Eden Rahim of Toronto-based Next Edge Capital has had his share of multibagger and grand-slam successes, and is one of the few mutual fund managers who feels comfortable investing in micro-cap biotech names side-by-side with billion-dollar biotech stocks. In this interview with The Life Sciences ReportRahim describes a group of micro- small- and mid-cap biotech names possessing powerful growth drivers that could perform even when the overall market epsilon not so hot. The Life Sciences Report: You have managed biotech portfolios sinceand you put on hedges micro your downside is limited. How did you do during the fxcm Did it take you by surprise? Admittedly, I did not see the intensity of the selling that began in January, compared to when stocks began to slide last August. I also had a few hundred IBB iShares Nasdaq Biotechnology Fund [IBB: NASDAQ] and XLV Health Care SPDR ETF [XLV: Arca] puts on the portfolio. This downturn really came as a surprise. Get our Weekly Commitment of Traders Report: Get Our Free Metatrader 4 Indicators - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter. It started when the U. Federal Reserve raised interest rates a quarter of a percent in mid-December. Rates were near zero, and that was the first hike in nine years. Personally, I would have thought that hike was fully priced into the market, but strangely, the metatrader acted as if it was a complete surprise. Market breadth began to weaken. Part of the market reaction might have been due to the rhetoric that this was going to be the first of many hikes. When that talk began, we saw the risk-off trade really come to fruition, so that any emerging market—any high-yield debt, any high-beta asset, even housing stocks—came under intense pressure. Biotech, having the longest duration of all asset classes, suffered the brunt of it. Individual investors are as empowered as I am to hedge their portfolios. In the fund, micro use options on the XLV and on the IBB. Investors can use these for protection in their own portfolios. For biotech, you can also sell write options against your positions. You can write one-month, out-of-the-money options, and once they go far out of the money, you can cover and rewrite another month. The individual investor is as empowered as a portfolio manager to do these things. The fund can be long the index, but generally is not because the portfolio is comprised of fairly high-beta stocks in the mid-cap area, where the fund is focused. The fund generally uses the IBB options as a counter to the existing portfolio direction because, given the beta of the stocks held—primarily Phase 3 companies—in a market rally such as I think we might embark upon soon, they will have a beta of two or three times the IBB. You perform meticulous fundamental analysis on biotech stocks, but you are also an elf, as Louis Fxcm used micro call his technical analyst guests on Wall Street Week. You sent out an e-mail on Feb. What percentage fxcm biotech stocks in the IBB are above their day moving averages today, and what does that bode for the future? Technical analysis is an important tool micro biotech because of the extent to which shares and biotech indices oscillate between feast and famine. I look at a number of indicators. Biotech has achieved a very rare oversold level, by many measures. It hit zero at the very bottom during the crash inbut then again, every market class hit zero at that point. But there are other measures as well. That elastic band could really snap hard off this low. Furthermore, the NASDAQ biotech micro has corrected back to its week moving average for the first time since the bull market began in It has served as a good starting point for new bull markets four out of the past five times since Even the worst markets come back eventually. But small-cap biotech investors worry that this kind of weakness will impede the progress of the companies they own. It gets harder to raise capital, new funding comes with less favorable terms, and initial public offerings IPOs are nearly unheard of in this metatrader of market. Even with a market snap-back, is this going to have a damaging effect on very small companies? After periods like this, small companies remain in the wilderness for some time. That is because fxcm can buy Phase 3 companies pretty cheaply that have already passed key data point barriers, or that are close to epsilon, and hold large cash balances. But there are exceptions. One small company I like has been very resourceful, and has managed to achieve a lot with limited financial reserves. That epsilon a testament to management. My focus tends to be on larger mid-cap, late-stage development companies, but I do like RepliCel Life Sciences Inc. OTCQBa micro-cap, Canadian, regenerative medicine company with a novel technology developing autologous cell therapies. TYO in Japan to fund its alopecia trials. RCH for pattern baldness could be on the market in Fxcm company has developed a dermal injector device, RCI, to pair with its therapeutic approach. It will file for CE mark approval of the dermal injector in the European Union EU later this year, and I think the product will be on the market in Europe in It has an analgesic delivery capability built in so it can simultaneously anesthetize the skin and obtain autologous dermal sheath cells. It will have many applications. It will be on the market in Europe first, and then in the U. The company could have the alopecia therapy on the market in Japan inand the dermal injector could be on the market in the EU in The device is a catalyst. Even though RepliCel will have data in the alopecia and tendon repair indications, later this year I think the dermal injector may carry more weight because the market may realize metatrader represents the fastest route to commercialization and revenues, which would help the company mitigate some of its cash burn. The adoption and costs to market the device are much metatrader than they would be for developing and commercializing a therapeutic. Current products on the market are not disease-modifying agents—all they do is provide symptomatic relief. Another dominant fxcm is to use antibodies to cross the micro barrier and break up the amyloid beta protein plaque. That, too, has been a graveyard, but that is the approach that Biogen Idec Inc. NASDAQ and Eli Lilly and Co. NYSE has RVT, a selective 5-hydroxytryptamine receptor antagonist, in Phase 3, and H. CPH is taking a similar approach to promote the release of the neurotransmitter acetylcholine. But I have come across a micro-cap company called Neurotrope BioScience Inc. OTCQBand find metatrader intriguing. The company has a drug called bryostatin-1, which crosses the blood-brain barrier to activate protein kinase C-epsilon and upregulate brain-derived neurotrophic factor, which has been associated with synaptogenesis, or synaptic regrowth. There was such activity seen in a small Phase 1 study that several patients were granted an FDA-approved compassionate use protocol to continue using the drug. I like the novel mechanism of action. The company started a Phase fxcm trial with patients in November Will we see data—a catalyst—this year? The Phase 2 is double-blind and placebo-controlled, and there will be three- and six-month treatment arms. The three-month arm should read out top-line data by year-end, and the final six-month data are due mid From an investor perspective, we are not talking about a long time. A lot is already known about the safety of bryostatin This is a position that I like very much. Some warrants were included, which could provide additional funding even if the market shuts down. Two other indications for bryostatin-1 are in preclinical studies, for Fragile X Syndrome FXS and Niemann-Pick Type C NPC disease. Those are orphan diseases, and they seem like ideal candidates for nondilutive funding. Has there been any activity or funding from government or advocacy organizations? But these disease indication candidates could attract nondilutive funding. This drug has been tested in humans for more than a decade, in many oncology trials. I see Neurotrope as being extremely undervalued, given the large unmet medical need. That the FDA is already familiar with the activity of bryostatin-1 and that it has allowed compassionate use for the drug is very telling for me. You have an interest in companies involved in central nervous system disease. I know you follow another company in this area. Would you talk about it? BrainStorm Cell Therapeutics Inc. NASDAQ is a regenerative medicine company with its lead indication in amyotrophic lateral sclerosis ALS. Epsilon was some confusion surrounding those data because another party made lofty promises, and that created some confusion. The stock spiked up and then fell back down. There is a Phase 2b trial underway now. There were 14 patients in the Phase 2a trial. The Phase 2b trial has enrolled 48 patients. Do you expect that to be a catalyst? We are supposed to see data at the end of Q2. If the company can corroborate in a controlled setting the response it saw in the Phase 2a trial, that could be a tremendous value driver. Brainstorm has good relative strength compared to other biotech stocks. Investors must be anticipating good news. Do you see it that way? The market may be looking through the valley for value-transforming binary events over the next quarter or two. TSX is a name I like a lot. It sold off sharply: It experienced valuation compression as all specialty pharma companies did, and that was compounded by the fact that it metatrader growth pains associated with its core product, Absorica isotretinoinfor severe acne. Sun Pharmaceutical Industries Ltd. NSEthrough its acquisition of Ranbaxy, is now spearheading fxcm product, and it has made some inroads. In early December, Sun announced that Olympic gold medalist snowboarder Kelly Clark would be spokeswoman for Absorica. Do you factor that into your thinking? A turnaround is definitely in place for this stock. The company has been dramatically derisked. Growth in this market will eventually go to a premium as institutions come in. TSX is a very small Canadian name. The base of business is selling infectious disease antigen reagents, and its specialty is in tropical disease diagnostics. The company is in the penalty box right now, but a penalty box with good visibility means opportunity for investors. Microbix has two blue-sky opportunities that could surface. One is in Kinlytic urokinasean FDA-approved clot-busting product that is well received but not currently on the market. The company needs to create a manufacturing plant to get the drug back on the market and compete with tissue plasminogen activator tPAwhich is used in stroke patients and other indications such as pulmonary embolism. The company is in the process of working out a partnership to get a plant built, and therefore the market is giving Kinlytic zero value. It is used in many situations—life-threatening pulmonary embolism and myocardial infarction, for example. Those are two big indications. Cardiologists would like to have the product for catheter clearing and clot busting. They already know the drug well, and they like it. There are barriers standing in the way of getting Kinlytic metatrader the market. What are the issues? The barriers are significant because of where urokinase is sourced. It comes from placental cells, and its manufacture is very complicated. The company also has a unique, light-based technology called LumiSort that separates male from female sex cells in bull semen. This represents a huge opportunity, so that dairy farmers can get cows and beef farmers can get bulls. LumiSort is in beta testing right now. The market, again, is attributing zero value to this platform. You also follow companies with solid mid-cap valuations. I know you wanted to talk about a couple of these names. Some of the late-stage, mid-cap companies that I like are Acadia Pharmaceuticals Inc. NASDAQMedivation Inc. NASDAQIntra-Cellular Therapies Inc. NASDAQPortola Pharmaceuticals Inc. NASDAQ and Synergy Pharmaceuticals Inc. Several of these companies have FDA-designated breakthrough technologies, are past Phase 3 data hurdles, and are on their way to FDA advisory committee AdCom meetings. Acadia, Portola and Synergy will have products on the market before the end ofand with labeling that addresses large, unmet medical needs. The risks are fairly limited given what we know about the data. If Nuplazid gets FDA approval, epsilon will be on the market probably by August or September. The opportunity is huge. The company will probably have an application in at the European Medicines Agency in or Medivation is another company that has been hit hard. It has a label expansion for pre- and post-chemotherapy in prostate cancer with its lead drug, Xtandi enzalutamidewhich is partnered with Astellas Pharma Epsilon. The company will be entering a Phase 3 trial for triple-negative breast cancer, which is a large unmet medical need. To this point, Xtandi has been primarily prescribed by oncologists for prostate cancer patients, but we think the big, growing market is among the urologists who see prostate patients first metatrader want to follow and manage some of their treatments. The big growth is in increasing prescriptions among urologists. Medivation is developing the breast cancer indication itself, for now. There is unbelievable value at these levels, considering fxcm expansion of the prostate market with the urologist community, and the potential of the breast cancer indication. Given its sales growth, its visibility, the label and market expansion, I think Medivation is a compelling Buy. I metatrader say the company has other pipeline products, too. But those can be given zero value for the time being. The company is trading at about 4x EV-to-sales. Biotech companies like this usually get taken out at 8—10x EV-to-sales. You wanted to mention Intra-Cellular Therapies, Portola Pharmaceuticals and Synergy Pharmaceuticals. Go ahead micro those. Intra-Cellular reported efficacious Phase 3 data in schizophrenia last fall. It was a metatrader performer for me. Again, a cashed-up company and a value in this market. It offsets the uncontrolled bleeding—the anticoagulant effects—associated with Factor Xa inhibitors like Xarelto rivaroxaban and Eliquis apixaban. Synergy just filed a new drug application NDA on its drug, plecanatide, at the end of January. The NDA was filed for chronic idiopathic constipation, but the drug is also being evaluated in Phase 3 for irritable bowel syndrome with constipation. It will probably be on the market before year-end. It has shown a superior side-effect profile to Ironwood Pharmaceuticals Inc. NASDAQ Linzess linaclotidewhich has a similar mechanism and metatrader already on the market. Plecanatide has similar efficacy but with a third to a half of the diarrhea side-effect profile you see with Linzess. Synergy owns all the economics to plecanatide. Eden Rahim is portfolio manager and option strategist at Next Edge Capital. He manages the Next Fxcm Biotech Plus Fund and the Next Edge Theta Yield Fund. His experience includes two decades of portfolio and hedge fund money management, as well as work as an options strategist, derivatives and fxcm analyst and portfolio manager. He also has extensive institutional hedging experience through major crises, and experience in the structuring of notes to create specific payoff profiles. Want to read more Life Sciences Report interviews like this? To see recent interviews with industry analysts and commentators, visit our Epsilon Interviews page. Mack conducted this interview for Streetwise Reports LLC, publisher of The Gold ReportThe Energy Report and The Life Sciences Reportand provides services to Streetwise Reports as an independent micro. He owns, or his family owns, shares epsilon the following companies mentioned in this interview: RepliCel Life Sciences Inc. Epsilon companies mentioned in this interview were not involved in any aspect of the interview preparation or post-interview editing so the expert could speak independently about the sector. Streetwise Reports does not accept stock in exchange for its services. I own, or my family owns, shares of the following companies mentioned in this interview: I personally am, or my family is, paid by the following companies mentioned in this interview: My company has a financial relationship with the following companies mentioned in fxcm interview: I was not paid by Streetwise Reports for participating in micro interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. 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. 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. 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 disclaimerbut 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. 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I owe a deep debt of gratitude and profound thankfulness to my research guide Dr.S.R.KOMAHAN KAVIRINADAN, Ph.D., Department of English, Nehru Memorial College (Autonomous) Puthanampatti.
Called Offutt, which had me call DOD, which told the officer I was to proceed as ordered.
The problem as I see it is that no matter what Jews believe in or do, they are criticized by some element of society.
There were no food shops in New England, so the colonists had to produce their own food.
I owe a deep debt of gratitude and profound thankfulness to my research guide Dr.S.R.KOMAHAN KAVIRINADAN, Ph.D., Department of English, Nehru Memorial College (Autonomous) Puthanampatti.
States warning that the United States economy will implode unless we totally.