Month: October 2013

By HY Markets Forex Blog

Major European stock indices in Europe were seen trading higher opening the market on Friday, while investors continue to focus on the US government shutdown.

The European Euro Stoxx 50 advanced 0.38% higher, opening at 2,912.74 at the time of writing, while the British FTSE 100 edged 0.01% higher to 6,448.50. A the same time the French CAC 40 rose 0.35%, standing at 4,142.68, while Germany’s DAX fell 0.05% lower at 8,602.73.

Meanwhile in Germany, the country’s Producer Price Index (PPI) dropped 0.5% in August after it rose 0.5% in July, while analysts predicted  the reading would  remain unchanged.

The PPI report for the whole eurozone is expected to be released from Eurostat by 9:00am GMT.

The budget revenue for Greece has surpassed its target by 8.3% in September, standing at €4.08 billion, Greek’s newspaper eKathimerini confirmed.

Meanwhile Italy’s former Prime Minister Silvio Berlusconi is the main topic for discussion over if he will be expelled for a tax fraud conviction from August. If the Senate votes against the former Prime Minister it will pass the upper house in two weeks.

European Stock – Washington

Over in Washington, federal employees and breadwinners won’t be receiving pay from work, while tourists are being turned away at the National Mall.

“We planned to spend three days here, but if you only can see the outside of buildings, it’s finished. What to do next?” Peter Wiltepoer, whose family came to visit from the Netherlands, “Even where no personnel are being used, the sites are closed. It’s ridiculous,” he added.

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The post European Stock Climbs With US Shutdown In Spotlight appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

By HY Markets Forex Blog

Futures for  WTI crude were seen dropping lower on Friday during the early hours of the European trading session and the late Asian trading sessions amid a lack of economic events which could potentially price-changing fundamentals.

The West Texas Intermediate oil futures traded 0.14% lower at $103.17 a barrel at the time of writing, while the European Benchmark crude Brent futures declined 0.12% to $108 a barrel at the same time.

WTI Crude – US Shutdown

The US Congress failed to finalize an agreement over the country’s budget for the fiscal year which began yesterday, leading to the government’s first shutdown in 17 years and could affect almost 800,000 federal employees.

Due to the Congress failure to conclude on the US spending bill for the next fiscal year, the expected non-farm payrolls report from the Department of Labour will not released on the first Friday of the month as expected.

The US shutdown remains in the spotlight as the House of Representatives, dominated by Republicans are refusing to pass the bill without changes to Obamacare, however the President Barack Obama have refused to make any changes to healthcare plan that’s included in the spending bill.

The government shutdown could cost the US approximately $300 million a day.

The risk of a US default has disfigured the markets more than the shutdown as questions were raised as to whether Congress would raise $16.7 trillion debt ceiling.

The US Treasury announced that its borrowing authority would end by October 17; it would not have sufficient funds to pay approximately $70 billion due to bondholders.

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The post WTI Crude Oil Futures Declines Amid US Shutdown appeared first on | HY Markets Official blog.

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Source: Peter Byrne of The Energy Report (10/3/13)

http://www.theenergyreport.com/pub/na/don-coxe-china-japan-and-chekhovs-gun-where-does-fracking-fit-in

If there’s a gun on the table in the first act, it will be fired by the end of the play. The way legendary portfolio strategist Don Coxe sees it, the potential to bring on vast U.S. energy reserves is the gun. . .or is it a safety valve? Don Coxe tells The Energy Report that the fracked oil and gas boom has saved the U.S. from endless recession and explains why he remains bullish on China and Japan as sources of energy demand. Coxe also shares his preferred portfolio allocation ratios between industrial and financial stocks, bonds, metals and energy, with a weight on fossil fuels.

The Energy Report: The consensus of The Street for the last 18 months has been that the slowdown of China’s economic growth is not temporary. Do you agree?

Don Coxe: Since the current commodity boom started up in 2002, critics of my strong belief in the future of China’s growth have said, “It’s not real. The numbers are phony. China is about to collapse. There is too much corruption in Beijing.” And China just kept on growing at double-digit rates! The reason China stopped growing at double-digit rates is the economic collapse in the Europe and the United States—the principal customers for Chinese exports.

But even during the rolling recessions in the U.S. and Europe, China has grown its GDP at 7%, which means that it is experiencing substantial internal growth. Admittedly, China has added dramatically to its government debt, but because the country had a 30% savings rate before the 2008 crash, its financial system has been able to draw on a huge pool of savings for sustenance, instead of borrowing money to sustain consumer growth.

China has a built-in method of achieving GDP growth: When peasants on 1½ hectare farms are barely able to feed themselves, they migrate to industrial cities. The small farms are amalgamated into larger, more efficient farms, which produce more food and increase China’s GDP. When the farmers flock into the cities, housing is built for them. There are no ghost towns in China. A real ghost town is downtown Detroit, where skyscrapers reflect the demand of the past, but not the present.

This basic model of economic growth has carried China through the worst industrial recession since the Great Depression. Rising iron ore prices alongside increased consumption of oil are growth indicators. And China’s 10-year plan is to move from being the world’s main producer of goods to being the world’s main consumer of goods. China’s leaders are planning to increase imports and to provide all sorts of consumer goods for the populace.

As for energy: People who live on farms where the air is fresh are reluctant to move into cities choked with coal smoke. The Chinese are cutting back on the use of coal and using less-polluting hydrocarbons for power generation. On the other hand, people are buying more cars. And even 10-lane highways are getting congested, which means that more highways will be built to accommodate more cars. All of this growth requires oil.

TER: Where will the oil come from?

DC: Back in the sixties, oil sold for $4 per barrel ($4/bbl). Now, a new oil field cannot be opened up if oil is priced under $60/bbl. The low-hanging fruit, the oil that’s really cheap to produce, is no more. But there is still plenty of oil available through fracking in California and in the Alberta oil sands and offshore drilling. That means spending a lot of money on refining, because processing heavy crude to light crude to gasoline is a very expensive process.

TER: Where’s the capital going to come from for expanding the fracking and refining sectors?

DC: The oil industry can borrow capital to expand because it can easily grow its output. U.S. refiners are aggressively taking leadership from the European refiners. The Swiss did not retool for heavy oil after the collapse of Libya removed the country’s light crude source. The Saudis expand refining capacity for heavy crude, not light crude. The only good supply of light oil on land is from fracking. But the oil industry can only grow fracking so fast, and each oil field has different characteristics. Big oil cannot meet total demand with fracking alone. The next 25 years of growth in the oil industry will be a combination of light oil from under the ocean floor and light oil from fracking.

TER: Will China be able to develop its internal oil fields, or will it be forced to import large amounts?

DC: Down the line, China has a lot of potential for growing a fracked oil and natural gas industry. In the meantime, we are seeing growth in exported liquid natural gas (LNG). The oil industry aims to get higher prices for its frozen natural gas by shipping it to China.

If worldwide GDP growth averages 3% for the next five years, it is hard to see how oil prices could fall. But the current situation is a really good story for oil—in many ways the best story since the seventies. Despite the fact that there is zero inflation, oil prices have gone from $70/bbl to $100/bbl. In the past, that kind of increase in oil prices would have automatically meant higher inflation, but this time around it did not.

TER: If Europe and Japan continue to grow, how will that affect energy prices?

DC: When the Japanese ambassador spoke in Chicago a few months ago, he began his speech by saying that Japan has no commodities. This is the third biggest economy in the world and it has to import virtually everything. Japan has no oil, no gas and it cannot use nuclear power because of Fukushima. It is not going to coal, because Tokyo does not want to have the kind of air pollution problems that afflict Beijing. It is going to be hydrocarbons, one way or another. The Japanese economy is strong and will continue to grow fast. It is ironic that in less than a year, Japan went from a negative growth rate to a rate 50% higher than the U.S. growth rate.

TER: What is driving Japan’s growth?

DC: The fact that Japan devalued the yen is driving its growth. Japanese manufacturing and exporting companies were in a poor position with the yen stuck at 75 to the dollar. Remember that it had fallen from 250 yen to the dollar when Japan was booming in the eighties. The 75 yen to the dollar meant that Japan’s manufacturing companies had to be incredibly efficient to attract exporters. Now the yen is floating, and manufacturing cash flow is available to expand outputs. Japanese manufacturing is now competitive with China and the rest of the world.

The devaluation of the yen is causing Japanese consumers to unzip their wallets for two reasons. First, they see strong economic growth. Second, Prime Minister Abe has announced that a new sales tax will debut in April. Consumers are afraid that prices are going to rise because of the increase in Japanese exports, and also because of higher sales taxes. The double whammy encourages more economic activity, and that activity feeds on itself positively for growth.

TER: You have previously mentioned the positive economic effects of public/private partnerships on economic growth. Would you call that Keynesianism?

DC: Public-private partnerships are a form of Keynesianism because they can use the state to expropriate land to build roads and bridges. Private companies cannot deal efficiently with a farmer who says, “You bought land to my south and to my north, so I am raising my price per acre from $5,000 to $25,000.” Eminent domain takes care of the gouging issue. Capital needs the public sector.

Another example is that public pension funds promote increased cash flow over the decades for retirees. After the crash, the pension funds were in desperately bad financial shape with zero interest rates. Public-private partnerships in energy ventures are now providing long-term investments with a built-in inflation hedge. These types of investments create wealth in both the private and public sectors through the magic of compound interest.

TER: You talk about “Chekhov’s gun” as the implied threat of the Federal Reserve to allow interest rates to rise. How is that threat affecting energy markets?

DC: The Russian playwright, Anton Chekhov, said that if there is a gun on a table in the first act of a play it will be fired later in the play. That creates a certain amount of suspense. Chekhov’s gun was spotted last spring when Ben Bernanke said, in effect, that the Federal Reserve cannot continue adding $85 billion each month to the balance sheet forever. At some point, the Fed will start tapering down the stimulus project. That tapering down is Chekhov’s gun. Initially, the bond market sold off. Ben must have thought, “We are only in act one of a play that is going to last for several acts.” So the gun is still hanging there, unfired.

For the energy markets, however, Chekhov’s gun operates in reverse: The gun is the threat of bringing on vast new energy resources. But everybody knows now that there are enough hydrocarbons in the ground to spur economic growth for a long time. In regard to energy, the gun is a safety device, as opposed to the bond market, where it functions as a threat.

TER: You are appearing at the Casey Research Summit this week. Can you give us a preview of your talk on the energy front?

DC: The U.S. would be back on the edge of recession if it were not for fracking. Fracking produces cheap natural gas and high-quality light crude oil. Thanks to fracking, we have been able to reduce the use of coal without shutting down the utilities. In the past, it was risky to rely on conventionally produced natural gas because natural gas prices could rise monumentally in times of shortage. Recall what happened after Katrina when natural gas went to $15 per thousand cubic feet!

Fracking will provide cheap natural gas for the next century without importing a cubic foot. It is a tremendous guarantee of stability to the U.S. economy. It also means that economic growth can be energized by light crude without having to rely on heavy crude. Without fracking, we would be spending trillions of dollars refining Venezuelan and oil sands heavy crude. We would still be in recession without fracking. The energy industry has done more for the U.S. economy than anybody except … Ben Bernanke.

TER: It is always informative talking to you, Don.

DC: It’s been great fun.

Don Coxe has 40 years of institutional investment experience in Canada and the U.S. As a strategist and investor, he has been engaged at the senior level in global capital markets through every recession and boom since the onset of stagflation in 1972. He has worked on the buy side and the sell side in many capacities and has managed both bond and equity portfolios and served as CEO, CIO and research director. From his office in Chicago, Coxe heads up the Global Commodity Strategy investment management team, a collaboration of Coxe Advisors and BMO Global Asset Management. He is advisor to the Coxe Commodity Strategy Fund and the Coxe Global Agribusiness Income Fund in Canada, and to the Virtus Global Commodities Stock Fund in the U.S. Coxe has consistently been named as a top portfolio strategist by Brendan Wood International; in 2011, he was awarded a lifetime achievement award and was ranked number one in the 2007, 2008 and 2009 surveys.

Learn more about the agenda for the Casey Research Summit, October 4-6.

Want to read more Energy Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Interviews page.

DISCLOSURE:

1) Peter Byrne conducted this interview for The Energy Report and provides services to The Energy Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of The Energy Report: None. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.

3) Don Coxe: I or my family own shares of the following companies mentioned in this interview: None. I personally am or my family is paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.

4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts’ statements without their consent.

5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer.

6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.

Streetwise – The Energy Report is Copyright © 2013 by Streetwise Reports LLC. All rights are reserved. Streetwise Reports LLC hereby grants an unrestricted license to use or disseminate this copyrighted material (i) only in whole (and always including this disclaimer), but (ii) never in part.

Streetwise Reports LLC does not guarantee the accuracy or thoroughness of the information reported.

Streetwise Reports LLC receives a fee from companies that are listed on the home page in the In This Issue section. Their sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734.

Participating companies provide the logos used in The Energy Report. These logos are trademarks and are the property of the individual companies.

101 Second St., Suite 110

Petaluma, CA 94952

Tel.: (707) 981-8204

Fax: (707) 981-8998

Email: [email protected]

Source: Peter Byrne of The Life Sciences Report (10/3/13)

http://www.thelifesciencesreport.com/pub/na/not-all-stem-cells-are-created-equal-vernon-bernardino

Biotech companies are fiercely competing to create the newest and best miracle drugs using stem cell technologies. How can an investor spot the potentially victorious outliers amid the chaos of rival scientific claims? The failure rate of new product development in the only recently understood cell space is terrifying, but in this interview with The Life Sciences Report, analyst Vernon Bernardino of MLV & Co. reveals his formula for evaluating the strongest contenders. Bernardino also names five companies with products that may succeed in this new and competitive space.

The Life Sciences Report: Vernon, how do you pick investor entry points for the life science firms that you cover for MLV & Co.?

Vernon Bernardino: It all comes down to evaluating and then articulating whether a company’s stock is still a compelling value. Let’s use my newest report on NeoStem Inc. (NBS:NASDAQ) as an example of how a stock is evaluated. I previously put a lofty price target on NeoStem: Other analysts followed, and the company’s stock performed very well. When I initiated coverage on NeoStem on Sept. 11, 2013, it was up almost 100% from its May lows, and up 70% since January. The stock rose to 52-week highs shortly thereafter, then slid after disappointing data was released from CADUCEUS, a study using autologous stem cells (SCs)—like SCs being tested by NeoStem—as a heart attack treatment, in the Sept. 17, 2013, online issue of the Journal of the American College of Cardiology.

In looking to see if NeoStem was a good bargain in the wake of the slide, I pointed to the sum-of-the-parts valuation approach I used in my initiation-of-coverage report, which derived a $16 price target. The approach applies because NeoStem has many different lines of business, some stronger than others. The stock remains a long-term play, but should positive results come in from a top-line readout with its lead product, AMR-001, there could be substantial upside to our current target price of $16 to $22.

TLSR: What is NeoStem’s AMR-001?

VB: AMR-001 is the company’s flagship product candidate. It is a cell-based product derived from bone marrow stem cells, enriched with a genetic marker called CD34+/CXCR4+ that is relevant to ischemic cardiovascular disease conditions, such as heart attack.

TLSR: What makes that marker valuable?

VB: It is very difficult for anyone to obtain intellectual property (IP) rights on bone marrow stem cells because they have been studied so extensively in many patients. For example, more than 1 million (1M) people have received bone marrow transplants. But NeoStem was able to obtain IP status with a bone marrow stem cell-based strategy to repair damaged heart muscle that uses the CD34+/CXCR4+ marker. That means other firms cannot copy NeoStem’s specific stem cell therapy, making it more commercially viable.

TLSR: What was the nature of the non-NeoStem study that impacted NeoStem’s shares?

VB: The CADUCEUS trial, conducted at the Cedars-Sinai Heart Institute in Los Angeles, used a similar approach to NeoStem’s study regime, but it did not use NeoStem’s AMR-001 product. The CADUCEUS study isolated, cultured and prepared stem cells derived from heart biopsies, known as cardiosphere-derived stem cells (CDSCs), as a treatment for heart attack. The CDSCs were then injected back into the patient’s heart to elicit heart repair and improve heart function. Treatment with CDSCs did result in improved heart function, which is similar to results observed in many other stem cell studies. However, the stem cells studied in CADUCEUS did not result in repair of heart muscle, which was a central thesis with using stem cells for treating heart attacks.

Some investors jumped to the conclusion that NeoStem’s phase 2 study for AMR-001 would also not show repair of heart muscle. But it is expected that NeoStem’s phase 2 study will actually confirm the company’s phase 1 study for AMR-001, which demonstrated a heart muscle repair signal. The study is called PreSERVE AMI: It is due to complete enrollment by year-end, and due for a top-line readout of cardiac function and other measures in H1/14.

TLSR: Do you cover biotechs in the autoimmune and anti-inflammatory spaces?

VB: I cover Dynavax Technologies Corp. (DVAX:NASDAQ), which has experienced some mixed study results for its hepatitis B vaccine, Heplisav. In our opinion, Dynavax’s technology and approach is rather advanced, and it is the scientific status quo that needs to catch up to Heplisav.

Dynavax’s stock has suffered, however, because not much is known about the patient population that it studied in looking for effects of its immune-stimulating approach. But the company is well aware of the issues it needs to address with the U.S. Food and Drug Administration (FDA). The FDA seems to think the vaccine works, but further data points are needed, including safety data. The vaccine has only been tested in 2,000 or so patients in a clinical setting, so the safety data is not yet comparable to similar treatments.

TLSR: Heplisav also has an application to asthma?

VB: Yes. Asthma is associated with inflamed airways. In fact, the asthmatic’s inflammatory response is most often an immune system overreaction. An asthma vaccine would putatively turn on the signal that dampens the inflammatory response. However, Heplisav’s application to asthma is secondary to its hepatitis B application, and requires further study.

TLSR: How are Dynavax’s financial fundamentals looking?

VB: At the end of June, the company reported it had about $105M in cash, but is likely to maintain a high burn rate because it is conducting an additional study that is expected to generate additional safety data. The additional data will accompany the safety data observed in clinical studies conducted in 2,000 hepatitis B patients so far. Generating safety data will cost a fair amount of money, and it is uncertain whether Dynavax will need to raise that money immediately. We believe that the company has enough cash on hand to get to the end of next year, but obviously, since these required studies are expensive, Dynavax will need to raise money again in the next six to nine months.

TLSR: What are the prospects for Dynavax acquiring a partner?

VB: Dynavax has publicly acknowledged having discussions with possible partners. However, any deals are pending the arrival of more safety information. The immunotherapy approach is, in many ways, unproven. The recent failure of Vical Inc.’s (VICL:NASDAQ) Allovectin, a cancer immunotherapy, for example, shows that the vaccine approach to melanoma has high potential for failure. Part of the problem is the basic science, which is still relatively early in development, but also the scientific knowledge needed to improve the process of selecting the correct patients to include in these types of studies.

TLSR: Can you talk about the importance of having scientists on the management team in a biotech firm?

VB: John Yu is a good example of the importance of having a scientist as a company’s initial chief executive. Yu founded ImmunoCellular Therapeutics Ltd. (IMUC:OTCBB). And because he is a neurologist, he is able to explain the science at every level to investors.

Biotech investors can be very sophisticated. Many have MBAs, as well as PhDs and/or MDs. Yu can talk to them in technical language about why ImmunoCellular’s cancer vaccine is a next-generation approach with a good chance of succeeding as a treatment. Of course, a biotech company rises or falls depending on how it manages cash burn rates. If a firm runs out of money, it does not matter how strong the science is. A forward-looking firm deploys its cash to create value by advancing the science of its lead product.

TLSR: What products does ImmunoCellular have in the pipeline?

VB: Its lead product is ICT-107, which is a dendritic cell vaccine similar to Dendreon Corp.’s (DNDN:NASDAQ) recently approved Provenge, for treating prostate cancer. Like Provenge, ImmunoCellular’s dendritic cells are isolated from the patient, cultured with antigens highly expressed in cancer cells and then given back to the patient. In this case, the vaccine is targeted to glioblastoma multiforme in newly diagnosed patients. The phase 1 studies were very impressive. In fact, quite a number of those patients are still alive, although they’re not followed by the company any longer.

The phase 2 trial is designed with a randomized control arm, which means it could be used for the final approval study. ImmunoCellular has, nonetheless, decided to conduct a phase 3 study. But if the phase 2 results are really positive, it would then be unethical for ImmunoCellular to do a phase 3 study that includes placebos. The company also has ICT-121 and ICT-140, which, like ICT-107, are autologous dendritic cell-based vaccines targeting cancer, but are still early stage. We currently rate ImmunoCellular as a Buy with a $6 price target.

TLSR: How did you arrive at the target price?

VB: Our valuation methodology for ImmunoCellular used a mathematical formula that factors in a product’s potential to drive future earnings but changes depending on study release dates, discounts and comparable company valuations.

TSLR: What other companies do you like for stem cells?

VB: Aastrom Biosciences Inc. (ASTM:NASDAQ) has developed a stem cell product to treat dilated cardiomyopathy (DCM), a condition where the heart becomes enlarged. The patient has not necessarily had a heart attack, but is experiencing conditions that can lead to ischemia as a result of blockages in the arteries. That condition forces the heart to work harder and, therefore, grow larger. Over the long term, the enlargement can result in heart failure, because blood cannot adequately supply newly enlarged areas due to blocked arteries.

TLSR: How does this specific product work to retard heart growth?

VB: The mechanism of action through which Aastrom’s stem cell drug improves heart function and elicits muscle repair is still unclear, but a growing body of evidence shows that some of these stem cells can acquire the properties of the preexisting heart cells. They can replace the damaged or non-functioning heart cells.

It is also becoming widely accepted that there is a related paracrine, or hormonal mechanism of action, whereby cytokines (signaling molecules) and other factors are produced. These actions can help to improve the cardiac repair process because they promote blood vessel growth and limit inflammation. That is important, because runaway inflammation can result in a lot of scarring. Where such fibrosis occurs, muscles can no longer function optimally. We have a Hold on Aastrom with a $75 target.

TLSR: Your investment bank is involved in underwriting Galena Biopharma Inc. (GALE:NASDAQ). What’s interesting about Galena?

VB: Galena is in a phase 3 clinical trial with a vaccine called NeuVax (nelipepimut-S), which targets underserved breast cancer patient populations. Obviously, when a breast cancer patient is first diagnosed with breast cancer, the disease should be treated right away. But many breast cancer patients survive the first treatment and later experience a recurrence of breast cancer. Galena’s vaccine, by strategy, prevents a recurrence, and at the least increases the time until the recurrence—potentially increasing overall patient survival rates for breast cancer.

TLSR: Does Galena have any other products?

VB: In March 2013, Galena acquired Abstral, which is a fentanyl product to manage breakthrough pain in cancer patients. The acquisition is part of Galena’s preparation to enter the oncology space in a substantial way should NeuVax be approved by the FDA. Acquiring Abstral is a low-cost strategy to get a toehold in the marketplace. Fentanyl is a non-opioid and can be used by outpatients dealing with toxic side effects from chemotherapy.

The other product Galena has is a folate binding protein (FBP) vaccine, which, like NeuVax, uses the immune stimulation strategy but targets a different oncogenic peptide. The FBP vaccine has shown promising results in an ongoing phase 1b study in 20 treated cancer patients. We rate Galena as a Buy with a $6 price target.

TLSR: How does the shape of the entire cell product biotech space affect the prospects of a specific stem cell-product firm for valuation purposes?

VB: Our method for finding winners over time is to examine the whole cell product space—not just for stem cells, but also for cancer vaccine cell products like those produced by Dendreon and Oncothyreon Inc. (ONTY:NASDAQ) and ImmunoCellular. The winners are likely to be companies with a scientist at the helm and management that understands that funding follows good science, not necessarily vice versa.

Most of the cell-product winners are not going to be like Dendreon, which got to the finish line on its own. Most will partner with deeper pockets. On the other hand, Dendreon may have to sell hundreds of millions of dollars’ worth of vaccine just to break even, because the margins on its vaccine are terrible. And when it gets cells from a patient, it can only make one, two or three doses at the most. That becomes very expensive. In contrast, ImmunoCellular’s approach can produce about 20 doses per patient. If each has the same price point, it makes ImmunoCellular’s product more commercially viable. Obviously, if you can make 20 doses out of one sample, your margins will be better.

These are the kinds of problems that are shaking out in the cell product space. The long and the short of it is that companies have similar cell space approaches on their drawing boards. Firms that can achieve initial economies of scale, whether or not the products have been proven to work, will continue to lead the pack in attracting investors. Value is a partial function of the health of the whole cell product development sector.

TLSR: Thank you for your time, Vernon.

VB: Very good talking to you, Peter.

Vernon Bernardino is an analyst in MLV & Co.’s life sciences equity research department. His principal focus is on biotechnology, biopharmaceutical, specialty pharmaceutical and immunotherapy companies that focus on treatment of cancer, infectious diseases and cell-based therapies targeting inflammatory disorders and vascular diseases. Bernardino has more than 10 years of experience covering life sciences companies at various financial institutions, including Rodman & Renshaw, UBS and Dawson James Securities. Earlier in his career, Bernardino held a position as a buyside analyst at Nicholas-Applegate Capital Management, and founded the strategic advisory group Oceros Advisors LP. Bernardino holds a bachelor’s degree from Rutgers University and a master’s degree in business administration (finance) from the University of San Diego.

DISCLOSURE:

1) Peter Byrne conducted this interview for The Life Sciences Report and provides services to The Life Sciences Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of The Life Sciences Report:NeoStem Inc. Streetwise Reports does not accept stock in exchange for its services.

3) Vernon Bernardino: I or my family own shares of the following companies mentioned in this interview: None. I personally am or my family is paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: Galena Biopharma Inc. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.

4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts’ statements without their consent.

5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclosure.

6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.

Streetwise – The Life Sciences Report is Copyright © 2013 by Streetwise Reports LLC. All rights are reserved. Streetwise Reports LLC hereby grants an unrestricted license to use or disseminate this copyrighted material (i) only in whole (and always including this disclaimer), but (ii) never in part..

Streetwise Reports LLC does not guarantee the accuracy or thoroughness of the information reported.

Streetwise Reports LLC receives a fee from companies that are listed on the home page in the In This Issue section. Their sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734.

Participating companies provide the logos used in The Life Sciences Report. These logos are trademarks and are the property of the individual companies.

101 Second St., Suite 110

Petaluma, CA 94952

Tel.: (707) 981-8204

Fax: (707) 981-8998

Email: [email protected]

By WallStreetDaily.com

Words mean little on Fridays in the Wall Street Daily Nation.

Instead, we try to let pictures do the talking for us.

Each week, I select a handful of graphics to put important economic and investing news into perspective for you.

I’ll (mostly) shut up now. Enjoy!

Bitcoin Scam Update

Earlier this year, you would have thought that a Bitcoin could cure cancer. End heart disease. Even reverse aging.

The hype was that intense.

You’ll recall that, back in May, I told Bitcoin investors to channel their inner Ice Cube and “check yo’ self before you wreck yo’ self.” I hope you listened.

Yesterday, the overhyped digital currency plummeted 33% on news that the FBI seized and shut down Bitcoin-based online marketplace, Silk Road.

Perhaps most damning, the criminal complaint against Silk Road reveals that someone was able to get a list of Bitcoin users. So much for the digital currency offering anonymity – which, incidentally, was heralded as its main benefit.

As Bloomberg’s Mark Gimein says, “The only point left in its [Bitcoin’s] defense might be that you don’t like central banks or national currency. If so, for those left holding a bunch of Bitcoins, this can turn out to be a very expensive protest.”

Agreed! Consider this your final warning. Cash in your Bitcoins while you still can.

Talk About Being a Drag

The government shutdown continues. Dun-dun-duuuuun!

While I’d like to ignore it, I can’t.

As Goldman Sachs’ (GS) Alec Phillips points out, “For every day of shutdown, federal compensation in Q4 is reduced by $400 million.” Less income for government employees equals less spending. So at some point, the shutdown is going to start weighing (heavily) on the economy.

But where is that point?

I’d say it’s around 21 business days. At that point, the shutdown would slash GDP growth for the fourth quarter by about 40%. Yikes!

Enough with the grandstanding, fellas. Get back to work!

Déjà Vu Anyone?

Let’s play a little game of “Name That Year” in U.S. history…

• Republicans voted down a debt-ceiling increase
• Syria found itself engaged in a war
• 10-year Treasury yields rose one percentage point in a matter of about four months
• GDP growth averaged a sluggish 2% in the first half of the year
• Profit growth for S&P companies virtually flatlined on year-over-year basis
• And, finally, the United States won the America’s Cup

I’m definitely talking about 2013, right? Wrong! Try 1967.

Hat tip to LPL Financial’s Chief Market Strategist, Jeff Kleintop, for noticing the eerie similarities. Here’s one more for you, though.

As you can see, it’s as if the S&P 500 Index is mirroring its performance from 1967.

“If the pattern continues to hold,” says Kleintop, “Lawmakers will eventually ‘kick the can’ on the fiscal issues, and the concerns leading to the current pullback may give way to a resolution that powers a comeback for U.S. stocks later this year, as we saw in 1967.”

That would be the best case of déjà vu ever, wouldn’t it?

That’s it for this week. Before you go, though, let us know what you think about Bitcoins, political stalemates and history repeating itself by going here.

Ahead of the tape,

Louis Basenese

The post Friday Charts: R.I.P Bitcoin, Shrinkage and the Best Case of Déjà Vu Ever appeared first on Wall Street Daily.

Article By WallStreetDaily.com

Original Article: Friday Charts: R.I.P Bitcoin, Shrinkage and the Best Case of Déjà Vu Ever

By www.CentralBankNews.info     Japan’s central bank maintained its target for expanding the country’s monetary base by an annual  60-70 trillion yen as inflation continues to accelerate and economic activity strengthens.
    The Bank of Japan (BOJ), which is seeing the effects of the aggressive monetary easing that began in April, omitted any reference to the government’s plan announced this week to offset some of the impact of a planned sales tax rise with a stimulus package.
    The BOJ repeated its statement from September that the country’s economy “is recovering moderately” and should continue a moderate recovery while the annual rate of increase in consumer prices “is likely to rise gradually.”
    In August, Japan’s inflation rate accelerated to 0.91 percent from 0.7 percent in July and 0.3 percent in June when inflation turned positive for the first time in 12 months.
    Meanwhile, Japan’s Gross Domestic Product expanded by 0.9 percent in the second quarter from the first for annual growth of 0.9 percent, a jump from 0.3 percent in the first quarter, and the fastest growth rate in the last four quarters.

    www.CentralBankNews.info

USDCHF’s downward movement from 0.9455 extends to as low as 0.8967. Initial resistance is at the downward trend line on 4-hour chart, as long as the trend line resistance holds, the downtrend could be expected to continue, and next target would be at 0.8900 area. Key resistance is now at 0.9077, only break above this level could indicate that consolidation of the downtrend is underway, then the following upward movement could bring price back to 0.9200 – 0.9250 area.

Provided by ForexCycle.com

By MoneyMorning.com.au

Whenever you buy a stock you do so for a specific reason.

It might be because you like the dividend and you’re after income.

Or it could be because you like the company’s technology or the drug it’s developing, and you’re after growth.

But sometimes what you expect to happen doesn’t happen. And you’re glad it didn’t, because what does happen is sometimes better. As our old pal Nick Hubble recently found out…

You may recall a few weeks ago we sent you details to check out an outstanding report written by Money for Life Letter editor, Nick Hubble.

Nick had a specific investment in mind. It was a $7 billion opportunity for Aussie investors to profit from…milk.

That’s right, milk.

If you got in on Nick’s recommendation you should be sitting pretty right now. The stock is up over 60% since he made the tip seven months ago. Most of the gains have come in the past few weeks. Because of that, this week he’s given his readers detailed instructions on what to do next.

If you’re a Money for Life Letter subscriber and you missed Nick’s note we suggest you check your email or log in to the members’ only website.

If you’re wondering how you can make that much on milk in just seven months when the papers are constantly bleating about how dairy farms are doing it hard due to the supermarket milk price war, well, we’ve one word for you: China.

Profiting from China’s ‘White Market’

If you read Nick’s analysis you’ll know he had spotted an opportunity to profit from China’s ‘White Market’. That is, the illegal import of milk products into China from overseas.

After a series of scandals including contamination of powdered milk formula for babies, Chinese parents had lost all faith in domestic milk products. This led to a burgeoning ‘White Market’ where organised crime groups and even ordinary people smuggled milk products across the border from Hong Kong into Mainland China.

Nick learned of this situation and figured it represented a great opportunity for one small Aussie stock that had a chance to import milk products legally.

But then a few weeks ago, things got better for this Aussie stock. New Zealand company Fonterra revealed it had discovered a potential contamination problem at its manufacturing facility.

As you can imagine, that news didn’t go down well with Chinese consumers who had experienced dodgy milk product supplies in the past – hence the ‘White Market’ demand for imported milk products.

China put an immediate ban on the import of Fonterra’s milk products, which gave another boost to this small Aussie stock. But that wasn’t the end of the good news. Within a matter of weeks things got even better…

A Decade of Dividends in Seven Months

This brings us back to Plan B being better than Plan A.

When Nick tipped the stock it was all part of his ‘cash-out’ strategy. That is, backing stocks that pay a healthy dividend and have the potential to increase the dividend in the future.

Exploiting the Chinese milk products market was one way this Aussie company could have increased its revenue, profits and dividends.

It was a long-term strategy. And it was a great strategy if you’re saving for retirement.

However, sometimes you don’t have to wait 10 or 20 years to get the ‘cash-out’ from a company. If the company is that good there’s always the chance you’ll get to ‘cash-out’ of the company sooner.

One way of doing that is if the company you’ve invested in receives a takeover offer. That’s exactly what happened with Nick’s stock tip.

So instead of shareholders bagging a – say – 5% dividend per year over the next few years (plus the potential for capital growth), shareholders get to bank a 60% gain today. Or put another way, it’s like banking the next 12 years’ worth of dividends after just seven months.

Who can say no to that?

While you’d always prefer to hold on to a good company forever, there’s no harm in capitalising more than a decade of dividends in one hit and then using the proceeds to reinvest elsewhere.

After all, it’s not as though there aren’t other good quality dividend and growth stocks on the Australian market. And dare we say it, stocks that could also be ripe for a takeover.

The simple message for investors is this: if you buy into a good stock at a fair price, odds are good things will happen …if even they don’t happen in quite the way you expected.

Cheers,
Kris+

From the Port Phillip Publishing Library

Special Report: UNAVOIDABLE: Australia’s First Recession in 22 Years

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By MoneyMorning.com.au

In all the hubbub about the US government shutdown, let’s not forget that Australia is headed toward a 2014 recession.

This is not a bad thing, mind. Recessions are the corrections for previous credit excesses. An economy in recession is reloading and getting ready to reallocate its resources toward more productive uses.

But before that, the recession. In Australia’s case, the latest evidence is that the economy can’t manage to generate a trade surplus. The August deficit was $815 million, seasonally adjusted, according to data released this week by the Australian Bureau of Statistics. In the last three months alone the country has racked up an impressive $2.7 billion trade deficit.

As my colleague Greg Canavan pointed out in a note, the August figures include strong iron ore prices and volumes. He asks rhetorically, ‘When is this mining boom meant to pay off?’

My answer, non-rhetorically, is that Australia had a resources boom and all it has to show for it is this lousy trade deficit, a rising government debt, and a housing bubble. QED recession in 2014.  

Click to enlarge

The iron ore price is worth a closer look. It was the backbone of the resources boom and the one thing everyone is counting on to keep on keeping on. For example, Australia should export nearly 1 billion tonnes of iron ore per year by 2018, according to the latest quarterly report from the Bureau of Resources and Energy Economics (BREE).

BREE reckons exports will grow by 8% a year between now and 2018 and that, ‘The strong growth is being supported by many of the mines in the Pilbara region of Western Australia being at the lower end of the cost curve.‘

What official estimates of iron ore exports generally fail to talk about is whether Chinese steel production – the great driver of Aussie exports – is sustainable at future levels (much less at current levels). China is set to produce nearly 755 million tonnes of steel in 2013 – more than the next five countries combined.

As usual, some portion of this production is driven by top-down decisions in the Chinese Communist Party (CCP) to stimulate the economy so it grows at 7.5% a year like clockwork (enough to keep unemployment from becoming socially destabilising).

Too many people who analyse the Australian iron ore industry, and thus the Australian economy, take growth rates in Chinese  steel production at face value.

The official forecasters at Treasury (and in the RBA and the banks) missed the end of the resources boom because of overly-optimistic forecasts of commodity price growth (and thus government taxes and resource royalties). They’re going to miss the recession of 2014 for the same reasons. They’re not looking.

Dan Denning+
Editor, The Denning Report

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