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 |
