Celsion and Oncothyreon

Celsion still is a good investment thesis.

If you have not heard, Oncothyreon had a failed trial this morning and had the share price cut by more than 50%. As a disclosure, I had no position in ONTY but was in it a couple years ago for the continue at the first interim. I do have a lot of friends and colleagues who were in it, some quite heavily, and they are hurting quite a bit this morning.

Celsion has had a number of people who are bullish because of models showing the trial “is running longer than it should, thus it must be doing well.” ONTY, as numerous trials have before this, should serve as a wake-up call to these investors. Fortunately, Celsion’s Thermodox has a plethora of features that allow me to be “watchfully bullish.”

For one, the method of action (MOA) is pretty clear.
Reviewing the concept in extremely basic language, Thermodox is the chemo doxorubicin, covered by a fatty layer. That fatty layer is engineered to be attracted to the “leaky” blood vessels that are found most prominently in tumors. So after Thermodox is infused into the patient, these entities congregate around tumors. When radio-frequency ablation (RFA) occurs, burning away the cancerous tissues, that fatty layers cracks open (it has been compared to a hexagonal soccer ball) and releases the doxorubicin, bathing the tumor and surrounding tissue in the chemotherapeutic agent.
Doxorubicin does two extra things germane to this process:
Its cell-killing activity is heightened by heat. Thus it’s even more effective than normal.
It lowers the temperature of the surrounding tissue. This means heat-activated ablation is more effective, especially in the margin areas that otherwise would not be completely ablated.

Importantly, both RFA and doxorubicin are known processes and drugs, with a familiarity by doctors and the FDA.

I question the models that show the trial is “going long.” We are actually on the schedule put out by management in the prior year. Enrollment took a heck of a lot longer than anyone initially thought. And HCC is a wide-open kind of cancer, where many issues interact and no patient can be said to be “average.” The size and number of tumors, where they are located, and general health (otherwise to the cancer!) all have a lot to do with their prognosis. While generally speaking the median progression-free survival (PFS) should be around 12 months for the RFA-only group in the trial, the clinical sites are at some of the most skilled RFA-practitioners in the world. Patients who are in clinical trials tend to have better outcomes, due partially to the placebo effect, to the improved follow-up care and also simply by the desire to live as evidenced by being willing to enter a clinical trial. I will not be surprised to see PFS for the placebo arm come in higher than 12 months.

The Japanese firm Yakult partnered with Celsion a couple years ago, and before partnering you can be sure they got a peek at the preclinical and other available Thermodox data. At the beginning of 2011 Yakult elected to pay an extra couple million dollars upfront in order to receive a lower-than agreed royalty rate going forward. I cannot imagine how that can be spun as anything but positive. Philips Healthcare has partnered with us using their high-frequency ultrasound (HIFU) technology at the heating mechanism in lieu of RFA. They are paying trial costs, which is a reasonable (and bullish) commitment, also having seen private company data. I think it fair to propose that preclinical and ph1 data are reasonably strong.

The most “squishy” factor to consider is the insider buying. Several officers and directors have recently bought shares on the open market or exercised options or warrants. As a reminder, this takes real money, either straight up or as “income” defined by the IRS, and so it is coming out of these folks’ disposable income. As the old saw goes, insiders can sell for many reasons, but there is only one reason for them to buy.
Alongside that, we need to look at the company’s refusal to do a financing prior to data, and in fact their reiterated commitment NOT to do so very recently. This is pretty much unheard of, and very bullish. Let me be explicit here – the insider buying and no-raise factors are bullish but these people do NOT have much more insight into the trial than investors do. They do not have unblinded info from the interim look, they don’t get “winks and nudges” from the Data Monitoring Committee (DMC), and they cannot trade if they did know such things. But they are the closest to the data and such actions should at least be acknowledged.

In sum, I feel Celsion at a sub $300M market cap is undervalued and eminently tradable. I think the HEAT trial has a very reasonable chance of success and have a 2-month target price of $20.

Disclosure and disclaimer:
I own shares and option of Celsion at the time of this writing and while my positions may change, I have no intention of doing so within three days of this article. My own resources, risk tolerance, and personal situation have been taken into consideration for any trades mentioned and should not be used as a basis for someone else's trades. Stocks may lose value and this is not recommendation to buy or sell this particular issue.
This is presented for educational and informational purposes only, and should not be construed as personalized legal, tax, investment, or financial advice.

Arena wins approval

The FDA, as I expected, approve Arena's drug today, following last month's 18-4 Advisory Committee positive vote. The drug will sell under the name Belviq and is for weight loss - the first such drug approved in the last 13 years. The full release can be viewed here: http://finance.yahoo.com/news/arena-pharmaceuticals-eisai-announce-fda-171300471.html Congratulations to any who were long here. I believe the fun is just getting started. Best regards, Trond Hildahl

Return to 1981?

Very nice and succinct summary of why history cannot repeat itself right now. http://markdow.tumblr.com/post/24081371136/reagans-gone-youre-old-get-over-it Which reads in part: "The world of 1980 had tons of pent-up demand and gale-force tailwinds. Inflation and interest rates were coming down from high levels, household leverage was very, very low, financial innovation non-existent, consumption had been deferred, and demography was coiled as the baby boomers were just coming on line. On the government side, unions were powerful, price and wage controls were a reality, and tax rates were high. This was the ideal set up for supply side reforms. "Fast-forward to post-2008. Whatever the opposite of pent-up demand is, that’s what we have. Inflation and interest rates are already low, household leverage is a major burden, consumption was pulled forward during the boom, and demography is no longer our friend. Plus, we have globalization acting like a supply shock to our labor pool, holding down wages. In short, the tailwinds are now headwinds. On the government side, unions are far less powerful today, there are no price and wage controls, and tax rates are low. It seems next to impossible to make the case that supply-side policies can have anywhere near the effect today that they had in the 80s." Trond out. Pool, here I come.

Arena (ARNA) garners positive Advisory Committee vote

A couple of years after it should have occurred, but ARNA got a 18-4-1(abstain) thumbs up from the FDA's Advisory Committee today. The company's weight-loss drug Lorquess is up for approval. The stock nearly doubled to $6.85 after opening for trading in after hours - it was halted during the Committee meeting and vote. The actual approval decision is not due until June, but expect fireworks over the next couple days. Congratulations to the longs (of which I happen to be a member in my personal accounts) and to the company. Regards, Trond This site is for educational and informational purposes only. Nothing contained here should be construed by anyone as an invitation or solicitation to buy or sell any security. This site does not contain personalized legal, tax, investment, or financial advice. Users of this site should consult with a qualified adviser to obtain advice suited to their personal circumstances.

Celsion thoughts

I was asked the following question about Celsion raising more money prior to getting results from their HEAT trial....

>>Do you have an opinion on whether they would hang ten on cash until after the HEAT readout?

I was blindsided by the raise immediately after the interim results. That one-two punch really killed us, and only the specter of the 2nd intermi look was what was keeping us above $1.75.

It kind of blows my mind that we're this low - even if we're 7-9 months out. But it is what it is.

I feel fairly confident that as the summer draws nigh, we'll pick up some analyst coverage - and while they may be positive or negative, we're almost sure to add some, "IF they get good results, then my target is $XX" statements. Keep in mind the three targets we have, ($6, 7, and 10 IIRC) all were assuming a continue at interim. So we are so far below those targets it's not even funny (or at least my accounts are not laughing). We do have target reiterations to look forward to, as well as China completing enrollment, DIGNITY/ph2 starting, more ABLATE news, the mysterious product #4, Yakult news in Japan, the ever-present chance of a partnership or buyout, and the clock is always winding down towards Q4 and the 380th event. Today may not be the lowest price we'll see, but odds are in our favor to start a climb upwards - you just need to be patient.

All that does not answer the question, "Do you have an opinion on whether they would hang ten on cash until after the HEAT readout?"

They have been both aggressive and safe at times. Last summer, they starved themselves of cash to see if they could make it through the interim, and then they also raised at the worst possible post-interim time. It would not surprise me to see a raise at any time, but my opinion is they will not do so in the next two months. Once we have a handle on DIGNITY andf ABLATE costs in the next quarters' numbers, I might change my mind! And of course, when the price does get some traction, that begs the company to raise a little.

It probably comes down to how close they really are in partnership talks. Right now, they are fine for cash. Projecting out for 5 quarters, after thinking about the trials going on, we'll definitely need some more. Does it change things that we should *know* HEAT results exactly one year from now? Uh, yeah. So final thought is again the partnership side of things. If they can sign one more regional agreement for Thermodox - only (China, or Europe) and grab a $4M up-front payment, then I think a further raise can wait until we're at the final (and the price should be above $3).

Best regards,
Trond

Disclaimer:
This is presented for educational and informational purposes only, and should
not be construed as personalized legal, tax, investment, or financial advice.
I am long shares of Celsion in my personal accounts, but my holdings are based on my own risk tolerances and situation.

Mothballs

I am a little sad as I write this.

The Port24 is hereby mothballed. There are quite a few regulatory requirements when an investment adviser representative (as you probably know, I am now President of Heartstone Capital Management) puts out any kind of stock-picking list. Beyond the disclaimers that you could probably figure out, there are performance and trading considerations.

If I sold any stock in the Port that a client owns, or contra-wise bought a stock that I’d recently chosen to sell in real-life, there are issues. To even mention performance, without bringing up a comparable index, with the associated warnings about commissions, fees, and reinvested dividends, and its performance, brings down the wrath of several agencies.

I’m not saying that it’s gone, just mothballed while I figure out some of these issues. The good news is that I think all the securities within the Port can last a while without any guidance from me. And the best ideas are going to be what I’m investing in, and recommending, at Heartstone.

In the meantime, if you want to hear about a couple stocks a month, as well as get tips for financial planning, you can sign up for my free newsletter at http://eepurl.com/i4VQ1 or go to www.HeartstoneCapital.com and visit Services – Newsletter.

Best regards,
Trond Hildahl


This site is for educational and informational purposes only.
Nothing contained here should be construed by anyone as an invitation or solicitation to buy or sell any security.
This site does not contain personalized legal, tax, investment, or financial advice.
Users of this site should consult with a qualified adviser to obtain advice suited to their personal circumstances.

Launch!

Poor TrondsWorld has been sorely neglected. I have good news and bad, for readers.

The good news is that I have launched my firm, Heartstone Capital Management, Inc. That puts me firmly in writing mode, perhaps not daily, but considerably more often than I have in the past.

The bad news is that I have a blog, The Four Money Steps, at www.HeartstoneCapital.com also, so that will absorb half or more of the writing I do. However, I do intend on keeping up both blogs. Most mentions of securities will be more appropriate for that site, since disclaimers are built in, but there will be plenty of commentary from Trond the person that will be more appropriate for this venue.

I'll give the quick plug, of course - visit http://eepurl.com/i4VQ1 to sign up for my twice-monthly newsletter, chock full of financial planning tips and more.

If you are looking for a comprehensive finanical plan, I will cover your entire financial picture: including your budget and debt; family situation and college aid expectations; investment choices, both taxable and retirement-oriented; tax planning, estate planning; and retirement projections.

I'll also manage accounts for growth according to your needs and timelines. If you are in Southern California or beyond, check out the site at www.HeartstoneCapital.com.

Regards,
Trond

Disclaimer:

This newsletter is for educational and informational purposes only. It expresses the views of the author as-of the date on the byline and such views are subject to change without notice.

Nothing contained herein should be construed as either 1) personalized legal, tax, investment, or financial advice, or 2) as a solicitation to buy or sell any security. Readers should consult with a qualified adviser to obtain advice suited to their personal circumstances.

Heartstone Capital Management, Inc. is a Registered Investment Adviser registered in the State of California. If you live in another state, I may only transact business in your state if first registered, excluded, or exempted from registration requirements in that state. Follow-up, personalized responses to people in such states that involve either attempting to effect securities transactions or the rendering of individualized investment advice for compensation will NOT be made absent compliance with state

Celsion safely past interim look

CLSN released a PR today:

http://www.celsion.com/releasedetail.cfm?ReleaseID=627024

Of which the important parts are shown below:

"Celsion Corporation (NASDAQ: CLSN), a leading oncology drug development company, announced today that the independent Data Monitoring Committee (DMC) for Celsion's Phase III HEAT Study, a multinational, double-blind, placebo-controlled, pivotal study of ThermoDox® in combination with radio frequency ablation (RFA) for hepatocellular carcinoma (HCC) or primary liver cancer, has completed a planned interim analysis for safety, efficacy and futility and unanimously recommended that the study continue to its final analysis as planned. The DMC evaluated data from 613 patients in its review, which was conducted following the realization of 219 progression-free survival (PFS) events within the study population. A total of 380 events of progression are required to reach the planned final analysis of the study.

Celsion also announced today that the DMC, in its review, followed a statistical boundary determined by the Company using the Lan DeMets implementation of the O'Brien-Fleming spending function. This approach allows for the Company to conduct additional interim efficacy analyses prior to final data read-out at 380 PFS events with no increased risk of statistical penalty. The additional analyses may allow for earlier stopping of the study. Additionally, based on its internally modeled estimates of PFS events, Celsion reconfirmed that 380 PFS events are projected to occur in late 2012.

"The DMC's unanimous recommendation is a significant achievement for Celsion based on the most comprehensive review of the HEAT Study to date, including the first-ever review of efficacy results," said Michael H. Tardugno, Celsion's President and Chief Executive Officer. "Critically, we have the potential to realize a successful outcome to the study prior to its planned completion. We are encouraged by what may be sufficient rationale for conducting an additional preplanned efficacy review prior to the 380 events called for in our protocol, and will seek to amend our Special Protocol Assessment Agreement with the FDA accordingly. We thank the DMC for their work and thorough review, and are grateful for the continued support and enthusiasm from the healthcare community, regulators, our investors and our employees."

The HEAT Study is being conducted under a U.S. Food and Drug Administration (FDA) Special Protocol Assessment, has received FDA Fast Track Designation and has been designated as a Priority Trial for liver cancer by the National Institutes of Health. Target enrollment of 600 patients was reached in August 2011, after which the DMC conducted this interim efficacy analysis based on the realization of 219 progression-free survival events. Consistent with the Company's global regulatory strategy, Celsion is continuing to enroll patients in the HEAT Study in order to randomize at least 200 patients in China, a requirement for sFDA (State Food and Drug Administration) registrational filing in that country and to ensure timely readout of final data. In addition to meeting the U.S. FDA enrollment objective, the HEAT Study has also enrolled a sufficient number of patients to support, in Asia, registrational filings in S. Korea and Taiwan, two very important markets for ThermoDox®."

So - my thoughts are as follows:

Disappointed? Yes - I did think we had a great shot at interim. Funny thing is, we just don't know: was P-value there but OS not enough of a trend? ("totality of the data")

So what do we know?

Safety is not an issue.

Enrollment at 613 (mid/late Sept?) This worries me a little bit. If 600 was ~ 8/5 and enrollment was 613 on 9/19ish, enrollment in China is slow. However, I believe that only those treated and at least one follow up might qualify under the 613. In that case, true enrollment might be closer to 625ish... I will have to follow up with the company here.

219 evaluated as "events". Q was asked at cc about the # past 190 and MT said "not substantial." 29 over = ~15% surplus... in my book that is substantial, but whatever.

The biggie in my estimation is that DMC advised them to seek an amendment to the SPA, instead of "simply" reccing a continue to 380. There is NO reason for this unless they were awfully close to being close enough to stop the trial. There is no other reason - period.

We have enough cash for about 8-11 months, depending on how much burn changes from the mrq. HEAT costs are "over the hump" supposedly but then we're still enrolling to 700, plus ABLATE expenses start. I assume ~1.7-2M a month, yielding my 8-11 months. We've demonstrated that we're willing to scrape the barrel... In my opinion it depends 1) on the FDA chat re the SPA and how soon we decide to take another peek and 2) on how licensing talks with big pharma (BP) go. Now that we're "de-risked" past the interim, BP may be more willing to loosen the purse strings. I repeat: with the DMC rec to amend SPA, the cat is out of the bag.

Was it Rodman & Renshaw that said $6 if a continue? I'm disappointed today, but especially if the overall market rallies, we'll nudge out of the mid $2s soon enough.

-Trond

Celsion quarterly call

Following are my notes, in very rough form.
I'm very excited still, but very conscious that an investment here assumes that company guidance for 12 month placebo median PFS is correct. More precisely, it appears that anything up to about 17 months placebo PFS would give great odds at interim, which is 40% worse than guidance! So I am comfortable with such risk, but others need to decide for themselves.

26.6M shares OS, $21.4M cash, Q burn was 6.9M (will slow down somewhat - Q3 was high for HEAT milestone payments)

Acknowledged that burn will decrease slightly simce "hump" of HEAT costs are over in Q3.

380 events "possibly as early as q412".

HEAT enrollment extended to 700.

[me - was 640-650 to allow China to be registrational.]

later in QA acknowledged that 700 will get them to 380 events quicker

No OS (overall survival) bar is set at interim - it is "totality of the data".

Cash should last through 2012 [me- although this would reduce us to scraping the barrel again - doubt they'd go past 2q12]

S Korea and Taiwan are registrational in size, China [believe he said Taiwan in the call, but misspoke] is "quickly approaching" 200.

Japan PMDA still reviewing but no action. Yakult in charge of details of new trial and approach.

ABLATE - data should "closely follow" the approval of TDox. [assuming company guidelines]

Gross margins should be 90%+

SPA says if interim hit FDA would need to be consulted. No specific process.

If only a continue, co guidance is that DMC will only relay that fact. NO EXTRA DATA.

Well placed in terms of competition on horizon.

Co. gets "standard set of data" after continue - but pooled, not broken out per arm - it is still blinded!

No saying when DMC meets or when 190 happened [except we know 190 in 3q11 from the 8k filing. my best guess still second week of Aug '11]

Will not disclose p-value needed at interim. Can figure lots of stat data from that - not fair to all shareholders.

Went to 8-10 weeks for processing data... [believe this incorporates taking "extra care" with data into account w/ the increase over prior 6-8 weeks given]

Not substantially more than 190 events, but included a "safety margin".

Licensing talks continue.

MarketWatch contest - round 2 article

MarketWatch is running a contest to find its "Next Great Investing Columnist." I've entered, and my first column made it through the initial round, thanks to social media voting placing me in the top 25.

Now it gets interesting - as they are technically running two contests. There is an "Editors' Pick" winner (who actually wins the gig writing a column) and a "Readers' Pick" (based still on social media voting). The editors picked one additional writer to put through, so there are 26 remaining contestants. This round, 6 total writers will make it through - three Readers' Picks and three Editors' Picks.
I'm pretty much in need of being an Editors' Pick this time, as the top three vote getters in the first round all got more than 300 votes ("likes" on Facebook) and mine, while respectable in the field, drew only 148 votes.

I really don't mean to bag on the actual contest, but allowing the social media voting is a bit of a farce. The lead contestant got over 800 votes, more than twice as many as the second place vote... and the article is in broken English and extremely hard to follow. I guess I need more friends on Facebook. *grin*

I am asking the gentle readers here to visit the column, nevertheless. Any "likes" are certainly welcome, but I would actually appreciate comments in this round. I think the editors are more likely to place some credence on comments this time around!

My second article can be read here:
http://blogs.marketwatch.com/great-columnist/2011/11/07/dont-settle-for-average/

My thanks to all!

Regards,
Trond

Celsion - buy, sell, or hold?

We should be hearing from the DMC (data monitoring committee) regarding the interim results at nearly any moment.

While I am a raging bull as far as Thermodox goes, this is a clinical trial and "anything" can happen. I feel it a very slim-to-none kind of possibility that the trial be stopped for failure, but one has to keep it in mind. If the loss of your dollars here would cause you to lose sleep at night; then it may be time to sell, today.

As long as you can live with that chance, the remaining choices are a recommendation for continuing to the final look or a recommendation for filing for early approval, based on overwhelming statistically significant advantage.

Message boards have been frothy with the odds of success as high as 60% or more. And I have to say, there appears to be some good data backing up such assertations. Nevertheless, the most likely possibility, in my opinion, is simply a continue. So what does that spell, in terms of CLSN's price?

I believe this depends solely (short term) on what data is released with such a recommendation. It is important to note that the DMC does not have to release anything extra. That said, if there is a definite trend, regardless of meeting the higher bar at interim, it is conventionally believed that the committee will say something about the data.

A drop, short term, could easily happen, especially if there is not extra data released. Many stat experts have been saying, contrary to company assertations, that the final look at 380 PFS events will not occur until mid 2013 (company has been guiding for about Q3 2012). With such an extra amount of time in between interim and final, I think the price would drop again to the $2s.

However, with the release of some data, speaking to the improvement seen to date or at least the placebo arm's performance, would go a long way to being able to peg the actual performance of Thermodox. If we can see that at the final, it looks to be a success, we could even see some price appreciation.

A buy here would simply be a lottery ticket for interim success; with normal volatility I'd say a hold here is prudent, again as long as you can stand the possibility of a near 100% loss on an admittedly low chance of trial failure.

Regards,
Trond

HARPing on refi reform

President Obama is stumping for changes to the HARP program -- and while I try to stay politically neutral here, I reserve the right to call out idiocy anywhere I see it. (and yes, idiocy may be a stronger word than is called for - but wasting political capital slightly modifying a program that is very weak and doesn't address some fundamental issues, is not exactly smart)

http://www.marketwatch.com/story/mortgage-refi-plan-targets-hard-hit-borrowers-2011-10-24?siteid=nwhpf

"To spark interest in HARP, the program will lower fees, eliminate the current 125% loan-to-value ceiling, waive lender warranties and eliminate the need for property appraisals. "

Gee, make it easier for bad credit risks to refinance? Here's my take.

Yes, something needs to be done. But allowing people who fundamentally are screwed *anyway* to get out of their loans (which includes forgiveness of some principal) shifts the burden unfairly to the bank-stock shareholders. If you are underwater on a mortgage, it is not necessarily an emergency. Absent plans to move, all it takes is some time to change the situation. The wholesale granting of "liar's loans" a few years ago was obviously a stupid things for banks to do; I am NOT excusing them. But folks who enter a mortgage need to realize that a secured loan is exactly that - and the house IS the security. You pledge to pay $250,000, and fail to pay it back - you don't get to keep the house. No one questions the repossession of a car after failing to pay a $20,000 car loan!

So it is all well and good to question this kind of program - but what do I propose instead?

First, only allowing a program that is guaranteed by FreddieMac or FannieMae does not help the 70% of homeowners who have a mortgage through another institution. Secondly, principal should not be forgiven. Third, credit issues still need to be resolved. Here's my proposal.

Allow a two-year period where refinances can be done with the following waivers:

* Any amount can be refinanced, up to the current loan amount.
This only makes sense. If the bank is on the hook for $400,000, then they by definition cannot be hurt by allowing a refinance of $400,000. By allowing the refi, they increase their chances of getting repaid AND make more in interest charges the next few years!

* Modify the appraisal process.
This is basically a correlary of the above point. We don't care about what the home is worth; we just want to make sure it is structurally sound.

* Credit still needs to be checked. Income verification needs to be revamped.
We do want to make sure that the loans made can still be repaid. If a household is bringing in $5,000 a month, is there any doubt that a $2,000 payment - 40% of their income!! - might be a stretch, still? If their P&I payment was $2,800 a month but an extra member of the household used to be working, their situation has changed enough that perhaps they shouldn't be owning a house anymore.

I guess I am angry that only a small percentage of homeowners may qualify under HARP and that the fix hurts shareholders who have already been nailed by the last few years of bank stocks' crumbling share prices.

Regards,
Trond Hildahl

Next Great Investing Column contest

Well, I appear to be in full solicitation mode this morning. Facebook, Twitter, Google+, and now my blog...

I'm in a contest to become an investment column writer for MarketWatch. The first stage's winners (25 of them) are determined solely by social media voting. If you've enjoyed my blog posts over the years, please help me out and vote for me here: http://blogs.marketwatch.com/great-columnist/2011/10/19/dont-be-an-english-lord/.

And THANKS!
Regards,
Trond Hildahl

Marketocracy results

Well, I am a big fan of full disclosure, but this is a hard post to write. The Marketocracy website allows anyone to participate in managing a mutual fund - fake of course. Nevertheless, you are bound by some rules; you can't bet it all on one stock, as no one stock can be more than a certain percent of the total. You can't be on margin, and you must be at least 65% invested. If you want to be a sector based fund, then a certain percentage of the holdings must be in that sector. They do all the calculations across months, quarters, and years to figure your returns and most importantly, compare those returns against the other marketocracy funds.

The best of the best are called the M100 - the 100 best performers, long term; culled from the 85,000+ managers and the 100,000+ funds being managed. Those 100 actually make a little money, too - the company uses the best managers' ideas to run an actual mutual fund and those managers are compensated. It is no secret that I firmly intend to be one of those manangers one day.

And that is why I am writing so sheepishly today. They update the quarterly returns quite late - Q2 was just posted about a month ago. And in my Heartstone Health fund (http://www.marketocracy.com/cgi-bin/WebObjects/Portfolio.woa/ps/FundPublicPage/source=CmOhHbFfEfOmLoNbMaKiAbDf), I was the 7th best fund (yes, 7th, not top 7%!!!) for the three month period. For the 3 year returns, for as long as I've HAD the fund for more than 3 years, I've been in the top 89%, and this quarter I came in at #67 overall.

I was ecstatic, of course, but now for the disclosure. Since they posted the results in September, I knew already that my 3rd quarter results were going to equal my second quarter results to the downside. Yes, I fear that I may well be the 7th WORST fund across the universe this coming quarter. Celsion dipped about 40%; VirnetX went from the $30s to about $20; and Dendreon crashed from the $30s to about $10! To be frank, I am not sure if any holding had a positive return in this quarter.

Since I am a sector fund (biotech/healthcare) my beta is quite a bit higher than the S&P 500. Beta is a measure of how volatile I am versus the market-as-a-whole. It is the long term that matters, of course, and I'm fully confident that I will come back and with a vengeance. Bring on the fourth quarter!

Regards,
Trond

Celsion info re: Mangrove

Hello all,

It has been quite awhile since I have updated the blog. I've been a busy beaver on multiple fronts, but I still have great expectation for Celsion. Below, please follow the link to a great interview with Nate August, whose Mangrove Partners, LLP recently took an 8% stake in Celsion, expecting a great result at the interim look of the HEAT trial.

http://celsion.blogspot.com/2011/10/exclusive-interview-with-mangrove.html

Regards,
Trond

Barry Ritholtz's blog

Occasionally there is something blogged that compresses exactly what I'd like to say in such a simple way that I just can't improve it. Barry Ritholtz (The Big Picture) is such a writer most days, and I highly recommend a daily stop there.

Check out his post today (and his linked article about black swan events is a must-read as well).

http://www.ritholtz.com/blog/2011/09/what-should-investors-do-now/

People almost always need to do "something", however. If you can't just sit on your hands, I'd suggest reviewing your allocations, now that stocks have taken a pounding.
-Is it time to rebalance so that you buy into stocks again now, when they are "on sale"?
-Have you contributed fully to your IRA for the year? Get it in now and buy low.

Yes, the markets could certainly sink somewhat lower. Is it the end of the world yet? Probably not! While I think we could see a recession again in the next quarter, the stock market has been diverging from the economy quite a bit in the last three years - Sept/Oct, when going down, is historically a pretty good time to be buying stocks.

Regards,
Trond

More thoughts on Celsion's 190th event

So it looks like the company has probably hit the 190th event... recent PRs talk about "confirming" rather than "achieving" the 190th event.

A reputable poster (biopharmpr) on Yahoo, who also tweets a bit under Magicsia and has a blog with some great info about Celsion, says he spoke with IR and the company is now backing off saying they will PR when the 190 happens.

Supposedly, they are concerned about having more than 190 events by the time they confirm 190 for sure, and then having to explain THAT makes them not want to do so at all. So - it is getting more likely that the next PR about the HEAT trial will end up being the actual interim results!!

I don't like this for several reasons, and I will probably call Jeff Church tomorrow when I can get my thoughts down cogently. But the important things for CLSN investors today are:

Per the last filng, they expect the 190th event in the 3rd Q and results in the 4th Q.
Previous guidance is for 6-8 weeks between the two.

Absolute best case is results by 9/17 -- meaning the 190th occured quite a while ago, has already been confirmed, and the DMC is currently doing the scutwork of visiting sites and checking paperwork ad nauseam... leading to a postulation of the interim results at 8 weeks by 10/1, but being done in only 6 weeks: 9/17/11. I find this extremely unlikely and think Q4 means exactly that.

Worst case would be the end of December. This could happen if radiologic reviews truly take 2-4 months to accomplish, meaning the event probably happened already, the confirms are pending, and might still take a couple months from now. Adding in the 6-8 weeks to compile/check the trial site info, we could be looking at December before knowing results.

I am mostly in shares, but did dabble in Oct and Jan calls. I think Jan are definitely the safest but there could easily be an "October Surprise" by the third Friday of October. I still expect a runup through September to the $5-7 range. As Mr. Market gets wind of the potential of Thermodox (and who doesn't like a binary event thrown in?) there will be some speculators also riding this up.

Regards,
Trond

Dendreon - time to cut bait

I am selling all remaining shares of Dendreon in the Port24 - today's current price is $11.58. This is at a steep loss to the buy in price, but I simply have no patience for mgmt anymore.

I certainly hope I'll be buying in again at some point, but what with mgmt indications from the last call that they will be letting folks go and the unwillingness to throw out any kind of revenue estimates, I cannot urge a position here at the present time.

Regards,
Trond

Celsion - To PR (190) or not to PR

An online friend contacted CLSN's IR today regarding the 190th even in the HEAT trial. Instead of regurgitating the content, I am just going to direct you there.

I will note, however, that I am putting less credence on having results by the options expiration in October. I still firmly believe we'll see quite a runup through Sept and October, but anyone betting on the Oct strike timeframe will probably not see the actual results by then.


http://celsion.blogspot.com/2011/09/dont-bank-on-190-pfs-event-press.html

regards,
Trond

Building a business

As announced previously, I am going through a number of steps to hang out a shingle on my own. I'll be doing financial planning and investment management; combining what I love to do, I love to talk about, and what I can see myself doing for a long time without burning out.

In the next few weeks, I'll post somewhat frequently about the steps in setting up such a business. While a sole proprietorship in some industries can be started by simply taking on work, this type of business is quite convoluted in some ways.

For liability reasons, I have decided that I need to either incorporate or form an LLC. And as a financial planner, I will need to pass the NASD Series 65 test to become a Registered Investment Adviser (RIA).

Those two steps, and the associated compliance, will take a couple months as well as about $7K to get the ball rolling. Then there are the practicalities to think about:
An office, a home-office, or a "virtual" office?
Equipment? Laptops, smart phones...
Business name, fictitious business name, trade/service marks, logo design...
Domain names, building a website...
Accounting! Taxes!
CRM (client relationship mgmt) software, electronic signature vendor...
Marketing! Advertising! Networking (I don't know any millionaires, personally), what is my niche? What are my bragging points?
What services exactly will I offer? Pricing?

Fortunately I do not see myself hiring employees for a long time yet... reading up on all the hoops that an employer must go through gave me a headache.

One thing I know for certain, is that I will be using the Spoke Fund concept (see www.SpokeFund.com) for how I handle investing money. Starting a mutual fund would cost about $400K, and while a hedge fund is much cheaper, you can only advertise to "high net worth individuals"... or basically millionaires. With a Spoke Fund, the investor's money remains in his or her own name, with a discount brokerage custodian I select, but invested according to a model of stocks I control. Importantly, my own account is the "hub" - where I am invested in the model myself with all the risks and rewards - and the "spokes" connecting my account and my clients' accounts are simply the model's percentages of the various investments.

As to financial planning, I intend on being a fee-only planner, taking no commissions, kickbacks, or other incentives for the products I may recommend.

So please, gentle reader, lay it on me! Ideas this post may have raised? Questions on the whys or hows? Advice from experience? I thank you and look forward to any comments!

Regards,
Trond