With the recent passage and signing of the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (the Credit CARD Act), some changes will be coming to a credit card near you in the not-too-distant future.

Among major provisions of the act are restrictions on the issuance of credit cards to persons under the age of 21 — young credit card applicants must now have an adult co-signer or provide proof of sufficient income — and a requirement that the interest rate on a newly issued credit card remain unchanged for at least 12 months.

Set to go into effect in February 2010, the Credit CARD Act also institutes a number of regulations intended to bring about some measure of credit debt relief to the nation’s indebted and cash-strapped cardholders. Under the new legislation, credit card issuers must provide 45 days’ notice before raising the interest rate on a credit card, and they’re prohibited from applying retroactive “punitive” interest rates on credit card accounts until an account is at least 60 days past due. Card issuers will also be required to reduce a punitive interest rate to its previous non-punitive level once a cardholder has made on-time payments for six months.

Already facing potential losses of over $70 billion from record-breaking numbers of cardholder defaults, the credit card industry has been attempting to recoup at least some of its losses through higher interest rates and penalty fees.

Consumers, struck by rising unemployment and the still-lagging economy, have been defaulting on their credit card debt at never-before-seen levels. Card issuers have seen their charge-off rates soar as they write off more and more outstanding credit card debt — full charge-offs for the growing number of consumers who are declaring bankruptcy and those who simply stop making payments altogether, along with partial charge-offs for debt-laden cardholders who are increasingly turning to debt relief programs like credit card debt settlement and debt consolidation that aim to secure creditor write-offs for a portion of a customer’s debt.

Credit card companies maintain that the new legislation will prevent them from assessing interest rates according to the relative risk a cardholder poses and will force them into across-the-board retrenchments that will negatively affect responsible cardholders who pay their credit card bills on time and in full each month.

Card issuers say that the new regulations will force them to charge annual fees for credit cards, shorten or eliminate purchase grace periods, raise standard interest rates and fees, and limit the issuance of new credit cards to consumers with superior credit ratings — those consumers who are least likely to need the additional credit. Already, some of the largest credit card companies have begun raising fees for standard services like balance transfers and eliminating fixed-rate credit cards — typically issued only to applicants with excellent credit — to be replaced with variable interest rates.

Some industry analysts say that card issuers will be forced to reduce credit limits on existing accounts and offer lower credit limits to new cardholders. Stung by the rise in defaults that reared its head months ago, credit card companies had already begun to cut credit limits in order to reduce their risk exposure, and analysts say the new rules will force banks to make even more cuts.

Reduction of consumer credit limits and tightening of credit could bring even a weak economic recovery to a standstill. Studies show that consumers who make purchases with credit cards spend almost twice as much as when they pay with cash. Restricted credit limits, combined with the persistent generalized consumer unease about overspending in the current recession, could force many cardholders back into making cash-only purchases and reduce overall consumer demand for goods.

Analysts predict that as much as 10 percent of outstanding consumer debt will “disappear” once it is paid off. Banks will reduce or eliminate credit accounts, and some banks may choose not to issue credit cards at all. Experts also warn that the poorest consumers, those who are most in need of debt relief and a way to pay for basic necessities like food and gas, will be forced into non-credit predatory lending schemes when they can’t get the credit they need.

Author Bio

Jeff Lawson  is a freelance writer that has been free lancing for over 7 years. He enjoys surfing the Internet for new blogs and is an avid reader. He primarily writes with regards to anything ranging from business to technology.

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Disclosure: No Positions

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By reading StocksHaven Investments you agree to the disclaimer, and thereby will not hold Michael Vlaicu accountable for any transactions or decisions you make. It is up to you to do your own due diligence.

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(Public, NASDAQ:TSTR)

TerreStar Corporation’s recent launch of TerreStar-1, world’s largest communication satellite is progressing nicely through the critical stages, well on its way to reaching a geostationary orbit.

TerreStar 1 will be maneuvered into a circular geostationary orbit eventually parking itself above the equator at 111 degrees West longitude to cover the United States, Canada, Puerto Rico and the U.S. Virgin Islands.

A geosynchronous satellite is a satellite whose orbital track on the Earth repeats regularly over points on the Earth over time. If such a satellite’s orbit lies over the equator and the orbit is circular, it is called a geostationary satellite. The orbits of the satellites are known as the geosynchronous orbit and geostationary orbit. Another type of geosynchronous orbit is the Tundra elliptical orbit.

TerreStar-1 will soon offer and deploy a geosynchronous network offered to AT&T users with a base for roughly 300 million, a communication network based on communication with or through geosynchronous satellites.

Reflectors on the satellite are expected to open up as of Saturday, July 11, 2009.

The TerreStar-1 satellite can be viewed in real-time at http://www.n2yo.com/?s=35496

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Disclosure: Short-Term Position

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By reading StocksHaven Investments you agree to the disclaimer, and thereby will not hold Michael Vlaicu accountable for any transactions or decisions you make. It is up to you to do your own due diligence.

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(Public, NYSE:ELN)

About

Elan Corporation, plc (Elan) is a neuroscience-based biotechnology company. Its principal research and development, manufacturing and marketing facilities are located in Ireland and the United States. Elan’s operations are organized into two business units: Biopharmaceuticals and Elan Drug Technologies (EDT). Biopharmaceuticals engages in research, development and commercial activities primarily in neuroscience, autoimmune and severe chronic pain. EDT focuses on the specialty pharmaceutical industry, including specialized drug delivery and manufacturing.

The following article was written and contributed by a highly regarded investor and member within the StocksHaven Investments community, Nicholas DeCesare:

Any long term holder of Elan can’t be happy with the stock price over the past year. In fact, shares have gone from the mid 30’s in the summer of 2008, to around $7 a share. Since announcing a deal with pharmaceutical giant Johnson and Johnson, in which J&J agreed to pay one billion dollars for an 18.4% stake in Elan, the share price has had little upside. Elan shares closed at $7.24 on Wednesday, this was only a little more than 3% higher since announcing the deal. This after Elan shares hit an intra-day high in the $8.50 range the day the deal was announced on July 2nd. Why such lack of movement for Elan after such a big deal was announced? Shareholders have been voicing their concern over the stock price movement in the past week, or lack there of, however, Elan could be well positioned for a bright future and a large move up in their price per share.

One of the bigger issues facing Elan is its lack of credibility on Wall Street. Their reputation was tarnished after current CEO Kelly Martin promised the world to investors last year about their current Alzheimer’s drug, bapineuzumab. But, when Phase II data was released in 2008, the results were mediocre and the stock price collapsed. Many shareholders were calling for his ouster, and some still are, despite his efforts to begin looking for a buyer for part or all of the company in January of this year.

After months of searching for a suitor and with help from Citigroup, who was hired by Elan to review their business, they found a buyer for part of the company in Johnson and Johnson. The deal gives Johnson and Johnson an 18.3% stake in Elan, it will spend one billion dollars 107.3 million newly issued American Depository Receipts at $9.32 each. More importantly for Elan, Johnson and Johnson will spend up $500 million right off the bat for the development of Elan’s blockbuster Alzheimer’s drug, bapineuzumab. Also, J&J will get Elan’s 50 percent stake in its Alzheimer’s immunotherapy research partnership with Wyeth, and set up a newly formed company, that will be 49.9 percent owned by Elan. Johnson & Johnson will gain all rights to any drugs approved while Elan will get 49.9 percent of the profits, plus royalty payments on sales.

Perhaps the most important piece of the puzzle is that Elan will now be able to significantly reduce its heavy debt load. In fact, Elan now believes it can turn a profit in 2010. The main goal of their strategic review that began in January, was to find a partner who could reduce their balance sheet risk and eliminate a large portion if not all of their debt. Martin has succeeded in finding perhaps the best pharmaceutical company, if not one of the best, in the world to partner with. Johnson and Johnson has a team of unbelievable researchers, marketers, and scientists. However, what investors have been concerned with, is what Martin will do with the money from Johnsons and Johnson. Rather than pour boat loads into further R&D, it is the debt load that investors would like to see get first priority. Elimination of a millions of dollars in debt is what Martin says is a priority and it remains to be seen if this in fact will be done. Moody’s Investor Services has placed Elan under review for a possible upgrade. Once the deal was announced with Johnsons and Johnson, Moody’s immediately released a statement saying that: “The transaction is expected to have a very favorable impact on Elan’s capital structure and liquidity profile, prompting the rating review for possible upgrade,” stated Moody’s Senior Vice President Michael Levesque. Moody’s rating review will focus on Elan’s uses of the equity proceeds, and the impact of the collaboration on Elan’s earnings and cash flow over the next several years. The rating review will consider the progress of the Alzheimer’s program and the sales trends of Tysabri—factors which will also influence Elan’s cash flow in the coming years.

Should Elan get a Moody’s upgrade in the coming days, have some good news at the International Alzheimer’s Conference from July 11th – 16th, and have decent news on the earnings front when they report on July 21st, the stock could be in for a nice move up. Elan is set to showcase their research in Alzheimer’s disease with a focus on their blockbuster drug bapineuzumab, which they currently have completed Phase III enrollment for. With the help of Wyeth, bapineuzumab looks promising, with Phase III probably due out in the second half of 2010. However, since the debacle last summer, recent Phase II reports from the companies look solid, and investors are anxious for updates on how Phase III trials are proceeding.

Finally, Elan also has a strong partnership with Biogen Idec, they both co-market the multiple sclerosis drug, Tysabri which has recently been making headlines. Tysabri is a huge money maker for both companies, however, recent reports of a brain infection known as: progressive multifocal leukoencephalopathy, or PML, in patients who have been taking Tysabri for an extended amount of time have pressured shares of both companies. Just last week, Biogen announced the tenth case of PML, and have been giving updates every Friday on new cases of the brain infection. The last update on July 3rd stated that there were no new cases. Even with ten cases, the incidence of PML in patients taking Tysabri for an extended period of time is low, much lower than the 1 in 1000 that the FDA required be stated on the Tysabri label when they allowed it to be reintroduced in 2006. In fact, according to Biogen researchers and scientists, the incidence is more along the lines of 1 in 4000. Investors still fear that such occurrences will cause doctors to remove patients from the drug after a shorter amount of time on it, thus cutting into Biogen and Elan’s profits. However, when Biogen stops releasing their reports of PML cases on July 24th, we will have a better update on the safety of the drug. Biogen has also stated that they are working on a PML related test that should be ready by year’s end. This test will allow for early detection of the possibility of developing PML by finding a virus in the patient’s body that could lead to the brain infection. Biogen is reporting earnings on July 16th, and will give an update on the increase in revenue from Tysabri, which could have a positive impact on Elan shares as well.

With so many positives for Elan, it is almost impossible to justify a $7 share price. Such a price barely factors in the huge deal with Johnsons and Johnson which could and should eliminate a huge part of Elan’s debt, something investors and Wall Street love. With the potential for upgrades, positive news from the Alzheimer’s conference, and some decent earnings news, Elan shares could be in for a solid ride up in the short term. Longer term, with the help of Johnson & Johnson, bapineuzumab could have unbelievable potential. Also, Tysabri could continue to generate millions more in revenue if more and more patients continue to use it, despite the possible small percentage of patients that have acquired PML. Finally, with so many interested parties in Elan throughout the strategic review, the long term possibility of an outright takeover is more and more likely.

Author bio

Nicholas DeCesare is an educator of 11 years in the state of Connecticut and holds a Master’s Degree in Education. He has been a freelance journalist for several local newspapers writing about topics ranging from investing to all aspects of technology. Nicholas has been investing in the stock market for the past 15 years with a particular focus on DRIP plans and biotechnology companies.

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Disclosure: Nicholas DeCesare has a Long-Term Position

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By reading StocksHaven Investments you agree to the disclaimer, and thereby will not hold Michael Vlaicu accountable for any transactions or decisions you make. It is up to you to do your own due diligence.

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(Public, NASDAQ:TSTR)

With the recent launching of TerreStar-1, TerraStar Corporation looks to break through and become a leader in the communications industry. AT&T Mobility along with TerreStar Corporation will market a hybrid prototype terrestrial/satellite hand set yet this year. The technology will allow the new hand set to operate on ground-based phone networks. In dead zones, the customer could use the device via satellite if they can access the southern sky similar to a satellite dish. The TerreStar-1 has a life expectancy of 15 years. StocksHaven Investments sees this price point of $0.958 as an extremely undervalued play based on financial and potential product analysis.

About

TerreStar Corporation, formerly Motient Corporation, is the controlling shareholder of TerreStar Networks Inc. and TerreStar Global Ltd., and a shareholder of SkyTerra Communications. TerreStar is based in Reston, VA, and plans to build, own and operate North America’s first next generation integrated mobile satellite and terrestrial communications network that will provide universal access and tailored applications throughout North America over conventional commercial wireless devices. With a first-to-market launch strategy in 2008, TerreStar expects to offer customer-designed products and applications over a fully optimized 4G IP network. For more information on TerreStar Networks visit www.terrestar.com.

Outlook of TerreStar-1 Satellite

“With the successful launch of TerreStar-1, we are redefining the mobile communications landscape,” said Dennis Matheson, CTO of TerreStar. “We are creating a new paradigm in mobile broadband network services and devices that will leverage our integrated satellite and terrestrial communications components to enable true ubiquity and reliability – anywhere in the United States and Canada.”

“Today’s launch is just the beginning of the TerreStar story,” said TerreStar President, Jeff Epstein. “We believe there are tremendous opportunities ahead – in both the commercial and government sectors – and we remain focused on our promise to help solve the critical communications and business continuity challenges faced by government, emergency responders, enterprises and rural communities.”

According to TerreStar, the satellite will have a spectrum footprint that covers a population of nearly 330 million throughout the United States and Canada. [ source : 7/1/09 8-K ]

TerreStar is also looking to manufacture and launch a second satellite this year. TerreStar-2, which is to be a ground spare, is identical to the TerreStar-1 satellite. Construction of TerreStar-2 commenced in September 2006, and is scheduled to be delivered in 2009. In November 2006, the Company entered into a launch services contract with Arianespace that entitled the Company to a launch window for the launch of TerreStar-1, with an option to purchase two additional satellite launches at fixed prices.

The Technology

By offering mobile satellite service (MSS), using frequencies in the two gigahertz band, part of what is often referred to as the S-band, in conjunction with ancillary terrestrial components (ATC), the Company can deploy an integrated satellite and terrestrial wireless communications network. Its network allows a user to utilize a mobile device that would communicate with a traditional land-based wireless network when in range of that network, but communicate with a satellite when not in range of such a land-based network. TerreStar-1 has an antenna approximately 60 feet across and is  be able to communicate with standard wireless devices.

Competition

SkyTerra Communications Inc. (SKYT) is planning on launching a similar satellite and offering a similar service sometime fourth quarter of 2009, so how this will play out versus TerreStar is yet to be determined. The specifications of SKYT’s sattelite and whether or not they will broaden the market to individuals, not just government and business entities will be the major concern for TSTR shareholders.

Financial Analysis

Support for TSTR has been set at around the 90 cent levels for this penny stock, which I suspect will be tested again as seen from today’s (Thursday, July 09, 2009) PPS. Longer-term, the technology will have to work for TSTR to keep the market’s attention. There’s plenty of room for potential upside, even though the true value of the company is a little hard to deteremine and most of the hype is simply that, hype. With patience, TSTR should release more concrete information with regards to the evaluation of their new launch and whether it is ready to generate money.

There are several critical steps for this satellite to start earning
money:

1. Successful launch
2. Injection into the transfer orbit (from LEO to GEO)
3. Contacting the satellite via command link
4. Parking at the GEO slot
5. Deploying the solar panels
6. Unfurling the reflector dish
7. Maintaining correct attitude at the GEO (this depends on actuators and the star tracker/inertial platform).
8. Basic shakedown of the radio systems, verifying expected antenna gain as a double-check for correct unfurling.
9. Testing the signal chain / beam-forming (DSPs, receivers/transmitters, antenna array) — this will include ground verification of beam shape /positioning accuracy.

*Should any of these fail, the satellite is as good as dead.

This process will take at least a few months to determine whether or not TerreStar has passed these critical steps.

With regards to bankruptcy, you should feel somewhat safe. 481.09 equity / 139.21 shares, means the shareholders would expect cash equivalents of $3.45 PPS. Moreover, the Debt-To-Equity ratio ( 845.94 / 481.09 ) = 1.75 is not a staggering number when compared to the industry average. Multiply this by 100 and they owe 175% more than they own in equities.

Moreover, this company is currently being held by a large number of major institutional and mutual fund holders. Among the top are: Harbinger Capital Partners Special Situations Fund, Solus Alternative Asset Management, VANGUARD GROUP, INC. (THE), Harbinger Capital Partners Master Fd I, Ltd. [ source ]

Overall Sentiment

With AT&T Mobility reportedly set to begin reselling satellite enabled phones and service from TerreStar in the near future an investment in TSTR seems like a logical choice both short-term (at these low PPS levels) and in the long-term. AT&T and TerreStar have been working together since August of 2008 when the two companies signed a nationwide reciprocal roaming agreement. Pocket sized satellites are no longer a figment of the imagination thanks to TerreStar Corporation.

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Disclosure: No Positions

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By reading StocksHaven Investments you agree to the disclaimer, and thereby will not hold Michael Vlaicu accountable for any transactions or decisions you make. It is up to you to do your own due diligence.

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• TerreStar-1 Nears Geostationary Orbit (NYSE:TSTR)

(Public, OTC:ARDM)

Aradigm is a company with a lot of potential positive long-term gains, especially with regards to its product pipeline involving the inhaled Cipro product (ILCH) for BE and CF, however the short-term play is a very different story. This company lacks visibility and the ability to fully utilize press release syndication to maximize potential reach for investors, and also engages in massive dilution in order to maintain ongoing operations. Moreover, the financial position also suffers as the company is enduring a heavy amount of cash burn every year with zero revenues as of Q1 (Mar’09). There is also a big question mark when it comes to partnerships — who will step up to the plate and infuse the cash which is so badly sought after?

About

Aradigm Corporation is a specialty pharmaceutical company focused on the development and commercialization of drugs delivered by inhalation for the treatment of severe respiratory diseases by pulmonologists. Product candidates in development include both the Company’s own products and products under development with collaborators. They consist of approved drugs combined with the Company’s inhalation delivery and/or formulation technologies. The Company’s programs under development include ARD-3100 (Liposomal ciprofloxacin), ARD-3150 (Liposomal ciprofloxacin), ARD-1100 (Liposomal ciprofloxacin) and ARD-1600 (Nicotine). Its collaborative programs under development include ARD-1550 (Inhaled treprostinil), ARD-1500 (Inhaled liposomal treprostinil) and ARD-1700 (combination products).

Products

Inhalation drug delivery is the preferred method of treatment for many respiratory diseases and it is gaining acceptance as a route of delivery for the treatment of systemic diseases. Currently, Aradigm on its own or with partners has respiratory inhalation products in preclinical and clinical development which are used for the treatment of cystic fibrosis, bronchiectasis, inhalation anthrax and tobacco smoking cessation. These products are designed to improve patients’ quality of life and overall treatment outcomes by enabling them to safely and painlessly self-administer aerosolized liquid medications directly to and through the lungs. All of these products utilize the Company’s proprietary drug delivery technologies.

ARD-3100 and 3150

(Liposomal Ciprofloxacin)

Development of a new way to treat chronic debilitating and life-threatening respiratory infe

ctions in cystic fibrosis.

This product candidate is currently in Phase 2 programs for respiratory infections associated cystic fibrosis and bronchiectasis. Ciprofloxacin has been approved by the FDA as an anti-infective agent and is widely used for the treatment of a variety of bacterial infections. Today ciprofloxacin is delivered by oral or intravenous administration. We believe that delivering this potent antibiotic directly to the lung may improve its safety and efficacy in the treatment of pulmonary infections. We believe that our novel sustained release formulation of ciprofloxacin may be able to maintain therapeutic concentrations of the antibiotic within infected lung tissues, while reducing systemic exposure and the resulting side effects seen with currently marketed ciprofloxacin products. [ source ]

ARD-3100 and ARD-3150 – Liposomal Ciprofloxacin for the Treatment of Infections in Cystic Fibrosis and Non-CF Bronchiectasis Patients

We have two proprietary liposomal ciprofloxacin programs for the treatment and control of respiratory infections associated with chronic diseases – one common to patients with cystic fibrosis, or CF, and the other for infections associated with non-cystic fibrosis bronchiectasis.

CF is a genetic disease that causes thick, sticky mucus to form in the lungs, pancreas and other organs. In the lungs, the mucus tends to block the airways, causing lung damage and making these patients highly susceptible to lung infections. According to the Cystic Fibrosis Foundation, CF affects roughly 30,000 children and adults in the United States and roughly 70,000 children and adults worldwide. According to the American Lung Association, the direct medical care costs for an individual with CF are currently estimated to be in excess of $40,000 per year.

Phase 1 and Phase 2 Data on Inhaled Liposomal Ciprofloxacin

The results demonstrated in both healthy volunteers and cystic fibrosis patients similar pharmacokinetics of inhaled liposomal ciprofloxacin, with a long systemic elimination half life (t_½) of ~10.5 hours supporting a once-daily dosing allowing for less frequent dosing than current inhaled antibiotic regimes. As reported before, this treatment was effective to result in highly significant reduction in the sputum of Pseudomonas Aeruginosa colony forming units (CFU), an objective measure of the reduction in pulmonary bacterial load in the CF patients. The promising efficacy data is also supported by the high concentration of ciprofloxacin found in the sputum of CF patients following treatment with inhaled liposomal ciprofloxacin. [ source ]

Financial Analysis

A quick glance at the balance sheet shows that they have just about as many liabilities as there are assets — a very bad position to be in for any company, never-mind one that is not making any revenues.  Moreover, ARDM’s Debt-to-Equity ratio (total liabilities / total shareholders equity) is a high number, but what does this really mean? The Debt-to-Equity Ratio measures how much money a company should safely be able to borrow over long periods of time. It does this by comparing the company’s total debt (including short term and long term obligations) and dividing it by the amount of owner’s equity. (17,7/7.67)*100 yields us a staggering 230%! They owe 230% more of what they own in equities!

The next issue at hand is the net profit margins, operating margins ect., which are all well in the negative percentages, however when it comes to small BioPharmas involved with PDUFAs, these should be overlooked due to the fact that if one of their products sees FDA approval, these numbers will once again begin to see a positive value.

The short interest has also changed by a staggering 45,526.01% to 371,852 shares out of 2,138,748 total shares traded per avg. daily volume according to Pinkheets.com

Expect Continued Dillution

ARDM already gave investors a scare with an 82% dilutive offering in February 2009. At this point it is not out of the question think that management is going to have to raise as much as $30 – 40 million over the next 3+ years in order to get to cash flow positive operations and positive EPS in 2013.

Hopefully the bulk of this will come in the form of an upfront payment on ARD-3100/3150. Other potential non-dilutive cash raising opportunities exists from Zogenix, the anthrax program, or through partnering ARD-1600 or ARD-iDMS.

Zogenix Royalties ( from May/12/09 10-Q)

Source: Pinksheets.com

The possible revenues from this, however, will be small in comparison to the amount of cash Aradigm will need to focus on its real core objective: the development of their liposomal ciprofloxacin hydrochloride (ILCH) program for non-cystic fibrosis bronchiactisis (BE).

This product, known as ARD-3150 is now the key focus for the long-term growth of the company. What we all can hope for now is that Aradigm finds a partner to help commercialize this product in 2010 if the results from Phase IIb are positive. We will know the results of Phase IIb towards the end of 2009. That being said, the July 15 decision could very well have a positive impact on the stock price, but we personally do not see ARDM trading at anything above 0.35 — 0.40 before the results of the ILCH for BE are out late 2009.

July 15th Royalty & Impact

Migraine patients: 26M
Sever migraine patents need injectable treatment: 11M
US market size for injectable treament : $215M

Currently Par Pharma has Imitrex® Injection, injectable sumatriptan treatment available on market since late last year. Since Imitrex is not a drug has been in market for years, the potential for taking over the portion of injectable sumatriptan injecton treatment market by ARDM can be challenging, but could be good very good.

Let’s assume if Sumarvel DoesPro from Zogenix can take over 7% of injectable sumatriptan market by end of next year and ARDM gets one digit royalties, let’s say 4%;
0.07 * 215M=15.05M
15.05 * 0.04=0.6M annually from 2012 which is equal to about 2% of
annual net income loss to cover.

*These numbers are all educated assumptions

As we can see from this, the much anticipated July/15/09 PDUFA for Zogenix is a mere illusion when it comes to playing a significant role in pulling ARDM back on its feet. It will take a heck of a lot more revenue than this in order to cover the heavy cash burn incurred on a yearly basis.

Some really questionable analysis was done by Ladenburg Thalmann giving Aradigm a price target of $6.00. Take this with a grain of salt, and do your own due diligence before following any advice like a mindless zombie. In order for this to happen, all of the products would have to see approval, the company would have to establish a number of partnerships in order to fund mass production and marketing, and these are not as easily accomplished as it may initially sound.

Overall Sentiment

As a long-term play, Aradigm shows potential to add decent value to your portfolio. All of the products are in Phase I & II thus the hype has yet to be generated. Given that they survive and find ways to infuse cash, this company should stride past hurdles and see the light at the end of the tunnel. Conversely, as a short-term investor there is no ‘diamond in the rough’ to be found here. The royalty payments on July/15/09 from Zogenix are infantile and insignificant and are merely a distraction from the overall problem. Aradigm is the type of company you buy and forget about for the next couple of years, it is not for the faint at heart — playing with fire.

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Disclosure: No Positions

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By reading StocksHaven Investments you agree to the disclaimer, and thereby will not hold Michael Vlaicu accountable for any transactions or decisions you make. It is up to you to do your own due diligence.

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(OTC:ACCP)

Many investors have raised concerns with regards to Access Pharmaceuticals being on the OTC. Indeed more than half the time companies which are not listed on a major exchange tend to lie, cheat and do just about anything possible in order to stimulate investor demand. They will reach out to stock promoters, make deals with various PR companies and even go as far as releasing their own false press releases — usually involving buyouts (see OTC:PGYC). Folks, you need not worry, Access Pharma takes part in none of these illegal activities in order to induce demand, rather they focus on a solid and sound business strategy which willslowly take them into the promise land. Patience is a virtue.

MuGard is an interesting product with a lot of potential, and we truly believe that it is only a matter of time before this drug gains worldwide success from the ongoing marketing campaigns.

Oral Mucosis
Oral mucositis is a frequent complication of cancer chemotherapy or radiation therapy to the head and neck region. Currently available therapy is usually inadequate, and a more effective treatment to minimize the extent and duration of mucositis is clearly needed.

• }Mucositis can affect most patients receiving cancer therapy.
• Addressable market estimated at over $1 billion.
• }MuGard is polymer solution which provides coating for oral cavity.
• }Dispensed as a ready-to-use viscous liquid.
• }Potential expansion to other markets, such as dental market, oral surgery, etc.

Clinical Study

The clinical study was conducted at 11 centers.

Patients rinsed up to 6 times a day with MuGardTM during a course of radiation therapy (with or without concomitant chemotherapy) with a planned dose of at least 60 Gy over 6-7 weeks.

Patient mucositis was evaluated 3 times a week according to the Oral Mucositis Assessment Scale (OMAS), a validated assessment scale

MuGardTM data were compared with data from two similar sets of patients receiving standard care. Statistical analysis comparing the mean maximum OMAS score of the MuGardTM group to each of the untreated groups was performed using two-sided tests at the 0.05 level of significance.

42% of patients in the MuGardTM Rinse group
did not develop significant mucositis during the 6-7
week radiation treatment cycle compared with only
9% in the historical control group

Summary

• MuGard has a US 510(k) FDA marketing allowance and European CE Mark approval

• Access has recently announced agreements with SpePharm for the EU, Milestone for the US, JCOM in Korea, and RHEI for China and other Southeast Asian countries

• “Prevention” positioning yields significant sales potential and lessens the number of competitive products

• In patients receiving radiation therapy for head and neck cancer, 42% of patients using MuGard Rinse group did not develop significant mucositis compared with only 9% in a historical control group

• Simple ready to use formulation is major competitive advantage

MuGard Entering Europe (Extensive  Market)

ACCESS PHARMACEUTICALS, INC. (OTCBB: ACCP), announced today that its European partner, SpePharm has commenced commercial launch of MuGard in Greece. This follows previous commercial launches in Germany, Italy and the UK. Under a license from Access Pharmaceuticals, SpePharm is responsible for manufacturing, regulatory approval and commercialization in the 27 countries of Europe. SpePharm plans to launch MuGard in the rest of Europe over the coming 12 to 18 months. The license agreement includes royalties on net sales to Access.

Additionally, the Company announced that two MuGardTM patents have been issued from the United States Patent and Trademark Office, as US Patent numbers 7,544,348 and 7,547,433. The second patent includes claims on formulations with actives against mucocutaneous disorders, which provides protection of product line extensions.

MuGard is a novel, ready-to-use mucoadhesive oral wound rinse for the management of oral mucositis, a debilitating side effect of many anticancer treatments. Up to 40% of all patients receiving chemotherapy and/or radiotherapy develop moderate to severe mucositis, and almost all patients receiving radiotherapy for head and neck cancer and those undergoing stem cell transplantation develop mucositis. Updated clinical practice guidelines for the prevention and treatment of mucositis recommend the use of a preventive oral care regimen as part of routine supportive care along with a therapeutic oral care regimen if mucositis develops. The market for the treatment of oral mucositis is estimated to be in excess of $1 billion world-wide.

MuGard forms a protective coating over the oral mucosa when swirled gently around the mouth. In a comparison of cancer patients receiving standard mucositis care with those patients receiving MuGard, the incidence and severity of mucositis was significantly lower in the MuGard treated group using a validated scale for the assessment of oral mucositis.

Bonus Conference Call Audio with CEO, Jeffrey B. Davis

If you are experiencing technical difficulties, please visit this link. You will be taken to the original source of the mp3 file where your automatic preset media player should make the file play.

In conclusion, some persistence will go a long with with this small yet flourishing company. Yes, indeed, patience is a virtue which is all too often forgotten.

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Disclosure: No Positions

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By reading StocksHaven Investments you agree to the disclaimer, and thereby will not hold Michael Vlaicu accountable for any transactions or decisions you make. It is up to you to do your own due diligence.

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• Conference Call – Access Pharmaceuticals Inc.

(OTC:ACCP)

At approximately 5:00pm EST, 6/23/09, StocksHaven Investments began the call conference scheduled with Director & CEO of Access Pharmaceuticals Inc., Mr. Jeffrey B. Davis, whom was also joined by Director & Consultant, Mr. David Luci. The basis of the interview was to provide an executive summary, along with their respective business strategy. Mr. Davis shed light on acquisitions, partnerships, current and future plans, and also discussed preparations to re-rejoin a major exchange. The interview was concluded as of 6:05pm EST, 6/23/09.

The exclusive StocksHaven Investments interview:

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Update: For best results please use Mozilla Firefox version 3.0.10 web browser

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(OTC:BIEL)

BioElectronics is a company which is plagued by a poor financial balance sheet, unaudited filings and barely sustainable ongoing operations with its current expenses constantly exceeding revenues, however is it worth investing in? Here is a top-down unbiased analysis which tells all, investigating deeper into the lion’s den.

About: BioElectronics Corporation (BioElectronics) designs, develops and markets a variety of drug-free, anti-inflammatory patches for a range of medical indications. The Company’s patch products, which are marketed under the name ActiPatch Therapy, deliver pulsed electromagnetic field therapy, an anti-inflammatory and pain relief therapy. The ActiPatch Therapy products combine a miniaturized microchip, power source and antenna in a soft, flexible outer envelope. When applied to the body, these devices deliver a pulsed radio frequency signal into the body on a 27 megahertz (MHz) frequency wave that induces a low frequency electromagnetic field to damaged cell tissue.

Balance Sheet & Financial Analysis

It doesn’t take a rocket scientist to notice that their balance sheet looks poised for failure: Their liabilities greatly outweighs their assets (by almost 3-4x). So why should we care about this? Well this is a negative aspect because current assets (cash) are the most important item for a small business – more importantly the liquidity of the asset which in turn grants the ability to finance their ongoing operations, as well as pay off any liabilities (short-term, long-term debts). From an overall business standpoint, their balance sheet is really weak. A quick comparison with other small-cap BioPharma companies and you will notice by contrast that they usually posses enough cash in hand to ensure survival. An example is Nephros (OTC:NEPH), they have 9x the assets vs. liabilities, thus do not have to worry about obligations while producing products, and thus have the ability to continuously take on researching and development of their product.

Moreover, BIEL’s Debt-to-Equity ratio (total liabilities / total shareholders equity) is a negative number, but what does this really mean? The Debt-to-Equity Ratio measures how much money a company should safely be able to borrow over long periods of time. It does this by comparing the company’s total debt (including short term and long term obligations) and dividing it by the amount of owner’s equity. For now, you only need to know that the number can be found at the bottom of the balance sheet. You’ll actually calculate the debt to equity ratio in segment two when we look at real balance sheets.) The result you get after dividing debt by equity is the percentage of the company that is indebted (or “leveraged”). The normal level of debt to equity has changed over time, and depends on both economic factors and society’s general feeling towards credit. Generally, any company that has a debt to equity ratio of over 40 to 50% should be looked at more carefully to make sure there are no liquidity problems. If you find the company’s working capital, and current / quick ratios drastically low, this is is a sign of serious financial weakness.

The next issue at hand is the net profit margins, operating margins ect., which are all well in the negative percentages, however when it comes to small BioPharmas involved with PDUFAs, these should be overlooked due to the fact that if one of their products sees FDA approval, these numbers will once again begin to see a positive value.

If you already don’t already know, PinkSheets.com is a premier source for penny stock fanatics to gain access of financial data otherwise unavailable on their favourite multi-million dollar financial news portals. Here is an updated unaudited sept/30/08 financial overview on BIEL (.pdf). One of the poorest balance sheets we have ever seen. At first peek into the raw data, from 2007 to 2008 they seem to have been reducing the difference between their assets and liabilities, although the difference is still staggering. Now the big problem which insues is that their most important and liquid asset account, cash has gone down by almost 100%, this is extremely dangerous should they continue at this pace.

Lastly, although volatile, their one year chart has been through its ups and downs, while maintaining a fairly steady pace around its current price per share point — Expect to see more of this if the company continues to disregard the use of press release syndication to excite new shareholders into buying in.

Company Achievements

*All data and information used is courtesy of BioElectronics Investor Overview

The dermal patch delivery system creates a multitude of new product opportunities for chronic and acute inflammatory conditions. The market potential is estimated at $10 billion or 400 million incidents worldwide. The distinctive value proposition of ActiPatch is the delivery of drug-free therapy that reduces pain and inflammation and accelerates healing by 30% to 50% when compared with the present standard methods of patient care. The current major applications are:

• Medical Surgeries
• Chronic Wounds
• Oral Surgeries
• Sprains and Strains
• Lower Back Pain
• Chronic Repetitive Stress Injuries, Heel Pain, Carpal Tunnel, Bursitis, etc.

Below is a list of the Company’s accomplishments to date.

• United States Food and Drug Administration market clearance
• Canadian market approval for relief of pain in muscosketal complaints in both medical and over-the-counter markets
• CE Mark (European Common Market) Certification for the medical and retail over-the-counter markets
• ISO Certification
• Chosen as “One of 9 Medical Breakthroughs That May Change Your Life” by MedicalHeadway.com
• 15+ domestic independent sales agents
• 20+ International distributors with additional agreements in place or awaiting regulatory approvals
• A medical research agreement with the David Genecov, MD, Dallas Medical Center, a leading medical researcher to supervise and write manuscripts for four studies, plantar fascitis (heel pain), ankle sprains, breast augmentations, and cesarean sections.
• Canadian retail product line launched in June of 2008, actively interviewing distribution partners throughout the rest of the world.
• A solid intellectual property portfolio covering both the product design and the pulse signature.
• A 3-year pipeline of new products for treatment of sports injuries, bone fractures, chronic injuries, chronic wounds, skin conditions, arthritis and post-operative care.
• Product now available online to the consumer market via multiple websites in several countries.
• Projected annual sales in 2008 of over $2,000,000.

Now all of this seems really impressive, however how successful could they really be when you look at the poor quarterly and annual revenues when their balance sheets were in fact audited, after all, a lot of these numbers speak for 2008 in which their balance sheet was feasible. Personally, when looking at their current products, nothing really impresses or jumps out at you. They are simple patches to help reduce pain and discomfort.

Their distributors are very infintesimle, and while at first glance the number of overseas countries on their list is impressive, a deeper analysis and read into the situation reveals the products are only available at minor, small stores and pharmacies which are quite insignificant for the time being.

Now on a lighter note, a positive is their growth. To date the Company has signed agreements with 20 countries. Sales for the first 6 months of 2008 were just under $400,000 and year end sales are projected to be between $1 and $1.2 million. This does show they have a willingness to expand operations and are just as unsatisfied with their current status as we are.

Seems like they are really struggling to maintain current operations, however how do other investors feel about this company, and more importantly how should you feel?

According to PinkSheets.com, Short interest in the stock is up by 1,678.32% or 471,362 shares in May 2009, so it is clear that many are betting against this little company looking to break through its troubles.

However, amongst all the troubles this company is experiencing, there does seem to be light at the end of the tunnel — StocksHaven Investments believes there lies opportunity amongst uncertainty, thus an investment in this company may not be such a bad idea after all, and here’s why: upcoming PDUFA. Yes indeed, even poor financials will not stop the frenzy of investors from piling in and purchasing this stock in anticipation of an FDA approval.

FDA NEWS

Allay (TM) Product – Menstrual Pain Therapy

The Allay product, which is based on proven and effective ActiPatch(tm)
technology, uses electromagnetic pulse therapy to reduce many of the symptoms
and discomfort associated with a woman’s menstrual cycle. Approximately 50% of
women experience such symptoms, with approximately 30% of women having to
curtail normal activities due to the pain and discomfort. While millions of
women suffer, very few solutions exist. The Allay product is specifically
designed to fill this need.

“The Allay device is a natural extension of the use of ActiPatch technology. Knowing the positive benefits of low frequency pulse electromagnetic fields after invasive surgery, applying it to the problem of menstrual discomfort is a logical and no risk extension of those potential benefits. The product is easy to wear, well accepted by the patient, and has no downside,” commented Dr. Barry
Eppley of Indianapolis, Indiana. “The product is a non-drug, anti-inflammatory therapy that is immediately reversible and affordable. While it will not eliminate all menstrual pain in every patient, it will clearly be of benefit for many women.”

CEO of BioElectronics Andrew Whelan added, “We are very excited about the introduction of this new product. Thus far, reaction has been very positive, with many of our retail oriented distributors expressing significant interest and already placing orders. We expect this to be our biggest product to date and we are very positive about the revenue generation possibilities.”

The filing follows a very successful double blinded, placebo controlled clinical trial in which 71% of women in the active group reported either complete elimination or a reduction in their typical menstrual pain symptoms, with 49% showing at least a 50% reduction in pain associated with dysmenorrhea.

“While between 60% and 70% of women suffer from pain during menstruation, with millions of women experiencing pain severe enough to significantly restrict daily activities, there are very few safe alternatives for pain relief,” commented Andrew Whelan, CEO of BioElectronics, Corp. “The most widely used treatment for dysmenorrheal is acetaminophen, but it is also the leading causes of liver failure in the U.S(1). The Allay Menstrual Pain Relief Patch offers a far safer, highly effective and drug-free solution for millions of women who suffer from period pain and cramps. We are excited to bring this product to market.”

Here is a MSN Money article which recaps BioElectronic’s recent conference call which was held on Thursday, June, 18th regarding their new product and FDA submission.

This new product does intrigue us, however based on the financial analysis we would advise you invest a small portion of your portfolio, we’re talking <5%,  because if they do not gain FDA clearance for this, the
company looks prime for bankruptcy as their current products are not enough to suffice their ongoing business operations as seen from their net incomes.

In conclusion, an investment in BioElectronics Corporation does have a staggering risk, however the potential for massive gains does exist as well. A treatment for menstruation does have a huge market potential, however in this company’s current state they would need some extensive cash infusion and partnerships in order to maintain operations and even touch upon marketing, advertising, and mass production of their new product.

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Disclosure: Long-term Position

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By reading StocksHaven Investments you agree to the disclaimer, and thereby will not hold Michael Vlaicu accountable for any transactions or decisions you make. It is up to you to do your own due diligence.

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(OTC: NEPH)

A reader of StocksHaven Investments by the name of Michael Sklar has contributed the following article regarding Nephros, Inc. The article outlines one of the most undervalued BioPharma companies around, at only $1.08 PPS with three pending FDA decisions. If you are an avid investor of pre-PDUFA companies, StocksHaven Investments highly suggests you conduct some due diligence on this company, as its potential value greatly outweighs the risks involved.



About: Nephros, Inc. (Nephros) is engaged primarily in the development of hemodiafiltration (HDF), products and technologies for treating patients with end stage renal disease (ESRD). The Company has three products in various stages of development in the HDF modality to deliver therapy to ESRD patients: OLpur MDHDF filter series (which it sells in various countries in Europe and consists of its MD190 and MD220 diafilters); for HDF therapy and employing its Mid-Dilution Diafiltration technology; OLpur H2H, the Company’s add-on module designed to allow the most common types of hemodialysis machines to be used for HDF therapy, and OLpur NS2000 system, its stand-alone HDF machine and associated filter technology. Nephros has also developed its OLpur HD 190 high-flux dialyzer cartridge, which incorporates the same materials as its OLpur MD series but does not employ its Mid-Dilution Diafiltration technology.

Nephros, like many other BioPharma companies these days is waiting for an FDA decision, actually they are waiting for three. Currently the FDA has made many investors in this sector ride through bi-polar roller coasters. One of the major reasons is the appointing of a new FDA director. This is understandable because anytime a new director comes on board there is a transition stage. Day traders might be raking in the money because of all the nervous investors out there who might not be as patient as others, however, people investing with long positions are investing because they truly believe in the company.

Nephros is waiting on decisions on the following 3 Class 2 510(k) applications:

The Nephros hemodiafiltration (HDF) system is designed to improve the quality of life for End-Stage Renal Disease (ESRD) patients while addressing the critical financial and clinical needs of the care provider. The HDF system removes a range of harmful substances more effectively, and with greater capacity, than existing ESRD treatment methods, according to the Company. On 11/14/08, Nephros submitted a 510(k) application to the FDA for approval of its HDF products for ESRD in the U.S. market. Following its review of the application, the FDA has requested additional information. Nephros replied to the FDA inquiries on 3/13/09. Per FDA guidelines, the FDA has 90 days to review the additional information provided by the Company for an estimated PDUFA of Friday 6/12/09 or Monday 6/15/09.

On 10/7/08, Nephros filed a 510(k) application for approval to market its Dual Stage Ultra-filter (DSU filters) to dialysis clinics for in-line purification of dialysate water. Following its review of the application, the FDA requested additional information, and Nephros provided a formal response to the agency on 2/24/09. Per FDA guidelines, the FDA has 90 days to review the additional information provided (5/26/09), but a response from the agency is still pending.

The FDA’s authority over devices dates only to 1976, when they decided to make 3 classes. One way of prioritizing was to assign categories of risk associated with the devices. Rubber gloves seemed less risky than cardiac pacemakers, for example. So the agency assigned devices to 1 of 3 levels of scrutiny. Class I devices have low risk; oversight, performed mainly by industry itself, is to maintain high manufacturing quality standards, assure proper labeling, and prevent adulteration. Latex gloves are an example.

At the other end of the stick lay the class 3 devices which are mainly impantable, things that are life-supporting, and diagnostic and treatment devices that pose substantial risk.

Nephros is seeking FDA approval for 3 Class II devices. They already have an FDA approval on a similar device so they’re not new to the industry They also have several military contracts.

To this date in the year 2009 the FDA has not made a single PMA Device denial, they have all been approved.

What chances does Nephros have with three upcoming decisions?

All information used has been found on the FDA Device section.

May 2009

Summary of PMA Supplement PMA Approval/Denial Decision Times
Number of Approvals: 71
Number of Denials: 0
Average Days Fr Receipt to Decision (Total Time): 163
FDA Time: 116.3 Days MFR Time: 46.7 Days

April 2009

Summary of PMA Supplement PMA Approval/Denial Decision Times
Number of Approvals: 92
Number of Denials: 0
Average Days Fr Receipt to Decision (Total Time): 103.5
FDA Time: 79.3 Days MFR Time: 24.2 Days

March  2009

Summary of PMA Supplement PMA Approval/Denial Decision Times
Number of Approvals: 74
Number of Denials: 0
Average Days Fr Receipt to Decision (Total Time): 169.4
FDA Time: 124.9 Days MFR Time: 44.5 Days

February 2009

Summary of PMA Supplement PMA Approval/Denial Decision Times
Number of Approvals: 60
Number of Denials: 0
Average Days Fr Receipt to Decision (Total Time): 124.4
FDA Time: 89.4 Days MFR Time: 35 Days

January 2009

Summary of PMA Supplement PMA Approval/Denial Decision Times
Number of Approvals: 53
Number of Denials: 0
Average Days Fr Receipt to Decision (Total Time): 129.2
FDA Time: 92.7 Days MFR Time: 36.5 Days

NEPH Post Approval PPS Calculations ( ~ $7.00 )
Contributed by Srini Mandavilli

C: Total Customer Base = 2,000,000 by 2010

R: Annual Revenue Per Customer = 8,250 ( taking a very conservative
approach) (Total therapy cost per patient per year in the United
States is approximately $66,000. Assuming the cost of dialysis filters
to be 12.5% of total cost=0.125*66,000=8250)

P: Potential Market Penetration = 0.025

N: Net Profit Margin = 0.15

E: Cost of Equity = 0.22 (Beta for NEPH)

S: Number of Shares = 38,200,000

Predicted PPS = ((2,000,000 * 8,250 * 0.025 * 0.15) / 0.22) /
38,200,000 = 7.36 ~$7.00

In conclusion, StocksHaven Investments agrees with Michael Sklar in that there is tremendeous opportunity for this company both in the short-term and long-term. It is rare to see small cap BioPharma companies with low numbers of outstanding shares thus providing investor confidence away from fears of dillution — Nephros provides just that with only 38.17M shares. If any one of their products sees FDA approval, expect the PPS and market cap to soar to new heights this coming year.

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Disclosure: Michael Sklar has a Long-Term Position

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By reading StocksHaven Investments you agree to the disclaimer, and thereby will not hold Michael Vlaicu accountable for any transactions or decisions you make. It is up to you to do your own due diligence.

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