cells. The patent application relates to new peptide candidates that may significantly expand the potential target patient population for the company’s cancer stem cell vaccine product candidate, ICT-121. ICT-121 is an immunotherapy designed to target tumors at their roots by attacking cancer stem cells; preclinical studies suggest that it may be applicable to many different forms of cancer, and have demonstrated it to be a highly targeted destroyer cancer cells. The company expects to file an IND application to begin Phase I clinical trials next quarter. Shares ended the week up 25%, gaining nine cents to close at $0.45.
On the Wires: interCLICK (OTCBB: ICLK) the fastest growing advertising network in the US according to comScore, announced last week that it has appointed Brett Cravatt to its Board of Directors. Mr. Cravatt worked as a securities lawyer for Loeb & Loeb, LLP before serving as COO for Connexus’ ad network Traffic Marketplace, where the company’s online marketing revenues grew from $6 million a year to $125 million a year during his tenure; ICLK expects that his extensive operations experience and established marketing industry relationships will help support the company’s aggressive corporate growth strategies and technological innovation. In other personnel news last week, i2 Telecom (OTCBB: ITUI), a leading developer of award-winning patented and innovative high-quality mobile applications and services, announced that Michael Reardon has been appointed to its Board of Directors. Mr. Reardon has more than 25 years experience as an entrepreneur, consultant, director and marketing expert in the fields of telecommunications, finance and manufacturing; he is currently the President of ProVision Communications, a telecommunications consulting firm established in 2000, and serves as the Chairman of HyperFlo, a manufacturer of precision cleaning equipment. Previously, he was Co-Founder of Choice Cellular, a cellular telephone company that was sold to WorldCom in 1996. Mr. Reardon also served as Senior Vice President/Managing Director of Franchise Finance Corporation (now GE Capital Franchise Finance) from 1983 until 1992. Management expects that his wide breadth of expertise will serve the Board well as the company continues to expand its offering of award winning mobile applications.