Adamis Pharmaceuticals Corp. (ADMP.OB)

There is an old saying that I love: “It ain’t bragging if you can back it up”.  While the ADMP people aren’t saying they are going to be a ten-bagger, I am.   And, I think they will back it up for me.

I haven’t been this excited about a pharma company for quite some time.  Adamis Pharmaceuticals Corp. (ADMP.OB) currently is a beaten-down pharma stock that isn’t generating much positive buzz.  Their reverse merger with Cellegy in 2009 (to go public) generated a lot of bad blood and their recent unsuccessful attempt to merge with La Jolla Pharmaceuticals left many traders wondering if the company was going to be able to survive.  The boards are, by and large, down on ADMP.  The negative comments I am hearing center around their lack of financing, poor results for their highly touted Epinephrene syringe initiative and disbelief in the company’s current strategic direction.  In fact, there is still a great deal of short activity surrounding ADMP.  Yesterday’s FINRA report shows that out of 150,500 shares traded….33,000 were shorts.

To my mind NOW is a great time to have ADMP on your trading radar.

I have known about ADMP for quite some time.  I actually did a blog the company in August of 2009 when the stock was at $0.24.  I titled my blog “When it goes, it will go big“.  Well, it did go big…for awhile.  Shortly after I blogged it, ADMP went on a run to $0.45 (a gain of over 87% in less than two weeks). I got many emails from traders thanking me for that call.  Since then, the stock has been very volatile trading in a range between $0.55 and $0.15 and is currently is trading right around the $0.25 mark.

It is time to take a close look at ADMP again.

ADMP calls itself a commercial-stage specialty pharmaceutical company.  click here for website.  The site needs updating, but it will give you more information about the company.

Before I wrote this blog, I did extensive research on the company, reading financials and talking with both the IR firm and several officers of the company.  All have extraordinary confidence in the company.   On its face it might be hard to share their optimism, but I drilled into the company and found out some things that make me very high on the stock.

Financing will come

All of my conversations with the company and its IR firm started and ended with the question…..”What about financing”.   While the company would not give me any details on current financing efforts, I got the impression that something was imminent.  The company is highly motivated to raise the capital since one of the conditions of their recent acquisition of their prostate cancer drug candidates was a minimum equity raise of $2MM.  I am inferring here, but I couldn’t see a company licensing its technology to ADMP (especially since they have blockbuster drug potential) without real confidence that the financing could be accomplished.

Once this initial financing is accomplished, the company believes this will be the last financing it will ever have to do because of the following.

The “Steak and Sizzle” Growth Strategy

I had a very extensive conversation with Dr. Dennis Carlo, CEO and President.  I came away very impressed with Dr. Carlo (more on him later).

Dr. Carlo used an analogy for ADMP’s growth strategy calling it the “Steak and Sizzle” plan.   What he means by that is that the “meat” of the company is their Epinephrene syringe product that can conceivably generate many millions of dollars for the company NOW.  The product has been approved by all of the major medical supply distributors (Amerisource Bergen, Cardinal Health, McKesson, etc…), major drug chains and a number of insurance companies.   It is priced significantly below the current competition’s products and the company is aiming at capturing 10% to 20% of a $200MM market…which could mean millions to the company annually.  However, the success of this strategy is heavily dependent on achieving financing which hopefully they will accomplish soon.

The company has lined up manufacturers….all it needs is the capital to produce production quantities for distributors to stock and reps to sell.  Dr. Carlo’s actually is convinced that the Epinephrene sales could make the company profitable in its first year AND fund the trials for its other drug candidates.

Part of his “steak” strategy are two other products:

1. Nasal Steroid for the treatment of Allergic Rhinitis - The company is very high on this product (Beclomethasone HFA aerosolized nasal steroid….to be exact) that would gain the company entrance into a $3 Billion market.  The product is not expected to be ready for launch until 2012, but the company has high hopes for it.  They also have two other extensions of Beclomethasone for Asthma and COPD expected to be released in 2013.
2. A topical contraceptive for women  (C31G) - Hidden away in their SEC documents is a product that has passed Phase III testing with the FDA and might represent income (either from sale or licensing) for the company.  This product is a wildcard because the company has made no announcements of what they plan to do with it or the financial impact of the product.  This was a technology that came with the Cellegy reverse merger.  I will be looking for some news on this one in the near future.

The “sizzle” are a suite of products that were recently licensed from Colby Pharmaceuticals Corporation (read the full release here) that cover three small molecule compounds for the possible treatment of prostate cancer (PCa) called CPC 100, CPC 200 and CPC 300.  These three drugs are initially targeted at prostate cancer, but have application to many other types of cancer.

All are reasonably early stage (phase 1 and 2), but have already shown great promise.  According to the company, over $18 million has been spent developing the drugs to this point.

In 2006 and 2007, CPC-100 and CPC-200, respectively, received the National Cancer Institute’s multi-year, multi-million dollar RAPID (Rapid Access to Preventative Intervention Development) Award. Each year, this award is given by the NCI Division of Cancer Prevention, under the RAPID Program, to the most promising new preventative/ therapeutic anti-cancer drugs.

These drugs are very promising, but are years (and many FDA trials) away from being ready for market.  However, the payoff could be enormous for the company.  The National Institute of Health states prostate cancer is the most common cancer in America, affecting 1 in 6 men.  Prostate cancer accounted for nearly one quarter of all new cancer diagnoses of all new male cancer diagnoses. Worldwide, about 395,000 men are diagnosed with prostate cancer each year and the incidence is on the increase.  The NIH estimates that prostate cancer therapeutics in the U.S., Europe and Japan will cost $ 7.3 billion in 2011.

The point man for ADMP

Dr. Dennis Carlo is a very impressive man, as I mentioned earlier.  Here is his bio from the website (edited by me for brevity):

Dr. Carlo is a co-founder of Adamis Pharmaceuticals Corporation and……and has extensive biotech research and development experience ……  He served as Vice President of Research and Development and Therapeutic Manufacturing at Hybritech Inc., which was acquired by Eli Lilly & Co in 1985. After the sale to Lilly, Dr. Carlo, along with Dr. Jonas Salk, James Glavin and Kevin Kimberland, founded The Immune Response Corporation, a public company, where he served in various capacities from Chief Scientific Officer, COO and President and Chief Executive Officer. He served as president of Telos Pharmaceuticals, a private biotechnology company, prior to founding ADMP.  Dr. Carlo has extensive experience in the development of vaccines and biologics. He has a Ph.D. in Immunology and Medical Microbiology from Ohio State University. He is named on 23 patents and has authored over 225 articles and abstracts in the field of Immunology.

Being the skeptic that I am, I also took a trip through Google trying to find any “dirt” on the good Dr.  I found none! He appears to be just as advertised: A seasoned, accomplished pharma/immunology expert that is passionate about his company.

Their Dendreon (DNDN) fascination

When I talk to people at ADMP, they always bring up Dendreon, Inc. (DNDN) as a model for the kind of company they could become.  (emphasis on “could”)  They believe their prostate cancer drug candidates have the potential to be more effective against a wider range of cancers than even DNDN.  The amazing story of DNDN was that the stock skyrocketed even before the technology was proven.  According to my conversations with the company….DNDN only delays the inevitable (i.e.  The patient will live longer, but still die).  ADMP’s drug candidates could represent a cure for certain cancers.  Everything is couched in “maybe” or “possibly”, but I get the very real feeling that Dr. Carlo believes that he has a cure for certain cancers.

The Chart

While ADMP is not a short-term play to me, I am including a chart just so you can see the volatility inherent in the stock.  The stock has made some strong moves over the past year…and could again.  And, with the high short positions being taken, any short squeezes could really rocket the stock.

The Bottom Line

ADMP is, to me, a short-term and a long-term play.  I am buying some and plan on holding it for a minimum of several months.  I am not against however selling into any spikes, recovering my original investment and “playing with the house’s money” to quote the old gambling adage.  I think that ADMP has great long-term potential. Dr. Carlo pointed out to me that while CEO at Immune Response Corporation, he took the stock from $0.50 to $60.00.  It is unknown if ADMP can make the same kind of jump, but I like the fact that Dr. Carlo has “been there, done that” with another public company.

The company still has a long way to go.  If and when the company is able to secure financing, they will still have to execute on their “Steak and Sizzle” business plan.  The chart will continue to be weighted down with shorters who will do everything in their power to drive the shares down further.

Despite the potential of a DNDN-type stock price move, the other option for the company is to be acquired.  Johnson and Johnson (J & J) set the bar for the acquisition of companies with prostate cancer drug candidates with itsa US$1.0bn acquisition of Cougar Biotechnology in 2007. The acquisition, which was valued at US$43 per share, saw J&J acquire candidate drugs focused on prostate and breast cancers. This hefty valuation was in the face of the fact that Cougar was still in phase 1 trials for most of their drugs.  The market is not as frothy as it was in 2007, but the point is that larger companies are always willing to pay well for technologies they don’t have…and want!

Here is what I am looking at for entry/exit points

Last Close:              $0.26

Buy Opinion:          $0.22 to $0.30  (with a stop loss at $0.17)

Short Term Sell:    $0.50 to $0.75

Long Term Sell:     $1.50+

Good Luck and Great Trading,

Jeffrey Dean

Disclosure:  Long ADMP

About InvestorSoup

InvestorSoup.com is committed to provide intelligent commentary and solid analysis of small cap stocks, micro-cap stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily on the underserved OTC stocks market (Stocks under $5), or “penny stock” market, which has traditionally been shunned by Wall Street. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average trader is aware of them.

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Disclaimer

DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Neither InvestorSoup.com nor its affiliates have a beneficial interest in the mentioned company; nor have they received compensation of any kind for any of the companies listed in this communication. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

AISYSTEMS, INC. (ASYI)

I get calls from Investor Relations people all the time.  They all want me to know about their client, company X, that will be the next best….whatever.  They are all earnest and mean well, but I don’t always trust them.

One IR guy that I do trust brought me AI Systems, Inc. (ASYI).

He arranged for me to talk with the President of the company, Stephen Johnston, several times.  Despite Mr. Johnston’s understandable reticence to give me anything meaty, his passion for and confidence in his company came through clearly.   I shouldn’t get too excited because I have been lied to by many IR guys and company personnel.  But, I don’t think Mr. Johnston is lying.

I also think that ASYI is a company that traders should put on their radar.  It is a longer-term prospect given its chart and current situation (no rev’s, no customers and little cash).

Sounds like a deal you can’t pass up?  Right?

ASYI is a specialty software company that is targeted to the Airline Industry.  They are offering a suite of software services that “Can change the airline industry as we know it“.  Those words came out of Mr. Johnston’s mouth and I am quoting them.  Let’s look at what is behind his bravado.

Currently, airlines plan their overall schedules (route, crew, fleet and maintenance) in a process that closely resembles a Rube Goldberg machine.  For the largest airlines, it takes literally hundreds of personnel many weeks to create an overall schedule for the airline.  And, it takes weeks and weeks to create…all at enormous cost to the airline.

According to ASYI’s latest press release, “The end-to-end process (of creating the master schedule) is extremely time consuming, inflexible and often hinders an airline’s ability to achieve and sustain profitability. Utilizing current technologies to create an airline business plan and schedule has become a highly complex, expensive and often error prone process typically taking weeks to months to complete.”

If there are any deviations in the schedule (Weather, Flight Delays, Broken Planes, Icelandic Volcanoes), then the process must start again.   The Icelandic Volcano of 2010 is a perfect example of what I mean…ASYI believes their software could have saved the airlines MILLION$ during this crisis alone.  ABC News reported (read it here) that airlines lost billions ($200MM per day) while the volcano had air travel shut down.  According to Mr. Johnston, what airlines lacked was a way to quickly, efficiently and effectively change their schedules.  There was NO WAY given the current way that schedules are  constructed for airlines to change quickly.

That is what ASYI is counting on.  They have created several pieces of software (jetEngine Business Planning Software (BPS) and jetEngine O/S) that could change forever the way that airlines manage their business.

The BPS software has been released and is currently on the market.  However, no sales have been reported yet as the company is “working with several major airlines” who have expressed interest in both the BPS and O/S software.  According to the company, the biggest impediment to full adoption is the airlines’ decentralized decision making structure and the cost of the software.  The BPS software will cost airlines $1MM annually (which is a big number to swallow) and the O/S software is double that.  The O/S (due out in 2011) will also include a $0.40 per passenger fee.

However, ASYI is counting on a cost/benefit analysis that clearly shows how much money airlines will MAKE using their software.  Mr. Johnston told me of a collaborative study that was done with a major domestic airline.  The airline gave ASYI all of their schedule data for a previous year and the company then ran those numbers through their program.  According to Mr. Johnston, the use of ASYI’s software would have resulted in an increase in EBITDA of $300 MILLION dollars.

The benefits to ASYI are clear: The passenger fee alone could mean millions upon millions to ASYI since the major airlines routinely fly 100 MILLION passengers annually.  In addition, it is important to note that there are well over 1,000 passenger airlines who are potential customers for ASYI’s software and at a million dollars per installation that could mean big dollars for the company.

Sounds great, but what’s the catch?

The catch is getting someone to buy the software.  ASYI has been around for several years and seemingly had it made a few years back with the signing of a $35 Million dollar contract with AeroMexico.  They were going to be the test bed for the new software.  It looked like everything was going to turn out well for ASYI.  Then the global recession hit the airline industry hard (AeroMexico too) and ASYI lost a great deal of momentum as well as the perfect test bed for their product.

The company has adopted a bunker mentality…dumping payroll (firing their CFO and COO recently) and keeping operations “lean and mean”.

The chart isn’t much help

With a bloated capital structure (over 90 Million shares in the float), I am curious how the company will generate trader interest.  They have done some promotion in the past, but that didn’t seem to lift the stock for very long.  I have a feeling that it will be news that drives this stock.  If they are able to start closing some customers in the near term, they might be able to reach their goal of being cash flow positive by 3Q 2011.

Bottom Line:

If I had a “Top Stocks for the New Millennium” list, I would put ASYI on it.  It is not a great stock to trade now (and that is management’s fault for large part), but the stock is all about the future.  I would like to see management and their investment bankers work the price down and tighten up the bid/ask spread.  Very few traders want to buy a software company with a market cap of $66MM that has no clients, no revenues and little cash in the bank.

HOWEVER, I am going to watch ASYI because I think it has real “home-run potential” .  I will watch with interest to see if the company can truly “revolutionize the airline industry”.

I will keep you posted.

Here is what I am looking at for entry/exit points (There is a little bit of fantasy about these numbers since ASYI doesn’t trade predictably yet)

Last Close:              $0.49

Buy Opinion:          $0.20 - $0.30

Short Term Sell:    $0.75

Long Term Sell:     $1.50

Good Luck and Great Trading,

Jeffrey Dean

About InvestorSoup

InvestorSoup.com is committed to provide intelligent commentary and solid analysis of small cap stocks, micro-cap stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily on the underserved OTC stocks market (Stocks under $5), or “penny stock” market, which has traditionally been shunned by Wall Street. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.

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Disclaimer

DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Neither InvestorSoup.com nor its affiliates have a beneficial interest in the mentioned company; Investor Soup covered this company under an expired promotion contract in June 2010. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

JADE ART GROUP INC (JADA.OB)

I blogged JADA  a few months back and hit the nail on the head with my call.  The chart looked to me to be setting itself up for a move and I was right.  The stock delivered almost a 50% gain over a week’s time.

I was very pleased with myself and with JADE ART GROUP INC (JADA.OB).  I think the time is right to take another look at JADA.

Jade Art Group Inc. is a seller and distributor in China of raw jade, which has uses ranging from decorative construction material for both the commercial and residential markets to high-end jewelry.

The stock itself is currently trading at around $0.36 and its prices have swung from a 52-wk. low of $0.15 to a high of $1.09.  The stock itself is not having a good 2010 being down 45% for the year and 67% from its April 5th high of $1.09.

I am not seeing a near-term pop with JADA due to any technical analysis.  In fact, the momentum (and volume) has plateaued.  But, that does not mean that JADA is not a good trade.

The chart is showing that JADA is trading near the 2010 base of around 35 cents.  This is the base that the stock used in its April move and could with its next move.

I am willing to wait around to let JADA be rediscovered.  The company is in strong financial condition with a strong balance sheet and profitable operations.  In fact, as of March 31, 2010, Jade Art Group had cash and cash equivalents of $5.7 million, up from $147,392 as of December 31, 2009. Current assets and current liabilities as of March 31, 2010, were $11.7 million and $3.2 million, respectively, yielding working capital of $8.5 million.

JADA has made it known they are looking to diversify (vertically within the Jade business and beyond) and with strong financials and strong balance sheet, they could easily snap up another company.  All it is going to take for JADA to fly again is the next earning release, news of an acquisition, traders rediscovering it, etc….

The risks are small, but it is good to be aware of them.  JADA has only one source for its Jade (albeit on a 50-yr. exclusive contract) and a limited number of customers (under 10).  Any political upheavals, market glut, government intervention (it is China after all) could negatively impact the stock….I don’t see that happening however.

I think I will be right on JADA again!

Here is what I am looking at for entry/exit points

Last Close:              $0.38

Buy Opinion:          $0.33 - 0.45

Short Term Sell:   $0.65

Long Term Sell:     $1.00+

Good Luck and Great Trading,

Jeffrey Dean

About InvestorSoup

InvestorSoup.com is committed to provide intelligent commentary and solid analysis of small cap stocks,micro-cap stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily on the underserved OTC stocks market, or “penny stock” market, which has traditionally been shunned by Wall Street. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.

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Disclaimer

DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Neither InvestorSoup.com nor its affiliates have a beneficial interest in the mentioned company; nor have they received compensation of any kind for any of the companies listed in this communication. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

Provectus Pharmaceuticals, Inc. (PVCT.OB)

Today’s penny stock pharma pick is Provectus Pharmaceuticals, Inc. (PVCT.OB).  It is another one of those pharma plays that has what I look for in a pharma company:

1.  Promising Drug Candidates

2.  Cash in the bank

3.  Manageable debt

4. Beaten down chart

PVCT, a development-stage pharmaceutical company, through its subsidiaries, engages in developing, licensing, and marketing over-the-counter (OTC) products, prescription drugs, and medical device systems in the fields of dermatology and oncology.  Provectus Pharmaceuticals has developed various intellectual properties and technologies in the areas of imaging, medical devices, and biotechnology. The company was founded in 2002 and is based in Knoxville, Tennessee.                                                                         source: Yahoo! Finance

PVCT has two major drug candidates; PV-10 which is a therapy for metastatic melanoma and other cancers and PH-10 which is a topical treatment for a wide range skin conditions (psoriasis, atopic dermatitis, actinic keratosis, and severe acne).  The company also is designing a suite of medical device systems include therapeutic and cosmetic lasers for cosmetic treatments, such as reduction of wrinkles and elimination of spider veins, and other cosmetic blemishes; and photoactivation of PH-10 other prescription drugs and non-surgical destruction of certain skin cancers

Rather than regurgitate/update how the company is doing, I will direct you  to their latest PR that updates shareholders on the company’s progress (sounds positive, by the way) - click here for link.

What is important to know is that PVCT has the financial wherewithal to make it through this next round of clinical trials.   The company has come out and said they have “ample cash” and with no debt, I think that PVCT might be a good position trade (several months probably).

Insiders own almost 17% of the company, but they haven’t attracted much institutional interest.  Their latest PR (linked above) intimates that could change.

Let’s take a peek at the chart:

According to the company, they are planning a major announcement in conjunction with their Australian trials at Melanoma 2010 Conference in Sydney, Australia, November 4-7, 2010.  Good news there could make this stock jump.  In fact, any news could make this stock jump.  My crystal ball is telling me to expect good news, but there are no guarantees.

Here is what I am looking at for entry/exit points

Last Close:              $1.05

Buy Opinion:          $.90 - $1.15

Short Term Sell:   $1.45 (45% gain from $1 purchase price)

Long Term Sell:     $2.00+

Good Luck and Great Trading,

Jeffrey Dean

About InvestorSoup

InvestorSoup.com is committed to provide intelligent commentary and solid analysis of small cap stocks, micro-cap stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily on the underserved OTC stocks market, or “penny stock” market, which has traditionally been shunned by Wall Street. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.

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Disclaimer

DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Neither InvestorSoup.com nor its affiliates have a beneficial interest in the mentioned company; nor have they received compensation of any kind for any of the companies listed in this communication. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

CAEH Could be on the Fast Track to a Higher Share Price!

Good Morning Trader!

CAEH is in the middle of a strong chart reversal and I want you to know about it!  The stock is under heavy accumulation after a long sell-off.

Caleco Pharma Corporation (CAEH) engages in the acquisition and development of over-the-counter medications, dermatalogic products, alternative medicine and FDA-approved pharmaceuticals. continue

MNLU has Money, News and a Chart that Could Combine to Give Us OUR NEXT WINNER!

Good Morning,

Mainland Resources, Incorporated (MNLU) is an oil and gas exploration and production company with several gas shale leases in the famous Haynesville Shale Prospect in Louisiana and Mississippi. continue

GTWO productions are viewed by over 10 MILLION people every month—yet its shares are trading at around 30 cents!

Can You Say: Near-Term Price Reversal!

Good Morning!

Gen2Media Corporation (GTWO) is a video production house and a digital advertising network.

continue

With gold now trading above $1,000 an ounce…

AGCZ is Doubling its Gold Production—and Veteran Traders are Eyeing the Stock Again!

Good Morning Trader!

With gold trading this week around $1,134 per oz. it’s obviously a great time to be a gold exploration and mining company—especially one that’s already pulling gold out of the ground like there’s no tomorrow!

That’s why I am excited to bring you your next trading opportunity:

Andes Gold Corporation (AGCZ)

AGCZ is a gold mining company with three large gold-producing properties in Ecuador, South America. continue

Remember When I Alerted You to ALME at $1.22?

Well, Alamo Energy Corporation (ALME) is now trading at $2.00… and it could go a lot higher!

Good Morning!

When I alerted you to ALME in early March, it was a new issue that was just beginning to make waves.

Now it’s practically a tsunami—and I think it’s a still very tradable stock! continue