Facebook is a $7.50 Stock

By Diane Alter
www.moneymorning.com

Facebook (Nasdaq: FB) is on the cusp of amassing one billion users, unarguably a milestone.

The last official tally of Facebook users was 955 million. Employees have become giddy in expectation of reaching the one billion mark any day now.

But, they might want to hold off tossing confetti, because the momentous occasion will also shine a bright light on the social network's shortcoming.

No matter how many users Facebook acquires, if it can't sell anything, the landmark number is useless.

As Owen Thomas of Business Insider wrote, "Bottom line: One billion users isn't cool. You know what's cool? Two billion."

Facebook Sales Estimates Slashed

The failure to monetize that many subscribers is a shame because Facebook's massive user base is an advertiser's dream if effective - but there have been no signs of future revenue growth.

That's why market research firm EMarketer Inc. recently slashed its projections for the Menlo Park, CA-based company from $6.1 billion in annual sales to $5.04 billion. Facebook continues to struggle for advertising growth, in particular the fast growing mobile market.

An increasing number of Facebook users are now accessing their accounts via smartphones and other mobile devices, an area where Facebook collects a great deal less in ad revenue than it does on desktop access.

Facebook enjoyed an 88% revenue increase in 2011. EMarketer estimates Facebook revenue will rise only 36% this year and 31% in 2013. Advertising growth, which comprises the bulk of Facebook's sales, was more than 68% in 2011, according to EMarketer. That number will dwindle to 34% in 2012 and 29% in 2013.

In July, in its first earnings report as a public company, Facebook reported sales growth of 32% for the second quarter, down from 45% in the prior quarter and 55% in the fourth quarter of 2011.

The company's earnings report was lackluster, uninspiring, and very short on guidance.

Can Facebook Ads Even Work?

Now an increasing number of marketers have questioned just how effective Facebook advertisements are, according to EMarketer analyst Debra Williamson.

Sales "haven't been growing as fast as we and others had expected. There is still hesitation about the effectiveness of the advertising, about how much the advertising is worth," Williamson told Bloomberg News.

Facebook maintains that it's working with companies to show that ads do have an impression and are impactful, but Williamson cautions it needs to move faster in this arena.

In the days leading up to Facebook's hugely hyped, highly anticipated IPO, behemoth General Motors Co. (NYSE: GM) announced it would stop advertising on the social media site. GM claimed its Facebook ads failed to have a big impact on consumers.

GM was spending some $40 million a year on Facebook marketing, $10 million of which was for paid advertising, according to data from The Wall Street Journal. The company's defection did more than strip money from Facebook's ad revenue. It promoted a plethora of other companies to review their Facebook ad strategy.

Now Facebook hopes a fresh strategy will appease advertisers. Facebook next week will debut a new tool for marketers, company spokesperson Elisabeth Diana confirmed to Bloomberg. Advertisers will be able to use information they have gathered from their own customer base, including e-mail addresses and phone numbers, to target those same customers on Facebook, using a software program that protects identities.

Facebook Stock Dips Under $20

Facebook's shares have lost more than half their value from the May 18 IPO.

The company, currently worth about $50 billion, has seen more than $40 billion slashed off its value since its entrance as a public company. Facebook is now the worst performer on record among all large IPOs, Bloomberg reported.

"Investors who bought into the IPO have lost billions of dollars," Victor Anthony of Topeka Capital Markets explained to Bloomberg. He added that CEO Mark Zuckerberg and his team need to detail how the company plans to drive revenue growth if they want investors to hang around.

Zuckerberg's indifference to Wall Street's opinions and the day-to-day movement of Facebook shares are also troublesome for many investors. They may not hang on to shares for much longer if they don't see much to like. They want to see revenue growth, sales, a concerned CEO and continued membership development.

Facebook stock traded around $18.27 in Friday morning trading, down nearly 16% for the month of August.

Source: Congrats on One Billion Facebook Users… Who Buy Nothing:

Related News

• Forbes: General Motors (NYSE:GM) Says Facebook Ads Don't Work

Breakthrough Tech Lets Users Surf the Web With Just Their Eyes

By Michael A Robinson
www.moneymorning.com

Forget about using a keyboard to type in your question on Google or Bing. Ditto for voice control on your smart phone. Soon you'll be able to control your computer or mobile device just by moving your eyes.

A British research team did just that with a new system that costs less than $100 - all with parts they could simply pull off a shelf. In a moment, I'll give you all the details. But first, let's put this breakthrough in context. You see, for most of us surfing the Web, writing emails or sending texts is so routine we don't even give it a second thought. In fact, it sometimes seems that mobile phones, in particular, have become part of our bodies. (Just try telling my teenagers to stop texting at the dinner table.)


And yet, millions around the world simply cannot join the digital age for a simple reason. Their bodies won't let them, either because of disease or severe injuries.

That covers a wide range of problems from adults with lost limbs or broken spinal cords to kids who have muscular dystrophy, an illness that causes the muscles to wither away. But all that is about to change...

The Promise of Eye-Control Tech

Fact is, cutting-edge eye-control tech promises to have a profound impact on the way humans use a wide range of machines. We're taking about everything from controlling robots and wheelchairs to setting the timer on your coffee maker. It's thanks to the research team at Imperial College London that this tech is finally within reach.

Today's standard eye-tracking systems (like those used by the U.S. military) cost "tens of thousands of times" more money than the system they built, the research team noted. With this milestone behind us, I predict this new system - or something like it - will bring eye-control tech to the masses. Team leader Aldo Faisal agrees. He says just about anyone can learn to control devices with their eyes. In his project, people became adept at using the system in just a few minutes.

Faisal's team got their results, published July 12 in the Journal of Neural Engineering, by having test subjects play Pong, that early table-tennis video game that debuted way back in 1972. They not only played the game without a head set, test subjects also learned to surf the Web and write emails using only their eyes.

Dubbed the GT3D, the system includes two fast video-game console cameras attached to a pair of cheap glasses and "smart" software that processes the input quickly. The cameras took constant pictures of the eyes and tracked just where the pupils were pointing. That allowed the research team to figure out the precise spot where a person was looking. Turns out the system works in 3D. The research team devised ways to figure out how far in the distance the test subjects looked. This last detail could prove crucial; the spatial control would allow people to work an electric wheelchair just by looking where they want to go.

Really, the possibilities are endless...

Just by using a simple eye movement, like a wink, paralyzed patients - or any one for that matter - could turn the pages of a book in their e-reader or "tell" a robot to clear the dishes off the dinner table. No doubt, this milestone clearly fits into the Era of Radical Change. Not long ago, eye-control was the stuff of sci-fi or advanced U.S. defense platforms.

But in the near future it will become a reality for millions around the globe. It's also one of the reasons I say the world of high tech moves faster these days than what most folks can get their minds around. Consider this related piece of news that came out on the very same day... A team in the Netherlands said a new system will allow paralyzed people to control computers with just their minds.

This brain-computer link from UMC Utrecht relies on an advanced MRI scanner. Test subjects looked at a computer screen that allowed them to see just what a camera on a toy robot was looking at. In turn, the MRI scanner measured the brain activity of the test subject. Then, the computer "learned" when the four test subjects were thinking left, right, or forwards.

Each of the volunteers got the robot to complete a course of about 30 feet with four stops along the way. All the while, the "drivers" were lying inside the MRI machine - just thinking about what they wanted the robot to do. "All four study subjects were able to control the robot very quickly," said brain researcher Nick Ramsey, who led the team. "They all felt in control of the robot. This means that this type of brain-computer interface is very easy to master. Training is barely needed." Ramsey said this is a crucial step in proving the long-term potential for this type of approach. Later, patients will have electrodes implanted in their brains to track their thoughts and control robots.

It's hard to predict how long it will take either of these systems to come to market. If I had to guess, I'd say the eye-tracker will come out sooner because it's cheaper and easier to use - at least for now. But either system would be a godsend to millions of paralyzed people around the world. It will give them a brand new lease on life, a way to take control of their surroundings that today they can only dream about.

About the Author
Michael A. Robinson is one of the top financial analysts working today. His 30-year track record as a leading tech analyst has garnered him rave reviews. The first analyst to uncover the rare earth mineral crisis, he amassed cumulative gains of 990% for his readers in just 16 months. Today he is the editor of Radical Technology Profits. He also edits the Era of Radical Change e-letter that explores "what's next" in the tech investing world.

Source: Breakthrough Tech Lets Users Surf the Web With Just Their Eyes:

Microsoft Corp. (Nasdaq: MSFT) Revived by New Tech Breakthrough: Here's Why MSFT Is (Finally) a "Buy" Again

By Michael A Robinson
www.moneymorning.com

Not long ago, the future of Microsoft Corp. (NASDAQ: MSFT) was slipping through its grasp.

Then it introduced Kinect. Today, the tech giant is using Kinect to win big on a breakthrough that will literally touch millions of lives. It is one of the reasons why Microsoft's stock has gained more than 20% this year.

What is Kinect? You may recognize it as the best-selling add-on to the Xbox 360 video game. But it's much more than that. It represents a revolution in how we will communicate with our computers, our TVs, and our smartphones. For Microsoft, Kinect is literally a game changer. They lead the world in the technology behind it, and it promises to be big. But not just for Microsoft...not by a long shot.

The Promise Behind Microsoft Kinect

The magic behind Kinect is that it responds to body gestures. And while Kinect did debut to rave reviews, Microsoft executives really didn't understand how Kinect could change the world -- and rack up new sales.

But since its introduction in 2010, hackers have found dozens of very cool uses for Kinect-- none of which did much for Microsoft's bottom line. This got the software giant to thinking that maybe they were sitting on a potential gold mine. That's why Microsoft is now tapping the genius of young entrepreneurs (You know, the type of guys who live and breathe cutting-edge high tech) to better monetize the technology behind Kinect.

In fact, Microsoft recently picked 11 startups to work at its Kinect development offices in suburban Seattle. It's a savvy move. After all, these guys get out of bed every day looking to create the Next Big Thing.

Already, the program shows great promise. Here are some of the slick high-tech ideas these young turks are already tackling:

• Styku only hopes to reinvent how people shop online. The startup's idea is to provide you with a personal avatar that lets you "try on" clothes virtually before you buy them.

• Jintronix uses Kinect and 3D gaming to improve rehabilitative therapies for patients suffering from a motor disability. Virtual reality could be a godsend for stroke victims who want to rehabilitate from their homes.

• GestSure Technologies targets surgeons and hospitals. It wants to bring touchless interfaces into the operating room. Doctors could access computer data during surgery without compromising cleanliness.

• Ikkos uses algorithms to teach movements. Parents will love this one. It's designed to help people develop the body mechanics of an Olympian.

It's too soon to tell if any of these startups will ever go public and give savvy investors the kind of big gains that have been pushing the Nasdaq to new heights lately. But don't worry. Kinect is bound to provide its share of breakouts.

First of all, Microsoft recently released a version of Kinect for Windows and is now pushing a version with developer software.

In fact, I predict we will see hundreds of applications using Kinect by the end of this decade. And many of them will be practical for everyday use.

"Kinected" Carts Follow Shoppers

Take the case of Whole Foods Market Inc. (NASDAQ: WFM). The upscale food store is working on a smart shopping cart equipped with Kinect. How cool is this? The Kinect cart can automatically follow a shopper through the store. Not only that, it can import a shopping list. But it gets better -- the system can direct a customer to items on store shelves. It can even scan goods as they are placed in the cart.

My gut tells me they will come up with an app that accepts wireless payments as you roll past a digital register. And that's just the start. Turns out Microsoft is working with roughly 300 companies to develop more Kinect uses with Windows.

The list includes big-cap leaders like American Express (NYSE: AXP), Boeing (NYSE: BA) , Mattel (Nasdaq: MAT) , Toyota (Nasdaq: TM) and UnitedHealth Group (NYSE:UNH), to develop Kinect for Windows applications. In the near term, Kinect likely will have its biggest impact on businesses that can make good use of large screens.

But it won't be long before Kinect becomes a mainstay of PCs, smartphones and tablet computers. Let me close by saying it's impossible to predict just how much Microsoft can earn from stand-alone sales of Kinect.

That's going to depend on how many applications emerge and how popular they become with the public.

But this much is clear.

Less than a decade ago, operating a computer with the wave of your hand was the stuff of science fiction - remember the movie Minority Report? Now it's becoming reality. That's what makes Kinect part of the Era of Radical Change, and it won't be long before we find a way for investors to profit from it.

Source: Microsoft Corp. (Nasdaq: MSFT) Revived by New Tech Breakthrough: Here's Why MSFT Is (Finally) a "Buy" Again:

Cisco Systems (Nasdaq: CSCO) is Looking More and More Like a Dividend Stock

By Diane Alter
www.moneymorning.com

Since the height of the dot.com boom, the transformation of Cisco Systems (Nasdaq: CSCO) has been extraordinary.

These days, the Silicon Valley Internet giant looks more and more like a dividend stock rather than an explosive growth company.

In fact, last Wednesday, the San Jose-based behemoth increased its dividend rate by a whopping 75% (from 8 cents per share to 14 cents) starting with the present quarter. That gives shares of Cisco a new dividend yield of roughly 3% which among the highest of major tech stocks.

For investors seeking a reasonably safe return and a less volatile investment, a great deal of value can be found in Cisco these days since the company now plans to return half of its cash flow to investors by way of dividends and stock buybacks.

And while the company may not post eye-popping revenue growth year-after-year, Cisco does appear poised to post healthy results and robust cash flow for years ahead.

That means Cisco's dividend will be both safe and stable.

Cisco Systems: Past, Present, Future

A once high-flying internet company, Cisco went public in February of 1990. The company rode the entire internet wave to the top, and is widely credited with changing the telecom landscape.

In fact, by late March 2000, at the apex of the dot.com boom, Cisco was crowned the most valuable company in the world, sporting a market cap in excess of $600 billion.

Since then its market cap has dwindled to $102 billion. Even still, in June 2009, it was added to the Dow Jones Industrial Average, and also maintains a place in several other influential indexes.

Of course, the future will tell if Cisco's bigger dividend and buyback program are part of a bigger and better Cisco, or simply a small consolation.

In the meantime, the fresh dividend hike is likely to keep shareholders happy, while the share buybacks (which reduce the amount of outstanding shares) will make its outstanding shares more valuable.

The news comes as Cisco reported impressive fourth quarter earnings that beat on all accounts. Cisco posted massive growth global rates in all regions except troubled Europe. Revenue increased 4% and profits jumped 56% compared to the same quarter a year earlier.

Following the earnings report, Cisco CEO, John Chambers noted that an uptick in orders at the end of the just ended quarter is a positive sign for the future. Acknowledging Europe remains a lackluster region, Chambers commented that the U.S. market is showing clear signs of improvement.

"We wouldn't have done the dividend commitment and the cash commitment if we didn't see stabilization in our business and had good confidence going forward," Chamber said on the earnings conference call.

Analysts and investors were quick to take note. Goldman Sachs (NYSE: GS) recently added Cisco to its coveted "conviction buy list," and Piper Jaffrey upgraded Cisco shares.

For income investors, Cisco is suddenly a stock worth considering.


Source: Cisco Systems (Nasdaq: CSCO) is Looking More and More Like a Dividend Stock:

Disruptive Biotechnologies Stir Up Profits: Ray Blanco

By George S. Mack of The Life Sciences Report
Source: Disruptive Biotechnologies Stir Up Profits: Ray Blanco:


The Life Sciences Report: You have written about your faith in veteran and proven management. Would you talk about that briefly?
Ray Blanco: One of the first things I look for in management is a good stable of scientists—the more, the better. I review credentials, previous academic work and published research. If management has a good scientific background, I take that as a big positive. In addition, I look for a group of people that knows how to design and manage clinical trials and how to work with the U.S. Food and Drug Administration (FDA), which is always tough. It's also good to have somebody in management who has a track record as a dealmaker, especially with early-stage companies. A good dealmaker can form partnerships with big pharmas, which is a way to get funds that don't dilute shareholders.
TLSR: My next question is actually about dilution. Investors in small-cap, pre-commercial-stage companies are always facing dilution, and we've come to expect it. Is that the price of doing business? How do you address this issue as an investor?
RB: Dilution is certainly a huge risk. The earlier you invest in a development-stage company, the greater the risk. With later-phase companies, which I deal with most often, an investor can look at the balance sheet and think about the burn rate going forward. In many cases companies have already been diluted—that is how they raised capital. But they should have enough cash on their balance sheets to finish up pivotal trials and, hopefully, get through the FDA before running out of cash. That's one way to do it.

"One of the first things I look for in management is a good stable of scientists—the more, the better."

Another way is to look at partnerships. Biotech companies will receive milestone payments from larger partners, which also will defray part of the developmental cost for drug candidates. That helps bring down the burn rate and reduces the amount of dilution that a company's stock will experience over time.
TLSR: You are fond of breakthrough and disruptive ideas in technology. How do you know when you've landed on one of these types of platforms?
RB: The important thing about a disruptive or breakthrough technology is that it can either do something that's never been done before—or do something that has been done before but do it better or cheaper. If it can cure a disease that has been incurable, or improve the survival rates for patients using a new drug, that qualifies as a disruptive biotechnology.
Just having a cool science project isn't enough. For instance, I'll mention Dendreon Corp. The company possesses a real breakthrough in terms of biotechnology in its prostate cancer autologous cell platform. You could think of it as a scientific triumph, but in the real world it doesn't move the needle much in terms of patient survival times, and it is incredibly expensive. Two-thirds of the cost of the therapy is eaten up just in the cost of goods sold. That's an example of a scientific breakthrough that I wouldn't consider a disruptive technology.
TLSR: Ray, what are your preferred biotechnology platforms today?
RB: I like technology platforms that are maturing and getting close to generating revenues, or have begun generating revenues in the past year or two, including RNA interference, antisense (genetic "on–off" switch), antibody-drug conjugate (ADC) and stem cell. I like companies with unique discovery, design and validation platforms because they can use those platforms to build a fat pipeline of many different drug candidates, not only in the present but also into the future.
TLSR: Could we talk about some ideas that you are recommending to investors? If you could, please briefly address the platform if it applies.
RB: I'll start with Seattle Genetics (SGEN:NASDAQ) and ImmunoGen Inc. (IMGN:NASDAQ). Both have their own versions of an antibody-drug conjugate technology platform. Antibodies have burst onto the pharmaceutical scene over the last 15 years or so because new breakthroughs in recombinant DNA and biologic manufacturing have allowed pharmaceutical firms to build engineered antibodies. Naturally occurring antibodies have the ability to target an antigen with great precision. The important thing about the ADC platform is that developers can take an antibody with a chemo payload and target it to a specific molecular entity on a cancer cell, using it to destroy that cancer cell. Your run-of-the-mill chemotherapies not only hurt cancer cells but also damage healthy cells. This corrects the problem by targeting the disease more precisely.
TLSR: Is this a double-barreled approach, in which you are getting both signal pathway disruption with the antibody as well as the toxic effect of the conjugated chemotherapeutic agent?
RB: Yes. Genentech (a unit of Roche Holding AG [RHHBY:OTCQX]) has a very successful antibody therapy called Herceptin (trastuzumab) on the market that targets breast cancers expressing the HER2 (human epidermal growth factor receptor 2, also known as "neu") receptor. Genentech has teamed up with ImmunoGen, and the antibody has been improved by linking ImmunoGen's cancer cell-killing toxin to it. Not only do developers get disruption, but they also have the opportunity to deliver a knockout blow to breast cancer cells. The combined product is T-DM1 (trastuzumab emtansine).

"The important thing about a disruptive or breakthrough technology is that it can either do something that's never been done before—or do something that has been done before but do it better or cheaper."

Seattle Genetics has used a similar technology with Adcetris (brentuximab vedotin) to go after Hodgkin's lymphoma (HL), from which I suffered about 20 years ago. It is currently approved for late-stage HL and anaplastic large-cell lymphoma (ALCL) patients who have failed one chemo regimen. In Hodgkin's patients it is approved for those who have failed an autologous stem cell transplant or for those who have failed two previous chemo regimens and are not stem cell candidates. This is the first new therapy for Hodgkin's in many years. The compound goes after the Reed-Sternberg cell, which expresses the CD30 antigen, but it has the opportunity to expand into other CD30-positive cancers. The treatment also may expand into earlier disease stages, and the company also has a pipeline of in-house and partnered ADC compounds that it is using to go after other cancers.
TLSR: Do you feel that Seattle Genetics will be able to develop Adcetris for CD30-positive cancers in much the same way that Genentech/Roche was able to develop Rituxan (rituximab) for several indications in CD20-positive cancers?
RB: Yes. Several cancers are CD30 positive, but Seattle Genetics picked the low-hanging fruit—lymphomas, which were the most obvious targets—first.
TLSR: Is Seattle Genetics funded well enough to develop its other candidates?
RB: Yes. If it's not totally self-funding already, it will be with just a few indications added to Adcetris. I think it will be fully self-funded very soon.
TLSR: You mentioned ImmunoGen, which is partnered with Roche/Genentech in development of its conjugated antibody, T-DM1. This product will probably cannibalize Herceptin, which has been a huge product for Genentech and now Roche/Genentech. ImmunoGen shares were down about 8% on July 12, after it announced a new stock offering. Is this an example of the dilution issue we discussed earlier?
RB: ImmunoGen just announced phase 1 trials for a new compound. If you are going to dilute, I think the company picked a great time to do it. ImmunoGen's share price will rebound, especially as we get close to T-DM1. That's my expectation anyway.
TLSR: What other companies could you mention, Ray?
RB: Vertex Pharmaceuticals Inc. (VRTX:NASDAQ) has Incivek (telaprevir), which is basically the first new hepatitis C (HCV) therapy approved in over a decade. Incivek has demonstrated superior efficacy. But the company is not resting on its laurels. It is also developing nucleoside analogs for use as all-oral regimens so that patients can dump interferon and ribavirin injectables, which have nasty side effects. We have already seen improvement in the HCV regimen with Incivek because it can cut the average treatment time from about a year to about six months. In addition, a superior percentage of patients have had a sustained viral response.
But it's not just about HCV. Vertex is also developing a cystic fibrosis (CF) franchise. It has already received approval for and marketed Kalydeco (ivacaftor) for a very small percentage of the population of CF sufferers. Kalydeco basically targets a particular mutation for the misfolded protein that causes CF, called G551D.
TLSR: On May 6 Vertex delivered interim data on an ongoing phase 2 trial of Kalydeco in combination with another CF pipeline candidate, VX-809, and it showed significant positive improvement in lung function in a specific group of patients.
RB: Right.
TLSR: The stock price was up dramatically that day, and it has held most of these gains. Do you think there is still value in the company?
RB: There's still a lot of value in the company—a lot of upside. If you look at how sales could grow from expanding the franchise, I think Vertex is severely undervalued. Plus there are the other compounds in development for HCV.

"I like biotech companies with unique discovery, design and validation platforms because they can use those platforms to build a fat pipeline of many different drug candidates."

VX-509 is another very exciting Vertex product; it is in phase 2 for rheumatoid arthritis (RA). It is a JAK3 (Janus kinase 3) inhibitor, and unlike the JAK-inhibiting RA compounds on the market right now, it can be taken orally because it is a small molecule. For patients, this would be a big deal. Instead of having to have an injection or infusion, patients can take the pill at home. VX-509 has the potential to be a very successful drug.
TLSR: Is there another company you would like to mention?
RB: We can talk about Aveo Pharmaceuticals Inc. (AVEO:NASDAQ). It has a unique drug-screening technology called the Human Response Platform. Basically, the state of the science today, and for quite a few years now, has involved grafting tumor cell lines in mice for in vivo modeling or in vivo testing.
TLSR: Xenografts (using cells from another species)?
RB: Yes, xenografts. But Aveo has developed a different platform—genetic mouse lines in which a few molecular switches can be flipped and the mice naturally develop the cancer of interest on their own. The tumors are not grafted in; they grow in a more natural way. The advantage is that there's genetic variability to the cancer, just like in the real world. The tumors behave more like real-world tumors. Xenograft models do not display that variability. The platform has been licensed out to large pharmaceutical companies because it is so superior to what everybody else has.
TLSR: The company has a partnership with Astellas Pharma Inc. (ALPMF:OTCPK) for its drug tivozanib, which is for renal cell carcinoma (RCC), correct?
RB: Yes. Tivozanib is Aveo's lead compound. I expect it will submit a new drug application (NDA) to the FDA for marketing approval before the end of the year. Tivozanib in RCC has the highest progression-free survival rates of any comparable drug, but the big deal is its tolerability. Patients often can't take a lot of the RCC drugs out there right now. The side effects, which can be difficult to tolerate, often lead to reduced dosing or discontinuation of the therapy. A drug you don't take is a drug that doesn't help you. Tivozanib targets the mutated vascular endothelial growth factor (VEGF) receptor far more selectively than the wild-type VEGF receptor, which means that side effects are far fewer, yet efficacy is greater.
TLSR: In the TIVO-1 (tivozanib versus sorafenib [Nexavar] in first-line advanced RCC) trial, tivozanib demonstrated superiority to Nexavar, a Bayer Healthcare Pharmaceuticals (BAY:FSE) product. It will also compete with Sutent (sunitinib), a Pfizer Inc. (PFE:NYSE) product, which is the market leader. Tolerability is so important with these patients, as you say.
RB: From a tolerability standpoint, I think tivozanib will be very successful because physicians will appreciate being able to give patients a cancer drug that will actually maintain quality of life while they take it. Patients will also stay on the drug, as opposed to earlier-generation VEGF receptor inhibitors that don't necessarily work in the real world.
TLSR: Is there another company you wanted to mention?
RB: I would like to talk about a couple of additional platform companies. The first is Ariad Pharmaceuticals, Inc. (ARIA:NASDAQ), which has in-house, proprietary drug-screening drug-design platforms. One of the platforms, for example, is called Argent, which helps the company design small molecules that control intracellular processes. Like Aveo's Human Response Platform, Ariad has licensed its technology to other firms.

"The important thing about the antibody-drug conjugate technology platform is that developers can take an antibody with a chemo payload and target it to a specific molecular entity on a cancer cell, using it to destroy that cancer cell."

Ariad also has ponatinib in phase 3 for chronic myeloid leukemia (CML) and acute myeloid leukemia (AML), and it was able to use its discovery platform to develop and design a compound that works on almost all of the most common mutations for CML and AML. These mutations confer resistance to the existing compounds, but ponatinib has demonstrated the ability to actually work on those mutations.
TLSR: Would you like to mention one more company?
RB: Isis Pharmaceuticals Inc. (ISIS:NASDAQ) has an antisense platform that hits the messenger RNA that delivers blueprints for proteins from DNA to the ribosomes. If you interfere with the messenger, you can modify a lot of different kinds of diseases. Isis is waiting for a first-ever approval for a systemic antisense compound, mipomersen (Kynamro) for patients with familial hypercholesterolemia. It works by interfering with the protein manufacture caused by a genetic defect in the patient. The company is working on approval for homozygous patients (who have two copies of the disease-causing gene); it will seek approval for heterozygous patients (who have one defective copy of the gene) later on. These are patients who, even with the arsenal of statins on the market today, can't bring their cholesterol levels down enough to get out of the danger zone. By going after the genetic roots of the disease, it will help these patients (homozygous patients die very young, in their 30s).
TLSR: Isis has a huge pipeline, and many partnerships, yet the company gets no credit for that pipeline. Once mipomersen has been approved in Europe and the U.S., will this prove the platform? Will the company begin to get some credit for its other pipeline products?
RB: I certainly hope so. As you say, the company does not get respect right now, which is probably a good thing if you want to buy. I think the mipomersen approval is going to open a lot of eyes to the potential of the platform, and it will drive investors to bid up the price. It has 24 or 25 additional drugs in the pipeline, either wholly owned or partnered. It is partnered with everybody you can imagine—Teva Pharmaceutical Industries Ltd. (TEVA:NASDAQ), Novartis AG (NVS:NYSE), GlaxoSmithKline Plc (GSK:NYSE), Biogen Idec Inc. (BIIB:NASDAQ).
TLSR: I have really enjoyed meeting you, Ray. Thank you.
RB: Thank you. I enjoyed it too.
While other eighth-graders were out playing soccer, Ray Blanco was in his basement learning how to build what's called a "Wilson Cloud Chamber"—a super-cooled device for detecting particles of ionizing radiation. These days he is an expert in advanced robotics, avionics, genomics and biotechnology. Blanco was raised in Miami, Florida, after his family fled Cuba in the 1960s. He is coeditor of Technology Profits Confidential and contributes to Breakthrough Technology Alert and Penny Sleuth.
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DISCLOSURE:
1) George S. Mack of The Life Sciences Report conducted this interview. He personally and/or his family own shares of the following companies mentioned in this interview: Isis Pharmaceuticals Inc.
2) The following companies mentioned in the interview are sponsors of The Life Sciences Report: None. Streetwise Reports does not accept stock in exchange for services. Interviews are edited for clarity.
3) Ray Blanco: I personally and/or my family own shares of the following companies mentioned in this interview: None. I personally and/or my family am paid by the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview.

(Companies Mentioned: ARIA:NASDAQ,ALPMF:OTCPK,AVEO:NASDAQ,IMGN:NASDAQ, ISIS:NASDAQ, RHHBY:OTCQX, SGEN:NASDAQ, VRTX:NASDAQ)

Cutting-Edge "Maple Seed" Drones are About to Reshape High-Tech Surveillance:

July 18, 2012
By Michael A Robinson
www.moneymorning.com

A new generation of small drones and robots are about to reshape the world of high-tech surveillance.

They include drones that look like the seeds of a maple tree and others that can fly in formation like a flock of birds.

Soon swarms of drones will hit the skies and take to the oceans...

They could provide remote surveillance for complex systems like oil rigs and power plants. Or they could help farmers track crop yields and insects in their fields.

But no matter how you slice it this is cutting-edge stuff...

Take the case of the newest entry from Lockheed Martin Corp. (NYSE: LMT). Its latest spy drone is called the Samarai.

The firm compares it to maple tree seeds that millions of kids over the years have turned into toy helicopters.

Drones that Take Their Cue From Nature

Fact is, maple seeds make great auto-rotating craft -- just let them go and watch them fly. In nature they begin rotating almost from the instant they fall from a tree. They work so well that NASA engineers have studied them.

Some of you may have heard of Lockheed Martin's Samarai in the past.

The company released details last year, but only posted the video to the Web last month. You can watch it in action on YouTube by clicking here.

Lockheed Martin execs says this new approach could save the U.S. government tons of money.

Rather than launch one big drone that could get shot down, our armed forces could drop thousands of these at a fraction of the cost.

Using a tablet computer, the "pilot" can maneuver the device while it captures video. To ensure the footage doesn't make viewers sea sick, Lockheed Martin wrote an algorithm to compensate for the whirling effect.

Look for Lockheed Martin to announce more advances in the field. Last January, the defense giant bought Procerus Technologies, a firm specializing in autopilot and other avionics for micro unmanned aerial systems.

Samaria itself stems from a project launched by a research arm of the Pentagon known as DARPA. That unit began the work back in 2007 under its "nano air" project.

But this isn't the only DARPA-backed mini drone to create media buzz with web videos.

In a Money Morning article last December I told you that DARPA had worked with AeroVironment Inc. (NASDAQ: AVAV) to create a hummingbird drone.

That same device landed in TIME magazine's list of the top 50 inventions of 2011.

Meantime, a German team recently developed a flock of drones with special sensors that allow them to fly in formation without running into each other. They also provide high-quality 3D images.

With a total wingspan of about six feet, this mini-helicopter is much larger than DARPA's micro drones. But it's every bit as complex.

It's the brainchild of theFraunhofer Institute for Microelectronic Circuits and Systems

in Germany. Researchers there say the swarm of what wags call "Eye-Bots" could work well for crowd control.

The team sees other uses as well. The flock could help with disasters by telling workers where to find victims that need help. Urban planners could use them to produce 3D models of streets or to inspect roofs from a distance to check on solar panels.

A New Wave of Undersea Robots

Of course, not all unmanned systems fly. Some take to the water instead.<

Consider the case of the hydrogen-powered robotic jellyfish invented by a team at Virginia Tech with funding by the Pentagon.

The robot gets its juice from the chemical reactions between the oxygen and hydrogen in water and the platinum on bot's surface. Heat is then transferred to the robofish's artificial muscles, causing them to move.

Designed to aid in under-water rescues, these robofish aren't technically spy devices. But it would take very little to fit them with a wide range of sensors that could track ship movements or provide other data to military leaders.

Clearly, we are entering a period in which high tech will move faster than we can fully comprehend.

Not surprisingly, this new trend in spy technology has already raised privacy concerns.

But the companies building the drones are aware of those concerns. In fact, a trade group for the drone makers recently released a code of conduct to address privacy issues.

At present, federal officials still haven't given the green light to operate most of these advanced platforms.

But when they do, you can bet that the legal issues surrounding the use of these drones -- like getting search warrants -- will get resolved.

So, fasten your seat belts -- it's going to be a very wild ride




About the Author

Michael A. Robinson is one of the top financial analysts working today. His 30-year track record as a leading tech analyst has garnered him rave reviews. The first analyst to uncover the rare earth mineral crisis, he amassed cumulative gains of 990% for his readers in just 16 months. Today he is the editor of Radical Technology Profits. He also edits the Era of Radical Change e-letter that explores "what's next" in the tech investing world. Learn more about Michael on our contributors page.

Source: Cutting-Edge "Maple Seed" Drones are About to Reshape High-Tech Surveillance:

Profit from Canadian-Based Biotechs and Specialty Pharmas: Philippa Flint

July 13, 2012
By George S. Mack
The Life Sciences Report
Source: Profit from Canadian-Based Biotechs and Specialty Pharmas: Philippa Flint:

The Life Sciences Report: Most of your coverage is Canadian-based. Why limit yourself to that?
Philippa Flint: We are a healthcare-specialized boutique investment firm with a primary goal to provide coverage of the Canadian healthcare space. We have long-standing histories with the management teams of the companies we cover, and intimate knowledge of the businesses. We feel that we have home-turf advantage. Because of our physical location in Toronto, we have good access to management, and we can distill stories down. That is not to say we won't cover companies based outside Canada in the future, but at this point in time, we can add value for U.S., Canadian and European clients taking a close look at Canadian companies.
TLSR: As we approach the age of the non-blockbuster and become focused on more personalized therapies, do you see biomarkers and drug development occurring together more commonly?
PF: Definitely. We're already starting to see it. The trend will continue, with companies developing drugs for a specific, appropriate patient population and ensuring that drugs are not given to incorrect patient populations. In times of economic constraint, like we are in now, drug development companies need to make sure they have the greatest chance of success with products.
This also highlights the importance of understanding the biology of a disease during drug development. Companies need to take the time early on, from a preclinical perspective, to understand what they have and how it could potentially be used before progressing to the clinic. We are seeing steps in that direction and it will continue. I have one company under coverage, AEterna Zentaris (AEZS:NASDAQ), that has stated it will not start a phase 3 trial with its targeted oncology drug AEZS-108 (zoptarelin doxorubicin) until it has a diagnostic, so it can most appropriately pick the right patients for treatment.
TLSR: Would you talk about a few of your ideas under coverage?
PF: Sure. Oncolytics Biotech Inc. (ONCY:NASDAQ; ONC:TSX) is fascinating, and it is very much at a critical juncture in terms of company development. We are waiting for data from the first 80 patients of a phase 3-randomized trial of Reolysin (human reovirus) in squamous cell head and neck cancers. These metastatic patients are refractory to platinum-based therapy and are taxane-naïve. This will be the first truly randomized data in a controlled setting for the product.

"In times of economic constraint, drug development companies need to make sure they have the greatest chance of success with products."

In the next month or so, we should see progression-free survival (PFS) data from these patients, who have each been treated for at least 12 weeks. Positive data would be extremely favorably regarded because the drug potentially could be used in a variety of other cancer indications.
The downside comes if the results are negative, as Oncolytics is a one-product company. Although it has four or five randomized phase 2 trials that are ongoing or about to start, investors might not give it the benefit of the doubt, and the stock could drop precipitously. Reolysin is unlicensed and unpartnered, so the data are expected to have a huge impact on the valuation and future of the company.
TLSR: These squamous-cell carcinomas of the head and neck are extremely difficult to treat under any circumstances. These patients are treatment-experienced and that compounds the difficulty. Is this uphill all the way for the company?
PF: I am very encouraged by the phase 2 data, but I am cautious because the head-and-neck data were from an uncontrolled, single-arm study on a limited number of patients. That said, the response rate for Reolysin beats that of anything else on the market. There are very limited choices on the market. The most notable competitor is Erbitux (cetuximab), which can be used in advanced disease but has a response rate of 13% versus Oncolytics' Reolysin, which has a 42% response rate in a phase 2 U.K. study. If Reolysin shows good PFS data, it's off to the races. There will be a lot of interest in the stock, not only from potential partners but also from the standpoint of expanding and gearing up for other indications as quickly as possible.
TLSR: Oncolytics raised $21.3 million ($21.3M) in Q1/12. It was a bought deal that showed a tremendous amount of confidence in the company from the Street.
PF: There are a lot of high expectations for these data. The stock has come off a little from where it was in Q1/12. The proof will be in the pudding, and for many cancer companies, until you have randomized phase-3 data, there is always risk.
TLSR: I made a list of oncolytic viral therapy companies that is not complete but includes Introgen Therapeutics Inc. (INGNQ.OTCPK; filed for Chapter 11 bankruptcy in 2008), BioVex Inc. (acquired by Amgen Inc. [AMGN:NASDAQ] in January 2011), Crusade Laboratories Ltd., GenVec Inc. (GNVC:NASDAQ), Viralytics Ltd. (VLA:ASX), Cell Genesys (merged with Biosante Pharmaceuticals Inc. [BPAX:NASDAQ] in 2009; its oncolytic viral assets were then sold to Cold Genesys Inc.), Neotropix Inc. and Wellstat Biologics Corp. I haven't heard much about these companies or this technology. Does Oncolytics Biotech have an edge in this space?
PF: When I look at Oncolytics Biotech, I don't necessarily see it as a virus company, although it is developing a virus. To me, the competition is with drugs developed for a specific indication regardless of mechanism of action, whether it's a monoclonal antibody like Erbitux or a small molecule. That is what Oncolytics will be competing against in the marketplace, not necessarily another virus company. The products of other viral companies can work in very different ways in the body. I look at the competition in the indication, as opposed to the mechanism of action.
TLSR: When will we see phase 3 data?
PF: Perhaps within the next month, but certainly in Q3/12. I expected it in Q2/12 because I thought management would take a look at these patients earlier. But the company has stated that it will wait until all 80 patients have received Reolysin for at least 12 weeks to ensure that there is a treatment effect. The effect will become more evident after the PFS curves have had a chance to separate. This strategy gives the drug the best chance of success.
TLSR: What kind of response do you want to see for this company to meet your expectations?
PF: Historically, the median PFS for a control group is six to eight weeks. I would like to see at least 50% more—a PFS of 12 weeks. Then there would be confidence that on the primary endpoint, which is overall survival (OS), it has a good chance of meeting expectations in the second phase of the trial.
TLSR: What would be your ideal OS?
PF: It is relative to the control group. If the control group is in the typical five- to seven-month survival timeframe, I would like to see at least eight to nine months in the Reolysin group. But the results are relative to the control group, so they may vary.
TLSR: Do you see Reolysin as a first-line therapy or will it be used as a combination therapy with other first-line therapies, such as platinum or other chemotherapy?
PF: That is an interesting question with regard to head and neck cancers. Certain types of head and neck cancers respond very well to surgery. Once you get into chemotherapy, there is potential for Reolysin to be used in a first-line combination, but much more testing would be required.
TLSR: Are you still at a $10 target price and Speculative Buy on Oncolytics Biotech?
PF: Yes.
TLSR: Another company?
PF: Paladin Labs Inc. (PLB:TSX) is a Canadian-based specialty pharma company. It has a very solid management team. It has grown organically as well as through product and company acquisitions. The majority of its business is in Canada, but it has expanded internationally and notably, most recently, into South Africa. I nickname it the "Bank of Paladin" because it has completed a series of deals where it has used cash (and it currently has more than $250M in cash) to provide loans to other companies. It gets a great return on its investments. It assumed the debt of ProStrakan, and when ProStrakan was acquired by Kyowa Hakko Kirin Co. Ltd., the debt was repaid plus a fee. Paladin earned more than $8M in about five months on that investment. Just recently, it has agreed to loan up to $8M to Nuvo Research (NRI:TSX), another Canadian-based company. Paladin manages all aspects of its business very well.
TLSR: Paladin's loan to Nuvo Research includes a license for Nuvo's local anesthetic patch Synera (lidocaine + tetracaine). It had done a lot of due diligence before making this loan. Do you consider the "Bank of Paladin" to be a serious part of its business model?
PF: No, but I point it out because Paladin is not only looking for products and companies that will help expand its business, but also uses its cash in an opportunistic, low-risk manner to get a very attractive return. Other companies do not necessarily do that.
TLSR: Speaking of low risk, Paladin is consistently one of the best market performers. It has quadrupled its share price over the last five years, unlike many other specialty pharmas and biotechs. The stock has a beta of 0.36. It has a conservative business model. You rate it a Buy, but I'm curious about why you think it is an above-average risk company?
PF: My above-average risk qualifier is against the broad spectrum of companies, not just healthcare. Within healthcare, I think Paladin is relatively low risk.
TLSR: The company made a significant acquisition recently. Will that be accretive and when?
PF: The most recent major event on the acquisition side was the closing of the Litha Healthcare Group Ltd. (LHG:SJ) purchase. Litha is a South African company. That deal closed on July 2. I believe the impact of the Litha deal is not fully reflected in analysts' consensus yet; however, it is in my numbers. Paladin indicated that if the deal had been done in 2011, it would have added $25M in earnings before interest, taxes, depreciation and amortization (EBITDA) and Paladin would have recorded about 44% of that, which would have been just over $11M. When Paladin starts to report on a consolidated basis, starting in Q3/12, we'll see a significant bump up in revenues and EBITDA. I believe investors will continue to be very satisfied with year-over-year growth as a result of this acquisition and other products that Paladin is introducing.
TLSR: Will this acquisition represent an opportunity to improve scale and margin?
PF: The margins on the Litha business are not as good as on the Paladin business. Litha has a large vaccine business in South Africa. Although Litha is taking steps to improve its margins, I don't think that business will be as profitable as Paladin's, partly because of the nature of its product portfolio. But it will be an accretive acquisition that will be beneficial for Paladin.
TLSR: Your target price on Paladin is $50. That does not represent a lot of upside.
PF: No. But over the last few weeks the stock has been improving steadily, which is great. Maybe people are starting to realize the potential upside with Litha. When Paladin reports next quarter, we'll take another look at our numbers and see if we fully reflected the additional value that could be created. We had to make a number of assumptions on the Litha deal, but once we get the Q3/12 numbers, expected near the end of the year, we will be in a better position to see just how much value will be created.
TLSR: You follow QLT Inc. (QLTI:NASDAQ), rated a Speculative Buy with a target of $10, correct?
PF: Correct.
TLSR: What is your investment theory here?
PF: QLT, as I'm sure you know, just had a shakeup on its board, with a new board elected. The stock reacted favorably to that, but we still see the company as undervalued based on its cash position. It has more than $4/share in cash. It also has about $1.80/share in contingent consideration from its 2009 sale of Eligard (leuprolide acetate, for the treatment of advanced prostate cancer) to Tolmar Holding Inc. Right there, we have almost $6/share worth of value. It also sells Visudyne (verteporfin) to treat wet age-related macular degeneration (AMD). Although we see Visudyne's sales slowly declining, it still earns about $30–35M annually from sales, royalties and manufacturing revenues, which is more than $0.50/share. When you take those three things into consideration, we're looking at around $6.50 in value, and the stock is now trading at $7.80–8. I believe there is little value being given to the potential of the pipeline.
The new board at QLT recently announced it will focus on its synthetic retinoid program for Leber congenital amaurosis (LCA) and retinitis pigmentosa (RP). It intends to divest its punctal plug program for glaucoma. The board also cut almost 70% of its workforce, including the CEO and CFO, and it intends to return $100M in capital to shareholders. It appears the new board is focusing on cost control. We believe significant value could be created in the retinoid program. It is expected to be in phase 3 trials in 2013. Given where the stock is trading, we think there is enough return to our price target to warrant the Buy rating, although we also believe that the risk profile of an investment is slightly increased with the latest board announcement, as the product pipeline will become less diverse.
TLSR: Spinning out the punctal plug system for glaucoma seems like an outstanding way to monetize less valuable intellectual property and allow QLT breathing room to develop its more valuable synthetic retinoid product. With regard to the synthetic retinoid (QLT091001) for treatment of RP and LCA, I noted that headaches occurred in 94% of the patients, which are children. How will the regulators view that?
PF: Headache was reported in 94% of patients. This was observed within the seven-day treatment period, but the efficacy was looked at over months. When physicians and patients look at this disease, they must consider that while a patient may have a headache rated mild to moderate, that child may also have recovered meaningful parts of his or her vision. I believe the benefit-to-risk profile is in the patient's favor. This is a terrible disease, and there are no real treatment options on the market at this point in time. If a drug can help a child see better, it's worth trying. The investigators involved in the study did not see headache as a deterrent to use. Patients were willing to undergo retreatment despite the side effects, which speaks to the tolerability.
TLSR: Philippa, I enjoyed speaking with you very much. Best wishes.
PF: Thank you very much for your time.
Philippa Flint has more than 11 years of experience in drug development and regulatory affairs at big pharma, combined with 10 years of capital markets experience as an equity research analyst. Prior to working at Bloom Burton & Co., Flint was an equity analyst at RBC Dominion Securities, providing research coverage of small- to mid-cap biotech/pharma companies. She has been consistently ranked the top earnings estimator in Canada in the healthcare sector by StarMine, including over the period from 2004–2008 and in 2011. Prior to this, Flint was the vice president for medical affairs at AstraZeneca Canada, managing a department of 150 people working on more than 100 clinical trials. She led the merger of Astra and Zeneca in Canada, prior to which she was the vice president for regulatory affairs and corporate project management at Astra Canada. Flint holds a master's of science degree and a master's degree in business administration.
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DISCLOSURE:
1) George S. Mack of The Life Sciences Report conducted this interview. He personally and/or his family own shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Life Sciences Report: None. Streetwise Reports does not accept stock in exchange for services. Interviews are edited for clarity.
3) Philippa Flint: I personally and/or my family own shares of the following companies mentioned in this interview: None. I personally and/or my family am paid by the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview.

( Companies Mentioned: AEZS:NASDAQ,
LHG:SJ,
NRI:TSX,
ONCY:NASDAQ; ONC:TSX,
PLB:TSX,
QLTI:NASDAQ,
)

Biotech Stock Trading: The "ASCO Effect" Can Double Your Money in Days

By William Palaton III
www.moneymorning.com

At the beginning of May 2011, OXiGENE Inc. (Nasdaq: OXGN) was a relatively unremarkable biotech stock. It was trading at less than $2 a share.

You might even say that OXiGENE was deeply troubled.

The company faced questions about management turnover and its cash position. Its investors were worried about its cancer-drug pipeline.

In fact, the stock was one of the biotech sector's worst performers in 2010, and the company had to endure the ignominy of a reverse stock split in February 2011.

Then came the "ASCO Effect."

Over a nine-trading-day stretch that started the first day of May, OXiGENE shares soared 218% - on a massive spike in volume. If you include the intraday high, the stock gained as much as 245%.

This isn't an isolated case.

Each June, the American Society of Clinical Oncology (ASCO) hosts its annual meeting - an event that's attended by 30,000 people and the scene of 4,000 presentations.

Roughly two months beforehand, ASCO posts the titles of the research abstracts that will be the basis of those presentations.

Traders search those abstracts to identify the sponsoring companies - many of them development-stage oncology biotechs whose low share prices make them fodder for some fast action.

That's exactly what happened with OXiGENE at this time last year: Traders scoured ASCO's Website and found two abstracts dealing with the company's cancer drug Zybrestat.

Not long afterwards the stock zoomed.

Biotech Stocks and the ASCO Game Plan

This year's ASCO annual meeting was scheduled for June 1-5 in Chicago.
The ASCO Effect move often starts in April. But there's almost always an additional stretch in May during which oncology stocks experience near-vertical spikes in very short periods.

This second leg of the ASCO Effect usually involves a large handful of stocks. And it happens every year. For instance:

• In May 2010, Delcath Systems Inc. (Nasdaq: DCTH), a development-stage biotech specializing in liver cancer, saw its shares rise 30% in 21 days. That was the culmination of a longer-term (and wildly whipsawing) surge that started in mid-March and sent the shares up as much as 164%.
• In 2009, shares of Dendreon Corp. (Nasdaq: DNDN) went from $6.30 a share in early April to $25.74 in early June - a gain of 309%. If you go back even further, you'll see that Dendreon's stock went from $2.60 in early March to $25.74 at the start of June - a near 10-bagger.
• Starting in early May 2008 (and reaching its peak that June 6), Celldex Therapeutics Inc. (Nasdaq: CLDX), gained exactly 50% in slightly less than 30 days. That was the final burst of a 2½-month move that saw the shares gain 142%.

But here's the thing: Although this can be tremendous fun while it lasts, the "ASCO Effect" is more of a trading opportunity than an investment. The gains generally don't stick, meaning you need to get out ahead of the investor exodus.

OXiGENE shares, which traded as high as $6.07 during its surge last May, dropped all the way down to 92 cents each by the following October. Today, the company trades for 95 cents.

[Editor's Note: In Bill's latest research report he has identified three oncology stocks that could benefit from the "ASCO Effect." But that's only one of the ways investors can profit from them.

Bill intentionally picked companies with long-term growth potential. That gives shareholders a shot at the profits being reaped from the current surge in multi-billion-dollar biotech buyouts.

To get Bill's report - "The Biotech Buyout Binge: Why These Three Stocks Could Double Your Money in the Next Three Months" - just click here. ]

News and Related Story Links:

• American Society of Clinical Oncology (ASCO) Meeting 2012: Official Website.

Source: Biotech Stock Trading: The "ASCO Effect" Can Double Your Money in Days:

How Light Will Make the Web 85,000 Times Faster-and Power Blazing Fast Computers

By Michael A Robinson
Defense and Technology Specialist
www.moneymorning.com

Since the dawn of the Internet, millions of users have dreamed of getting true high-speed connections.

Well, fasten your seat belts folks...

A new breakthrough promises to provide Web and other computer networks links that are 85,000 times faster than what we have today.

No, that's not a misprint. But it is so fast it's hard to get your mind around-especially for those of you who remember using phone lines to surf the web.

Back then it seemed you could take a break, paint your house, cut the grass and clean the kitchen -- and still get back to your computer before it finished downloading a photo.

Forget video. That sounded like a sci-fi fantasy.

Admittedly, it's gotten quite a bit faster since then. Over the past decade millions of users around the U.S. have joined the broadband revolution. It's now becoming standard to link to the Web at speeds of at least 10 megabits per second, or about 175 times faster than dial up.

But even at those speeds, the magnitude of the change I'm describing is hard to fathom. But I'll try.

Think of it this way: If dial up was a one-story home, then today's broadband would stand almost twice as tall as the Empire State Building.

Yet, to equal what I'm calling Ultimate Broadband--or 85,000 times faster than what we have now-- you'd have to string Empire State Buildings 1.3 times around the entire surface of the Earth!

Internet Speeds Beyond Belief

It works using twisted beams of infrared light.

Now you know why this innovation will be so crucial for the future of broadband communication and entertainment.

Having just upgraded my home theater, I can speak from personal experience. Super-fast connections are what's driving the next wave of home entertainment and data services.

And here's the thing: you won't need wires to take advantage of these incredible speeds.

In fact, a global team lead by the University of Southern California used wireless gear to prove the system works. They achieved speeds of 2.5 terabits (2.5 trillion) per second.

They beamed data over open space in a lab. The idea was to simulate the type of link that might occur between satellites in space.

Team members manipulated eight beams of light. They twisted each one into a spiral shape. Turns out twisted light beams are very powerful because they can encode huge amounts of data.

This, by far, exceeds anything we can get today with radio frequencies used for WiFi and cellular networks.

Next up: adapting the system for fiber optics like those often used to transmit data over the Web.

I believe we are still several years away from making light-based data links standard. But I do predict this breakthrough will help lead us to the Holy Grail of computers -- harnessing the speed of light.

To me the question isn't if we'll have optical networks-- but when.

Blazing Fast Computers

Here's the thing. The USC news came out the exact same day that a second research team reported a breakthrough using light to create super-fast computer chips.

This one deals with an arcane field known as quantum computing. It's complicated so I'll simplify it for you.

Today's chips depend on the use of electricity to move or store data.

Quantum systems go much deeper -- they rely on basic atomic-scale elements like photons. Think of these as tiny pieces of light that have neither mass nor electric charge.

But they do have speed. Lots of it, in fact.

Just ask the team from the University of California at Berkeley and the City College of New York who did the study. To encode data, they used light to control the spin of an atom's nucleus.

The result: chips several times faster than anything we can produce today.

Not only that, what they call "spintronics" would yield a huge increase in processing power -- it would allow you to have multiple data streams running at the same time.

It gets better. The research team said chips would no longer remain fixed after they're etched in the factory. Spintronics would allow us to rewrite them on the fly.

Need a faster computer? Just zap your chip with a beam of light and you're good to go.

So you can see that light-based computers and networks represent a radical new approach to the way we obtain and share a wide range of data.

It's one of the reasons why I say the future will be like nothing we've seen before.

Cheers,
Michael A. Robinson, Defense and Technology Specialist

Further Reading...

If you want to find a way to profit from the next generation of tech breakthroughs, Michael's Era of Radical Change newsletter is a great place to start.

And you can't beat the price. You can get it free by clicking here.

About the Author


Michael A. Robinson is one of the top financial analysts working today. His 30-year track record as a leading tech analyst has garnered him rave reviews. The first analyst to uncover the rare earth mineral crisis, he amassed cumulative gains of 990% for his readers in just 16 months. Today he is the editor of Radical Technology Profits. He also edits the Era of Radical Change e-letter that explores "what's next" in the tech investing world. Learn more about Michael on our contributors page.

View articles by Michael A. Robinson

Source: How Light Will Make the Web 85,000 Times Faster-and Power Blazing Fast Computers:

WellPoint (NYSE: WLP) Rides the Obamacare Profit Wave Even Higher

by Diane Alter for Money Morning

Merger Monday lived up to its moniker today with news that WellPoint Inc. (NYSE: WLP), one of the largest U.S. health insurers, inked a deal to acquire Amerigroup Corp (NYSE: AGP).

The $4.9 billion deal would make the Indianapolis-based company the top private manager of Medicaid benefits.

The strategic move underscores WellPoint's bid to shore up its Medicaid business following the recent Supreme Court decision upholding Obamacare. The combined company will have a Medicaid business presence in 19 states, the largest in the nation.

The transaction is expected to close in early 2013. Under the terms of the all-cash deal, WellPoint will pay a lofty $92 a share for all outstanding shares of Amerigroup, a nearly 43% premium to the company's closing price prior to announcement.

WellPoint CEO Angela F. Braly said in a statement, "We believe that this combination will create an industry in the government sector serving Medicaid and Medicare enrollees. This is an opportunity to capitalize on the strengths of both companies to better serve our members and position our companies for future growth as the health insurance industry changes."

WellPoint has been on a buying spree of late. In May, the company purchased contact lens retailer 1-800-Contacts, and last year it picked up CareMore, a provider of managed care for the elderly.

Obamacare and Medicaid

Under the Obama administration healthcare overhaul, Medicaid, the public program for the poor, will be extensively expanded.

By 2014, Obamacare will extend Medicaid to all those with incomes of up to 138% of the federal poverty level.

The implications from this development are massive. A report from the Urban Institute reveals some 22 million people without insurance at present, roughly half of America's uninsured, could qualify for Medicaid.

Republicans vehemently vow to repeal Obamacare before it ever takes effect, and the topic is a heated and prominent issue in Election 2012. Twenty-six states oppose the Medicaid expansion, as well as the individual mandate that requires everyone to buy health insurance or pay a penalty (tax), and adamantly maintain they will not implement these portions of Obamacare.

Congress ruled that the states don't have to go along with the Medicaid expansion. Currently, Washington covers 50%-83% of each state's Medicaid program, and states that opt out of expanding coverage can keep the money they have already.

Texas Gov. Rick Perry wrote in a letter today to U.S. Health and Human Services Secretary Kathleen Sebelius, "If anyone was in doubt, we in Texas have no intention to implement so-called state exchanges or to expand Medicaid under Obamacare. I will not be party to socializing health care and bankrupting my state in direct contradiction to our Constitution and our founding principles of limited government."

WellPoint's Braly said in a conference call Monday that the law's expansion of Medicaid, set to begin in 2014, "is only one element here."

She added, "We expect organic growth in the Medicaid segment. We did this deal no matter what and decided to do it no matter what the Supreme Court decided."

Looks like all's well at WellPoint either way.

Source: WellPoint (NYSE: WLP) Rides the Obamacare Profit Wave Even Higher: