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This Weeks Stock Pick

8-2-2010 STW Recommendation CXM - Strong Buy

Cardium Therapeutics - CXM Stock was added to the STW biotech watch list several weeks ago and the share price has increased over 30% from .33 to a high last week of .46. We see the current pullback to the .42 range as an opportunity to build a position in a company that has great profit potential, needed technology and a multi pronged pipeline.   

A positive answer is expected from the FDA on the Decembers 510(K) Excellagen registration filing very soon. While occasionally the FDA acts on these in 6 months the response usually takes several months longer and the slight delay indicates to this analyst that it is still under consideration since denials usually come quickly.  Excellagen is a badly needed wound care product with excellent trial results. Trials show the efficacy and safety are superior to the competitions products. Our market analysis projects initial sales to be up to 200 million with higher long term upside potential.  

Cardium’s other wound care programs for the currently approved OTC MedPodium and Excellarate in mid stage trials should both benefit from the awareness that will come when Excellagen reaches the market. This will add to both immediate sales and long term profit potential of CXM.  

Cardiums cardiovascular product, Generx shows great promise using some unique technology.  While Generx has had a rocky path it has now been approved for PIII trials which will begin soon. Though the scope of this trial is narrow approval will open doors to broader use of this new heart drug.  

As with all emerging biotech-pharmaceutical small cap stocks the financial picture could be better but it has improved over the past year. The company has had help from major pharma in the past and we believe there are opportunities for partnerships if needed, though it appears Cardium would prefer to take its programs to the marketing stage without diluting their profit potential. While income from the approved MedPodium has been slow to materialize indications are it will produce income later this year or early next year. 

With the positive FDA action expected soon and the strong technical analysis of CXM shown below, we think this may be the last opportunity to take a position in this emerging company at these price levels. Our analysis and projections based on industry standards show a short term price target of $2.00 with long term potential of $12 - $15. 

We are recommending CXM as a STRONG BUY.


CXM Current Pipeline


Excerpts From Recent Press Releases 

Cardium Regains Listing Compliance With NYSE Amex

Wednesday 07/07/2010 - Pr Newswire

Cardium Therapeutics (NYSE Amex: CXM) today reported that the Company has received a letter from the NYSE Amex LLC informing Cardium that it has now resolved matters relating to the Company's exchange listing compliance.

 In the communication from NYSE Amex LLC, Cardium was informed that based upon a review of publicly available information, including the Company's Form 8-K filed on June 24, 2010, the Company has resolved the continued listing deficiencies referenced in the NYSE Amex LLC's letter dated December 28, 2009, as previously reported. In addition, the Exchange also indicated that as with the case for all listed issuers, the Company's continued listing eligibility will continue to be assessed on an ongoing basis and that the Company is subject to the provisions of Section 1009(h) of the NYSE Amex Company Guide, which may be accessed at www.nyse.com/regulation.

  

Cardium Announces Master Services Agreement With bioRASI for Planned Late-Stage Clinical Study and Commercialization Activities for Generx Product Candidate in International Markets

Press Release Source: Cardium Therapeutics On Thursday June 10, 2010

SAN DIEGO, June 10 /PRNewswire-FirstCall/ -- Cardium Therapeutics (NYSE Amex: CXM) today announced that it has entered into a Master Services Agreement with bioRASI, an international contract research organization, to assist Cardium in the conduct of a planned late-stage clinical study and commercialization activities for Cardium's Generx (Ad5FGF-4) drug candidate in Russia and affiliated jurisdictions, as well as in potentially other newly industrializing markets.  Under the terms of the agreement, bioRASI will assist Cardium to conduct a late-stage clinical study to evaluate the efficacy and safety of Cardium's Generx product candidate at up to three leading medical centers in Moscow and to assist the Company in commercialization activities in these international markets.

The Generx clinical study is expected to be initiated in the second half of this year and will be a randomized, controlled, parallel-group, multicenter study to evaluate the safety and efficacy of Generx using adenosine SPECT imaging of myocardial blood flow in patients with stable angina pectoris.  The primary endpoint will be the change in reversible perfusion defect size as measured by adenosine SPECT imaging, which is directly analogous to that successfully used in a Phase 2a clinical study of Generx.

Positive results from the prior Phase 2a clinical study (Grines et al., J Am Coll Cardiol 2003; 42:1339-47) showed that Generx improved myocardial blood flow in the ischemic region of the hearts of men and women following a single intracoronary infusion as measured by the objective efficacy endpoint of SPECT imaging.  As noted in the publication, the mean change observed in Generx-treated patients was a 4.2% absolute reduction (which represents a 20% relative reduction) in the reversible perfusion defect size from baseline at eight weeks (p<0.001), while the placebo group showed only a 1.6% absolute reduction from baseline (not significant) at eight weeks following treatment.  The observed treatment effect for patients receiving Generx was similar in magnitude to that reported in the literature for patients undergoing angioplasty/stent or revascularization procedures with reversible perfusion defects of comparable size at one year following these procedures.

The Company believes that Generx could potentially be developed as a cost effective front-line therapy for patients with coronary artery disease in the large markets of newly-industrializing countries who often do not have access to costly advanced care procedures such as coronary angioplasty and stenting, or cardiac bypass surgery (which in the U.S. can cost $50,000 to $100,000 over a five-year period following initial treatment).  Having such additional clinical evidence confirming the safety and effectiveness of Generx for improving coronary collateral circulation in men and women with severe coronary artery disease could also potentially be used to optimize and broaden commercial development pathways in the U.S. and other major markets such as Europe.

  

Cardium Announces Collagen Supply Agreement with Devro Medical for Planned Market Launch of Excellagen Product Candidate and Reports on Further Positive Healing Effects

Final Data Analysis of Phase 2b Matrix Clinical Study Shows Statistically Significant Acceleration of Wound Healing Following One-Time Treatment

Press Release Source: Cardium Therapeutics On Tuesday June 8, 2010

SAN DIEGO, June 8 /PRNewswire-FirstCall/ -- Cardium Therapeutics (NYSE Amex: CXM) today announced that its wholly-owned subsidiary, Tissue Repair Company, has entered into a multi-year supply agreement with Devro Medical Limited, part of Devro plc, a public limited company registered in Scotland, for the supply of highly-refined fibrillar bovine Type I collagen, an important component of Cardium's new Excellagen formulated collagen product candidate, which is pending FDA 510(k) clearance.  A detailed slide presentation on the final data analysis of the Matrix Phase 2b clinical study, demonstrating a statistically significant acceleration of wound healing following a one-time application of the Excellagen product candidate, is now available at the Investors section of Cardium's website at http://phx.corporate-ir.net/phoenix.zhtml?c=77949&p=irol-presentations.

Under this supply agreement, the collagen component of Excellagen will be manufactured at Devro's new cGMP manufacturing facility which is currently undergoing final process validation activities and awaiting a formal accreditation audit for ISO certifications.  Devro also plans to establish a Device Master File with the FDA following completion of ISO certifications of other component manufacturing processes.  In addition, Cardium has also entered into a clinical manufacturing and supply agreement with its U.S.-based fill and finish contract manufacturer to provide final processing and assembly of the market ready Excellagen product.

"After a detailed review of potential commercial suppliers of medical-grade collagen fiber formulations for our Excellagen product candidate, we believe that Devro Medical is uniquely qualified to ensure a timely supply of highly-refined material of a quality and consistency designed for use in treating diabetic wounds and other important medical applications.  Rigorous specifications have been engineered into our formulated collagen by our researchers, which we believe contribute to the significant healing response that has been observed and now reported in our recently completed Matrix Phase 2b clinical study," stated Christopher J. Reinhard, Chairman and Chief Executive Officer of Cardium.

Mr. Reinhard added that "the final steps for regulatory clearance of Excellagen involve providing confirmatory product and process testing information obtained with the final market-ready product.  With our commercial supplier now in place, we expect to have market-ready material finalized and tested within the next quarter so that we can be in position for final FDA clearance and commercial launch.  In parallel, we are now initiating activities associated with launch, including packaging and other final product requirements, and are in discussions with potential commercialization partners for the marketing and sale of Excellagen in the U.S. and internationally."

  

Cardium Reports on First Quarter 2010 Financial Results and Recent Developments

Press Release Source: Cardium Therapeutics On Monday May 10, 2010

SAN DIEGO, May 10 /PRNewswire-FirstCall/ -- Cardium Therapeutics (NYSE Amex: CXM) today reported highlights and financial results for its first quarter ended March 31, 2010.  Highlights of the quarter and recent developments include:

 •Completion of a registered direct investment of Cardium's common stock with institutional and retail investors in 2010 for gross proceeds of $11.3 million ($10.4 million net after placement fees and offering expenses);

•Agreement with bioRASI, an international contract research organization, to assist the Company to explore more rapid and cost effective opportunities to advance its cardiovascular biologic candidate, Generx®, as a front-line therapy for patients with coronary artery disease in newly-industrializing markets in Eastern Europe, Asia and Latin America;

•Continued commercialization activities in preparation for market launch of Cardium's Excellagen™ formulated collagen gel product candidate, which is pending 510(k) clearance with the U.S. Food and Drug Administration (FDA), and for patients with dermal wounds, which can include diabetic ulcers, pressure ulcers, venous ulcers, tunneled/undermined wounds, surgical and trauma wounds, second degree burns, and other types of wounds;

•Advancement towards commercial launch the Company's MedPodium™ over-the-counter advanced skin care line intended to provide a first line of defense for individuals at risk for foot ulcers and that will enhance and expand Cardium's product portfolio beyond the current Excellagen product candidate platform;

•Continued identification and evaluation of innovative and capital-efficient product opportunities and strategic partnership opportunities for the Company's current product candidates as they are advanced and corresponding valuations are established.

Financial Report
 For the first quarter ended March 31, 2010, the Company reported a net loss of $1.0 million, or $(0.02) per share, compared to a net loss of $14.7 million, or $(0.31) per share for the same period in 2009.  Total loss from operations for first quarter 2010 was $1.5 million compared to $2.5 million for first quarter 2009.  The first quarter 2010 financial results also include a $437,000 favorable adjustment to income for the non-cash change in fair market value of certain common stock warrants we recorded as derivative liabilities upon the adoption of ASC 815 (formerly Emerging Issues Task Force EITF 07-05), recorded in  "Change in Fair Value of Derivative Liabilities."

 Research and development costs for the three months ended March 31, 2010 totaled $520,000 and general and administrative expenses were $961,000, compared to $1.2 million and $1.3 million, respectively, for the same period last year.  The decrease in research and development costs for first quarter 2010 was primarily due to a reduction in costs as a result of the completion of the Phase 2b clinical study for Cardium's Excellarate product candidate. 

 As of March 31, 2010, the Company had $11.8 million in cash and cash equivalents and $1.4 million in restricted cash compared to $1.4 million and $400,000, respectively, for the same period last year.  The Company's working capital at March 31, 2010 was $11.1 million (excluding $4.4 million of non-cash derivative liabilities for warrants from the calculation).  During first quarter 2010, the Company completed a common stock offering with institutional and retail investors resulting in gross proceeds of $11.3 million and net proceeds of $10.4 after deduction of placement fees and offering expenses.  As of May 6, 2010, 77,852,154 shares of Cardium's common stock were outstanding.


Company Overview

Cardium Therapeutics, Inc.
Cardium (CXM) incorporated on December 22, 2003, is a medical technology company primarily focused on the development and commercialization of therapeutics and medical devices for cardiovascular and ischemic disease, wound healing and tissue repair. Cardium has established a pipeline of products that are divided into two operating units: Cardium Biologics and the Tissue Repair Company.

Cardium Biologics
The lead product candidate from its Cardium Biologics unit is Generx (alferminogene tadenovec, Ad5FGF-4), which is being developed as a treatment for myocardial ischemia (insufficient blood flow within the heart muscle) due to coronary heart disease. Generx represents a therapeutic class of cardiovascular biologics designed to promote collateral angiogenesis, a natural process of blood vessel growth within the heart muscle, to improve blood supply to ischemic areas of the heart following a one-time intracoronary administration. The food and drug administration (FDA) has cleared Generx for a Phase
III clinical study in the United States for women with late stage coronary artery disease who are unresponsive to traditional drug therapy and are not appropriate candidates for mechanical revascularization (angioplasty/stents or by-pass surgery).

Tissue Repair Company
The Company’s Tissue Repair Company subsidiary is focused on the development of therapeutics and devices for the potential treatment of chronic wounds, such as non-healing diabetic ulcers and other wounds, as well as the repair of other tissues, including both hard tissue injuries, such as bone fracture, as well as soft tissue injuries affecting ligaments, tendons or cartilage. On December 3, 2009, its Tissue Repair Company subsidiary filed a 510(k) premarket notification filing with the United States FDA for its fibrillar collagen-based Excellagen topical gel for wound healing of diabetic foot ulcers and potentially other wounds. ExcellagenXL is designed for use by health care professionals in a clinical setting and as an adjunct to standard of care topical wound therapy, which in the case of diabetic ulcers typically includes surgical debridement and off-loading. The ExcellagenFX kit is designed for use by health care providers in a clinical setting in the treatment of larger soft tissue or tunneling wounds that may occur with pressure, venous and diabetic ulcers, as well as surgical wounds.
 

Cardium Contact Info

12255 El Camino Real Suite 250
San Diego, CA 92130
United States
Phone: 858-436-1000

Company Website

www.cardiumthx.com



Chart and Technical Analysis for CXM: AMEX

Moving Average
CXM is trading above its 13 day moving average. This a sign of a bullish trend. There is added weight for this indication because the moving average is rising indicating there is buying interest in CXM.

MACD
The MACD for CXM indicates a strong bullish signal. The MACD is above the signal line, a 9day moving average plus the MACD is above 0 indicating that the underlying moving averages are still trending higher.

Stochastics
The Stochastic Oscillator is registering a bullish signal with the %K line above the %D, however the oscillator has moved above the critical value of 80 and is overbought. Thin indicates a possible retraction before the uptrend continues.

Directional Movement Index
The +DI line is above the -DI line with an ADX greater than 20. This is a bullish sign indicating that CXM stock is in a confirmed uptrend

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