Disruptive Technology Stocks

[Paulness]

VNTH ,Vantage health inc , Got a 5 year development contract with NASA to develop a sensor to detect all types of cancers in the body using a breath sensor attached to a Ipod , the Mhealth APP will be sold and a monthly charge will be collected from every health worker world wide, staggering potential profits, and a real game changer.

[Pepsiman2001]

$SPIHF..............just saw this PR tonight. Partnership with Novarad is less than a month old and they are naming some of their Core technology after our Product, Glassware 2.0. Might want to hurry with the DD before it gets away. We are also expecting the Mother of all short squeezes to boot. The stars are aligning. But thats just my opinion.

Novarad to unveil NovaGlass for multiple platforms.
www.auntminnie.com/index.aspx?sec=sup_n&sub=pac&pag=dis&ItemID=107377

May 12, 2014 — RIS/PACS firm Novarad said it will launch new software called NovaGlass at the Society for Imaging Informatics in Medicine (SIIM) meeting that brings PACS images to a variety of platforms, including tablets and laptop computers.

Designed to broaden the utility of Novarad's PACS and RIS software, NovaGlass is installed on enterprise-grade appliances and allows users full access to imaging features while significantly enhancing operating speeds and choice of workstations, the company stated.

Utilizing virtual application and desktop technology from Sphere 3D, NovaGlass delivers Novarad's Marz vendor-neutral archive software on a variety of computing devices, including PCs, Macs, iPads, laptop computers, Android tablets, and Google Chromebooks.

The new platform will give users access to several new features and ways of deploying images that were previously unavailable, Novarad said.

[Pepsiman2001]

$SPIHF Should be VERY high on your list. Won't be long. Ask Dell........

[Tommy]

$PRCP - Perceptron: A Takeover Candidate Poised To Benefit From Robotic And 3D-Printing Revolution

http://seekingalpha.com/article/1918391-perceptron-a-takeover-candidate-poised-to-benefit-from-robotic-and-3d-printing-revolution?source=email_tec_edi_pic_0_0&ifp=0

Dec. 27, 2013 11:57 AM ET | 5 comments | About: PRCP, Includes: AME, CGNX, CIMT, DDD, FARO, GOOG

Disclosure: I am long PRCP, CIMT. (More...)

Editors' Note: This article covers a stock trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

PRCP Highlights

Perceptron, Inc. (PRCP) produces technology that is used in two of the fastest-growing industries, robotics and 3D printing. It has a low enterprise value of $60 million compared to its market cap of $92 million, and the company has $33 million in cash with no debt in a hot and growing industry. This makes PRCP an attractive acquisition target.
Three 3D-imaging companies have been acquired during 2013, and all three acquiring companies are in different industries: AMTEK, Inc. (AME), a diversified machinery manufacturer, LMI Technologies Inc., a 3D-imaging company, and 3D Systems (DDD), a 3D-printing company. This proves PRCP technology is useful in a variety of industries.
FARO Technologies Inc. (FARO) and Cognex Corp. (CGNX), both of which are competitors to PRCP, are actively looking to put their excess cash to work by acquiring other companies. PRCP sensors are used in robot guidance solutions, but FARO and CGNX sensors haven't evolved that far yet, a fact that makes PRCP an attractive investment.
Credit Suisse analysts believe this sector is ripe for future mergers and acquisitions because of increasing demand for industrial automation. Over the past half-year, Google, Inc. (GOOG) has acquired seven technology companies related to robotics. The company's expected targets are in manufacturing, not consumers.
The 3D-imaging market has a synergistic relationship with both robotics and 3D printing giving PRCP unlimited future potential. The 3D-imaging market is expected to grow as quickly as the 3D-printing market, around a 25-percent CAGR.
PRCP's revenues and net income have consistently grown for the past five years. With the company's current backlog at record levels, we foresee even higher sales and growth in future quarters, making it a "Star."
We believe PRCP is severely undervalued and should be valued at around $26.50 per share, which is up about 250 percent from current levels.
With FARO and CGNX continuing to make new highs, we expect PRCP also will make new highs soon.
PRCP has $33 million in cash ($3.69 per share), and that figure is growing. It is possible an acquisition, stock repurchase or special dividend could be announced in the not-too-distant future.

Perceptron Technology Enables Best Corvette Ever!

Background

Perceptron is a global, non-contact vision and metrology company with more than 30 years of experience in laser-based technology and applications. Perceptron offers a wide range of specialized inspection and measurement solutions, including dimensional gauging, robot guidance, gap-and-flush, wheel alignment, robotic scanning and portable scanning. Helix is Perceptron's newest 3D-metrology solution and is the world's only sensor of its kind. It utilizes Intelligent Illumination to process features in 3D and then translate the 3D point-cloud data into CAD. This technology is used in two of the fastest-growing industries, robotics and 3D printing.

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Introduction

PRCP has a low enterprise value of $60 million compared to its market cap of $92 million, and the company has $33 million in cash with no debt. Poised to benefit from two of the fastest-growing industries, PRCP is a prime, attractive acquisition target. The stock recently has pulled back from its highs, giving investors a buying opportunity as PRCP is much cheaper in valuation than its peers. The 3D-imaging market is expected to grow as quickly as the 3D-printing market, and PRCP technology is used in robotics and 3D printing. This gives PRCP unlimited future potential. 3D Analytics has completed a thorough review of PRCP and determined the stock is grossly undervalued. Consequently, we assign a buy rating on the stock with a $26.50 price target, which is up about 250 percent from current levels.

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AMETEK acquires Creaform

On Oct. 29, 2013, AMETEK, Inc. announced it had acquired Creaform, Inc. for approximately $120 million. Creaform is a leading developer and manufacturer of innovative, portable 3D-measurement technologies and a provider of 3D-engineering services. Creaform is a privately-held company based near Quebec City, Canada, with annual sales of approximately $52 million.

LMI acquires 3D3 Solutions

On May 1, 2013, LMI Technologies Inc. signed an agreement to acquire 100 percent of the shares of 3D3 Solutions, a Burnaby, Canada,-based company and a leading supplier of 3D-scanning software and hardware products. The takeover will result in the integration of 3D3 under the LMI Technologies brand to create a powerhouse in 3D-scanning, visualization and measurement solutions for both inline factory automation and offline 3D-scanning markets such as reverse engineering and 3D printing. The terms were not disclosed.

3D Systems acquires Geomagic

On Jan. 3, 2013, 3D Systems announced it had signed a definitive agreement to acquire Geomagic, Inc., a leading global provider of 3D-authoring solutions, including design, sculpt and scan software tools that are used to create 3D content and inspect products throughout the entire design and manufacturing process. This acquisition was subject to customary closing conditions and was expected to close during the first quarter of 2013, after those conditions were met. Terms of the transaction were not disclosed.

(click to enlarge)

FARO Technologies looking to acquire

In the Q3 conference call, FARO Technologies President and CEO Jay Freeland said, "Our cash balance, up 15 percent since Jan. 1, now sits at $182 million. This gives us plenty of flexibility. We continue to look at acquisitions that could enhance our business strategically."

Cognex looking to acquire

In the Q3 conference call, Cognex CEO, President and COO Robert J. Willet said, "The best use of that cash, from our perspective, would be to use it to - in acquisitions. And we have an active program. We are looking at potential entities to buy in different markets, in different geographies." CGNX currently has a cash balance of $217 million.

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Google aggressively acquiring technology companies used in robotics

On, Dec. 4, 2013, The New York Times published an article titled, "Google Puts Money on Robots, Using the Man Behind Android." The following excerpt is taken from that article:

Over the last half-year, Google has quietly acquired seven technology companies in an effort to create a new generation of robots. And the engineer heading the effort is Andy Rubin, the man who built Google's Android software into the world's dominant force in smartphones. The company is tight-lipped about its specific plans, but the scale of the investment, which has not been previously disclosed, indicates that this is no cute science project. At least for now, Google's robotics effort is not something aimed at consumers. Instead, the company's expected targets are in manufacturing - like electronics assembly, which is now largely manual - and competing with companies like Amazon in retailing, according to several people with specific knowledge of the project. A realistic case, according to several specialists, would be automating portions of an existing supply chain that stretches from a factory floor to the companies that ship and deliver goods to a consumer's doorstep. "The opportunity is massive," said Andrew McAfee, a principal research scientist at the M.I.T. Center for Digital Business. "There are still people who walk around in factories and pick things up in distribution centers and work in the back rooms of grocery stores."

PRCP specializes in using robotic technology for industrial manufacturers to automate assembly processes, which could make the company a favorable target for Google to acquire.

(click to enlarge)

3D imaging market is expected to grow substantially

Robotics are the future of industrial automation, putting PRCP in a strong position to benefit. A group of Credit Suisse analysts pointed out last year that companies which make and sell industrial-automation technology that both monitors and runs industrial manufacturing processes are an attractive long-term investment target. The $152 billion global industrial-automation market has grown 6 percent a year, on average, since 2003, which is nearly twice as fast as overall industrial production. There is increasing consolidation among makers of automation technology. Companies have been looking to expand horizontally by making products for different types of manufacturing, and vertically, by targeting different levels of manufacturing operations. Thus, the sector has become ripe for mergers and acquisitions. PRCP already has been paving the way toward automating the manufacturing process for automakers.

In our previous article on Cimatron (CIMT), we said CAD/CAM software is essential for the designing and manufacturing of 3D parts. 3D imaging also is essential to the 3D-printing revolution because it enables you to scan a part or physical object and translate the 3D point-cloud data into CAD, where it can be reproduced or modified. Helix, PRCP's newest technology, does just that. The 3D-imaging market is expected to grow as quickly as the 3D-printing market, with both expected to have compounded annual growth rates of around 25 percent.

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Source: MarketsandMarkets

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Financials

On Aug. 28, 2013, PRCP announced strong fourth-quarter results and record fiscal 2013 sales. The stock jumped from $8 to almost $15 a share. The stock recently has pulled back considerably from its highs, as on Nov. 13, 2013, PRCP announced disappointing results for the first quarter of its fiscal year 2014. According to its recent conference call, PRCP is making progress with Helix sales and bookings and expects to issue the next release of its Vector Software platform within the next 12 months. Also, backlog increased to $35.9 million (a record level), which generally leads to higher sales in future quarters.

With PRCP trading close to its $6.62 book value per share, one would assume the company is a slow growing "Cash Cow." However, over the past five years, PRCP quickly and consistently has been increasing revenues and income, with even a greater future ahead because of technology to be used in two of the fastest-growing industries. In the growth-share matrix, PRCP is a "Star."

(click to enlarge)

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A peer-group comparison shows PRCP is significantly undervalued

When comparing PRCP to FARO and CGNX, we find PRCP to be severely undervalued in all the valuation measures shown below.

By taking the ratios below and averaging them, we conclude PRCP should be valued at $26.50 per share, which is up around 250 percent from current levels.

(click to enlarge)

PRCP should soon make new highs

With FARO and CGNX making new highs, we believe PRCP will soon follow once investors realize how much the company is undervalued compared to its peers. Here are some yearly charts.

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PRCP high cash balance

PRCP has $33 million in cash ($3.69 per share), and that figure is growing. Possible uses for this cash include acquisitions, a stock repurchase or a special dividend, any of which would benefit shareholders and increase the value of the stock.

On Nov. 30, 2011, PRCP initiated a growth strategy through a combination of organic growth and evaluating the possible acquisition in a synergistic technology-oriented business in a complementary, non-automotive market segment.
On Sept. 27, 2012, PRCP announced a special dividend of $.25 per share. On May 7, 2013, PRCP announced an annual dividend of $.15 per share. Currently, that is a 1.40-percent yield for shareholders.
On Oct. 19, 2010, PRCP announced a $5 million stock-repurchase program.

Since the company is currently paying an annual dividend, we believe PRCP's best use of its cash would be the acquisition of a complementary, non-automotive company followed by a stock repurchase program.

Current Risks

In the recent 10-K filing, we found two risks worth noting:

First, PRCP revenues are highly influenced by the sale of products for use in the global automotive market, particularly by manufacturers based in the U.S., China and Western Europe. These manufacturers have experienced periodic downturns in their businesses that could adversely affect their level of purchases of PRCP products. We believe PRCP has technology that can be useful in a variety of industries and hope management will diversify the company's customer base.

Second, PRCP is a party to a suit filed by 3CEMS, a corporation based in the Cayman Islands and the People's Republic of China. The suit was filed on or about July 19, 2013, in U.S. District Court for the Eastern District of Michigan. The suit alleges that PRCP breached its contractual obligations by failing to pay for component parts to be used to manufacture optical video scopes for the company's discontinued commercial-products business unit. 3CEMS alleges that it purchased the component parts in advance of the receipt of orders from PRCP based on instructions 3CEMS claims to have received from PRCP. The suit alleges damages of not less than $4.5 million. PRCP intends to vigorously defend against 3CEMS' claims. The outcome is highly uncertain at this point, but the damages being sought are small compared to PRCP's cash of $32.8 million.

Conclusion

We believe PRCP is undiscovered, which creates a huge opportunity for investors to profit. PRCP should be an attractive acquisition target for a variety of industries, including two of the fastest-growing industries, robotics and 3D printing. PRCP is cheap in valuation despite being a growth company with an even brighter future ahead. Consequently, we assign a buy rating on the stock with a $26.50 price target.

[Tommy]

$ONVO - How To Play Organovo Holdings

http://seekingalpha.com/article/1911681-how-to-play-organovo-holdings?source=email_portfolio&ifp=0


Dec 22 2013, 13:29 | 19 comments | about: ONVO

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)

Use of 3D printing for producing human tissue, also called as bioprinting, has been made commercially viable through the initiatives of Organovo Holdings (ONVO). Next year, Organovo will launch its first bioprinted liver tissue. This 3D printing technology creates human tissue with the help of its own NovoGen MMX Bioprinter. Organovo aims to provide a technology that will solve the complex problems of biotech companies by providing an opportunity to test drugs on functional human tissues to better understand of drug's effects on the human body. In addition to this, the company plans to provide therapeutic applications by providing 3D tissues that can be implanted into the human body to repair or replace damaged or diseased tissues. The following is the application of bioprinted human tissue:

3D printing is not a new phenomenon, industries use it to build prototypes and finished products, but use of this technology for making functional human tissue is a new application. Use of this technology in biotech will revolutionize drug manufacturing by providing functional preclinical 3D human tissue, as it simulates the human biology, thus giving better results during drug trials. Preclinical trials are usually done on animal tissues before clinical trials, but animal samples don't always react the same way as human tissue.

Organovo isn't new to drug development; the company worked on two active research contracts last year with Pfizer and United Therapeutics Corporation. These collaborative research agreements involved use of Organovo's NovoGen MMX Bioprinter technology for facilitating drug discovery, thereby solving the specific needs of the company.

What is the future of Organovo's technology?

Organovo is working on developing its bioprinting technology for changing the future of drug trials and therapeutic applications. Organovo is a development stage company and currently generates revenue from grants and research agreements like the one with Pfizer. The company is working on its first product launch next year. This will be human liver tissue, which will be used in toxicology by pharma companies. Currently, the company doesn't have product based revenue, but its first product launch next year will be its first commercial transaction. It will facilitate drug discovery with the tissue's extended lifespan of up to 40 days. Current liver cells used in labs have problem replicating the nature of the human liver and had a short time span of viability. Therefore, this product will address these issues and will provide human biology simulating 3D printed tissue to companies.

The future of bioprinting is the use of this technology for making fully functional human organs to meet the customer demand. The company has demonstrated printing of the first fully cellular engineered human artery; it uses stem cells from fat tissue (like bone marrow) to create arteries. Use of Organovo's cell by cell 3D printing approach in developing human organs for transplant will be an important milestone, but this technology is still years away from producing human organs such as the liver or kidney. These organs require networks of blood vessels and other tiny structures to live, and 3D printing isn't capable of integrating blood vessels yet. Therefore, this technology is limited for regenerative medicine, and it will help in surgeries.

One cannot expect bioprinting to grow as quickly as traditional 3D printing. The medical world has been using 3D printing extensively, but use of this technology for bioprinting is a different ball game. Up to now, around 5.5 million patients have been treated using 3D parts, from prosthetic limbs to 3D-printed titanium jaw implants, around the world. 3D printing has been used extensively for making hearing aids, with more than 10 million printed hearing aids currently in use around the world. The medical 3D printing market is expected to grow from $354 million in 2012 to $965 million in 2019.

In addition, investors cannot expect Organovo to simulate the growth of 3D printing market leaders 3D Systems (DDD) or Stratasys (SSYS). 3D Systems specializes in all three 3D printing segments, i.e prototyping, direct digital manufacturing, and consumer. It provides end to end solutions in the 3D printing market, ranging from materials to 3D printers. On the other hand, Stratasys has focused on industrial grade printers, but with acquisition of Makerbot, the company now has a leading position in the consumer segment.

Organovo' changing market sentiments

Market sentiments towards Organovo have been changing quickly. At the beginning of the year, Organovo's share price was around $2.36 per share, but in November, the share price was high as $12.75, thus almost reaching a $1 billion market cap. This was due to bullish sentiments after the company announced in an October 22 Conference that it has achieved the 40 days performance target for its 3D bioprinted liver tissue, which will be launched in 2014. This October announcement added no new insight about the company's product pipeline, as it was just a progress report of previously announced news. Since then, there have been bearish sentiments towards the stock, and share price plunged below the $9 mark. Organovo entered an equity distribution agreement with JMP Securities, in which it may sell 4 million through its sales agent. This will help it raise cash and strengthen the cash position for funding growth initiatives. However, it will also put downward pressure on its share price.

So is this the right time to invest in Organovo?

Organovo's future revenue generation remains uncertain. As there is no new release regarding the company's upcoming product, its future revenue generation has come into question. The company is currently dependent on research agreements and grants for revenue generation, but its first product is expected to launch by December 2014, thereby creating doubts about Organovo's revenue next year.

Currently, the share price is benefitting from market sentiments with no clear fundamental support to the current stock appreciation. After reaching a market cap close to $1 billion in November, its share price has fallen, reducing its market cap, which is currently around $677 million. Its current trailing twelve months revenue is $693,000, and its price to sales ratio is just above the 1000 mark. This variation denotes that market sentiments are driving the stock price without much fundamental strength.

Bioprinting isn't a fad, and this technology will prosper in the future. I believe in Organovo' growth potential, so with a long-term view, investors should invest in this future technology with the understanding that there might be volatility. This stock isn't recommended for risk averse investors.

[Tommy]

$TPCS - Shares Of Techprecision Are Poised To Triple

http://seekingalpha.com/article/1911831-shares-of-techprecision-are-poised-to-triple?source=email_portfolio&ifp=0

Dec 22 2013, 20:56 | 8 comments | about: TPCS

Disclosure: I am long AAPL, OTCQB:TPCS. (More...)

(Editors' Note: This article covers a stock trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.)

During my time on Seeking Alpha, 10 of my 21 official picks to triple have doubled, tripled, or been acquired. Last week, Globalstar (OTCQB:GSAT) became #9. This week, Seagate (STX) became #10.

Based on significant breaking news, I believe Techprecision (OTCQB:TPCS) could soon become #11. I spoke with the company about the news on Friday afternoon. This article will discuss the news, its implications, and numerous other opportunities that should set the stage for shares of TPCS to triple in value.

On Thursday, privately-held Mevion reported on a major milestone in its quest to become the world's dominant supplier of proton-beam cancer therapy systems. Unbeknownst to most investors, this is big news for publicly-held Techprecision , which was awarded a 5 year, $115 million contract to be the exclusive manufacturer of Mevion's new S250 Proton Therapy System.

TechPrecision is a diversified manufacturer, specializing in the production of large components that require an abnormally high degree of precision. For the past several years, TPCS has been gearing up to ride the wave of several high-growth markets, including smart phones, Solar, Nuclear, Oil & Gas, and advanced cancer therapies.

After years of heavy lifting, the company finally appears well-positioned to reap the rewards.

Despite the company's many capabilities, its old management team seemed content to exist on a diet of one-off / custom projects with little or no lasting value. Turning that around required two things:

1) A reorganization of the corporate structure / culture.
2) Executing against a number of long-term deals to raise the value of TPCS to a strategic level.

That is the mission of CEO Leonard Anthony, who was named TPCS's Chairman in January. We have had multiple discussions with Mr. Anthony, who clearly aims to underpromise and overdeliver. I believe that Mr. Anthony's turnaround plan is succeeding. TPCS's excess spending has been reigned. More importantly, deals involving two hot companies set to ready to ramp up.

Here's the rundown:

Sapphire - Shares of GT Advanced Technologies (GTAT) skyrocketed on the news of a $578 million strategic agreement with Apple (AAPL). In turn, TPCS received a multi-million dollar order to begin supplying sapphire furnaces as part of this relationship.

But this is just the beginning. Based on what we are seeing in the underlying demand for sapphire, TPCS's furnace business should ignite in 2014.

In fact, thanks to new cost efficiencies in the marketplace, we believe that sapphire is on the cusp of wide-scale commercial adoption. Cell phone screens and grocery checkout counters represent two potentially huge opportunities. Our research suggests that a sapphire phone should only cost $15 more than a glass-screened phone. Considering that most consumers spend that much on screen protectors, it seems like we've hit a no-brainer inflection point on cost.

Of equal importance, sapphire is virtually unbreakable and scratch-proof as compared to any other transparent surface (except diamond). Sapphire is 2.5x harder than Gorilla Glass and GTAT expects that most smartphones will employ sapphire within the next few years (based on discussions with phone manufacturers). If they're right, a significant increase in industry-wide capacity will be required.

TPSC gets $50,000 per oven with high-30s margins. Based on our calculations, 1% of the cell phone market would require the equivalent of 3,000 TPCS furnaces. Of course, we need to take market share into account, but GTAT's leadership position gives us confidence that TPCS is in position to be a beneficiary here. We believe this will be a $20 million opportunity for TPCS within a few years.

Cancer Treatment - Proton-beam therapy is on the rise and TPCS was awarded a 5-year, $115 million contract with Mevion, arguably the industry's hottest proton-beam vendor. Under the terms of the deal, TPCS will be the exclusive manufacturer of Mevion's new S250 Proton Therapy System.

On Thursday, Mevion reported on a major milestone, setting the stage for TPCS's mega deal to ramp up. Mevion's recent round of funding ($55 million in June) was granted to accelerate proliferation of the S250 into the marketplace. This indicates a great deal of confidence on the part of Mevion's investors.

If all goes well, we calculate that this could become a $50 million business for TPCS by 2017. We would also anticipate a hot IPO for Mevion before long, which would surely draw attention to TPCS's role in its success.

Nuclear - TechPrecision had been supplying components to the nuclear power industry for over 50 years. It remains one of the few U.S.-based precision manufacturers with nuclear component (N-Stamp) certification. President Obama's nominee for Secretary of Energy, Ernest Moniz, is a nuclear advocate. Regardless of your political views, the administration is demonstrating a clear commitment to nuclear energy.

In fact, nuclear proliferation is now accelerating on a global basis. There are over 400 nuclear power reactors operating in more than 30 countries. Dozens more are under construction in 13 countries. Most of the new construction is taking place in Asia. However, according to the World Nuclear Association, "there are major plans for new units in the USA and Russia."

One problem with this is that the majority of containers (a.k.a. casks) used to transport nuclear isotopes are over 30-years old. For obvious safety reasons, we estimate that over 500 of them need to be replaced with newer, safer casks. At present, we believe that TPCS is the only manufacturer of modern NRC-Approved isotope transportation casks. They have already proven their ability to manufacture them to the NRC's approval. If / when they prove they can ramp production, we expect orders to start coming in. At a price of $1 million apiece, this appears to be a $500 million opportunity in its nascent stages.

Naval: On April 10, the U.S. government provided approval for the purchase of 10 Virginia-class submarines. The reason is that the Navy is seen as providing more bang for our budget dollars. By shifting spending there, overall military spending can be cut without a loss in military might. At one point, TPCS was doing just $300k of work per Virginia-Class sub. It has since grown that number to $7 million per sub. That's $14 million per year under the new work order.

TPCS could conceivably increase their share to $15 million per submarine by building more assemblies for its current customers, who include General Dynamics, Babcock and Wilcox, and Northrop Grumman. The government's order for 2 submarines per year (versus the usual 1) requires General Dynamics (GD), Babcock and Wilcox (BWC), and Northrop Grumman (NOC) to scramble for additional manufacturing resources. This provides cause for optimism as it relates to TPCS's opportunity here. In the meantime, $14 million per year seems like a solid bet.

Other Opportunities - TPCS is also involved in other areas, such as Oil & Gas and the solar market (which could finally rebound in the coming year). The Oil & Gas opportunity would be relatively new, but Solar was a major revenue contributor for TPCS a few years ago (GTAT was its primary customer). Investors shouldn't hold their breath waiting for these opportunities to bear fruit, but we felt it was prudent to mention them for those of you looking to do additional due diligence.

Valuation: Because of its past troubles, shares of TPCS pulled back to levels close to its book value. Via direct discussions with the company, we determined that its current operations can support upwards of $60 million in revenue. This gives the company a good amount of operating-margin leverage. In other words, any new revenues will contribute disproportionately to the company's profitability.

Because of this, along with 1) the financial prudence of its new CEO and 2) its line-up of opportunities we believe that TPCS is most likely to find financing for its ongoing and future projects.

Once that becomes a certainty and TPCS returns to profitability, investors will inevitably turn their attention to revenue growth and earnings forecasts. From that perspective, Mr. Anthony believes that the company's unique capabilities and N-stamp certification give it the ability to thrive, given continued direction and leadership.

Ultimately, its capabilities and leadership could support a multi-hundred dollar business. However, for now, investors should remain grounded and focused on the future size of its current opportunities -- and how much of that opportunity TPCS can execute against. A sample model is displayed below.

Looking at the stock chart, we can see that the company has been forming a bullish wedge. Once Mevion's news becomes more widely known, I believe the shares should break out, leading to a rapid 40%+ move above $1 per share. This would represent a good near-term target. From there, further positive tidings would serve as catalyst for further share appreciation.

(click to enlarge)

To be clear, a move would above $1 would merely be a good starting point, if all goes well (as investors can see from the opportunity chart above). Recently, ARC Group Worldwide (ARCW), another specialty manufacturer, rocketed from $5 to $44 as word spread that it is involved in another hot market (3D printing). Though I believed that to be an overreaction, its current valuation remains well above 2x revenue.

For TPCS, a comparable valuation would represent close to $5 per share.

The Bottom Line: TPCS now appears to be in good and prudent hands. Accordingly, we believe that the recently decimated share-price offers investors an attractive level of risk/reward. Considering the risks against the potential rewards, we believe that shares of Techprecision are poised to triple.

Accordingly, the company is an official constituent of the Poised To Triple Speculative Portfolio.

[goodboy2]

Great stuff, thanks Tommy. Happy Holidays

[Tommy]

Globalstar Triples -- These Stocks Are Next

Dec 13 2013, 10:49 | about: GSAT, includes: ATTU, GLUU, GTAT, HIMX, PXLW, TPCS

http://seekingalpha.com/article/1897431-globalstar-triples-these-stocks-are-next?source=email_rt_article_readmore

Disclosure: I am long AAPL, ATTU, GLUU, OTCQB:GSAT, HIMX, PXLW, OTCQB:TPCS. (More...)

(Editors' Note: This article covers a micro-cap stock. Please be aware of the risks associated with these stocks.)

Since 1996, I have tripled my money every three years or so, on average. In 2009, I started sharing my Wall Street expertise with Main Street investors. That led to the creation of my popular "Poised To Triple" series on Seeking Alpha, along with the founding of PTT Research.

During my time on Seeking Alpha, 18 of my picks have doubled, tripled, or been acquired. This week, Globalstar (OTCQB:GSAT) became #19.

On Wednesday and Thursday, GSAT bucked the market downtrend and rocketed from $1.72 to a high of $2.06 -- more than triple where it was when I picked it, just four months ago. In this article, I will update you on GSAT, along with four other stocks that I believe are poised to triple.

At The Core

I generally classify my picks as being "Core" or "Speculative", among others. Core stocks are ones which have established themselves and are on a strong growth trajectory. Attunity (ATTU) and Glu Mobile (GLUU) my two favorites at present.

GLUU is an emerging play on mobile gaming, which I believe is poised to triple in value. ATTU is a leading provider of Big Data solutions, which recently raised $20 million in order to accelerate the expansion of its sales and marketing efforts. Both company's business plans are further along and safer than my Speculative picks and therefore justify larger position sizes.

It is very common for picks like these to attract new coverage from Wall Street analysts. We saw this happen with ATTU this week, as ROTH Capital initiated coverage with a buy rating and a $13.50 price target (59% above its levels at the time, and 300% above our initiation price).

We have also seen improving Wall Street estimates and ratings for GLUU, whose CFO met with Wall Street investors on Tuesday. Because of this, GLUU is my largest personal holding (with ATTU not far behind). In general, I like to allocate 70-90% of my capital to Core picks, with heavy concentration in my favorites (like ATTU and GLUU).

Speculating On Higher Returns

"Speculative" picks tend to be less established than Core selections. In addition, reaching their potential may be reliant on external forces. As a result, they present a bit more risk, but also hold the promise of much more explosive profits.

Pixelworks (PXLW) and Globalstar have been two of my favorite Speculative names. Pixelworks became one of my picks to triple because of its unique position in the video processing space. The company has been showing steady progress in its core business, even as it works to deliver new solutions that will bring unprecedented levels of video resolution to mobile devices.

Apple (AAPL) has been moving away from Samsung (GM:SSNLF) as a technology partner due to obvious competitive issues. For PXLW, the falling out is particularly notable on display-panels (like iPad screens...and potentially iTV screens). Without Samsung's long history in TV display technology, Apple need to find an alternative. I believe that PXLW could be the solution, just as I believed that Himax (HIMX) would be the solution for Google (GOOG) to develop Glass.

If everything continue to progress as it has, PXLW's share price could head into the double digits (a near triple from current levels). It may also be upgraded to a "Core" holding before in the coming months, which would justify a significant increase in one's ownership in the stock. In the interim, a move to Roth Capital's price target of $6 will represent a 50%+ gain from current levels.

As for GSAT, after Amazon Tested GSAT's Satellite Network, it became apparent to me that the company's business and spectrum assets could be worth more than $4 per share (more than double GSAT's current stock price). However, this value will only be realized if the FCC approves a measure to expand the ways its spectrum can be utilized to include terrestrial Wi-Fi (thus, the speculative nature of the stock).

They're making great progress in this regard, but success is not yet a foregone conclusion. It's pretty clear that a great deal of GSAT's potential is out of its hands. Accordingly, I follow the advice of CNBC's Jim Cramer (a former client of mine via Cramer & Co. and Cramer Berkowitz) who advocates allocating 10% of one's portfolio to speculative picks. At times, I'll go as high as 20%, depending on my perception of the market's appetite for risk.

Despite this conservatism, I remain very bullish on the prospects for PXLW and GSAT.

This week institutional buyers followed suit on GSAT, presumably on the news that LightSquared is attracting big money from competing bidders. Indeed, the demand for wireless and public Wi-Fi bandwidth is at an all-time high and rising on the back of unprecedented mobile device sales worldwide. This is clearly great news for GSAT's prospects.

More Pain, More Gain?

Some of my Speculative carry extra risk (and extra potential for outsized gains). I often call these "Ten Baggers Or Bust". Because of their potential to bust, picks like these represent the smallest part of my portfolio. They are a subset of my 10-20% allocation to speculative names. However, due to their potential to explode, I believe they serve an important role in a diversified portfolio.

Techprecision (OTCQB:TPCS) is my favorite example of this right now. The company is chasing several large opportunities:

Nuclear - TechPrecision had been supplying components to the nuclear power industry for over 50 years. It remains one of the few U.S.-based precision manufacturers with nuclear component (N-Stamp) certification. We estimate that over 500 old casks need to be replaced with newer, safer casks. At a price of $1 million apiece, this appears to be a $500 million opportunity in its nascent stages.

Sapphire - Shares of GT Advanced Technologies (GTAT) have skyrocketed on the belief that sapphire is on the cusp of wide-scale commercial adoption, primarily in cell phones. TPCS provides sapphire production equipment (furnaces).

Naval - On April 10, the U.S. government provided approval for the purchase of 10 Virginia-class submarines. At one point, TPCS was doing just $300k of work per Virginia-Class sub. It has since grown that number to $7 million per sub. That's $14 million per year of revenue under the new work order, assuming their participation level holds firm.

Other - TPCS is also involved in other areas, such as Oil & Gas and the solar market (which finally appears to be rebounding).

However, with many of these opportunities, the chase needs to graduate to "participation". Simultaneously, management is navigating a delicate financing situation.

Net-net, the company could eventually rise 10-fold from my initiation price ($0.40) to $4 per share. However, if things take too long to develop, that promise could evaporate. Luckily, the company recently got some breathing room by winning an $8 million deal to supply GT Advanced Technologies with sapphire chambers. These chambers will be used as part of a strategic relationship with Apple.

[Tommy]

The Top 5 Disruptive Technologies of 2014
An Investor's Guide to Disruptive Innovation

http://www.energyandcapital.com/articles/the-top-5-disruptive-technologies-of-2014/4081

By Jason Stutman
Friday, December 6th, 2013

For technology investors, one of the most important things to consider is disruptive innovations in the market. These are trends that will create entirely new industries and, in most cases, displace others in the process.

On its own, innovation is not enough to be considered disruptive – there needs to be a cost benefit before any new technology can have a significant impact. Only when the value of a technology surpasses the value of a competing market does it officially become what we can call a disruptive trend.

One good example of a disruptive trend is the Ford Model T. Prior to mass production, automobiles were not yet a disruptive innovation due to their high cost. However, when the lower-priced Model T came rolling off assembly lines in 1908, the market for horse-drawn carriages dwindled, and the market for automobiles took off.

Understanding disruptive trends is a critical component of technology investing, as they will often indicate the winning and losing players in this space. Below, you'll find what we believe to be the top 5 trends of 2014 that are either approaching or just hitting this point of disruption.

1) Additive Manufacturing

More commonly known as 3D printing, additive manufacturing is the process of building three-dimensional objects with machines using computer-aided design (CAD) software.

3D printing allows manufacturers to make a product from the core up. In many cases this results in less waste, faster output, and lower operational costs. As the technology continues to mature, the ROI for 3D printers will continue to rise and entice an increasing number of manufacturers to buy in.

There are countless companies using 3D printing for a wide array of applications. Innovators have built working firearms, human tissue, prosthetics, musical instruments, clothing, and even electric generators with 3D printing techniques.

In the automotive industry, General Motors (NYSE:GM) and Ford (NYSE:F) are using 3D printers to build prototypes. In the aerospace industry, NASA, General Electric (NYSE:GE), and Rolls Royce are printing out parts for rocket and jet engines. Meanwhile, Boeing (NYSE:BA) is aiming to build airplane wings with additive manufacturing.

Perhaps even more important than what 3D printing can build is what it can destroy. Remember what digital formatting and piracy did to CD sales? 3D printing may just have a similar effect on physical goods. In fact, by 2018, an estimated $100 billion per year will be lost in intellectual property as a result of counterfeit goods made with 3D printers.

3D printing is currently a $2 billion industry growing at a CAGR of about 30%. Total revenue for the sector is expected to reach $6.5 billion by 2019 according to Wohlers Associates.

Currently, there is a ton of hype surrounding 3D printing, and while it certainly qualifies as a disruptive innovation, expectations for some 3D printing companies are likely inflated. Investors need to be cautious in this space.

2) The Automated World

Possibly the widest-reaching trend on this list, automation will soon touch nearly every aspect of our daily lives. From production lines to transport to the food on our plates, robots and computer algorithms will soon be working behind the scenes.

You may have heard about Google's self-driving car, which has driven hundreds of thousands of miles on public roads and has yet to cause an accident. Or maybe you've heard of Narrative Science, the company that's developed the automated author. We're talking about an artificial intelligence platform that can actually write its own financial articles and reports.

The fact is that while automated technology has already begun to creep into our daily lives, what we see today is nothing compared to what the future holds. The level of automation that comes in the next 10-30 years will bring a massive wave of both economic destruction and prosperity.

Gartner analysts recently made some ominous predictions regarding labor disruption due to automation. The group predicts that while most management jobs will stay in tact, many middle-class workers will be replaced at an increasing rate over the next decade. By 2030, Gartner even expects the world's first human-free enterprise – a business governed entirely by computer software.

Now, becoming obsolete is certainly frightening, but the automation of current jobs does not necessarily mean higher unemployment. Just as the industrial revolution eventually created a wide array of new employment opportunities, an automated world may have similar effects.

Key areas to benefit from this trend will include automated retail, advanced robotics, and artificial intelligence. Investors will specifically want to look for the companies taking advantage of this technology, the companies providing it, and finally the supply chains that support it all.

3) The Internet of Things

The Internet of Things refers to the concept of everyday objects becoming connected to the web. While this premise is a uniquely disruptive trend, it's also intrinsically tied with the automated world described above.

Let's say you're heading to the grocery store after a long day at work. You can't seem to remember what's in your fridge, so you pull up an app on your phone. The app connects to your refrigerator that contains embedded sensors. It then tells you what to buy based on which items are left in your fridge and which will expire soon – it even lets you know how many eggs are left in the carton.

This idea of connected devices will expand well beyond your fridge. In the winter, you'll be able to warm up your car and monitor the interior temperature from virtually anywhere on earth. In the summer, your thermostat will connect to the grid and turn down the cooling during peak hours to reduce your energy bill.

Further applications for the Internet of Things may include, but are not limited to:

Emergency response

Intelligent retail

Agricultural management

Waste management

Continuous care

Traffic reduction/vehicle-to-vehicle communication

There are several ways to play this emerging trend. One strategy is to seek out companies supporting this network. The most prominent example right now would be Cisco Systems (CSCO), which has launched an entire division focused on the Internet of Things. Another angle is to pin down companies providing the intelligent sensors that will be crucial for these devices.

4) Next Generation Interface

There are few guaranteed trends in consumer hardware, but one thing is for certain: devices will continue to become increasingly portable. In the past, this primarily meant creating smaller computer chips and batteries. Today, however, devices are becoming so small that we now need alternative ways to interact with them.

Over the next decade, we will see a new generation of devices, primarily in the form of wearable and embedded computers. To support the placement and size of these devices, non-touch interface methods will need to be adopted. Among these methods are voice control and spacial gestures: two forms of biometric recognition.

Voice control will still come in the form of programs similar to Apple's Siri but with advanced artificial intelligence and a greater range of applications. Today, you can ask your iPhone where the nearest gas station is – in 10 years you'll be having a full blown conversation.

Add gesture recognition to the mix, and we will eventually eliminate the need for keyboards and touch screens altogether. There are already devices on the market like Microsoft's Kinect that track your limbs, fingers, and even facial expressions. This technology allows us interact with and manipulate objects in a virtual world, much in the way Tom Cruise does in the movie Minority Report.

It's worth nothing that the input on these devices isn't perfectly accurate just yet, and the cameras are still too cumbersome to fit in wearable devices. But there is little doubt that these technologies will reach practicality for wearable devices within the next 5-10 years. When this happens, it will completely disrupt the mobile device industry as we know it.

5) Next-Generation Genomics

Just two decades ago, the Human Genome Project was among the most ambitious research projects in science. It took the National Human Genome Research Institute (NHGRI) billions of dollars, thousands of researchers, and nearly 15 years to complete the task. Today, we can map an individual's genome in a matter of hours, with a single machine, and for less than $10,000.

Genomes essentially work as blueprints for the human body. In combination with the surrounding environment, they determine the people we will become, as well as the diseases we'll inherit. By reading these blueprints, doctors aim to better understand the medical needs of individuals and also to design innovative and highly effective treatments for disease.

According to the NHGRI, there are currently over 350 biotechnology products in clinical trials, many of which are based on genetic sequencing. These products offer the promise of both individualized treatment and preventative care. The ultimate goal is to detect a disease before it even emerges and stop it at the source.

It's estimated that in the next 10-15 years, this will become a common reality. Instead of your doctor prescribing medicine based solely on your symptoms, he will determine the best course of action based on your genetic code.

Though we have the blueprints right now, the problem still lies in sorting and interpreting all this data. While there will be ample opportunities in small the biotechnology sector, there are also plays in big data and analytics. Look to companies like Pacific Biosciences of California (NASDAQ: PACB) to benefit from this trend.

[Tommy]

$TNXP - 4 Reasons Tonix Could Be A Multi-Bagger

Dec 2 2013, 10:30 http://seekingalpha.com/article/1870881-4-reasons-tonix-could-be-a-multi-bagger?source=email_inv_ar_2_2&ifp=0

Editor's notes: Strong leadership and market potential make Tonix a stock with potentially huge upside. Remaining uncertainties do not detract from the appeal of this company.
Alpha-Rich ideas are our best money-making long and short investment ideas.
They are released exclusively to Seeking Alpha PRO users 24 hours before publication.
Learn more about Seeking Alpha PRO.

Disclosure: I am long TNXP. (More...)

Tonix Pharmaceuticals (TNXP) is developing TNX-102 SL for treatment of fibromyalgia and Post Traumatic Stress Disorder. We think that Tonix is one of the most undervalued stocks in the market. The four most important trends and catalysts for Tonix are:

1) Fibromyalgia and PTSD are Very Large Problems

FM is a Debilitating Disease - FM takes over patient's lives

Millions of Americans Have FM - Between 5 and 15 million American adults have FM.

FM is a Rapidly Growing Diagnosis - The FDA only recently approved the first drugs for FM.

FM is Linked to PTSD - PTSD affects about 7.7 million American adults every year

2) Large Unmet Need for Sleep Quality in FM and PTSD

Sleep Problems are Nearly Universal in FM and PTSD - Patients' sleep is not restorative, and there is a vicious cycle of pain and poor sleep making each other worse

Hyper-Vigilance - Cyclical Alternating Patterns in sleep indicate patients are "on alert"

Patients Are Desperate - There are no approved bedtime medicines, and off-label drugs can make matters worse

3) TNX-102 SL Meets the Sleep Quality Need in FM and PTSD

Cyclobenzaprine Promotes Restorative Sleep - Decreases "alert" Cyclical Alternating Patterns A2/A3

TNX-102 SL is a Novel CBP Formulation - Sublingual form has many advantages

TNX-102 SL Should Be Approved - Many factors bode well for approval

4) TNXP is Deeply Undervalued

Strong Intellectual Property - Should protect TNX-102 SL until 2033 and opens the door for use in other indications

Billion Dollar Revenues - TNX-102 SL should surpass $1 billion in annual FM sales

Asymetric Upside - Tonix could be a billion dollar company within a year

Let's look at these trends and catalysts in depth:

1) Fibromyalgia and PTSD are Very Large Problems

A) FM is a Debilitating Disease

Fibromyalgia is a chronic disease characterized by widespread and constant pain, unrefreshing sleep, fatigue, depression, anxiety, and memory problems. FM usually affects women. FM is a disease of the Central Nervous System, and the type of pain FM patients have is central pain - pain coming from an abnormality in the brain rather than pathology in the places experiencing pain. From the Mayo Clinic:

"Fibromyalgia is a disorder characterized by widespread musculoskeletal pain accompanied by fatigue, sleep, memory and mood issues. Researchers believe that fibromyalgia amplifies painful sensations by affecting the way your brain processes pain signals… People with fibromyalgia often awaken tired, even though they report sleeping for long periods of time"

The University of Maryland Medical Center elaborates on the distressing pain and hallmark sleep problems of FM:

"Widespread stiffness, burning, and aching pain. The pain also "radiates," or spreads, to nearby areas. Most patients report feeling some pain all the time, but the intensity of the pain may increase or decrease. Many describe it as "exhausting." The pain can vary with the time of day, changes in the weather, physical activity or inactivity, and stress. The pain is often more intense when sleep is disturbed.

Fatigue and Sleep Disturbances. Fatigue and sleep disturbances are almost universal in patients with fibromyalgia. Restless legs syndrome (RLS) and periodic limb movement disorder (PLMD) are also common. It is not clear whether fibromyalgia leads to poor sleeping patterns or if the sleep disturbances come first.

Many patients complain that they can't get to sleep or stay asleep, and they feel tired when they wake up. Some report that their fatigue is more distressing than their pain, because it interferes with their ability to enjoy life. Some experts believe that if a person does not have sleep problems, the condition may not be fibromyalgia."

Many hormonal, metabolic, and brain chemical abnormalities have been shown in fibromyalgia patients, but the disease is not completely understood.

B) FM is Very Costly

People with FM often have trouble performing work and maintaining employment, as well as trouble with daily life activities and maintaining social relationships. According to the University of Maryland 50 to 70% of fibromyalgia patients have a lifetime history of depression, half have difficulty with routine daily activities, or are unable to perform them, and an estimated 30 - 40% have had to quit work or change jobs.

The National Arthritis Data Workgroup analyzed published studies from national surveys and noted the destructive effects of FM in both work and life, with higher rates of divorce and application for disability benefits.

The pain and poor sleep of FM can result in fatigue, mood, and memory problems sometimes called "fibro fog." This is very problematic for FM patients in the workforce. A 2007 internet survey of 2,596 people with fibromyalgia shows the impact FM has on patients' careers:

"The respondents were nearly equally divided regarding their ability to maintain gainful employment. Those who were still working felt that their symptoms compromised their ability to be productive due to frequent absences and reduced work hours. Approximately 20% of the respondents had filed some form of disability claim and 6% received workman's compensation."

The International Journal of Clinical Practice published a study titled "Characteristics and healthcare costs of patients with fibromyalgia syndrome" and found FM was associated with many costly diseases:

"FMS patients were more likely than those in the comparison group to have various comorbidities, including diseases of the circulatory system [OR (95% CI) = 2.1 (2.0-2.1)], diabetes [1.5 (1.4-1.6)], anxiety [4.3 (3.8-4.7)], depression [4.9 (4.5-5.2)], irritable bowel syndrome [6.2 (4.9-7.9)], gastro-oesophageal reflux disease [3.8 (3.4-4.2)] and sleep disorders [6.1 (5.4-6.9)] (all p < 0.001) (Table 2). They also were more likely to have pain-related comorbidities, including painful neuropathies [10.3 (9.6-11.0)], back pain [14.2 (13.3-15.2)], cervical pain [16.3 (14.9-17.9)], arthritis [6.3 (5.8-6.8)] and migraine headache [6.9 (6.0-8.0)] (all p < 0.001)"

Fibromyalgia is a devastating disease that takes over the lives of its sufferers. FM is also a lifetime condition with no cure that affects millions of Americans.

C) Millions of Americans Have FM

By most estimates 2% to 6% of American adults are living with FM, or 5 to 15 million Americans in 2012. The National Fibromyalgia and Chronic Pain Association estimates 10 million Americans have FM, and the National Institute of Health currently says 5 million.

The NIH number is flawed, though. The data it refers to is from a 2008 study "Estimates of the Prevalence of Arthritis and Other Rheumatic Conditions in the United States Part II." That study itself looked at 2 studies from the 1990s - one from Wichita and one from Ontario. The Wichita study showed 3.4% of adult women with FM and 0.5% of men, the Ontario study showed 4.9% of women and 1.6% of men with FM. The study then only used the (American) Wichita data and used the 2005 census to come up with 5 million American adults, then cited mitigating factors:

"The 1990 ACR criteria for the classification of fibromyalgia require the presence of widespread pain for at least 3 months and pain on palpation in at least 11 of 18 anatomic sites (33). Despite its acceptance, a number of problems occur when the ACR criteria set is used to define fibromyalgia in populations, leading to difficulties in estimating prevalence (34-36). Also, fibromyalgia may be more common among persons with other medical conditions (37), so prevalence estimates of primary fibromyalgia may be lower than estimates that do not differentiate primary fibromyalgia from fibromyalgia secondary to other disorders."

FM is hard to diagnose, and was even harder in the past. The "pain on palpation" is a very subjective test of pressure on points that are painful when squeezed - everyone has pain if squeezed hard enough.

And the other mentioned medical conditions - fibromyalgia is known to be associated with a number of other disorders that might mask its presence. These include Chronic Fatigue Syndrome, Myofascial Pain Syndrome, Major Depression, Chronic Headache, Multiple Chemical Sensitivity, Restless Legs Syndrome, Lyme Disease, drugs and alcohol, Polymyalgia Rheumatica, Disorders Affected by the Sympathetic (also called Autonomic) Nervous System, Irritable Bowel Syndrome, Temporomandibular Joint Disorders, and chemicals and environmental toxins.

These factors, along with the lack of a laboratory test that could confirm fibromyalgia, have led to difficulty in diagnosing patients. Per the University of Southern California it can take 5 years for the average person with the condition to finally get a diagnosis, and as many as three out of every four people with fibromyalgia remain undiagnosed. Most patients in the 2007 internet survey saw at least 3 doctors before diagnosis, and a quarter of patients saw 7 or more doctors before finally being diagnosed:

"Some 46% had consulted between 3 to 6 health care providers before obtaining the diagnosis of FM, while 24.6% had seen >6 health care providers prior to diagnosis."

More recently, in May of 2013 Arthritis Care & Research published a study showing a much higher prevalence of FM, including a large hidden population of undiagnosed men:

"The age- and sex-adjusted prevalence of fibromyalgia in the general population of Olmsted County by this method was estimated at 6.4%.

CONCLUSION:

To the best of our knowledge, this is the first report of the rate at which fibromyalgia is being diagnosed in a community. This is also the first report of prevalence as assessed by the fibromyalgia research survey criteria. Our results suggest that patients, particularly men, who meet the fibromyalgia research survey criteria are unlikely to have been given a diagnosis of fibromyalgia."

Men are documented to be less likely than women to seek help of all kinds. Men can also tend to: be less likely to complain of pain, seek help only when they can no longer stand the pain, generally have a higher pain threshold, and self medicate with things like alcohol. From the American Psychological Association:

"dozens of studies and surveys over the past several decades have shown that men of all ages and ethnicities are less likely than women to seek help for all sorts of problems--including depression, substance abuse and stressful life events--even though they encounter those problems at the same or greater rates as women. In a 1993 study published in Psychotherapy (Vol. 30, No. 4, pages 546-553), for example, psychologist John Vessey, PhD, reviewed several epidemiologic surveys and found that a full two-thirds of mental health outpatient visits were made by women."

Millions of Americans have fibromyalgia, and many people with the disease remain undiagnosed. That is changing, though.

D) FM is a Rapidly Growing Diagnosis

In 2010, consulting firm Frost & Sullivan published a report showing the U.S. fibromyalgia market at $1.2 billion and growing at a compound annual growth rate of 18.4%.

There are several reasons for the growth, including the first FDA approvals, the end of the FM "cold war," and a broader accepted definition for diagnosis.

The FM market should continue to grow as physicians' acceptance and comfort level with diagnosis increases. There is also a diagnostic test for the disease newly available, and the FDA has selected fibromyalgia as one of 20 diseases for special focus over the next 3 years.

FDA Recent Approval/End of Cold War

Fibromyalgia hasn't always been recognized as a specific illness. For years many people were skeptical that fibromyalgia was even a real condition. The Mayo Clinic's Fibromyalgia misconceptions: Interview with a Mayo Clinic expert describes the attitudes toward FM:

"The top misconception is that people think fibromyalgia isn't a real medical problem or that it is "all in your head." It's sometimes thought of as a "garbage-can diagnosis" - if doctors can't find anything else wrong with you, they say you have fibromyalgia. There's a lot that's unknown about fibromyalgia, but researchers have learned more about it in just the past few years…It is a real physiological and neurochemical problem."

With the FDA approval of drugs for fibromyalgia in 2007, 2008, and 2009 more and more doctors are becoming comfortable making the FM diagnosis.

In addition, Canada, Japan, and Israel have also approved drugs for fibromyalgia.

Broader Definition

In medicine fibromyalgia is a disease of pain and attended to by rheumatologists. The American College of Rheumatology released guidelines for FM diagnosis in 1990 that included the aforementioned tender points exam and may have excluded a large number of people that have the disease. In 2010, they released less stringent guidelines for diagnosis that are as inclusive as pain lasting at least three months and no other underlying condition that might be causing the pain.

Set For Growth

As acceptance and awareness of FM amongst doctors and the patients continues to increase the number of diagnoses should continue to increase as well.

One factor that should bolster acceptance and awareness of FM going forward is that in April of this year the FDA named fibromyalgia as one of 20 diseases to focus on for special regulatory treatment. This is part of a provision in the 2012 PDUFA Reauthorization Performance Goals to assess risk-benefit decisions in diseases where treatment options are not optimal, and to facilitate a program that assesses tolerance for risk on a disease-wide level.

The FDA will conduct a public meeting on December 10 on fibromyalgia under that initiative that should also build awareness of the disease.

Additionally, there is a FM diagnostic test that recently became available. The results of a trial were published on BioMedCentral Clinical Pathology and the test seems to work. If the test is adopted as standard of care for diagnosis the number of diagnoses could jump dramatically.

The fibromyalgia market is growing rapidly and should continue to grow for a long time.

E) FM is Linked to PTSD

Fibromyalgia is not completely understood, but it is sometimes brought on by trauma. The 2007 internet survey found that:

"People with FM often associate a specific event to the onset of their symptoms. In response to the question "have any of the following potential triggering events occurred around the same time that your fibromyalgia symptoms first became apparent" Approximately 21% of responders indicated that they could not identify any such association. Over 73% of those who indicated some triggering event made attributions to emotional trauma or chronic stress (Table 5). The next most common attribution was acute illness (26.7%), followed by physical stressors (surgery, motor vehicle collisions, and other injuries). Another 20.6% of the responses acknowledged physical or emotional abuse as a child and 15.1% associated abuse as an adult to the onset of their symptoms. Childhood sexual abuse was cited by 9% of respondents. Approximately 10.1% of the responders related the onset of FM symptoms to the menopause."

(click to enlarge)

Many studies link trauma with FM.

A 2010 study in the Journal of Psychiatry Research showed two traumatic experience types - sexual and physical assault/abuse - were associated with a fibromyalgia diagnosis.

A 2011 study in the journal Arthritis Care and Research found the same:

"OBJECTIVE:

To systematically assess the potential association of fibromyalgia syndrome (FMS) with emotional, physical, and sexual abuse.

…The search identified 18 eligible case-control studies with 13,095 subjects. There were significant associations between FMS and self-reported physical abuse in childhood (OR 2.49 [95% CI 1.81-3.42], I(2) = 0%; 9 studies) and adulthood (OR 3.07 [95% CI 1.01-9.39], I(2) = 79%; 3 studies), and sexual abuse in childhood (OR 1.94 [95% CI 1.36-2.75], I(2) = 20%; 10 studies) and adulthood (OR 2.24 [95% CI 1.07-4.70], I(2) = 64%; 4 studies). "

The Clinical Journal of Pain published a study titled "Sexual and Physical Abuse in Women with Fibromyalgia Syndrome: a Test of the Trauma Hypothesis" that found that women who reported rape were 3.1 times more likely to have FM and also more likely to have PTSD.

A 2010 study in Clinical and Experimental Rheumatology showed Holocaust survivors had more than twice the normal rate of FM and increased rates of PTSD symptoms.

In 2009, Clinical and Experimental Rheumatology published a study titled "A Painful Train of Events: Increased Prevalence of Fibromyalgia in Survivors of a Major Train Crash," the study found:

"Fifteen percent of survivors participating in the study met ACR criteria for the classification of fibromyalgia. Significantly lower rates of physical and emotional functioning were found among survivors with fibromyalgia compared with those not meeting the classification criteria. Survivors with fibromyalgia rated significantly higher on scales of somatisation, obsessive-compulsive ideation, interpersonal sensitivity, depression, anger and hostility, phobic and general anxiety, paranoid ideation and psychoticism. Survivors with fibromyalgia also rated significantly higher on scales of posttraumatic symptoms including intrusion, avoidance and arousal."

PTSD LINK

FM seems to be a hyper-vigilance disorder of the central nervous system. From USC (linked above):

"Some fibromyalgia patients may be oversensitive to external stimulation, and overly anxious about the sensation of pain. This increase in awareness is called generalized hypervigilance. Fibromyalgia patients have been found to have greater awareness of, or less tolerance for, movement problems (such as tremor) that don't match their expected sensory feedback. This mismatch in sensory signals might enhance the perception of pain. Fibromyalgia patients also seem to be more sensitive to sounds."

If hyper-vigilance and over-sensitivity to sensory feedback seems a little like Post Traumatic Stress Disorder, it should.

PTSD is an anxiety disorder that can develop from experiencing or witnessing terrifying events. PTSD was once associated primarily with war veterans, but civilian PTSD is quite common and can be triggered by accidents, violence, assault, abuse, or even sudden and major emotional loss. People with PTSD often manifest a state of hyperarousal, where they can be subconsciously "on alert" and as a result feel anxious, have difficulty sleeping, be irritable, suffer emotional outbursts, or be easily startled.

FM and PTSD are both associated with trauma, and likewise a number of studies associate FM with PTSD and vice versa.

A study titled "Prevalence of Post-Traumatic Stress Disorder in Fibromyalgia Patients: Overlapping Syndromes or Post-Traumatic Fibromyalgia Syndrome?" published in Seminars in Arthritis and Rheumatism found that 57% of FM patients qualified for a PTSD diagnosis:

"In this study, 57% of the FM sample had clinically significant levels of PTSD symptoms. The FM patients with PTSDreported significantly greater levels of avoidance, hyperarousal, reexperiencing, anxiety, and depression than did the patients without clinically significant levels of PTSD symptoms. The prevalence of PTSD among the FM patients in this study was significantly higher than in the general population. Women with FM and PTSD reported a greater number of past traumatic events than did their male counterparts.

CONCLUSIONS:

The results represent the first comprehensive study applying structured clinical assessment of trauma exposure and PTSD to a group of FM patients. This study shows a significant overlap between FM and PTSD, according to the currently accepted diagnostic criteria for each"

This significant overlap may have gone unnoticed because FM is considered a pain disorder of rheumatology, while PTSD is considered a psychiatric condition.

PTSD is a Big Problem

PTSD is a very common disease. The NIH says about 3.5% of adults have PTSD in a given year - about 8.4 million American adults in 2012.

According to the US Department of Veterans Affairs:

about 7-8% of the population will have PTSD at some point in their lives.
Women are more likely than men to develop PTSD. About 10% of women develop PTSD sometime in their lives compared with 5% of men
PTSD occurs in about 11-20% of Veterans of the Iraq and Afghanistan wars, and in about 30% of Vietnam Veterans

FM and PTSD are very large problems.

2) Large Unmet Need for Sleep Quality in FM and PTSD

A) Sleep Problems are Nearly Universal in FM and PTSD

Almost all FM patients suffer from poor sleep quality. A study published by Therapeutic Advances in Musculoskeletal Disease showed more than 90% of fibromyalgia patients with disturbed sleep.

In the 2007 internet survey of 2,596 FM patients, problems with sleep were listed as the first, second, and third most intense symptoms of FM (listed with average severity score on a scale of 0 to 10):

(click to enlarge)

FM patients are not getting quality sleep. And not only are they not getting quality sleep, they can actually feel worse after sleep - to the point where sleep has lost its restorative power. From a Journal of Rheumatology titled "Sleep as a Window into the World of Fibromyalgia Syndrome":

"One of the most clinically problematic challenges in the management of fibromyalgia syndrome (FMS) is the unrefreshing nature of sleep. The problem goes beyond misperceiving the duration or quality of sleep, to a point where patients may feel worse after sleep - a complete loss of the restorative power of sleep."

The poor sleep of FM contributes to the fibro fog phenomena of forgetfulness and decreased alertness. Restorative sleep can improve these symptoms in FM patients. A 2008 study published in Patient Education and Counseling called Patient Perspectives on the Impact of Fibromyalgia notes:

"Participants greatly desired an improvement in their ability to sleep, and many reported that pain interfered with sleep. Most participants indicated that both fatigue and pain were directly related to the quality of their sleep ('If I can get sleep, I can fix all the rest.'). Many participants experienced a great deal of difficulty in rising and beginning preparations for the day; this difficulty was often attributed to pain upon awakening.

Mornings were particularly difficult for participants because they had difficulty sleeping at night and woke up in pain."

It's not just FM, sleep problems are nearly universal in PTSD as well. We saw that FM and PTSD appear to be a problem of "hyper-vigilance," and that hyper-vigilance creates big sleep problems for PTSD patients. From the Department of Veterans Affairs:

"Why do people with PTSD have sleep problems?

They may be "on alert." Many people with PTSD may feel they need to be on guard or "on the lookout," to protect himself or herself from danger. It is difficult to have restful sleep when you feel the need to be always alert. You might have trouble falling asleep, or you might wake up easily in the night if you hear any noise.

They may worry or have negative thoughts. Your thoughts can make it difficult to fall asleep. People with PTSD often worry about general problems or worry that they are in danger. If you often have trouble getting to sleep, you may start to worry that you won't be able to fall asleep. These thoughts can keep you awake."

If poor sleep is part of the problem of PTSD then quality sleep may aid healing, and earlier this year the American Journal of Psychiatry published a study suggesting sleep treatments could accelerate PTSD recovery:

"chronic sleep disruption associated with nightmares may affect the efficacy of first-line PTSD treatments, but targeted sleep treatments may accelerate recovery from PTSD. The field is ripe for prospective and longitudinal studies in high-risk groups to clarify how changes in sleep physiology and neurobiology contribute to increased risk of poor psychiatric outcomes."

Sleep problems are central to FM and PTSD.

Vicious Cycle

Sleep is an active process, people need deep sleep for emotional and psychological health. Restorative sleep also refreshes the body's system for perceiving and processing pain.

Non-restorative sleep can exacerbate the pain of FM and PTSD, which in turn can make restorative sleep even more difficult.

Many studies have linked sleep problems with widespread body pain and lower pain tolerance. A 2008 study published in the journal Joint Bone Spine links sleep/wake disruptions with the exact kinds of symptoms seen in FM and PTSD:

"Experimental evidence from humans and animal studies indicate that there is an inter-relationship of disturbances in the physiology of the sleeping-waking brain with the widespread musculoskeletal pain, chronic fatigue, and psychological distress"

The Therapeutic Advances in Musculoskeletal Disease linked above shows sleep loss equates to a loss of pain tolerance.

A study published in the Journal of Neuroscience links sleep disruption with anxiety:

"Together, these data support a neuropathological model in which sleep disruption may contribute to the maintenance and/or exacerbation of anxiety through its impact on anticipatory brain function. They further raise the therapeutic possibility that targeted sleep restoration in anxiety may ameliorate excessive anticipatory responding and associated clinical symptomatology"

This vicious cycle is seen in PTSD. From a study published last year in the European Journal of Psychotraumatology:

"Sleep facilitates the consolidation of fear extinction memory. Nightmares and insomnia are hallmark symptoms of posttraumatic stress disorder (PTSD), possibly interfering with fear extinction and compromising recovery. A perpetual circle may develop when sleep disturbances increase the risk for PTSD and vice versa. To date, therapeutic options for alleviating sleep disturbances in PTSD are limited…This suggests that disturbed sleep is a precipitating and perpetuating factor in PTSD symptomatology, creating a perpetual circle."

B) CAP A2/A3

Slow wave sleep in particular seems to be key to restorative sleep. A 1999 study published in the Journal of Rheumatology shows disrupting SWS can bring on the symptoms of FM:

"Disrupting SWS, without reducing total sleep or sleep efficiency, for several consecutive nights is associated with decreased pain threshold, increased discomfort, fatigue, and the inflammatory flare response in skin. These results suggest that disrupted sleep is probably an important factor in the pathophysiology of symptoms in fibromyalgia"

In addition a landmark study by the Clarke Institute of Psychiatry used sound to disrupt slow wave sleep in healthy patients. Individuals then reported their sleep was unrefreshing, and they developed body aches, fatigue, and increased tender points in many of the same areas seen in FM patients.

Slow wave sleep seems to be key to restorative sleep. Some types of non-REM brain wave patterns called cyclic alternative patterns (CAP) can be especially disruptive of slow wave sleep in people with FM and PTSD.

Two types of these cyclical alternating patterns in particular that are problematic are Alpha-2 and Alpha-3 (A2/A3). These patterns may be a periodic alarm signal during sleep, and occur in healthy people's sleep. The patterns may be there from earlier times for safety purposes to keep from being too vulnerable. But in people with FM the CAP A2/A3 patterns are too active, and don't allow for restorative sleep. From the "Sleep as a Window" study:

"a complete loss of the restorative power of sleep. This clinical feature has been associated with changes in sleep that are not readily determined by conventional sleep stages and scoring, but may be identified by a number of complementary analyses. In essence, they all capture in some form the dominance of low amplitude fluctuations in physiological signals during sleep1?,2… In the electroencephalographic (EEG) domain, the low frequency oscillations are detected by scoring the cyclic alternating pattern, or CAP4. These periods are dominated by phasic EEG complexes. A1 CAP is made up of slower wave forms, A3 fast/arousing waveforms, and A2admixtures. An increase in A2/A3 CAP is seen in a range of sleep-fragmenting conditions, including FM, sleep apnea, epilepsy, and auditory stimulation4?."

A different Journal of Rheumatology study titled "Cyclic Alternating Pattern: a New Marker of Sleep Alteration in Patients with Fibromyalgia?" showed the severity of symptoms in FM were correlated with the rate of CAP A2/A3 during sleep.

Drug therapies like sodium oxybate and cyclobenzaprine that decrease A2/A3 as a percent of total CAP are also shown to improve FM symptoms. But none of the FM approved drugs or insomnia approved sleep drugs are shown to decrease A2/A3.

C) Patients Are Desperate

Making Matters Worse

While there are drugs for insomnia that increase sleep quantity, there are no approved drugs that increase sleep quality. We saw from the Mayo Clinic that patients often wake up un-refreshed from a full night's sleep. FM and PTSD patients frequently use prescription sleep drugs, but these drugs are not approved for FM or PTSD, are not shown to improve symptoms, and may actually make problems worse.

The common sleep drugs like Ambien and Lunesta are derivatives or improvements of benzodiazepines and affect the GABA chloride conductance channel. These drugs are commonly used in FM and PTSD because of the high incidence of sleep problems, but these drugs may actually exacerbate the traumatic experiences that often underlie FM and PTSD.

The Center for Military Health Policy Research published a lengthy review of PTSD in recent wars called Invisible Wounds of War that investigates why recent wars have had such astronomically high numbers of PTSD sufferers. One of their conclusions was that the benzodiazapines do not offer any special benefit, and the widespread increased use of these drugs and opiates may be an underlying cause of the widespread increase in PTSD.

Bolstering this claim is a study published in the MIT Press Journals last month called "Pharmacologically Increasing Sleep Spindles Enhances Recognition for Negative and High-arousal Memories."

This study compared three arms: placebo, sodium oxybate, and zolpidem tartrate (Ambien). The study showed that Ambien seems to make negative memories worse by enhancing memory of them. This is consistent with PTSD sometimes being referred to as an "improvement" in emotional memory. The brain processes that account for this negative improvement are called sleep spindles. The study implicates the drugs in the problems seen in military PTSD:

"We show that memory can be experimentally biased toward negative and highly arousing stimuli after a sleep period with pharmacologically elevated sleep spindles. Specifically, compared with PBO, naps with ZOL were associated with enhanced memory performance for both negative and high-arousal stimuli. By contrast, SO (a comparison hypnotic) did not affect memory for different classes of emotional stimuli…These results suggest that sleep spindles may be critical for the consolidation of negative and high-arousal memories…Finally, we note that there may be broader implications of our finding that emotional memory for high-arousal and negative stimuli was enhanced after ZOL-rich sleep. These two characteristics, negativity and high arousal, predominate in anxiety disorders with a sleep-disruption component, such as posttraumatic stress disorder (PTSD; Germain, Buysse, & Nofzinger, 2008; Cukrowicz et al., 2006; Gillin, 1998; Ross, Ball, Sullivan, & Caroff, 1989). There is a high prevalence of insomnia in patients with PTSD (Wallace et al., 2011), which often leads to prescriptions for sleeping medication. Despite Veterans Affairs and Department of Defense clinical guidelines recommending against the routine use of benzodiazepines for PTSD, the adjusted prevalence of long-term use of benzodiazepines increased among men and women with PTSD between 2003 and 2010 (Hawkins, Malte, Imel, Saxon, & Kivlahan, 2012). In addition, the U.S. Air Force uses ZOL as one of the prescribed "no-go pills." Because hypnotics and benzodiazepines produce similar effects on sleep (Mariotti & Ongini, 1983), our findings are relevant to these clinical practices. In light of the present results, it would be worthwhile to investigate whether the administration of benzodiazapine-like drugs may be increasing the retention of highly arousing and negative memories, which would have a countertherapeutic effect. Indeed, a week course of temazepam soon after trauma was not effective in preventing PTSD symptoms, even producing numerically worse outcomes (Mellman, Bustamante, David, & Fins, 2002)."

We saw the common link FM has with trauma, these results would seem to indicate the same making-the-matter worse problem could be happening amongst FM patients as well as PTSD patients.

Approved Options are Lacking

There are 3 FDA approved drugs for FM and 2 for PTSD. None is for bedtime use.

In FM all three drugs are shown to modestly reduce pain. Pfizer's Lyrica is a membrane stabilizer that is used primarily for pain, and is a round-the-clock medicine.

Eli Lilly's (LLY) Cymbalta and Forest's Savella are antidepressants that are very similar to each other. They are both SNRIs (Serotonin-norepinephrine reuptake inhibitors) that are taken in the morning and early afternoon so as to not interfere with sleep.

These 3 drugs are helpful for some but are hardly a panacea. Cymbalta outsells Lyrica and a study published earlier this year by the Cochrane Library found that Cymbalta and Savella were just as likely to harm patients as help:

"The authors reviewed 10 high-quality studies comprising more than 6,000 adults who received either duloxetine, milnacipran, or a placebo for up to six months…Among fibromyalgia patients taking either of two commonly prescribed drugs to reduce pain, 22 percent report substantial improvement while 21 percent had to quit the regimen due to unpleasant side effects, according to a new review in The Cochrane Library."

PTSD treatments are hardly better. Even with the recent surge of PTSD there has not been a drug approved for the condition in more than a decade. In PTSD the 2 approved drugs, Zoloft and Paxil, have significant side effects including some that are like the symptoms of PTSD - sleeplessness, agitation, and headache to go along with sexual problems and nausea.

If that were not enough, both drugs carry the black box warning - the most serious type of warning on prescription drug labeling:

"Possible side effects to look for are worsening depression, suicidal thinking or behavior, or any unusual changes in behavior such as sleeplessness, agitation, or withdrawal from normal social situations"

The only approved drugs for PTSD risk side effects that are a lot like PTSD.

Options are severely lacking for FM and PTSD, especially for restorative sleep, and patients are desperate.

Off-Label Opiates and Sedatives

A study published last year in Pain Medicine noted widespread "polypharmacy" amongst FM patients - in desperation for relief patients are taking an average of 2.6 drugs per day. The 2007 internet study we saw shows the wide range of drugs patients are trying:

(click to enlarge)

Note the very high off-label use of controlled substances like opiates and sedatives. These drugs are not shown to have any lasting benefit, and have a recognized potential for addiction. We saw that things like benzodiazepines work for sleep quantity but not quality. None of these sedatives are shown to reduce CAP A2/A3. Opiates are very useful pain killers for damage done to peripheral tissue like a toothache, but do nothing for central pain.

So why are these drugs reported with such high satisfaction rates? In the case of the sleep aids they may in fact work to put patients to sleep, but the sleep is not restorative and the patients may not make the connection.

Another reason the sedatives and opiates may be reported to work is that they can be lifestyle drugs, or "euphorics." Patients may like the way the drugs make them feel irrespective of changes to their original symptoms, similar to self medicating with recreational drugs and alcohol. This seems to be the case in PTSD, from the Invisible Wounds of War study:

"Alcohol and drug use disorders are highly prevalent among individuals with PTSD, MDD, and TBI. For PTSD, a study of Vietnam combat veterans showed that up to 75 percent of veterans with a history of PTSD in their lifetime met criteria for substance abuse or dependence…According to Bremner and colleagues (1996), Vietnam combat veterans reported that alcohol, heroin, benzodiazepines, and marijuana "helped" their PTSD symptoms"

There is no cure for FM or PTSD. There are precious few treatments that provide relief, especially for restorative sleep, and patients are desperate.

3) TNX-102 SL Meets the Sleep Quality Need in FM and PTSD

There is an unmet need for a safe, non-addictive drug treatment for improving sleep quality in fibromyalgia. TONIX Pharmaceuticals is developing a reformulated version of cyclobenzaprine that focuses on improving sleep quality. Cyclobenzaprine has been shown to decrease CAP A2/A3 in sleep and improve the symptoms of FM.

A) Cyclobenzaprine Promotes Restorative Sleep

Opportunities in Repurposed Drugs

It is hard to find new drugs for the Central Nervous System. When the human genome was sequenced humans were shown to be about five times as complex as bacteria, encoding around 30,000 proteins. That made for a far lower number of druggable targets than scientists were expecting.

In addition, each protein performs diverse functions in different cells at different times so many potential drugs have to be excluded for their off-target effects.

Molecular target based drug design remains the standard for targeting infectious agents like HIV, but for diseases of the CNS and others too often target based drugs have collateral damage.

This is one of the reasons for the FDA 505(b)(2) provision. This allows drugs to be repurposed for new conditions and brought to market faster. Filing a New Drug Application under the 505(b)(2) provision allows a company to partly rely on earlier findings of safety from a drug's previous approval, making for a faster and less costly process. Examples of popular repurposed drugs include Celgene's (CELG) Revlimid, Valeant's Medicis, and Jazz's (JAZZ) Xyrem.

Cyclobenzaprine

Merck (MRK) originally got the muscle relaxant cyclobenzaprine approved for back spasms in 1977. This approval included a lot of work on the safety of CBP, and Tonix is able to use this data without charge in its own approval process.

Tonix is developing CBP for bedtime use in FM and PTSD to decrease the A2/A3 alarm signal and treat symptoms with restorative sleep.

In 2010, Tonix ran a double-blind, placebo-controlled, multi-site Phase 2a trial of FM patients taking very low dose cyclobenzaprine at bedtime. This study was conducted with renowned sleep scientist Dr. Harvey Moldofsky as the lead researcher, and published in the December 2011 issue of the Journal of Rheumatology.

The study was very exciting for FM patients and doctors, it showed:

a statistically significant improvement in pain, tenderness, and depression in the CBP group versus placebo
a statistically significant improvement in restorative sleep in the CBP group versus placebo, as measured by CAP A2/A3
that the increased nights of restorative sleep correlate with improvements in symptoms

This was a Phase 2a study, these studies are generally designed for "proof of concept" and not necessarily powered with enough of a sample size to show statistical significance. It is noteworthy that this study showed statistical significance with a total sample size of only 36 patients.

In addition, there were no serious adverse events, and no discontinuations due to adverse events in the treatment arm. This is not surprising. This is a very low dose of CBP, 2.8 mg, and CBP has been on the market for years at doses up to 30 mg.

Notably, for approval the FDA will only require statistical significance versus placebo in pain. In this study that was achieved with a 26% reduction in pain in the CBP group vs. 0% with placebo.

Robert Thomas from the Harvard Medical Center Division of Sleep Medicine published a public comment on the study in the same journal noting that:

"A case can be made that any treatment that does not reduce CAP A2/A3 may not improve symptoms of FM, regardless of where the site action is."

It is no surprise that CBP fared so well, CBP was chosen to be studied for good reason. It is already widely prescribed off label - note on the 2007 internet survey that CBP was the fourth most tried drug, with more than half of the FM patients having already tried it, and most finding it helpful. In fact, it scored the highest of all the drugs listed not including the (euphorics) opiates and sedatives.

Sodium Oxybate

CBP is the only drug besides Sodium Oxybate shown to increase restorative sleep in FM patients:

"SXB has been shown to decrease sleep onset latency, increase slow wave sleep, increase growth hormone secretion, consolidate sleep by increasing sleep efficiency and promote a normal sequence of non-REM and REM sleep"

SXB went through three placebo-controlled trials for FM branded as Rekinla, but the program was ended because sodium oxybate has addictive potential, is a controlled substance, and is the same drug as the very problematic date rape drug GHB.

CBP, on the other hand, is not a controlled substance and has no recognized addictive potential. Whereas SXB induces a state of sleep that is basically a stupor, CBP just makes patients a little sleepy, and patients don't get amnesia like with SXB.

When SXB was being developed FM patients campaigned for its approval passionately - SXB provides the restorative sleep that patients are desperate for. CBP can provide that same benefit without the serious problems of SXB.

SNARI - Serotonin and Adrenalin

CBP is a member of a class of compounds called Serotonin and Norepinephrine Receptor Antagonist and Reuptake Inhibitor (SNARI), it targets one serotonin neuron receptor (5HT2A) and one norepinephrine neuron receptor (the alpha-1 adrenergic receptor).

These targets help explain why CBP works. Adrenergic means having to do with adrenalin, and CBP helps block the effect of adrenalin. Serotonin is thought to play a major role in sleep and the central inhibition of pain, and CBP inhibits serotonin receptors and serotonin reuptake.

Trazadone and Prazosin

Besides CBP, two drugs in particular are used off-label for FM and PTSD. Trazadone is used for sleep in FM and PTSD, and interacts with the serotonin type 2a receptor in the same way that CBP does, inhibiting serotonin receptors and serotonin reuptake.

Prazosin blocks the alpha-1 adrenergic receptor the same way that CBP does, and is used to prevent nightmares in PTSD patients, reducing adrenalin to reduce the sleep disturbance of nightmares:

"Prazosin is an alpha-adrenergic blocker designed to treat high blood pressure and anxiety. It makes users less sensitive to the effects of adrenaline - something that can be produced in excess in PTSD patients.

Murray Raskind, MD, a psychiatrist, and his colleagues with the VA Puget Sound Health Care System have been prescribing prazosin to Vietnam-era PTSD sufferers for years, having found that the drug significantly reduced the intense nightmares associated with the disorder."

CBP combines the effects of both of these drugs in one. CBP can fill a huge unmet need for restorative sleep in FM and PTSD.

B) TNX-102 SL is a Novel CBP Formulation

Tonix has begun enrollment for its pivotal Phase 2b trial called Bedtime Sublingual TNX-102 SL as Fibromyalgia Intervention Therapy (BESTFIT). This trial is very similar to the 2a study, but will treat FM patients with TNX-102 SL, Tonix's proprietary sublingual (under the tongue) formulation of very low dose cyclobenzaprine.

Tonix has conducted 2 preclinical and 2 clinical pharmacokinetic and bioeguivalence studies on their sublingual CBP. The results of the latest study are discussed in Tonix's most recent Annual Report:

"Our second clinical study of sublingual CBP evaluated TNX-102 SL, the sublingual tablet formulation we expect to advance into further development. This study was conducted :in Canada. This study enrolled 24 healthy volunteers and evaluated a single dose of one 2.4 mg tablet or two tablets (4.8 mg) of TNX-102 SL or the currently-marketed 5 mg CBP tablet. In comparison to oral administration of the 5 mg CBP tablet, both sublingual doses of TNX-102 SL demonstrated faster systemic absorption. After administration of TNX-102 SL, blood levels of CBP were significantly higher at 20, 30, 45 and 60 minutes relative to administration of the 5 mg CBP tablet. In the study, TNX-102 SL was generally well tolerated. There were no unexpected adverse events, with the exception of a mild, temporary numbness at the tongue experienced by less than one-third of the subjects that received TNX -102 SL tablets"

TNX-102 SL is a proprietary formulation of CBP and a eutectic agent (to give it a lower melting point), so these sublingual advantages cannot be replicated by crushing up tablets and placing them under the tongue.

TNX-102 SL offers many advantages over oral CBP: metabolism, tolerability/safety, efficacy, bedtime therapy, compliance, and chronic use. Let's look at them.

Metabolism

Taking CBP orally can create several potential problems. The drug takes a long time to reach the liver and then is only slowly released to the blood (because of enzymes), gets partly re-taken up by the liver (so that it will be active later), and is also partly converted into a similar-acting and long-lasting metabolite call norcyclobenzaprine.

By contrast, taking CBP sublingually delivers the drug directly into the bloodstream where it can travel to the brain and largely bypass the digestive system. One of the effects of this is that TNX-102 SL reduces production of norcyclobenzaprine vs. oral administration.

Tolerability/Safety

Taking CBP orally takes several hours to start working, and also spreads the effect out over a longer period of time versus sublingual administration. This means that more of the drug is needed to achieve the same blood levels vs. sublingual.

Taking CBP sublingually also reduces potential for next-day grogginess. The sublingual form acts faster and leaves the blood faster than the oral form. Fatigue is already a problem for FM patients, so this is important. They can get the beneficial effects and still have the drug largely cleared by the next morning.

Efficacy

CBP can help patients stay asleep by reducing CAP A2/A3, but the effect of CBP can also makes patients feel a little sleepy prior to bed. A faster-acting, shorter-lived version can help patients fall asleep in addition to helping them stay asleep vs. the same dosing delivered orally.

In addition, the accumulation and presence of the long lasting metabolite norcyclobenzaprine can blunt the effect of administering more CBP. So by reducing the production of norcyclobenzaprine in the past, the sublingual version works better in the present.

Bedtime Therapy

TNX-102 SL takes about 30 minutes to work, so it is perfect for taking at bedtime. Oral CBP takes about 2 hours to start working.

Compliance

Patients are more likely to take a bedtime medicine if it can be taken at bedtime. Having to commit to a bedtime 2 hours in advance would lead to a loss of compliance for some patients.

Chronic Use

We saw that many sufferers of FM and PTSD are desperate enough to try things like opiates, and addiction is a real concern. Tonix's Phase 2a trial showed CBP can successfully target pain indirectly with restorative sleep, and do so at a very low dose.

So CBP is a good candidate for chronic use in the first place. On top of that the sublingual version has an advantage over oral administration for chronic use because the norcyclobenzaprine metabolite has more potential for long-term accumulation with the oral version.

TNX-102 SL offers many advantages over oral CBP

C) TNX-102 SL Should Be Approved

In September, Tonix announced that it had begun enrolling the Phase 2b BESTFIT trial, the first of two essentially identical pivotal studies needed for FDA approval in FM.

BESTFIT is a multi-site, placebo-controlled, double-blind trial comparing 60 FM patients on TNX-102 SL with 60 FM patients on placebo over a 12-week period. The drug needs to show a statistically significant improvement in pain versus placebo for approval. Tonix expects to announce the results of the study in October.

TNX-102 SL should fare very well in the BESTFIT trial because of its safety, its sublingual formulation, the longer duration of the trial compared to the successful 2a trial, the larger sample size compared to the 2a trial, and the FDA selection of FM for special regulatory treatment.

Safety

Safety is a major concern for any drug coming up for approval, but CBP has been approved for decades at doses more than 10 times TNX-102 SL. Add to that the fact that the Phase 2a study had no serious adverse events in the CBP group, and safety is almost a non-issue for TNX-102 SL.

Sublingual Administration

TNX-102 SL is faster, more convenient, more effective, has less side effect and compliance risk, and is more suitable for chronic use than oral CBP.

12 weeks

TNX-102 SL is well suited for chronic use and the BESTFIT trial is 50% longer than the Phase 2a trial that showed statistical significance in pain versus placebo. An extra month of restful sleep could very well improve symptoms even more.

Larger sample

The 2a trial only had 18 patients in each arm, yet was still able to show statistically significant results. With a sample size of more than 3 times the 2a trial, the BESTFIT trial is powered to show statistically significant results even if the results are a little weaker than in the 2a trial. And as we've seen, there are reasons to believe the results will be better than the 2a trial.

FM selected for special regulatory treatment

We saw that FM was selected as one of 20 diseases for the FDA to focus on for special regulatory treatment. This is part of the Section X provision in the 2012 PDUFA Reauthorization Performance Goals: Enhancing Benefit-Risk Assessment in Regulatory Decision-Making.

This provision is designed to assess risk-benefit decisions in diseases where treatment options are not optimal, and to facilitate a program that assesses tolerance for risk on a disease-wide level.

By naming fibromyalgia a disease to focus on for this program the FDA has acknowledged that FM treatments are lacking and that risk-benefit analysis should play a special role in the review process for FM drugs.

This bodes very well for TNX-102's approval chances in FM.

TNX-102 SL meets the sleep quality need in FM and PTSD.

4) Tonix is Deeply Undervalued

A) RISKS

We think Tonix is destined for success and a much higher share price, but there are risks.

Trial Risk

We saw the reasons that Tonix may do well in their BESTFIT trials, but clinical trials always come with risk, and there are no guarantees that TNX-102 SL will make it through its trials successfully.

Patent Risk

We will see that Tonix's intellectual property looks very strong, but the legal system can be like the FDA - unpredictable. There are no guarantees that TNX-102 SL's patents will hold up against generics in court, and this is a risk.

Competition Risk

While the FM and PTSD markets are currently clamoring for restorative sleep treatments, new products could come along that are better than TNX-102 SL, and this is a risk.

Market Risk

Even if TNX-102 SL makes it to the market without a problem, there are no guarantees that the product will sell successfully, and this is a risk.

B) Tonix Has Valuable Intellectual Property

PK Patent

While Tonix has a method of use patent for TNX-102 SL, it also has an active patenting strategy, and has filed a number of patents to extend TNX-102 SL exclusivity and expand its reach.

By far the most important of these patents is the pharmacokinetics (PK) patent filed in June of 2012 that should guarantee market exclusivity for TNX-102 SL through 2032.

A PK patent refers to the curve that shows how much drug is in the blood at certain times after administration

PK patents are sometimes called "Oxycontin patents" because Purdue Pharmaceuticals got strong patent protection using Oxycontin's PK profile. Oxycontin survived every court challenge by generics, even though it was a reformulation of 95-year-old Oxycodone, and those patents beat every challenge and expired naturally.

The company that filed and defended Purdue's patents was Ropes & Gray, and that is who Tonix hired to file and defend its patents.

These types of PK patents have proven very difficult to circumvent in court. Tonix's intellectual property around TNX-102 SL should guarantee market exclusivity until at least 2032.

TNX-102 SL for More than FM and PTSD

Tonix has an active patenting strategy, and one of the patents they've filed (Methods and Compositions for Treating Depression using Cyclobenzaprine) gives a clue to their ambitions with TNX-102 SL:

"Therefore, we believe that a low dose cyclobenzaprine will be effective for treating depression, including major depressive disorder."

That is a huge market, 24 million depressed American adults, to go along with FM and PTSD. And Tonix's management has good reason to believe that CBP can treat depression - it showed a statistically significant improvement versus placebo in the 2a trial. And you can add to that the fact that people with insomnia are ten times more likely to suffer from depression.

Is that all? No, that same patent application shows where else TNX-102 SL could be useful:

"Furthermore, the utility of a very low dose cyclobenzaprine as an agent for improving the quality of sleep, as a sleep deepener, or for treating sleep disturbances has been investigated. The very low dosage regimen was viewed as particularly useful in treating sleep disturbances caused by, exacerbated by or associated with fibromyalgia syndrome, prolonged fatigue, chronic fatigue, chronic fatigue syndrome, a sleep disorder, a psychogenic pain disorder, chronic pain syndrome (type II), the administration of a drug, autoimmune disease, stress or anxiety or for treating an illness caused by or exacerbated by sleep disturbances, and symptoms of such illness and generalized anxiety disorder. See US Patent Nos. 6,395,788 and 6,358,944"

TNX-102 SL should have market exclusivity for almost 2 decades, and there are some very large markets that it may enter.

201/301

Tonix also has a TNX-201 program for headaches and a TNX-301 program for alcoholism. Both of these are reformulations of already approved drugs to be brought along the 505(b)(2) program.

There are no immediate plans for TNX-301, but Tonix will have a pre-Investigational New Drug meeting with the FDA in the first quarter of 2014 for TNX-102 (reformulated isometheptene mucate).

100% Ownership

All of Tonix's intellectual property is fully owned with no royalties or obligations owed to anyone. This is relatively uncommon for new biotech companies.

Krele

When the day finally comes that TNX-102 SL goes generic, Tonix will be prepared with Krele:

"In August 2010, we formed Krele to commercialize products that are generic versions of predicate NDA products. We anticipate that when our branded products lose patent protection, Krele may market authorized generic versions of them. Krele also may develop or acquire generic products approved under ANDAs and we may market branded versions (branded generics) of such products."

Tonix's intellectual property is very valuable and should serve the company well for a long time.

C) Billion Dollar Revenues

TNX-102 SL Should Be Covered By Third Party Payers

FM is a very costly disease for patients and payers, in terms of both lost productivity and healthcare costs. For example:

Working adults with FM miss about 3 times as many work days as working adults without FM
Between 10% and 30% of all doctor's office visits are due to symptoms that resemble those of fibromyalgia, including fatigue, malaise, and widespread muscle pain (per the University of Maryland)
Mean total healthcare costs were three times higher among FMS patients, median costs were fivefold higher (from "Characteristics and healthcare costs" in part 1)
Most money is not being spent on drugs that might provide cost saving benefits, but on more expensive things. Per the CDC office and emergency room visits, procedures and tests, and hospitalizations are the largest components of direct medical costs among patients with fibromyalgia.

The Springer Science and Business Media's Fibromyalgia Definition and Epidemiology Guide provides some bleak details on the lost productivity costs of FM:

"Employment may also be negatively affected by fibromyalgia. One study compared work status in 136 fibromyalgia patients and age- and sex-matched controls who were being treating for non-rheumatologic conditions [18]. Work at the time of medical diagnosis was compared with current work situation at the time of study evaluation. Patients with fibromyalgia were significantly less likely to still be employed in the same job that they had at the time of their disease diag- nosis compared with those without fibromyalgia (19% vs. 58%, P<0.0001). Job was lost due to the medical condition for 47% with fibromyalgia and 14% with other conditions. Furthermore, 7% of fibromyalgia and 5% of non-fibromyalgia patients additionally switched jobs due to their medical condition. In another study, employees with fibromyalgia (N=8,513) lost more work days annu- ally compared with either employees with osteoarthritis (N = 8,418) or controls (N = 7,260) [19]. Both patient groups were actively involved with medical treat- ment for their respective conditions. Total days lost in 1 year were 30 days for employees with fibromyalgia vs. 26 for arthritis vs. 10 for controls (dif- ference vs. fibromyalgia patients was significant for both arthritis and controls, P<0.0001). Consequently, fibromyalgia patients were absent from work on 15% of all possible work days over 1 year, about three times the loss seen with controls."

In addition to all these costs of lost work, FM patients are high pharmacological treatment seekers. In desperation they try different treatments, even risky ones that may have their own costs like opiates or currently available prescription sleep aids.

Third party payers have a lot of incentive to reimburse a new medical treatment that can get patients back to work and out of the hospital and therapist's office.

All of the drugs approved for FM and PTSD are reimbursed by insurers at Tier 2 (preferred brand drug).

TNX-102 was specifically designed for the treatment of FM. It is different from and not competitive with the other approved therapies. It focuses on a key symptom with a unique formulation.

With the problem of restorative sleep being so central to FM, it is hard to imagine the FDA approving TNX-102 SL (meaning it showed statistical significance in pain) and then insurers not covering the cost.

That is what Tonix's management believes. CEO Seth Lederman at the Warsaw conference in September:

"We spent a lot of time and effort to reach out to payers, describe the nature of our product and the kind of benefit it might give patients and we've had a very positive response from them. Because, it turns out, that the insurance companies are well aware that fibromyalgia is a very expensive problem as it is today, and that by reimbursing even a premium prescription product, they could save money in other areas."

FM Projections

The first drug for fibromyalgia was only approved six years ago. The approved drugs have shown the way forward for gaining approval for FM, but they have not solved the sleep quality problem. This creates a very dynamic marketplace and an excellent entry point for a company with a differentiated product that can make a significant difference in patients' lives.

TNX-102 SL is a bedtime medicine that is unlikely to meaningfully compete with the other available drugs. With almost all FM patients needing higher quality sleep, and no viable competitor, TNX-102 SL could treat a lot of patients.

According to a report by Decision Resources there were 3.7 million diagnosed, drug-treated FM patients in 2011 in the United States, France, Germany, Italy, Spain, the United Kingdom and Japan, with the US accounting for 80% of sales, or $1.44 billion. If we take 80% of 3.7 million patients we have 3 million diagnosed, drug-treated American patients with FM.

In the 2010 Frost & Sullivan Assessment of the U.S. Fibromyalgia Market the total value of the market for fibromyalgia drugs was $1.2 billion, growing at a compound annual growth rate (CAGR) of 18.4% per year from 2007 to 2010. That growth rate agrees with Decision's $1.44 billion 2011 sales number.

We saw the reasons that the FM market should continue to grow rapidly: relatively recent first FDA approvals in FM are helping to end the cold war against FM diagnosis, a broader definition for diagnosis recently recommended by the American College of Rheumatology, the FDA's recent selection of FM for special consideration, and a possible diagnostic test newly available.

There are two other factors that should continue to bolster growth in the FM market. One is that the Affordable Care Act going into effect will provide insurance for tens of millions of previously uninsured Americans.

The other is the graying of America. The incidence of FM rises with age - to more than 7% amongst seniors - and America is growing older.

TNX-102 SL should go to market in 2017. What kind of sales could it do after a few years?

We saw the US FM market was $1.44B in 2011, and growing at 18.4% annually. If that rate of growth keeps up then the US FM market will be $6.6B in 2020.

For a more conservative projection, let's say the market grows at just 8%. In this case the US FM market will be $2.88B in 2020, exactly double what it was in 2011.

$2.88B looks conservative - at 18.4% that number would be reached by 2015.

(It is important to note that most projections of the FM market show a drop-off coming. This has nothing to do with the growth of the FM diagnosis, but rather the fact that all 3 approved FM drugs are coming off patent. For our purposes of calculating a non-competing FM product's market potential, this does not matter.)

Per Decision Resources, 2011 sales in FM for Cymbalta, Lyrica, and Savella were $560M, $450M, and $137M respectively.

TNX-102 SL could be a game changer in FM, it has the potential to fill a major need for desperate patients. None of the currently approved drugs is a game changer. Yet, even in our conservative market projection Cymbalta and Lyrica are each on pace to sell about $1B by 2020 just with market growth. A bedtime medicine for restorative sleep could certainly match that, and possibly far surpass it.

Let's analyze it a different way and look at retail pricing of FM drugs and sleep aids:

Savella: $6.30 a day
Cymbalta: $8.00 day
Lyrica: $10 day
Ambien (Brand): $9.43 day
Silenor: Approx. $7 day
Lunesta: $10 day

Both FM drugs and sleep aids average a little over $8 per day. Frost & Sullivan projected TNX-102 SL at $8.14 per day by taking the average of Lyrica and Cymbalta, and that looks fair. They then applied a 72.9% discount factor (that number taken from Wolters Kluwer) to come up with a manufacturer's price of $5.93 per day.

TNX-102 SL is a novel formulation with a special design that is crucial to the way it works, and it could very well be priced at a premium to the market. But we will go with $5.93.

$5.93 per day X 365 = $2,164 year

We saw the reasons that FM is a rapidly growing diagnosis, and we saw there were about 3 million diagnosed, drug-treated FM patients in the US in 2011. If we calculate 6% growth of this population (less than a third of the 18.4% market rate) this would be 5 million in 2020.

This is a population of high treatment seekers that are desperate for a bedtime medicine for quality sleep. If half of the diagnosed patients opt for TNX-102 then:

2.5 million X $2,164 per year = $5.41 billion

What if TNX-102 only gets 1 million patients (one third of the current market)?

1 million X $2,164 per year = $2.16 billion

TNX-102 SL could easily do $1 billion in revenue annually in FM alone.

Tonix's future cash flows look hefty, and there's also the fact that TNX-102 SL is for chronic use - to be used as long as patients tolerate. Along with being very low dose, its sublingual metabolism should make TNX-102 SL tolerable in perpetuity. Add in patent protection and those cash flows look robust.

There is also the international market for FM to consider, the PTSD market, the depression market, and the other indications that Tonix is pursuing.

So what is Tonix worth?

E) Tonix Should Get a Valuable Partner

Major pharmaceutical companies are going through a "patent cliff" period where a lot of major drugs are coming off patent, and companies are scrambling to try and replace those revenues.

The stock market currently values pharmaceutical revenues at more than three times their annual rate. Let's look at a market cap vs. annual revenue comparison of 8 companies that relate to Tonix (all numbers from Yahoo):

Market Cap / Annual Revenue:

Lilly : $55B/23 = 2.4
Pfizer (PFE): 208/56 = 3.7
Allergan (AGN): 29/6 = 4.8
Merck: 143/44 = 3.3
Celgene: 67/6 = 11.2
GlaxoSmithKline (GSK): 129/42 = 3.1
Jazz 6.5/.8 = 8.1
J&J (JNJ): 269/71 = 3.8

Only Lilly has a multiple under 3, and the mean is 3.7. So generally speaking, $1 billion in annual pharmaceutical revenue is valued at about $3.7 billion by the market.

This has been the case for the buyouts of companies with reformulated drugs for the Central Nervous System.

In 2001, Johnson and Johnson bought Alza for $11 billion. Alza had a reformulation of Ritalin called Concerta. Concerta was doing about $200 million of annual sales at the time.

In 2007, Shire bought out New River Pharmaceuticals for $2.6 billion. Their drug Vyvanse was a reformulation of Dexedrine. In 2012, Vyvanse did $1 billion in sales.

Then there is MAP Pharmaceuticals.

MAP Pharmaceuticals

The most likely path forward, as Tonix CEO Seth Lederman sees it, is that Tonix will take on a partner after the current Phase 2b trial, run the final trial with funds from the partner, and then after the final trial a partner might want to do a complete buyout.

In January 2013, Allergan bought out MAP Pharmaceuticals. MAP had reformulated Migranal into Levadex under the 505(b)(2) program for migraine headaches. MAP is an interesting comparison to Tonix for a number of reasons:

The buyout was less than a year ago
The partnership was struck before the final trial was run
505(b)(2) reformulated drug
Central Nervous System drug
Pain drug
Women's health product (migraines)

MAP had no other viable candidates besides Levadex. Levadex was projected by Allergan's CEO to peak at $500 million in annual sales, and a Wells Fargo analyst projected $250 - $500 million peak sales.

After MAP ran its second to last pivotal trial (equivalent to Tonix's BESTFIT 2b trial running now) they agreed to a development and licensing deal with Allergan that included a $60 million upfront payment and $97 million in milestones. MAP's stock surged to a $500 million on the news.

After the final trial was run, and months before the FDA ruled on Levadex, Allergan bought out MAP completely, for $958 million.

TNX-102 SL for FM could represent MAP Pharmaceuticals times two based on projected revenues, and the drug has a lot of value outside of FM. It does not seem a stretch to say that Tonix could get a deal structured like MAP's deal, and at twice the value.

Who are the potential partners?

A lot of companies would benefit from marketing TNX-102 SL, but Pfizer, Lilly, and Allergan stand out.

Pfizer and Lilly are already in the FM game, and have huge sales forces to reach primary care physicians. As TNX-102 SL would be an add-on product and not a direct competitor to Lyrica or Cymbalta, these two companies make a lot of sense.

Allergan seems to make sense, too. Allergan is building out a women's health franchise and FM is most certainly a women's health concern.

Tonix could be like MAP times two, and that would make them a $1 billion company within a year.

Share Price

Fully diluted with options and warrants Tonix has less than 10 million total shares. If management gets their preference they will get a fair partner deal after the current trial, and have no need to raise funds. At $1 billion in market cap Tonix would be $100 per share.

F) The Celgene Contingency

Tonix could be a $1 billion /$100 per share company within a year, but that might be a shame for shareholders. Tonix has exciting possibilities that could make its value much higher than $1 billion if it stays independent. This is reminiscent of Celgene.

Celgene was repeatedly low-balled by potential partners in 2000, and instead of accepting an unfair offer, Celgene raised money themselves by issuing shares. A little more than a decade later and Celgene is now a $60 billion company - larger than many of the companies that would not pay up when Celgene needed a partner.

Tonix management has repeatedly said they will not accept an unfair offer, and they call this "the Celgene Contingency." Their preference is to partner after the current trial, but if they cannot get a fair deal they will stay independent and develop their products in house like Celgene.

Tonix has enough money to fund its operations until the current BESTFIT trial is over, and said as much in their third quarter 10-Q filed several weeks ago

(bold is my emphasis):

"The Company's primary efforts are devoted to conducting research and development for the treatment of CNS diseases. The Company has experienced net losses and negative cash flows from operations since inception and expects these conditions to continue for the foreseeable future. The Company does not have any commercial products available for sale and there is no assurance that if approval of its products is received that the Company will be able to generate cash flow to fund operations. In addition, there can be no assurance that the Company's research and development will be successfully completed or that any product will be approved or commercially viable. Management believes that the Company has sufficient funds to meet its research and development and other funding requirements through at least September 30, 2014...Our future capital requirements will depend on a number of factors, including the progress of our research and development of product candidates, the timing and outcome of regulatory approvals, the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims and other intellectual property rights, the status of competitive products, the availability of financing and our success in developing markets for our product candidates. We believe our existing cash is sufficient to fund our operating expenses and capital equipment requirements for at least the next 12 months. "

This in spite of the fact that Tonix announced in that same filing that it expects to begin a Phase 2 trial of TNX-102 SL in subjects with military-related PTSD in the second quarter of 2014.

CEO Seth Lederman explains this at the Rodman & Renshaw Annual Global Investment Conference:

"We're working with thought leaders from major academic institutions and there's so much interest in this area that the major academic institutions, we believe, are going to basically go at risk on this hoping that they can then get grants in the future because it is such an enormous problem."

Dr. Lederman may have a good understanding of academic institutions' inclinations - he was a tenured professor at Columbia University and founded Tonix with Donald Landry, chairman of the department of medicine at Columbia University.

The large amount of academic interest in PTSD is largely in response to a Presidential order for the establishment of two joint research consortia. These consortia are to research the diagnosis and treatment of post-traumatic stress disorder and mild traumatic brain injury over a five-year period, and are already funded with $107 million.

Tonix met with the FDA in October 2012 to discuss what they need to do to get approval for TNX-102 SL in PTSD.

This market is about the same size as FM, and there is a lot of urgency on the part of the US military for solutions. One stark fact of recent wars is that there are now more suicides than war deaths.

The military knows it has a big problem. Tonix has had talks with the U.S. Department of Defense, and while they have no official deal, the DOD is aware of TNX-102 SL. In the future the department could fund further development or be a very large customer of a shovel ready project, tested specifically in military PTSD.

CEO Seth Lederman sums up the prospects for TNX-102 SL:

"If TNX-102 SL can be shown to alleviate the symptoms of FM or PTSD more effectively than the currently accepted first line of treatments, it could become the new first line of treatment."

If Tonix stays independent to market these treatments, it could be the size of Celgene in about a decade.

G) The Best People

Tom Reddington was instrumental in helping Celgene raise funds when they needed to, and he has an impeccable record of helping quality biotech stocks with investor relations. He is now doing Tonix's investor relations, and his endorsement is noteworthy.

Also noteworthy are the rest of the people involved with Tonix. The board and management may be the most exciting thing of all for this very exciting company.

The first thing to note is that the board and management are all significant investors in Tonix. This data is from before the most recent financing, but it shows management's level of personal commitment:

(click to enlarge)

And there have been no insider sales.

Tonix's team is distinguished by success in exactly the areas in which Tonix is working - Fibromyalgia, 505(b)(2) drug development, and making differentiated treatments for the central nervous system from repurposed drugs.

In addition to a long list of business achievements, CEO and cofounder Seth Lederman was a professor of medicine and of rheumatology, having direct experience treating fibromyalgia patients.

CFO Leland Gershell helped Dr. Lederman found two companies, Bella and Targent. Even though he is a qualified CFO he is also an MD/PhD from Columbia.

Donald Landry is a cofounder of the company and the chairman of the department of medicine at Columbia University.

Dr. Samuel Saks cofounded and was CEO of $6 billion biotech firm Jazz Pharmaceuticals.

And Doctor Ernest Mario may be the most impressive of all. He's the former CEO of Glaxo, the global pharmaceutical company. But he is also the former CEO of Alza, and he sold that company to Johnson & Johnson for $11 billion.

Tonix is run and owned by very successful people that have direct experience in the most important areas of its business. Whether Tonix gets bought out or stays independent its future looks very bright.

Tonix looks like one of the most undervalued stocks in the market, and should be a multi-bagger.

[Tommy]

$ONVO - Organovo Is A 3-D Printing Game Changer

Nov 20 2013, 08:26 | http://seekingalpha.com/article/1851411-organovo-is-a-3-d-printing-game-changer?source=email_rt_article_readmore

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in ONVO over the next 72 hours. (More...)

Organovo is a 3D Printing Game Changer

3D printing is hot right now. Stories are cropping up everywhere about companies printing some amazing things. In June 2012, a 3D-printed lower jaw was fitted to an 83-year-old woman in Netherlands. The implant was built by LayerWise, a Belgium manufacturer. A new energy efficient car was built with 3D printing by a Winnipeg-based engineering group called KOR EcoLogic, created with the 3D printing capabilities of Stratasys (SSYS). The European Space Agency is testing the idea of printing an entire lunar base. There's even a new clothing line being printed by Continuum, a New York City based fashion label/experimental design lab. The future of 3D printing is wide open and the applications are endless.

So what do you get when you cross 3D printing with biotech? You get a game changer by the name of Organovo Holdings, Inc. (ONVO). Some big names currently dominate the 3D printing industry, like 3D Systems Corp. (DDD) and Stratasys, Inc. Both have appeared in Investors Business Daily repeatedly and have garnered lots of attention. Organovo is a lesser known company that is raising the bar on 3D printing with its planned pipeline. Organovo develops three-dimensional (3D) bioprinting technology for creating functional human tissues on demand for research and medical applications.

What is bioprinting? The bioprinting process revolves around the identification of key architectural and compositional elements of a target tissue, and the creation of a design that can be utilized by a bioprinter to generate that tissue in the laboratory environment. So what does that mean? It means that Organovo wants create functional human tissues starting with cells from any source. To do what? To develop an advanced routine surgical therapy and transplantation therapy for patients with damaged or diseased tissue using engineered (3D printed) tissue. The end product is a 3D printed liver, due for launch in December 2014, with plans for a 3D-printed heart and kidney.

Fundamentals

Fundamentally speaking Organovo is not a stellar investment, but that's what you expect from a development stage company, that doesn't expect a product launch until the end of 2014. Organovo is still in development. Don't waste your time trying to figure how much this company is worth, the traditional methods of valuation, such as PE ratios are not appropriate. One must approach Organovo as a long term speculative holding. There have been bullish articles responsible for driving the stock price much higher recently but all those articles are merely speculation not based on any facts. No corporate news is responsible for this run up. I repeat, treat this is a long term speculative holding.

Partnerships

Organovo is not flying solo in its mission. It has established several key collaborative partnerships to further the research and development in drug development and tissue therapy. In December of 2012, Organovo announced a new partnership with Autodesk, Inc. (ADSK), the leader in cloud-based design and engineering software, to create the first 3D design software for bioprinting. Early in 2013, Organovo partnered with ZenBio Inc., a leading provider of advanced cell-based solutions and services, to produce three-dimensional human tissues for drug discovery and advanced tissue therapies.

"Autodesk is an excellent partner for Organovo in developing new software for 3D bioprinters," said Keith Murphy, Chairman and Chief Executive Officer at Organovo. "This relationship will lead to advances in bioprinting, including both greater flexibility and throughput internally, and the potential long-term ability for customers to design their own 3D tissues for production by Organovo."

"ZenBio is a highly respected provider of human cells, which are key inputs to our 3D tissue models," said Keith Murphy, Chairman and Chief Executive Officer at Organovo. "Together, we can create new tissues and disease models that offer greater preclinical predictive value for drug discovery, and will fill unmet needs for medical research and surgical therapies."

Needless to say, these are intelligent partnerships that will no doubt enhance Organovo in both the 3D software needed to model tissue architectures and the human tissue cells needed to develop the prototypes.

Opportunity Matrix

The following slide was taken from the Organovo Investor Overview Presentation August 2013, which is available upon request from the company. Organovo has outlined three main areas of opportunity for their planned pipeline. The Organovo 3D printed human liver is anticipated to launch in December 2014 and has already shown tremendous success during initial testing in the laboratory. In the next few weeks we should be hearing the results of the liver's functioning test and tests against known drugs. Preliminary results suggest superior functional performance in 3D liver constructs vs. matched 2D cultures including demonstrated sustained production of a number of critical functional endpoints that include Albumin, fibrinogen, transferrin, cholesterol, CYP activity, inducible CYP1A2 and CYP3A4 activities.

Organovo plans on similar product launches of a 3D kidney and heart down the road. Organovo also plans on working collaboratively with partners to develop disease models, such as cancer, in order to develop pharmaceuticals from which it will collect royalties. Finally, the company has identified several key areas where advanced surgical tissue therapy can treat patients with damaged tissues of the lung, bone, blood vessels and heart.

(click to enlarge)

The implications upon successful testing and production are game changers, in my opinion. Imagine the possibility, for a moment, babies born with heart defects can have new heart tissue or perhaps even a new heart printed on demand for immediate transplant. Think about transplant patients no longer being placed on a waiting list for donors for their needed organs. Ex-smokers can go in and have their lungs repaired from years of tobacco abuse.

Summary

Reasons to Buy

Right now, there's a lot of hype around 3D printing. An Austin-based production company Solid Concepts developed the first metal handgun using 3D printer technology. Good luck to the TSA and other law enforcement agencies with that one. Food and pieces of art are also being printed. That's all good for demonstration purposes, but certainly not game changers. Well, maybe the 3D gun qualifies. Organovo, however, will be the definitive game changer. They're taking 3D printing to the extreme by printing actual human tissue to be used in 3D-printed human hearts, livers and kidneys. Patients may soon have therapy options for damaged tissue they having been living with for years. Advancements in pharmaceuticals may be just around the corner through Organovo's partnerships. Keep an eye on Organovo, it will earn some serious bragging rights.

Risky Business

Organovo may be the next leader in the 3D printing arena, but is still is a development stage company and does not expect product-based revenue until the commercial release of their liver toxicity assay product in 2014. Most articles that have been written are nothing more than attempts to create a catalyst for short term traders. Beware.

ONVO has been in a strong uptrend fueled by lots of bullish speculation and no corporate news. The stock was getting too parabolic soon after the latest earnings release and needed to correct. I am bullish on ONVO. For that reason, I am keeping ONVO on my watchlist. However, in light of its recent move, I will not initiate any new positions until I see a pullback/dip.

On 11/19/2013, ONVO dropped over 24%, on over 700% above average volume. The sudden drop was not specific to any corporate news, because other players in the sector, like DDD and SSYS, also dropped around 6% and 9%, respectively. I would buy now to take advantage of the dip, but because the3D printing leaders also dropped has me wondering if we might be experiencing a sector shift out of 3D printing. Time will tell.

[Tommy]

Cramer's disruptive cloud based tech stocks

http://www.cnbc.com/id/101212109/print

JIM CRAMER, STOCKS, STOCK MARKET, JIM CRAMER, S&P 500, INVESTMENT, STOCKS, STOCK MARKET, JIM CRAMER, S&P 500, INVESTMENT, STOCKS, STOCK MARKET, JIM CRAMER, S&P 500, INVESTMENT, S&P 500, U.S. BUSINESS DAY, JIM CRAMER, SALESFORCE.COM INC, WORKDAY INC, VEEVA SYSTEMS INC, YELP INC, BUSINESS NEWS
CNBC.com | Tuesday, 19 Nov 2013 | 6:01 PM ET

Some new companies are so cutting edge, they have the potential to change the competitive landscape, permanently.

Cramer thinks these are the kinds of stocks that investors should watch very closely.

Not only could shares be potential blockbuster investments but the services they provide could alter industries in ways difficult to imagine only a few short years ago.

Following are some of Cramer's disruptive tech favorites:



Salesforce.com

"Salesforce.com not only makes salespeople more efficient, it also eliminates the need for layers upon layers of management," Cramer explained.

The software is popular with some of the world's most influential corporate leaders.

"I was amazed, for example, to hear from CEO Marc Benioff that Jeff Immelt, the head of General Electric, uses the software to monitor his whole company's progress on his cellphone."

Cramer has been a fan of this stock for quite some time. And on Tuesday Goldman Sachs reiterated its Conviction Buy rating on Salesforce.

Workday

"Workday makes applications that human resources department might need, along with some financial management applications, too," Cramer explained. "While the business might sound boring, the numbers have been very sexy with shares gaining 164 percent since its IPO in October of last year. I don't think the run is over."

Veeva Systems

"Veeva makes software that keeps track of pharmaceutical salespeople's comings and goings with physicians," Cramer explained.

Although the Mad Money host hates to see anyone lose a job, the software could become quite popular with drug companies. "Who knows how many high-priced non-revenue producing positions that can replace?"

Wells Fargo initiated coverage of the stock with an Outperform rating while Deutsche Bank initiated coverage at a buy and a $45 price target.

Yelp

If you're an investor searching for growth, Yelp may be just what you're looking for. In its most recent earnings report, Yelp said revenue was up 68% year-over-year at $61.2 million for the quarter.

"This is a remarkably powerful and robust concept and it is working well," Cramer said.

Dropbox

Dropbox is a private company but it's technology is so disruptive, Cramer thinks it's worth including here.

"DropBox is a service that let's you store all of your photos, documents, videos—all your files—in the cloud, where you can access them easily from any computer or mobile device. They have 200 million users, and they reel you in with 2 gigabytes of free storage, then make you pay if you want to use a lot more space."

-------------------------------------------------------------
Read More from Mad Money with Jim Cramer
Welcome back to Nasdaq 4000
Cramer: This sector is undervalued
Mobile strategy to boost shares?
-------------------------------------------------------------

It should be noted that most of the companies outlined above are young companies, therefore their stocks present higher risk. However, given the opportunity may be quite substantial, Cramer thinks the risk is well worth the reward.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? [e-mail]

Questions, comments, suggestions for the "Mad Money" website? [e-mail]

© 2013 CNBC.com

URL: http://www.cnbc.com/101212109

[Tommy]

$HYGS - Hydrogenics and a Hydrogen Economy

By Kirt Hill
November 18, 2013 | Comments (0)

http://investorshub.advfn.com/boards/post_reply.aspx?message_id=93870671

Don't let it get away!

Today investors throw around phrases like "game changer" and "disruptive technology" with reckless abandon. True game changers are an elite group. Think Microsoft. Wal-Mart was a game changer in the retail world, and Starbucks changed the game for coffee drinkers and growers all over the world. No doubt you can think of other good examples.

What about disruptive technology? Disruptive technologies are not necessarily new technologies but are more often applications of technology that disrupt entire markets. The book on fuel cell firms contains chapter after chapter of losses and lackluster performance. But the book is still being written, and advances in fuel cell technology still have the potential for disrupting the energy production market. Which fuel cell companies have survived years of false promise and have the potential to disrupt the markets for energy production today?

The company
Hydrogenics (NASDAQ: HYGS ) is a company headquartered in Mississauga, Canada. Does this little company have the technology to disrupt energy markets? Hydrogenics describes itself as "a world leader in engineering and building the technologies required to enable the acceleration of a global power shift ." The shift is happening. Without getting too technical, Hydrogenics is pioneering a Power-to-Gas technology that makes renewable energy such as wind more efficient and practical. Hydrogenics calls Power-to-Gas "the world's most innovative way to store and transport energy." The company holds 121 patents and has 24 patent applications pending. New applications of technology disrupt markets.

Emerging story
Hydrogenics acquired Stuart Energy Systems in 2004. Stuart Energy traces its roots back to 1948 when Alexander T. Stuart started the company with his vision for a hydrogen economy. Stuart was a pioneer in applications of hydrogen technology. Combined with Stuart Energy, Hydrogenics has been working on applications of hydrogen technology for over 60 years.

Hydrogenics has been delivering technology for hydrogen filling stations around the world for over ten years. There are currently 45 facilities across the globe using Hydrogenics technology to meet the needs of hydrogen-based transportation. Look for these numbers to grow. The European Union's "Clean hydrogen in European Cities" project is committed to hydrogen-based public transportation in Europe. This past June, Hydrogenics was awarded a contract to utilize proprietary technology in a hydrogen fueling station under construction in Italy.

Data centers and telecommunications stations require backup power. A Federal Communications Commission mandate calls for at least eight hours of power backup at cell sites. Telecommunications stations are replacing banks of batteries and/or diesel generators used for backup power with fuel-cell technology. Using hydrogen fuel cells not only lowers operating costs, but also offers virtually limitless runtime. The cell tower and data center market for backup power is estimated at $2 billion. The company's products cell themselves. (Sorry I couldn't resist.)

The future
Here is where the story really gets interesting. The fuel cell companies have been losing money for decades. Last year, Ballard Power (NASDAQ: BLDP ) lost $18.5 million on revenue of $59.2 million. Fuel Cell Energy (NASDAQ: FCEL ) lost $38.7 million on revenue of $120.6 million. Hydrogenics lost $12.6 million on revenue of $31.8 million. While all three companies are showing healthy increases in revenue this year, Hydrogenics is alone in expecting to turn a profit when revenue reaches $50 million. The company closed out 2012 with $16.8 million in cash and almost no debt. According to CEO Daryl Wilson, "We remain on track to become profitable at around $50 million of revenue run rate and believe that 30% gross margins are clearly achievable as we reach that revenue level."

Just last month, the Governors of eight states announced an initiative to put 3.3 million zero emissions vehicles on the road in the next twelve years. In California Hydrogenics has built 12 fueling stations and services eight active stations.

Last year, Europe's largest gas and integrated energy utility known as E.ON contracted with Hydrogenics to develop a Power-to-Gas facility in Europe. In June of this year the two megawatt energy storage facility went "live." A second facility is currently under construction in Hamburg. Six month 2013 revenue of $22.1 million was up 58% over 2012.

The National Fuel Cell Research Center (NFCRC) is currently evaluating the operation of a Hydrogenics HomeFueler prototype. The HomeFueler could be located at a residence to support the operation of 1-2 hydrogen powered automobiles. An individual hydrogen fueling system could hasten the introduction of fuel cell vehicles by eliminating the need for a "hydrogen highway" with large fueling stations.

The American Society of Civil Engineers reports that the U.S. needs to invest $11 billion a year over the next seven years in electricity infrastructure to meet the needs of business and avoid troublesome blackouts. While this is only an estimate, you get the idea. As global warming becomes impossible to ignore, cleaner sources of energy will be at center stage. Whether it is the hydrogen highway or the path to renewable energy sources, Hydrogenics has been on this road since 1948. This could be the start of an exciting ride for the little company from Mississauga.

[Tommy]

$PXWL - Pixelworks (PXLW): Don’t Get Shaken Out

http://poisedtotriple.com/pixelworks-pxlw-dont-get-shaken/

PTT Insider Bonus Edition

Thursday night, Pixelworks (PXLW) reported its Q3 results. In after-hours trading, I believe that investor response was symptomatic of a common syndrome known as getting “shaken out”. In this article, I’ll discuss PXLW’s earnings report and how getting shaken out can prevent you from tripling your money.

Starting with the shake out, it’s important to understand that some investors employ a buy-and-hold strategy. Some go the opposite route and day trade. Still others choose to “play” earnings announcements. My personal belief is that the best method is to take a common sense approach. This is the safest way to avoid getting shaken out of a stock with a bright future.

When Wall Street professionals invest in a company, they develop a set of expectations for what management needs to achieve in order to justify their continued investment. These expectations have some leeway, because in real life, businesses don’t move forward in a perfectly straight line. As long as the company remains on the path, I’m ok if they veer a little to the left (and of course, love it when they sway to the “right”).

Before I started pre-establishing expectations, it was very easy to get shaken out of a position (scared into selling my stock). The shake down could occur because of something as insignificant as a few down days on the market. This is actually a typical human reaction to an uncomfortable situation, also known as fight or flight.

Deep in history, fleeing dangerous situations was prudent. On Wall Street though, fleeing what feels like a dangerous situation is foolish unless there is hard data to support the response. The after-hours response to Pixelworks’ (PXLW) Q3 results serves as a perfect example of everything I have discussed to this point.

The company reported revenue of $15.3 million, which exceeded Street estimates by $0.3 million. Earnings of 10-cents per share were a penny shy of expectations, but an incredible improvement over Q2’s 23-cent loss and the 2-cent gain reported for Q3 of 2012. Management’s commentary in the press release and earnings call were both extremely bullish.

At first, the stock was bid up in after-hours trading, but eventually reversed course and slid as much as 15%. Why?

Without surveying everyone who sold their shares, it’s impossible to know for sure, but here are a few thoughts:

The selling occurred on very little volume — small trades that wouldn’t have as much of an impact during market hours.
As mentioned above, some investors buy stocks ahead of earnings in hopes of an overnight pop (near-instant profits).
Missing the one Wall Street analyst’s number by a penny may have been seen as a miss. I disagree and see it as shortsighted, but understand the rationale.

To address the latter point, PXLW’s management generally sets a realistic range of expectations. Sometimes they miss those expectations. Sometimes they exceed them. In this case, they performed well within the range of expectations they set on the Q2 call (which sent the shares soaring as much as 50% the next day).

Unfortunately, they choose not to play the Wall Street game of sandbagging expectations so they can “beat their numbers” each quarter. Despite my when-in-Rome belief that management should play the game, I also respect their right to set expectations any way they wish. The most important thing to me is that they’re consistent, so I can judge them on an apples-to-apples basis.

Because they set a realistic range of expectations, I don’t worry if they “miss” the Street estimates (which tend to sit toward the high end of management guidance) by a small degree. If $14-16 million is the goal, $15 million is a “make” in my book.

However, many investors think otherwise and will flee what appears to be a dangerous situation.

There’s no imminent danger with PXLW, in my opinion. In fact, anyone who listened to the call heard a happy and confident management team discuss the progress they have made over the past several quarters and where that progress is leading them (something I have discussed many times in my PXLW reports on Seeking Alpha).

When I first discussed Pixelworks on May 31, I was promptly met with allegations of “pumping” the stock. To them, my assertion that PXLW might be chosen to power Apple’s highly anticipated (though still elusive) TV set was irresponsible, if not criminal.

It didn’t bother me. Most of my picks get greeted with the same response. It goes along with the territory. To find stocks that are poised to triple, it is often best to examine stocks that everyone hates (a topic for an upcoming discussion).

In fact, my best call of the year was greeted with hate mail.

I had claimed that Himax (HIMX) would power Google Glass. It seemed like an outlandish statement to most. I can understand why. The Internet is littered with scam artists who will say anything to boost the price of a stock they own. Most investors aren’t used to dealing with someone who is both honest and has the experiential background to discover seemingly incredible things before they happen.

At the risk of sounding cocky, I believe I meet both criteria. I’ve proven it consistently via my well-documented performance on Seeking Alpha.

Himax proved to be just another example. Four months after my initial report, Himax announced that my outlandish claim was indeed true — it was going to be powering Google Glass. Investors who trusted in my analysis were treated to a stock that, despite several ups and downs,tripled in just seven months.

Those who were shaken out, for whatever reason along the way, missed out.

I continue to believe that Pixelworks (PXLW) could be next. As we reported last week, Pixelworks and Apple (AAPL) will be appearing at same event in March. I’m not saying that a big announcement will come out of this event, but I wouldn’t discount it either. Apple has been distancing itself from Samsung. They have already separated themselves from Samsung’s displays and even formed a relationship to utilize sapphire instead of Corning’s (GLW) Gorilla Glass, something we anticipated as part of our investment in TechPrecision (TPCS).

Samsung possesses some of the industry’s best video processing capabilities. If Apple is going to compete, it will need its own video processing IP. PXLW would make a perfect fit. Based on my extensive research, PXLW is one of the few remaining independent vendors (most went under during the Great Recession) and has garnered several wins for its market leading UltraHD processing technology.

Of equal importance, PXLW is adapting its technology to power mobile devices. On the Q3 earnings call, ROTH Capital Partners’ Krishna Shankar asked management to discuss its chip development process for the tablet and mobility market. CEO Bruce Walicek responded:

“We’re well down that path at this stage and we’re anticipating demonstrations at a very deep technical level coming up at CES…we’d introduce products in the first half of 2014”.

Perhaps this is why insiders haven’t sold a share in years.

If investors think that a penny of EPS is more important than Mr. Walicek’s last statement, I’ll be more than happy to buy their shares as they get shaken out. Based on my pre-established expectations, I continue to believe that shares of Pixelworks are poised to triple.

[Tommy]

$ONVO - Organovo: A Leader In The Making?

http://seekingalpha.com/article/1783942-organovo-a-leader-in-the-making?source=email_rt_article_readmore

Organovo Holdings' (ONVO) 3D bioprinting technique helps in developing a bio- fabricated tissue of human organs, like liver, that are used by the pharmaceutical companies for conducting clinical research. This bio-generated tissue works the same as an organ in the human body. The tests conducted on bio-fabricated tissue provide data that is more accurate than research conducted on animals or on a single cell. The company's innovative technology holds huge market potential, which has attracted strong collaborative agreements with companies like Pfizer (PFE) and L'Oreal (OTC:LRLCY) for research and development of new products. Organovo recently demonstrated the data on its 3D liver tissue that displayed its extended functionality. Also, the technology has potential to develop new organs intended for direct therapeutic use to augment or replace damaged organs.

3D bioprinting

The 3D bioprinting process is the creation and designing of key architectural and compositional elements of a target organ tissue that can be generated with the help of a bio-printer in the laboratory environment.

Process:

The bioprinting process involves taking patient cells from a specific organ, growing, and collecting them in a specially incubated atmosphere in order to form bio-ink. The bio-ink consists of cells and the building blocks to form a functional organ system in-vitro. This is the beginning stage of solid tissue formation.

The cell mixture is loaded into a cartridge, which is then placed into the printer. The bio-ink building blocks are then dispensed from a bioprinter, using a layer-by-layer approach to form a target organ tissue.

Usage:

The tissue can be used in a number of research applications, such as drug discovery or toxicology testing. 3D bioprinting helps researchers replicate human physiology for research, drug testing, and eventually as therapies. Organovo is working with several tissue types including liver tissue, blood vessels, cardiac muscle, and lung tissue.

Organovo's value proposition

For a new drug approval, pharmaceutical companies have to run several clinical trials, which makes the drug discovery and development process very expensive. In 2012, the average expenditure on a new drug development was about $1.2 billion, and the total research and development spending of the pharmaceutical industry was approximately $48.5 billion.

The FDA follows a strenuous scrutiny process for approval of new drugs that includes pre-approval human trials. Pharmaceutical companies have to be extra cautious on the safety of the patients, and they spend millions of dollars on these clinical trials. When a drug application is rejected, all these expenses become a sunk cost and are counted in losses. Organovo's 3D bioprinting technology helps generate similar living tissues that provide an alternative to check the efficacy of a drug before going for expensive human trials; therefore, it helps researchers minimize the losses made on unsuccessful trials.

The 3D bioprinting technology also has the potential to create tissues intended for direct therapeutic use to augment or replace damaged or degenerating organs. In the U.S. last year, about 5,000 transplants took place, and approximately 18 people die each day waiting for an organ. We expect Organovo's 3D- bioprinting technology holds huge promises in creating and developing new organ tissue that can replace the degraded organs. These 3D human tissues have huge potential to accelerate the drug discovery process, enabling treatments to be developed faster and at minimum cost.

Recent progress in 3D bio-printed liver tissues

At the 3rd Annual Cell Therapy Bioprocessing Conference on October 22, 2013, Organovo presented the data demonstrating the retention of key liver functions in bioprinted liver tissues for up to 40 days. Earlier, the tissue lived for five days or longer. The extended functionality will offer significant value to pharmaceutical researchers by enabling assessment of both biochemical and tissue responses. We should note that the demonstration of extended function of 3D liver tissues was achieved faster than the projected time line scheduled at the end of 2013. The demonstrated data gives us a positive outlook for the development of other types of tissues as well. We believe the demonstration of extended function in Organovo's 3D liver tissues will help the company expedite its launch in 2014.

Key Collaborations

Organovo chose the route of partnership and collaboration to produce tissues that can be used in a variety of applications in the pharma industry as well as cosmetics. The collaboration brings the expertise of pharmaceutical companies, and at the same time, pharmaceutical companies are looking at the potential of 3D bioprinting to minimize clinical trials expenditure. Organovo is currently helping pharmaceutical and academic partners develop 3D human tissues for research, drug discovery and development, and toxicity testing.

L'Oreal


On October 7, 2013, Organovo signed an agreement with L'Oreal to explore the use of 3D skin for testing its skin care products. L'Oreal is the world's largest cosmetics producer with revenue of approximately, $24.7 billion. It has a market share of 15.8% in North America. It offers products in hair care, skincare, make-up, deodorants, and perfumes through its 27 brands. The terms of the agreements are not disclosed; however we expect the deal to bring a healthy cash flow for Organovo, as happened in earlier collaborations.

Pfizer


In December 2010, Organovo entered into a $600,000 collaborative research agreement with Pfizer to develop specific 3D tissue for two therapeutic areas utilizing the NovoGen MMX Bioprinter. In the fourth quarter 2012, Organovo has received all $600,000 under the agreement, as it delivered the tissue constructs to Pfizer. Pfizer is currently evaluating the constructs delivered by Organovo. Pfizer has not given any timeframe of when it will get back with results, but we expect positive developments in coming two to three months. A new deal is expected to be signed between the two companies that will bring an upfront payment for Organovo as well as some share of royalties for approved products developed using the technique.

ZenBio


On February 20, 2013, Organovo entered a partnership with ZenBio, a leading provider of human cells, which are key inputs for 3D bioprinting. The partnership with ZenBio will provide validated cellular inputs for NovoGen bioprinter that enable the generation of living tissue.

Knight Cancer Institute


In January 2013, Organovo entered a collaboration agreement with Knight Cancer Institute at Oregon Health & Science University, or OHSU, for the development of clinically predictive in vitro 3D cancer models for advance discovery of novel cancer therapeutics.

United Therapeutic


In October 2011, Organovo and United Therapeutics entered a $1,365,000 research agreement for a research program to discover treatments for pulmonary hypertension using the NovoGen MMX Bioprinter. The contract will bring certain milestone payments on successful completion and annual sales-based royalties to Organovo.

Organovo is expanding its collaboration with big market players. Its collaboration with Pfizer has already started bringing in cash flow and additional positive developments with Pfizer are expected in the coming quarters. Through its recent collaboration with L'Oreal, the company is also taking steps to partner with non-pharma players, which show the scope of application of its innovative bioprinting technology. We expect the company's innovative technology has huge potential, and it will help Organovo attract more collaborative partners.

A glance at numbers

For a development stage company, its financial stability plays a very important role in defining its future. In the quarter ended in June 2013, Organovo reported $12.48 million in its cash and cash equivalent, its research and development expenses were $1.46 million, and selling general and administrative expenses are $2.37 million. We believe the company's currently available cash and cash equivalents give it a strong financial standing that will help its operation run smoothly.

ONVO Chart

ONVO data by YCharts

In the last six months, Organovo's stock has provided a return of 93%. The company's strong collaborative agreements and the positive data on its liver tissue's prolong functioning increases our confidence in the company as an investment.

Conclusion

Organovo's 3D bioprinting technology is certainly a breakthrough technology that can help pharmaceutical companies as well as non-pharma companies prepare products that have a strong efficacy profile before beginning a human trial. The technology provides a solid alternative to animal or single cell trials, with better research data to avoid the risk of failure to advance at trial phase. Given the strong applicability of bioprinting, Organovo built strong partnerships with companies like Pfizer and L'Oreal, which have already started to generate returns. We expect the company to build additional partnerships that will help it expand the scope of bioprinting, and at the same time, bring more grants and revenue for the company.

The technology holds enormous potential and can help to generate functional human organs in the future for transplant. Currently, the company isn't generating any profit, but with the launch of the 3D bioprinted liver tissues in 2014, the company will start generating positive cash flow. Given the potential of the innovative 3D bioprinting, we expect the company to outperform in the foreseeable future.

[Tommy]

$BIOA - BioAmber: A Disruptive Green Tech Platform With Attractive Upside And Sizeable Cash Cushion

http://seekingalpha.com/article/1753632-bioamber-a-disruptive-green-tech-platform-with-attractive-upside-and-sizeable-cash-cushion?source=feed

Thesis: BioAmber (BIOA) is a differentiated player in the green chemicals space, with a low-cost and disruptive technology platform that already has industry partners in hand, and is on the cusp of scaling to service an industry that is eager to adopt usage of its renewable feedstocks. This article will outline brief background (which is more fully explained on the website & investor deck), but notably, to provide my outlook on the risk/reward at current levels- which I believe is attractive with limited downside from here.

Brief Corporate History

BioAmber was established in December 2008 as DNP Green Technology, when the succinic acid assets were spun off from Diversified Natural Products. Following the spin off, the company's shares were distributed to Diversified Natural Product's shareholders, making BioAmber a standalone legal entity with no ties to Diversified Natural Products.

In the fall of 2009, DNP Green Technology completed a $12 million financing and then in the fall of 2010, DNP Green Technology acquired 100% of the shares of its Bioamber joint venture from ARD. DNP Green Technology changed its name to BioAmber Inc. BioAmber raised two additional rounds of capital in 2011 and 2012, with gross proceeds of $75 million, and in May 2013, BioAmber completed its IPO on NYSE & raised $80 million in gross proceeds (with $44m in warrants for common).

Brief Background: Technology Platform

BioAmber is a chemical company. As per its comprehensive Investor Deck, the Company manufactures its bio-succinic acid in a facility using a commercial scale 350,000 liter fermenter in Pomacle, France. Succinic acid is used to manufacture a range of products used every day, including plastics, food additives and personal care products, and can also be used as a building block for a range of derivative chemicals. The Company produces and sells bio-succinic acid using its process for petroleum-derived succinic acid. It also has additional bio-based products under development with partners including bio-succinic acid derivatives, such as BDO, and applications of bio-succinic acid, such as plasticizers, polyurethanes and de-icing solutions.

The real "hook" here in my opinion is that just looking at corn futures of $4 per bushel, the succinic acid cost is basically equivalent to oil being at $25 per barrel which is at least 30% cheaper than its bio competitors. Simply put, BIOA is already operating at commercial scale in France & has worked out commercial processing details thus lowering its commercial scale-up risk and therefore at a major advantage vs. other bio-succinic acid companies (like Gevo INC (GEVO).

3Q Results & Catalyst Pathway.

BIOA reported ~in line results in its 3Q (in August), with revenues of $1m and 9 new customer additions, and noted that it will be burning $6m a quarter. The company also offered a useful update on the bio-succinic acid market, noting that volumes are up in polyurethanes, food, personal care, and coatings, despite prices falling (due to market penetration).

In my opinion, all eyes remain on the Sarnia plant build up and tracking the demonstration plant's yield (in France). Sarnia is scheduled to be completed by year end '14 and with it, a $125m CapEx project completion across 2 phases. Until then, I expect the market to focus on new customer additions- to date, named customers have included Brenntag (Succinic Acid, BDO) (BNR: ETR) , IMCD (Succinic acid in EU).

The company already has licensing from Cargill and DuPont, has partners with Mitsui (MITSY.PK) on production, and has customers including Lanxess (LXS: FRA).

Risk/Reward Outlook

Part of the decline in BIOA since the IPO is due to a perceived overhang from another capital raise necessary to fully fund the Sarnia facility. With management commentary that it will burn $6m per quarter in burn, and the projected Sarnia 'go live' in YE '14, it appears reasonable that BIOA can actually turn cash positive without a raise. Specifically, with $103m in cash exiting 3Q (after $72m from IPO and $25m from Hercules revolver), the company will exit 2014 with about $75m left, assuming it does not get any governmental loans (non dilutive, and can be $25-30m), partner contributions from Mitsui ($20m or so).

In scanning consensus (sell side estimates), it appears the Street is looking for revenues of $40m in '15, then ramping to $80m in '16 and $125m in '17- at these levels, EPS turns positive in '17 and cash burn is $27m in '15, and only $6m in '16. This yields an ample cash buffer at these proposed burn rates of about $40-50mm at the trough exiting the revenue ramp in late '15 before tapping these additional lines mentioned.

At the CURRENT share count, that provides you with a TROUGH cash balance of $3.50 per share; in the out years, it likely falls to about $2 per share (assuming share count comes in at 25mm in '15-'16).

As such, assuming the company continues to sign customers at a modest pace, the worst case scenario is that the stock is dead money for the next year ahead of any inflection ahead of the plant, i.e. that timing will most likely not slip significantly until close to the completion time- therefore the bear case for the next 12-18 months should be set around $5, which reflects the current cash balance ($5.50 per share) less a discount for forward burn rate- i.e. -25% from current levels, but likely a hard floor

On the upside scenario, assuming that the Sarnia OpEx comes in ahead of schedule, burn is reduced, and the company can generate increased customer interest and named signings, an ostensible scenario could yield a share price north of $12 (for reference, Pac Crest has target of $11, Credit Suisse has a target of $15, Societe General has a target of $22), which only includes the forward value of Sarnia at projected top line growth rates. BIOA is differentiated vs. peers in that it has a platform that can scale, has a fully funded model, and a lower break even level.

[Tommy]

$DSNY - Destiny Media Technologies to Market Disruptive "Play Anywhere" Clipstream® Streaming Video Cloud Service at the Seattle Interactive Conference

http://www.prnewswire.com/news-releases/destiny-media-technologies-to-market-disruptive-play-anywhere-clipstream-streaming-video-cloud-service-at-the-seattle-interactive-conference-227763291.html

VANCOUVER, Oct. 15, 2013 /PRNewswire/ - Destiny Media Technologies (TSXV: DSY) (OTCQX: DSNY) is pleased to announce that it will market its new disruptive, playerless, cross-platform streaming video technology to web developers at the Seattle Interactive Conference from October 28 through October 30, 2013 (http://2013.seattleinteractive.com). As a sponsor, Destiny's sales staff will be exhibiting the new Clipstream® video technology and will be marketing the upcoming Clipstream® Video Cloud service to web developers and corporate customers. As previously announced, a full commercial launch of the soon to be released Clipstream® Video Cloud service is expected before the end of the company's first fiscal quarter, which ends November 30th.

The Clipstream® Video Cloud service will enable any non-technical corporate user to easily create videos that play on devices ranging from TV's, tablets and mobile smart phones, to computers and e-book readers. In the past, corporations had the choice of using complicated transcoding and content delivery network services to reach an audience that spanned devices, using an advertising-supported video sharing service, or just restricting video playback to computers and leaving an empty "black rectangle" for viewers trying to access videos on other types of devices.

"We are excited to begin marketing our new Clipstream® Video Cloud Service during this pre-launch phase. This will be the first in a series of offerings that will use our Clipstream® technology and represents our first steps into a large multi-billion dollar market opportunity," said Destiny Chief Executive Officer, Steve Vestergaard. "In addition to ensuring videos play on HTML5-compliant devices, Clipstream® technology offers several other very compelling value propositions. Clipstream® will reach up to 50% more users than HTML5 video, there is no transcoding required, and there are no players or servers to install. In addition, Clipstream® offers watermarking and extensive security options and videos will play well into the future without re-encoding. Unlike plug-in solutions, Clipstream® doesn't expose viewers to the risks of viruses, hackers and privacy intrusions."

The Clipstream® Video Cloud service will be sold on an automated basis via the www.clipstream.com internet website. Publishers will use free cloud uploader software to drag and drop videos in a wide variety of formats including Flash, Quicktime, WMV, MPEG, and others into the cloud. In return, users will receive a link that can be embedded into websites, forums, emails, etc. Even though the video content appears to be part of the web page, it is actually streamed from Destiny's cloud rather than the web server displaying the web page. Users of the service will purchase a monthly package, similar to a cell phone plan, where they provide their credit card and are charged monthly. Packages include a number of transfer minutes and usage above that is billed as overage.

About Destiny Media Technologies

Destiny Media Technologies (TSX:DSY) (OTC:DSNY) provides services that enable content owners to securely display and distribute their audio and video content digitally through the internet. The Company's two major services are Clipstream® and Play MPE®. Clipstream (www.clipstream.com) is a video format that plays on any modern smart phone, tablet, internet, TV, or computer. With Clipstream, there is no player to configure or install, videos never go obsolete, and there are up to 99% cost savings from caching. Play MPE® (www.plaympe.com) provides a standardized method to securely and cost effectively distributes pre-release music to radio stations and other music industry professionals, before it is ready for sale. More information can be found at www.dsny.com.

[Tommy]

$DDD - 3D Systems at epicenter of disruptive technology

By Don Worthington

http://www.charlotteobserver.com/2013/09/23/4336021/3d-systems-at-epicenter-of-disruptive.html#.UmPO5-KiQlQ

DON WORTHINGTON - [e-mail]
Employees at 3D Systems in Rock HIll started with a three-dimensional computer representation to create a minature downtown Charlotte. The city was built one layer -- no bigger than the width of a human hair-- at a time.
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No matter where you turn these days, 3-D printing seems to be all over the news.

So much so that TheStreet.com reports the industry is at the peak of the “hype cycle,” a process used to determine how markets are adopting technology.

At the epicenter of the hype cycle is 3D Systems of Rock Hill.

3D Systems is one of the hottest companies in the country in an industry expected to triple its sales to $6.4 billion by 2019.

3D Systems is fourth on Forbes’ list of fastest-growing technology companies and fifth on Fortune’s list. Annual sales have topped $354 million and the company is worth $4 billion on the New York Stock Exchange. Sales have jumped 46 percent over the last three years.

The epicenter reference suits Avi Reichental, 3D Systems’ president and CEO, just fine.

“All the magic happens in Rock Hill,” he said. “We are an overnight success 30 years in the making.”

The epicenter is where an earthquake starts spreading disruption and 3D systems is the center of disruptive technology, he said.

Disruptive technology is defined as something new that changes the normal flow of how things are made. Reichental relishes that role. The result – the company holds more patents than employees.

Chuck Hull founded 3D Systems in 1986, calling the technology sterolithography. Others called it additive manufacturing because material is added rather than taken away to make something. The process starts with a 3-dimensional computer image. Printers slice the image into layers no thicker than a human hair, applying materials slowly to build the product.

One of Hull’s original machines is displayed at the headquarters, tucked into a corner of the Waterford Business Park east of the Galleria Mall. Hull is still with the company, but he stayed in California when 3D Systems moved east in September 2006.

Inside the Waterford building, large, computer-controlled 3-D printers precisely apply soft or hard plastics, or reinforced composite materials, to create objects.

The printers can create one-of-a-kind parts, or the same part over and over. That’s the beauty of 3-D printing, Reichental said. With a tweak of a computer program, a custom piece can be created. Creating prototypes for all kinds of industries is simpler, quicker and cheaper, he said.

The Rock Hill location, as well as other sites scattered across the country, offer content-to-print solutions for a variety of industries from aerospace to health care and transportation.

In the lobby are small consumer machines called the Cube, turning out smaller projects. The Cube sells for $1,299 at retailers such as Staples.

Throughout the building are examples of what’s possible, from sandals, an intricate lampshade, and a red-white-and-blue plastic electric guitar to automotive parts and car seat frames.

The building also has 3D Systems’ research and development offices.

What excites Reichental the most is the intellectual aspect of the process, how to make things different, better, more efficiently.

Doing things differently includes 3 D Systems’ recent purchase of The Sugar Lab, a small firm using sugar to make 3-D prints.

Others are using 3-D printing to take human tissue and make body parts. NASA recently issued a research-and-development contract to 3-D print food for outer space.

While 3D Systems is on the cutting edge of technology, its success comes the old-fashioned way.

“We have to know the spoken and unspoken needs of our customers,” Reichental said. Knowing what customers need now and anticipating what they’ll need ahead is one of Reichental’s strengths.

To that end, “nothing useful happens behind my desk,” he said.

Reichental describes his job as that of the “chief customer office and the chief intelligence officer.”

“I want to make sure I have my finger on the pulse of disruption, on the pulse of customers and on the pulse of opportunities,” he said in an interview with Investors Business Daily earlier this year.

But it wasn’t always this way. When Reichental came to 3-D Systems 10 years ago, he found a much different corporate culture.

The company had an innovative product, “but it was far too complex, far too expensive and took a rocket scientist to operate,” he said. The company’s culture was “we are so great, we know everything. Build it and they will come,” he said. The company was building printers – and debt.

Reichental knew he had to change things. He debated taking the job, but his wife, Dorit, convinced him he had to take what could be a once-in-a-lifetime chance in 2003.

If took a couple of years to make the changes. Colleagues call his management “creative innovative chaos.” When Reichental and 3D Systems were ready to make a splash, the economy tanked, but it had its coming-out party regardless: “We instinctively knew what to do.” It continues to refine its larger manufacturing printers and moved into the consumer market with the Cube. The primary focus remains with its high-end 3-D printers.

To stay on the cutting edge, 3D Systems has aggressively pursued others with great ideas. Since 1990 it has acquired 37 companies.

“It’s a fool’s errand to develop everything internally,” he said. To increase its capacity and market share, 3D Systems “wants entrepreneurs to hang with us,” Reichental said. “We want to get the first look at good ideas.”

Cathy Lewis, now 3D Systems’ vice president of global marketing, was among the first business owners acquired by 3D Systems. She was part of a company trying to build a small 3-D printer.

“I came to Rock Hill to see what 3D Systems was doing and I had to be part of this,” she said.

Some financial analysts have expressed concerns that the acquisitions could overextend 3D Systems, and others don’t share Reichental’s vision that 3-D printing will be an industry game changer. Yet Citigroup recently issued a buy recommendation for the company’s stocks.

Reichental said the acquisition strategy is designed to keep 3D Systems from being acquired by others. “We want to grow ... It’s good to be the 500-pound gorilla,” he said.

Mark Vitner, a managing director and senior economist at Wells Fargo, was at a recent conference in California about new technologies. The latest tech bubble – social media, cloud-based computing, apps and 3-D printing – have rescued California from the recession.

While no one mentioned 3D Systems by name at the conference, it was clear that’s who they were talking about, Vitner said.

“We need to grow this important sector locally, and we have a long way to go. But we already have one of the leaders, 3D Systems here,” Vitner said at Friday’s economic forecast breakfast at Winthrop University.

Looking ahead, Reichental is mindful that “this is just the beginning.”

“The audience is widening, we are maturing. It’s important that we not lose the passion, are not fooled by early success.”

To move forward, 3D Systems has a four-pronged approach: expand midmarket sales of 3D printers, boost health care sales, increase its parts business and increase consumer sales.

Reichental also is mindful that the future will not be one technology versus another. “We have to improve manufacturing in a more significant way with hybrid systems.”

Most of all, “if you’re not moving forward, you’re moving backward.”

[Tommy]

Thank you very much.

[FollowNoOne]

Tommy, you are doing an awesome job. Great, informative posts.

[Tommy]

Disruptive Innovation Explained - Video

Clay Christensen, Harvard Business School professor and the world’s most influential management guru according to the Thinkers50, lays out his landmark theory

http://blogs.hbr.org/2012/03/disruptive-innovation-explaine/

[Tommy]

CNBC Disruptor50 List

http://www.cnbc.com/id/100739744

[Tommy]

The Four Disruptive Technology Forces that Will Change the World

http://www.linkedin.com/today/post/article/20130902080056-206751421-4-disruptive-technology-forces-that-will-change-the-world

The "gales of creative destruction" forecast by Austrian economist Joseph Schumpeter in the 1940s are blowing as hard as ever.

The twin disruptive forces of tough economic times and technology-driven innovation are giving birth to new innovations, new markets and new opportunities.

Just this month the family-owned US media institution that is the Washington Post sprung a huge surprise, announcing it was selling up to Amazon founder and dot com billionaire Jeff Bezos. While the media industry is undergoing huge disruption right now, few saw that move coming and there's plenty of speculation about how that might play out.

But disruption and 'creative destruction' have been a feature of the corporate landscape for decades. Kodak and Polaroid are two of the most well-known victims of this process. Back in the 1970s Polaroid was one of the so-called 'nifty 50' largest stocks on the NYSE, with a huge army of skilled engineers, while Kodak sold 90% of the film used in the US.

Neither was quick enough to foresee and react to the rapid disruption of digital technology and the move to digital photography. When disruption happens it is often swift. Polaroid filed for bankruptcy protection in 2001 and Kodak in 2012.

From shop assistants and financial traders to engineers and celebrities, all our jobs, skills and industries are under constant threat from technology-driven disruption.

A glaring modern example is the decline of the high street video and DVD rental store. These have been overtaken and replaced by online streaming companies who offer the latest movies and TV series delivered instantly to your TV, PC, tablet or smartphone, anytime and anywhere.

The high street companies involved didn’t innovate and the superfast pace of technology overtook them.

But a central line of the creative destruction theory is the idea of a process of constant renewal through innovation. While disruption clearly poses threats to established ways of doing things, it also presents huge opportunities both for existing legacy businesses and nimble new start-ups. When those gales start howling it's a case of adapt or die.

Here are 4 powerful technological forces the I believe will drive disruption, innovation and opportunity in all areas of business and society in coming years and decades.

1. The internet of things
A world where everyone and everything is connected. Sensors in everyday objects and devices will be capable of automatically transmitting data over high-speed networks. Those previously 'dumb' objects will then become 'smart' objects capable of automated machine-to-machine (M2M) communications.

2. 3D printing
This technology opens up amazing possibilities for individuals and businesses, with fully working parts able to be created at the touch of a button and for a fraction of the cost of doing it previously. Already 3D printers have been used to create everything from toys and parts for NASA's Mars explorer to medical implants.

3. Graphene
The development of the super strong and highly conductive graphene has huge implications for the traditionally silicon-dependant technology industry. Potential applications include flexible display screens, electric circuits, solar cells and use in medical, chemical and industrial processes.

4. Connectivity
Ubiquitous connectivity through a combination of superfast mobile broadband, fibre optic fixed line broadband and wi-fi will drive massive changes in consumer activity and also the way we live and work, especially with faster, lighter and smarter mobile devices. Advances such as Google Glass are also just scratching the surface of connected augmented and virtual reality devices.

I’d be interested in hearing your thoughts on how your business is adapting to new technologies and what other technological forces you think will impact our world in the coming years.

[Tommy]

$MDGN - Medgenics' Disruptive Biotechnology Is One To Watch

http://seekingalpha.com/article/350361-medgenics-disruptive-biotechnology-is-one-to-watch

Medgenics (AMEX:MDGN) has, what I believe to be, the most disruptive biotechnologies of the last 20 years. This company is poised to own the 90 billion plus protein therapy market. We are talking about an enormous indication. Nomura (the big investment bank) calls this one of the top 10 biotech companies to watch over the next 5 years.

Currently the only form of treatment for Anemia is Epogen. Epogen is a synthetic version of the Erythropoietin that increases your red blood cell production. It is a $12B a year product monopolized by Amgen (AMGN) and affects nearly 1-2 billion worldwide.

When you are diagnosed with anemia, you go to your doctor. Your doctor is going to tell you that you have an abnormally low hemoglobin count and he will prescribe an epogen shot to get your hemoglobin into check and into a 10-12 count range which is considered healthy.

These shots cost about $25K a patient per year and are very painfully administered. What is going to occur is a spike of your Epo level from very low up to a 100x, which can lead to high blood pressure, a percentage increase of fatal cardiac events (as per the FDA) and all sorts of side effects. Over the next 48 hours, your Epo will crash back to a low level after which you will be treated with another shot of epogen, and this happens over and over again for the rest of your existence.

It's a terrible way to live, costs the system billions and is one of the worst FDA procedures on the market. In fact, Amgen has already received a black box warning because of the side effects and increased risks and is under major scrutiny for reimbursements issues as well.

The holy grail of Anemia treatment is to treat the patient without the infections and without that "spike" in Epo which is deadly in nature and provides a terrible quality of life.

Medgenics has developed a therapeutic system that can provide a dosage of the sustained levels (no spikes) of Erythropoietin naturally with literally no side effects and only two primary clinic visits for a fraction of the money. Let me explain exactly what they do and how they do it:

Medgenics takes a small piece of your skin about the size of a one inch toothpick from your abdomen.

This piece of tissue is then processed in a lab by inserting a small piece of DNA that teaches it to continuously produce the missing protein; which in this case is Erythropoietin.

Once this engineered piece of tissue is making the protein you are missing and at the levels needed, it is injected back under your skin and the result is a mini biobump that produced natural Epogen without the spikes, without the shots, without the side effects or dropouts. And for a fraction of the cost of Amgen's Epogen shots.

The Phase I/II study was done with 20 patients, all people diagnosed with anemia obviously. In all 20 patients you have biopumps producing Erythropoietin safely for as long as 36 months without any follow up, within that 10-12 count and without the injections and their dangerous spikes.

The most compelling thing about this story is that this isn't just a treatment for only Anemia; it is a platform that can be used on ALL protein therapies. In fact the company is entering Phase 1 for Hep C (Interferon) in Q2 of this year. Hepatitis C/Interferon is a 3.5 billion dollar Market this year. Gilead (GILD) paid 11 billion for a HEP C company… Inhibitex (INHX) was taken over for 2.5 billion (another Hep C company).

Medgenics already has an active program for Hemophilia developed with Baxter (BAX), and they will also be starting programs for:

Growth Failure/growth hormone
Multiple Sclerosis/Interferon Beta
Diabetes/Insulin
many others

In summary you have a company that has:

$50 million invested
the most disruptive technology in biotech today
a management team that is arguably from top to bottom the best I have ever seen. Former head of Stanford Medicine, and an entrepreneur who sold his last company for 600 million
Baxter collaboration and the potential for many more collaborations on multiple indications
already finished Phase I/II and entering Phase IIB, this is NOT pre Clinical; this is tested and proven in human
a ridiculously low valuation relative to its competitors.
the potential of two probably partnerships in the near term
a science which is not a one trick pony, it is a platform that covers every protein therapy which is more than a 91 billion dollar market
largest shareholders are Joel Kanter and Isaac Blech. Joel has just sold Clarisonic for $600 million. Isaac has founded over 35 billion in companies

Enough of the science. Let me walk you through the value proposition of the investment. There are two public companies and one collaboration that I will use as comparisons.

Protalix (PLX) has a platform technology and is at about the same stage of clinical as Medgenics, but is only for an indication of 25,000 patients and trades at a 520 million dollar market cap.

Prolor (PBTH), which has a treatment which only increases the half lives of protein therapies, trades at a 300mm market cap.

And of course Zymogenetics which only has an interferon lasting slightly longer than the usual 5-6 hours for Hep C, was bought by Bristol-Myers Squibb (BMY) for $545 million.

Medgenics' market value is currently approximately $32 million and is clearly poised to be the leader in a multi billion dollar space, and I believe will far exceed the market value of the the companies mentioned in this article.

[Tommy]

$CTIX - $NVIV - $ONVO - 3 Disruptive Biotech Companies Moving On To Higher Exchanges

http://seekingalpha.com/article/1557622-3-disruptive-biotech-companies-moving-on-to-higher-exchanges

Companies that trade on the financial marketplaces and electronic trading system operated by the OTC Markets Group (OTCQX, OTCQB, OTC Pink), or the Over the Counter Bulletin Board (OTCBB), are typically looking for greater exposure and attention, along with investments, in order to eventually uplist to a national security exchange. These exchanges, such as the NYSE-MKT or the NASDAQ-CM, open opportunities for the company to benefit from even larger investments from retail brokers and institutional investors.

The uplisting process is not automatic and requires meeting specific requirements. Companies that are uplisted to the NYSE-MKT gain from issuer-selected Designated Market Makers (DMM) that utilize world-class NYSE trading systems to reduce volatility, improve prices, add liquidity, and increase value.

Additionally, NYSE-MKT-listed companies can have greater brand exposure, attract more institutional investors and are eligible for issuer services afforded by the NYSE Euronext community. These advantages not only benefit the companies that are uplisting, but also the investors who purchased shares early. Three recent companies in the medical and pharmaceutical arena have taken the steps necessary to get uplisted, (with one recent success), and all three are worthy of investors' attention.

Organovo Holdings, Inc.

Though not an easy process, uplisting for a company can be extremely profitable for all involved. For example, Organovo Holdings, Inc. (ONVO) is currently reaping the benefits since it was approved for uplisting to the New York Stock Exchange (NYSE-MKT) on July 9. Before uplisting, it traded on OTCQX, OTC Markets Group’s highest financial marketplace. Keith Murphy, Organovo’s president and CEO, stated in a press release that trading on OTCQX, helped the company expand its investor base and increase its average daily trading volume, which was “instrumental” in enabling it to qualify for an NYSE MKT listing.

In a recent statement after the ringing of the opening bell at the NYSE, President and CEO of Organovo stated, "Organovo is proud to ring the opening bell on behalf of our employees, investors and all of our supporters, in recognition of our recent uplisting. This milestone is another important step forward for the company in our mission to advance the impact of 3D bioprinting in changing the shape of medical research and practice. We found NYSE to have made an unparalleled commitment to providing a fertile platform for growth to early stage biotechnology companies, and we look forward to a great future on the exchange."

Organovo has its own niche designing and creating functional, three-dimensional human tissues for medical research and therapeutic applications. The company collaborates with pharmaceutical and academic partners to develop human biological disease models in three dimensions.

These 3D human tissues, known as the NovoGen MMX Bioprinter which was developed to meet challenges in biologic research, could potentially accelerate the drug discovery process, and, that in turn, will enable treatments to be developed faster and at lower cost. This platform shapes human cells into 3D tissue, creating a superior analysis alternative to animal testing models.

As of this writing, the Organovo's shares climbed $.80 to $6.81, or 13% on 7.9 million shares. With a market cap of just $439 million, the company is in its infancy as it creates a viable product that many in the medical field are counting on for research. However, the recent uplisting enables Organovo's investors to utilize all of the trading technologies, including connectivity and routing of the NYSE platform that offers superior price discovery and liquidity, and reduced trading volatility. The investing frenzy into 3-D printing, combined with the application to medical research, continues to make this stock attractive one.

Cellceutix Corporation

If you missed the boat on Organovo, let's look at Cellceutix Corp. (CTIX.OB). The company trades on OTCQB, OTC Markets Group’s middle marketplace which identifies companies that are current in their reporting to the SEC or a bank or insurance regulator but either cannot or choose not to qualify for OTCQX. The company is a unique business in that it is a clinical stage biotechnology company focused on discovering small molecule drugs for difficult- to-treat diseases. The company has developed an extraordinary drug, Kevetrin, that has been found in the research to fight many forms of cancer. Kevetrin induces the activation of p53, often referred to as the "Guardian Angel Gene" because of its role in controlling cell mutations. This p53 is a tumor suppressor protein and has been widely regarded as possibly holding a key to the future of cancer therapies.

Cellceutix is on the path to uplisting as well. In December 2012, the company signed an agreement with Aspire Capital for $10 million in financing, and Kevetrin is currently undergoing human clinical trials at Harvard Cancer Center (Dana Farber). This year, the company received approval for a 505(b)(2) designation by the FDA for Prurisol, their Anti-Psoriasis compound. This accelerated path for testing and approval is boosting the company's chances for uplisting.

As Cellceutix CEO Leo Ehrlich stated during a recent interview, "We are very focused on what we are working to accomplish in the near term with the development of Kevetrin and Prurisol, but moving to a senior exchange is definitely part of our overall plan to maximize exposure and shareholder value. Making some preliminary plans, I had a meeting with the NYSE earlier this month to discuss the process and was pleasantly surprised that they knew who we were already. As I'm sure you can tell, we don't let the moss grow under our feet at Cellceutix." Ehrlich added that "We are always planning for the future, but we still recognize that there is work to be done in the here and now. As we meet our milestones, we will move forward. I am confident of that."

Cellceutix is worth examining because of the critical news that is due in the coming months. News should emerge about P21 data from their Dana Farber trial of Kevetrin, their human trials for Prurisol set to begin in Europe next month and also their sponsored studies at the University of Bologna and MD Anderson for blood cancers. The company is probably waiting for the trials to advance further before uplisting. This affords and appealing situation and an opportunity to pick up shares now while it's trading at less than $2.00.

InVivo Therapeutics Holdings Corp.

InVivo Therapeutics Holdings Corporation (NVIV.OB) is a developer of specialized technologies for the treatment of spinal cord injuries (SCI) and other neurotrauma conditions. InVivo is strong financially and should be a strong candidate for uplisting.

Last month the company announced that it raised $16 million from investor warrants. InVivo's CEO Frank Reynolds said that, "We are pleased with the addition of $15.6 million of cash from the warrant call which strengthens our balance sheet. With the resultant elimination of the $24.6 million warrant liability from our books, the last major impediment to up-listing to a national securities exchange has been removed." Reynolds also said, "We expect that an uplisting to a national securities exchange will increase liquidity and unlock inherent value in our stock."

InVivo is poised to attract investor attention when it is uplisted. Instead of focusing exclusively on regeneration, the company is in a unique position in that it is the only company that has developed a way to harness the ability to secrete substances to the local area of a spinal injury to help prevent other injuries. In other words, the company concentrates on neuroprotection.

Its products are intended to protect the spinal cord after primary injury by mitigating the bleeding, inflammation, and further cell death that result from the body's immune response to spinal cord injury, according to the company. By minimizing these secondary injury processes, and by supporting subsequent repair and recovery, the body can locally reorganize toward functional recovery through the spared healthy tissue. This process, known as neuroplasticity, may result in partial functional recovery.

The company's technologies encompass multiple strategies involving biomaterials, U.S. Food & Drug Administration (FDA) approved drugs, growth factors and human neural stem cells (hNSCs).

It is just a matter of time, but the uplisting of InVivo will happen which is why I believe now is good time to conduct a thorough analysis of the stock.

Conclusion

Investing in companies that are on the verge of uplisting is one strategy of investing. Noting the trend of the three companies above and including them on a closely reviewed watch list should increase an investor's likelihood of selecting good, long-term companies with possible above-average returns.

[Tommy]

$INO - The Disruptive Potential Of Inovio's SynCon DNA Vaccines

http://seekingalpha.com/article/1652522-the-disruptive-potential-of-inovios-syncon-dna-vaccines

The purpose of this report is to highlight the disruptive potential of Inovio's (INO) SynCon DNA vaccines, and Inovio's increasing leadership role in revolutionizing vaccines.

The key takeaways from this article are:

Inovio's Synthetic Consensus (SynCon) vaccines have the potential to disrupt the vaccine industry - e.g. broadened immunological impact, speedier design, cheaper production costs, more stable and easier to transport than alternatives, superior safety profiles, higher efficacy profiles, leverages the power of the human immune system, etc. Inovio's electroporation provides a superior method of delivering and invoking a targeted human immune system response.

The safety and efficacy studies of DNA vaccines have now matured to the point that there is a clear implication that DNA-based vaccines are likely to play an increasingly important role in preventative and therapeutic solutions in the near future.

Inovio Pharmaceuticals Inc. is positioned to lead the 21st century vaccine industry based on its increasingly broad & maturing pipeline, formidable IP patent estate, significant non-dilutive funding of its research through government (GO) and non-government organizations (NGO), eminent management and advisory teams with years of vaccines & immunology experience.

Inovio's share price is currently in an oversold position in comparison with the recent 52 week high of $3.03 due to significant uptick in short-seller interest (10.12M shares as of July 31, expectedly much higher as of August 20), presenting an opportunity for investors to establish a position prior to 2014 Ph II. HPV Therapeutic Clinical Study Results, and future partnership announcements.

Inovio's increasingly broad & maturing pipeline, its expanding GO & NGO agreements, are tangible catalysts for significant stock appreciation in 2013 and beyond. This report provides a detailed view of the pre- and clinical vaccines & candidates to demonstrate that Inovio is the real deal…with vaccines to combat some of the toughest infectious diseases, viruses, cancers, etc.

I. Reflections on the 2013 McKinsey Global Institute Report: "Disruptive technologies: Advances that will transform life, business, and the global economy"

McKinsey & Company is a premier global management consulting firms that advises Fortune 500 firms & governments on business & technology strategy, enabling transformational change.

In the opening section of the report, McKinsey states "….we believe these technologies will have large and disruptive impact. More importantly, the results of our research show that business leaders and policy makers-and society at large-will confront change on many fronts: in the way businesses organize themselves, how jobs are defined, how we use technology to interact with the world (and with each other), and, in the case of next-generation genomics, how we understand and manipulate living things. There will be disruptions to established norms, and there will be broad societal challenges. Nevertheless, we see considerable reason for optimism. Many technologies on the horizon offer immense opportunities. We believe that leaders can seize the opportunities, if they start preparing now."

The McKinsey article also states: "The science of genomics is at the beginning of a new era of innovation. The rapidly declining cost of gene sequencing is making huge amounts of genetic data available, and the full power of information technology is being applied to vastly speed up the process of analyzing these data to discover how genes determine traits or mutate to cause disease. Armed with this information, scientists and companies are developing new techniques to directly write DNA and insert it into cells, building custom organisms and developing new drugs to treat cancer and other diseases. Over the coming decade, next-generation genomics technology could power rapid acceleration in the field of biology and further alter healthcare…."

The criteria McKinsey used for identifying disruptive technology were:

The technology is rapidly advancing or experiencing breakthroughs
The potential scope of impact is broad
Significant economic value could be affected
Economic impact is potentially disruptive

The McKinsey report defined Next-generation genomics as: "Next-generation genomics marries advances in the science of sequencing and modifying genetic material with the latest big data analytics capabilities…. The next step is synthetic biology-the ability to precisely customize organisms by "writing" DNA. These advances in the power and availability of genetic science could have profound impact on medicine, agriculture, and even the production of high-value substances such as biofuels-as well as speed up the process of drug discovery."

Inovio plays an important role in this transformational field by a.) Effectively harnessing the power & insights of genomic sequencing and b.) Combining patented & novel processes to create synthetic DNA (SynCon) vaccines that equip the human immune system with the means to prevent & fight life-threatening infectious diseases, cancers, autoimmune disorders. These vaccines are effectively delivered to the human immune system via electroporation.

II. Inovio's SynCon DNA Vaccines - Innovative & Disruptive

In the book "The Innovator's Dilemma", the author Christenson describes the following characteristics of disruptive innovations:

Disruptive technology is "simpler, cheaper, and lower performing"
Incumbent firms "most profitable customers generally can't use and don't want" disruptive technology
Disruptive technology is "first commercialized in emerging or insignificant markets"
Disruptive technology promises "lower margins, not higher profits"

Advantages: DNA immunization offers many advantages over the traditional forms of vaccination

It is able to induce the expression of antigens that resemble native viral epitopes more closely than standard vaccines do since live attenuated and killed vaccines are often altered in their protein structure and antigenicity.
Plasmid vectors can be constructed and produced quickly and the coding sequence can be manipulated in many ways. DNA vaccines encoding several antigens or proteins can be delivered to the host in a single dose, only requiring a microgram of plasmids to induce immune responses.
Rapid and large-scale production are available at costs considerably lower than traditional vaccines, and they are also very temperature stable making storage and transport much easier.
Another important advantage of genetic vaccines is their therapeutic potential for ongoing chronic viral infections. DNA vaccination may provide an important tool for stimulating an immune response in HBV, HCV and HIV patients. The continuous expression of the viral antigen caused by gene vaccination in an environment containing many APCs may promote successful therapeutic immune response which cannot be obtained by other traditional vaccines"

Inovio SynCon DNA Vaccines: the future of vaccines

Inovio has leveraged the valuable body of genomics, immunology, epidemiology, and bio-engineering research to dramatically improve on the effectiveness of its SynCon vaccines: (the following sections of this report are based on information available on Inovio's website: inovio.com)

Design and selection of appropriate antigen targets for a particular disease. These include targets associated with the induction of antibody or T-cell or both immune responses observed during natural infection.
SynCon vaccines use a DNA fragment with instructions that enable cells in the body to produce ONLY the targeted antigen relating to a pathogen or cancer. The fragment cannot replicate and is not able to cause the disease.
Rather than being constrained by the paradigm of matching a preventive or therapeutic vaccine to a single pathogen strain, [Inovio's] SynCon vaccines are based on genetic code for a specific antigen from multiple strains of the target pathogen.Thus, while the SynCon antigens may not be perfectly (100%) matched to the pathogenic strains, they are designed to protect against multiple existing strains as well as changing strains of a virus. Extensive preclinical data has validated their ability to protect against many strains of a disease; initial human data for [Inovio's] influenza vaccine has also provided evidence of this capability.

With respect to cancers, preclinical data has shown that these "unmatched" gene sequences aid the immune system's recognition of "self-made" cells that are cancerous. Whereas normally it might tolerate these cells made in the body, antigens produced by SynCon therapeutic vaccines are able to induce strong immune responses against the cancer cells.

SynCon vaccines can produce strong T-cell responses (both CD4+ and CD8+): T-cell immune responses are considered vital to fighting cancerous cells and chronic infections. While live virus vaccines are able to generate T-cells, this approach is not viable for many diseases, such as HIV. Other "conventional" vaccine technologies (such as recombinant proteins, virus-like particles, subunit vaccines, and peptides) can at best produce only weak T-cell responses. Experimental approaches such as viral vectors have achieved strong T-cell responses, but have limiting factors such as their inability to boost with repeated vaccination due to immune responses to the viral vector itself (which can be based on a virus, such as a cold virus, to which we have been previously exposed).

However, Inovio's SynCon vaccines have, in human studies for cervical dysplasia and HIV, generated best-in-class T-cell responses that exceed all these approaches. What is particularly exciting is that these responses include strong CD8+ T-cell responses which are able to kill targeted infected cells. In a recent human study, Inovio's vaccine for cervical dysplasia demonstrated for the first time that a DNA-based therapeutic vaccine can produce immune responses with a killing effect on target cells and potentially reverse disease progression to cervical cancer.

Inovio's synthetic DNA vaccines can be designed in weeks instead of months or years. They are manufactured by a fast and efficient fermentation process. They have a better stability profile and do not require maintenance of cold-chain requirements for storage and transport. These important advantages yield more timely vaccine development and can improve accessibility in nations with less developed infrastructure.
The novel SynCon genetic sequences, which do not exist in nature, are patentable.

The elegance of Inovio's SynCon vaccines is that [Inovio] is not creating an immunogen that would then be placed into the body to induce a desired immune response. Instead, [Inovio] creates a fragment of DNA to produce one or more targeted antigens and place that DNA into cells of the body (with the assistance of our proprietary electroporation systems) where it does nothing other than give instructions to the cells to produce the desired antigen. This approach results in the body creating an immunogen capable of inducing strong, multi-faceted immune responses similar to immune responses to actual pathogens. Human data to date has shown our approach has a positive safety profile."

III. Further Information

Company History:

Inovio Pharmaceuticals, founded in 1983, engages in DNA vaccine research through subsidiaries VGX Pharmaceuticals and VGX Animal Health. The company became incorporated in 2001, in Delaware, and is currently headquartered in Blue Bell, PA, USA. The three companies focus on the discovery and development of DNA vaccines for the treatment of cancer and infectious diseases. The CEO of Inovio, Dr. Joseph Kim, co-founded VGX Pharmaceuticals with DNA vaccine pioneer Professor David Wyner (University of Pennsylvania), in December 2000. In June 2009, his company merged with Inovio Pharma.

Cash Position & Runway:

As of June 30, 2013, cash and cash equivalents plus short-term investments were $23.6 million compared with $13.8 million as of December 31, 2012.

Based on management's projections and analysis, the Company believes that cash and cash equivalents are sufficient to meet its planned working capital requirements through the first quarter of 2015.

Corporate Development:

Inovio continues to advance discussions with large pharmaceutical companies with the goal of securing strategic partnerships to advance the development of SynCon vaccines.

Inovio and the U.S. Army Medical Research Institute of Infectious Diseases (USAMRIID) received a $3.5 million grant from the National Institute of Allergy and Infectious Diseases (NIAID) to advance the development of Inovio's next generation DNA vaccine delivery device capable of simultaneously administering multiple synthetic vaccines via skin surface electroporation.

Inovio was recognized with Vaccine Industry Excellence (ViE) Awards for "Best Early Stage Biotech" and "Best Therapeutic Vaccine," for its HPV vaccine, VGX-3100, at the World Vaccine Congress. The ViE Awards recognize outstanding vaccine advancements and achievements of vaccine developers across the global industry as judged by a panel of global biotech industry stakeholders.

Due Diligence:
Prospective investors should research the potential risks and rewards associated with investing in Inovio, as well as any publicly held company. Inovio is a clinical-stage company, has been unprofitable thus far, and will likely require additional capital to further the research and development of vaccines. Investors may obtain access to the company's SEC reports at: http://ir.inovio.com/secfilings

IV. Inovio's Pipeline

Inovio has a growing and maturing pipeline of vaccines covering major infectious diseases, cancers, and autoimmune disorders:

Table I. Inovio's Pipeline: Clinical & Pre-clinical Test Results

Disease / Vaccine / Antigen / Clinical Study Results:

Cervical dysplasia HPV Type 16/18

An estimated 20 million Americans are currently infected with HPV; 6.2 million people become newly infected each year. Of the ~1.4 million CIN 1 dysplasias, 35 - 50% are caused by HPV types 16 and 18. HPV types 16 and 18 are responsible for ~70% of the 300,000 CIN 2/3 dysplasias and cases of cervical cancer. Cervical cancer currently affects 510,000 women worldwide and results in 288,000 deaths annually.

Vaccine: VGX-3100 Therapeutic
Antigens: E6,E7
Phase II.

PhII results expected Mid-2014. (internally funded) VGX-3100 is an investigational SynCon therapeutic DNA vaccine candidate designed to treat cervical intraepithelial neoplasias (CIN) that are caused by human papillomavirus (HPV) types 16 and 18 and others. VGX-3100 includes plasmids that target the E6 and E7 proteins of HPV types 16 and 18. Intramuscular injection of the plasmid DNA vaccine is followed by electroporation using our CELLECTRA delivery device.

VGX-3100 was recognized as the most promising research at the 2011 Global Vaccine Congress, winning first prize in the Edward Jenner Award Competition. It was also recognized by the Vaccine Industry Excellence (ViE) Awards for "Best Therapeutic Vaccine" in 2013.

Clinical Study Results:
In 2010, Inovio completed a phase I dose escalation study of VGX-3100, its investigational therapeutic cervical dysplasia synthetic DNA vaccine designed to treat pre-cancerous cervical dysplasias and cervical cancers, delivered with its CELLECTRA electroporation device. Of all phase I trial subjects evaluated to date, 100% of study participants reported antibody positivity to at least two vaccine antigens and 78% of the subjects showed T-cell responses to at least one vaccine antigen. These results indicate that VGX-3100 has the potential to drive robust immune responses to antigens from high risk types of HPV infection as well as generate an immune response powerful enough to initiate a killing effect on cells changed into precancerous dysplasias by HPV. Building on positive outcomes of an 18-subject phase I dose escalation study that achieved best-in-class immune responses, a phase II clinical trial evaluating VGX-3100 for the treatment of cervical dysplasias is ongoing. This randomized, placebo-controlled, double-blind study has enrolled adult females with CIN 2/3 or CIN 3 and biopsy-proven HPV 16 or 18. Inovio expects to report unblinded, top-line data from this trial in mid-2014.

Prostate Cancer

In 2010, more than 218,000 new cases were diagnosed and over 32,000 men died from prostate cancer in the U.S. alone.

Vaccine: INO-5150 Therapeutic
Antigens: PSA,PSMA
Phase: Pre-clinical

PhI. Study launch by Q4-2013. (internally funded) INO-5150 is Inovio's dual-antigen SynCon vaccine targeting prostate-specific membrane antigen (PSMA) and prostate-specific antigen (PSA). INO-5150 was generated by the creation of PSA and PSMA synthetic consensus antigens based on human and primate antigen gene sequences. By creating synthetic consensus gene sequences for the antigens coded by the vaccine that slightly differ from native proteins, the intent of this vaccine design is to help break the body's tolerance of self-made prostate cancer cells.

Pre-clinical Study Results:
Inovio is advancing INO-5150 into human trials based on strong positive preclinical data, including a simian study in which vaccination with INO-5150 generated strong and robust T-cell immune responses, and a murine study in which treatment with INO-5150 induced potent antibody and T-cell responses. Inovio intends to initiate a phase I clinical study in 2013.

Hepatitis C Genotype 1a & 1b

Hepatitis C virus is a disease characterized by inflammation of the liver. HCV is spread primarily by direct contact with human blood; the major causes worldwide are the use of unscreened blood transfusions and re-use of inadequately sterilized needles and syringes. About 5% of infected persons may die from the consequences of long term infection that leads to liver cancer or cirrhosis. The disease has been notoriously difficult to treat, with a prevalence exceeding 170 million worldwide. An estimated 5 million people are living with chronic HCV in the U.S.

Vaccine: INO-8000 Therapeutic
Antigens: NS3/4A, NS4B, NS5A
Phase: Pre-clinical

Phase I/IIa clinical trial in HCV infected individuals (4Q 2013) (funded by VGX INTL Inc.) Inovio is developing a synthetic multi-antigen DNA vaccine covering hepatitis C virus (HCV) genotypes 1a and 1b and targeting the antigens NS3/4A, which includes HCV nonstructural proteins 3 (NS3) and 4A (NS4A), as well as NS4B and NS5A proteins. The vaccine will be delivered with Inovio's CELLECTRA delivery device.

Pre-clinical Study Results:
Supporting this product development advancement are positive preclinical results, which were published in Molecular Therapy. Following immunization, rhesus macaques mounted strong HCV-specific T cell immune responses strikingly similar to those reported in patients who have cleared the virus on their own. The responses included strong NS3-specific interferon-? (IFN-?) induction, robust CD4 and CD8 T cell proliferation, and induction of polyfunctional T cells. The study was funded in part by a $2.8 million PA CURE grant received by Inovio and its collaborators in 2010.

HIV Clade B

Nearly 30 million people have died from HIV-related causes and 34 million are living with HIV1. Although a highly active antiretroviral therapy regimen has dramatically transformed the treatment of the disease in developed countries, effective HIV vaccines are needed to stop the spread of disease and reduce the need for antiretroviral treatments, which can have harsh side effects and lose their efficacy over time.

Vaccine: PENNVAX-B Preventative & Therapeutic
Antigens: gag,pol,env
Phase I. completed

Inovio is focusing future development on the HIV PENN-VAX GP (HIV Clade B Ph I. study funded by HIV Vaccine Trials Network)

PENNVAX-B is a DNA vaccine that was designed for the prevention and treatment of the HIV subtype prevalent in North America and Europe. The vaccine consists of SynCon immunogens targeting HIV gag, pol, and env proteins from HIV subtype, or clade, B. It is delivered with Inovio's CELLECTRA electroporation device.

Clinical Study Results:
In March 2012, Inovio reported that in an open label, phase I clinical trial (HIV-001) of PENNVAX-B in 12 adult HIV-positive volunteers, the vaccine generated significant T-cell immune responses. These responses were predominately antigen-specific CD8+ T-cells, which are considered to be paramount in clearing chronic viral infections and an important performance measure. There were no significant adverse events. In this study, four doses of PENNVAX-B were delivered with the CELLECTRA electroporation device. The study was conducted at the University of Pennsylvania Medical Center.

In a prior phase I study (HVTN-080) of 48 healthy patients, PENNVAX-B demonstrated best-in-class immune responses. These results indicated the potency of Inovio's synthetic vaccine technology platform, raising the potential for the development of therapeutic vaccines against HIV.

Knowledge from the PENNVAX-B HIV program has been incorporated into the design of our multi-clade, globally oriented PENNVAX-GP vaccine, which is now our lead preventive and therapeutic vaccine that broadly targets global HIV strains. Inovio will not further develop PENNVAX-B.

HIV Clades A,C,D

Vaccine: PENNVAX-G Preventative & Therapeutic
Antigens: env,gag
Phase I. Completed enrollment.

(funded by USMHRP/NIAID) PENNVAX-G is a developmental vaccine for the prevention and treatment of HIV strains present in Africa and Asia. It is intended to induce broad antibody and T-cell immune responses. This multi-subtype vaccine is based on optimized synthetic immunogens targeting the env and gag antigens of HIV-1 global subtypes A, C, and D. It is delivered via Inovio's CELLECTRA electroporation device.

Clinical Study Results:
A phase I study is evaluating administration of Inovio's PENNVAX-G global HIV vaccine plus a viral vector vaccine, Modified Vaccinia Ankara-Chiang Mai Double Recombinant (MVA-CMDR), as a unique prime-boost preventive HIV vaccination strategy. Together, PENNVAX-G and MVA-CMDR target a mixture of antigens for HIV-1 subtypes A, B, C, D and E to potentially provide global coverage.

This study, designed to assess safety and immune responses, is sponsored by the National Institute of Allergy and Infectious Diseases (NIAID), part of the U.S. National Institutes of Health (NIH), and is being conducted by the U.S. Military HIV Research Program (MHRP) through its clinical research network in the U.S. and East Africa.

Positive interim data was presented in September 2011. In the cohort of 11 healthy subjects enrolled in the U.S., administration of PENNVAX-G plus MVA-CBMR was associated with strong immune responses and safety. Early analysis of this initial data revealed a strong cell-mediated immune response, with CD4+ and CD8+ T-cells specific for both the gag and env antigens encoded by the prime and boost agents. The study was then expanded to three global MHRP sites, at which a total of 80 healthy, HIV-uninfected international participants have been enrolled.

HIV Clades A,C (B)

Vaccine: PENNVAX-GP Preventative & Therapeutic
Antigens: gag,pol,env
Phase: Pre-clinical

PhI. Study launch by Q4-2013 (funded by NIH/NIAID/HVTN)

PENNVAX-GP is a developmental vaccine to prevent and treat HIV strains primarily present in Africa, Asia, Europe, and North America. It is intended to induce broad antibody and T-cell immune responses. This multi-subtype vaccine is based on optimized synthetic immunogens targeting the env, gag and pol antigens of HIV-1 global subtypes A, C, and B. It is delivered using Inovio's CELLECTRA electroporation device. PENNVAX-GP is our lead preventive and therapeutic HIV DNA vaccine candidate.

Influenza - Universal Pandemic

Despite efforts to control the avian flu following outbreaks in 2004, the H5N1 influenza strain has spread from Asia. H5N1 was reported in wild birds in Europe in 2005, and in wild birds and poultry in both Africa and Asia in 2006. Nearly 600 human cases of H5N1 have been reported to the World Health Organization (WHO) from 15 countries with an alarmingly high mortality rate of about 60%. No occurrences of man-to-man transmission of H5N1 have been identified. The concern, however, is that through potential re-assortment with influenza subtypes that do transfer from man to man, highly pathogenic new strains may emerge.

Since the first-ever infection of a human with the new influenza subtype, H7N9, in early 2013, the very rapid spread of this subtype caused a total of 133 confirmed human infections in Asia, with 43 deaths. No occurrences of man-to-man transmission of H7N9 have been identified, however, experts remain fearful of the possibility of the virus mutating into a form easily transmissible between humans, with the potential to trigger a pandemic. In addition, laboratory tests showed that the H7N9 virus was resistant to treatment drugs in some patients.

Vaccine: VGX-3400X Preventative
Antigens: HA,NA,NP
Phase I. completed

(internally funded)

VGX-3400X is Inovio's proprietary, preventive DNA vaccine candidate to prevent infection by avian influenza (H5N1). In a completed phase I study this plasmid vaccine was initially delivered into muscle tissue using Inovio's CELLECTRA DNA Delivery System and followed by a booster vaccination in skin. In the future it would be exclusively delivered using intradermal electroporation to facilitate expression of the plasmid to produce the H5N1consensus antigen.

Clinical Study Results:
In this open-label phase I dose escalation study, a single intradermal electroporation boost of VGX-3400X generated hemagglutination inhibition (HAI) titers against six different, unmatched strains of H5N1; was associated with a four-fold or greater rise in HAI titers in 50% of boosted subjects; and generated antigen-specific antibody and cytotoxic T-lymphocyte responses against all three antigens that it was encoded to produce: HA, NA and NP.

The 17 patients boosted with the minimally invasive intradermal electroporation vaccination were given a second booster vaccination intradermally. 47% of immunized subjects generated an HAI titer of 1:40 or higher against at least one of the tested H5N1 viruses, and 71% had an HAI titer of 1:20 or higher against at least one H5N1 strain. This data indicates the potential of VGX-3400X to provide protection across influenza subtypes and strains.

More recently, positive results from a preclinical study of Inovio's influenza DNA vaccine against the newly emergent H7N9 flu showed protection against sickness and death in 100% of the vaccinated animals when they were challenged with a lethal dose of H7N9 virus. In addition to generating a strong immune response, the vaccine was designed, optimized, and manufactured within two weeks, proving Inovio's ability to not only rapidly create a DNA vaccine construct that can address a new global threat, but the ability of the SynCon vaccines to mount robust defenses against newly emerging viral threats with pandemic potential.

Influenza - Universal Seasonal (18 - 55 yrs.)

Influenza is one of the most communicable diseases, and is typically most severe in young children and the elderly. An influenza season usually strikes both hemispheres each year, resulting in three to five million cases of severe illness and up to 500,000 deaths annually.

The protective capability of currently available influenza vaccines is substantially limited: the vaccine can only protect against the influenza strains it contains; if the selected strains continue to mutate, the vaccine may not be effective. By encompassing multiple strains, Inovio's universal influenza vaccine strategy circumvents the traditional model and may potentially protect against changing strains within the targeted subtypes across many seasons.

Vaccine: H1 + H5 Preventative
Antigen: HA
Phase I. data reported

(funded by NIH Director's Office Transformative Research Award) Inovio is advancing the development of a synthetically created, prophylactic DNA vaccine against seasonal influenza based on multiple flu strains within different subtypes. Rather than specifically matching a single targeted influenza strain within a subtype, like today's conventional influenza vaccines, Inovio designs individual "constructs" based on a genetic consensus of multiple existing strains within each selected subtype. By combining multiple constructs, we created a vaccine to potentially protect against newly emergent strains and achieve "universality" within and across selected subtypes. Inovio has created subtype constructs for Type A H1N1, H2N2, H3N2 as well as Type B influenza, which are all strains that have caused seasonal influenza outbreaks.

Clinical Study Results:
Inovio has reported data from two phase I open label studies to evaluate safety, tolerability and immune responses generated by multiple combinations of Type A influenza subtypes.

In a phase I study assessing immune responses generated by a vaccine targeting two subtypes, interim clinical data revealed protective HAI titers of 1:40 or higher against each of the nine, unmatched strains of H1N1 in a significant percentage of immunized trial subjects. Additional phase I study results showed that this SynCon vaccine generated protective antibody levels comparable to a current FDA-approved seasonal influenza vaccine against a currently circulating influenza strain. This is the first demonstration of the DNA vaccine achieving a protective immune response rate comparable to a conventional seasonal vaccine.

Prior research has shown that Inovio's H1N1 influenza SynCon vaccine provided 100% protection of animals challenged with the 2009 swine origin H1N1 virus and, separately, the H1N1 virus that caused the 1918 Spanish flu that killed over 40 million people. Additional animal studies have also shown that the vaccination generated protective HAI titers against other important H1N1 strains.

Influenza - Universal Seasonal (65+ years)

Vaccines: Various Preventative
Antigen: HA
Phase I.

(funded by NIH Director's Office Transformative Research Award)

A study of an Inovio SynCon H1N1 vaccine in combination with a "conventional" H1N1 seasonal flu vaccine was launched in July, 2012. Trial data has showed that a single dose of the H1N1 universal SynCon flu vaccine in combination with a dose of a 2012 seasonal flu vaccine generated protective immune responses in 40% of elderly trial subjects compared with a 20% response rate in the elderly subjects who received the seasonal flu vaccine alone.

Malaria

Malaria is a deadly disease that still kills more than 500,000 children under age 5 every year. MVI accelerates the development of malaria vaccines by joining its scientific, managerial, and field expertise with companies, universities, and governments to develop malaria vaccines and continue to test and invest in those with the most promise.

Vaccines: Various Preventative
Antigens: Various
Clinical Phases: Various

Inovio intends to initiate a phase I/IIa clinical study in 2014.

(funded by MVI/PATH) Inovio is developing two synthetic multi-antigen DNA vaccines targeting the pre-erythrocytic stage of the malaria parasite Plasmodium falciparum to prevent the onset of malaria symptoms and further inhibit spread of the disease. INO-7105 targets four pre-erythrocytic, antigens, CSP, TRAP, LSA-1, and CelTOS, and one blood stage antigen, AMA-1. The second vaccine, INO-7103, targets pre-erythrocytic malaria antigens CSP and TRAP as well as one blood stage antigen, AMA-1. The vaccines will be delivered with Inovio's intramuscular CELLECTRA 5P delivery device.

Pre-clinical Study Results:
Pre-clinical studies demonstrated potent T-cell and antibody responses in animal subjects. This phase I/IIa study will test DNA vaccines INO-7105 and INO-7103 delivered using Inovio's CELLECTRA 5P electroporation technology in approximately 30 individuals as part of a challenge trial. Study subjects will be given four doses of one of the DNA vaccines prior to being exposed to the malaria parasite through the bites of multiple malaria infected mosquitoes. Successful results of this trial could prove these vaccines capable of inducing an immune response in humans that protects against malaria. This study is being completed in collaboration with PATH Malaria Vaccine Initiative and is being funded by the Gates Foundation.

In a study results published on August 15, 2013, Inovio researchers and collaborators designed a highly optimized DNA vaccine composed of four sporozoite and liver-stage malaria antigens using Inovio's SynCon technology. These antigens were chosen because of their important role in the control or elimination of malaria infection. Delivered using Inovio's CELLECTRA delivery system, this malaria vaccine generated robust and long-lasting T-cell responses in both mice and non-human primates. Moreover, these vaccine-produced T-cells exhibited the functional ability to kill and eliminate malaria-infected cells. Researchers also found vaccine-induced CD8+, or "killer T-cells," in the liver, which is essential for rapid elimination of liver-stage malaria parasites. The Inovio DNA/electroporation platform has demonstrated in prior preclinical and human studies the ability to induce potent immune responses to multiple antigens; in this study, robust and sustained antibody responses to all four malaria antigens were observed, a strong indication for a preventive response in humans.

Collaborator Vaccines & Studies

Leukemia CML & AML

AML, a cancer of the myeloid line of blood cells, is characterized by rapid growth of abnormal white blood cells that accumulate in the bone marrow and interfere with the production of normal blood cells. AML is the most common acute leukemia affecting adults; its incidence increases with age. Only about one-third of those between ages 18-60 who are diagnosed with AML can be cured. With conventional chemotherapy, 70% of the patients in the group under study will relapse within two years, and current therapy is devastating in older adults.

CML is a type of cancer that causes the body to produce large numbers of immature and mature white blood cells (myelocytes). Approximately 85% of patients with CML are in the chronic phase at the time of diagnosis. Ultimately, in the absence of curative treatment, the disease progresses to an accelerated phase where median survival is around three to five years. CML can occur at any age, but it more commonly affects middle-aged and older people.

Vaccines: WT1 Vaccine Therapeutic
Antigen: WT1
Phase II.

Owned/funded by U. of Southampton/ LLR and CRUK* (Inovio electroporation) Developed by the University of Southampton with funding from Leukemia and Lymphoma Research and Cancer Research UK, this DNA vaccine is encoded for Wilms' Tumor gene 1 (WT1), which is highly associated with leukemia. The vaccine is delivered using Inovio's ELGEN-1000 automated electroporation device.

Clinical Study Results:
Preliminary results of the phase II trial have shown robust vaccine-specific antibody and T-cell immune responses in all vaccinated trial subjects evaluated to date. In addition to favorable immunogenicity, the vaccine has proven to be safe overall and well tolerated by patients in the study. This open label, single dose level study is currently enrolling two patient arms (37 CML and 37 AML patients), and an additional 100-110 AML/CML patients as non-vaccinated controls, at multiple study centers in the UK.

Table II. Pre-clinical Studies & Vaccine Candidates Not Reflected on Inovio's Pipeline Diagram
Disease

Cytomegalovirus (CMV)

Cytomegalovirus (CMV) is a common virus that can infect almost anyone. Most people don't know they have CMV because it rarely causes symptoms. However, if you're pregnant or have a weakened immune system, CMV is cause for concern.

Once infected with CMV, your body retains the virus for life. However, CMV usually remains dormant if you're healthy. CMV spreads through body fluids, such as blood, saliva, urine, semen and breast milk. People with weak immune systems have a greater risk of becoming ill from CMV. If you're pregnant and develop an active infection, you can pass the virus to your baby.

There's no cure for CMV, but drugs can help treat newborns and people with weak immune systems.

Vaccine: Undisclosed Therapeutic
Antigens: Numerous - Undisclosed
Phase: Pre-clinical

Inovio researchers first investigated a novel panel of ten CMV immunogens comprised of mainly surface-associated proteins based on promising prior clinical and preclinical data that had been previously shown to be important for inducing cellular immune responses in CMV infection. To maximize the potential for broadly-reactive immunity, Inovio researchers created SynCon vaccines for each of the target proteins based on amino acid consensus sequences from multiple variant CMV clinical strains, and excluded those from potentially divergent, highly passaged lab-adapted strains. The researchers adopted the same strategy as was shown previously to enhance protective immune responses against divergent strains of influenza and HIV. The designed target sequences were further genetically optimized at the nucleic acid level.

Pre-clinical Study Results:
Researchers observed that vaccination with each CMV construct was highly T cell immunogenic in preclinical proof-of-concept mice studies, generating robust and broad T cell responses as extensively analyzed by the T cell ELISPOT assay. Each antigen produced responses against at least four and as many as 28 different regions of the antigen and, importantly, responses from both CD8+ and CD4+ T cells were observed. This increased diversity and magnitude of cellular responses may be critical for effectively mitigating CMV infection and disease in the transplantation setting.

These data demonstrate that Inovio's next-generation SynCon DNA vaccine technology is effective at inducing CD8+ T cell responses specific to CMV, in contrast to prior strategies that induced mainly CD4+-dominant responses. Additionally, a majority of epitopes identified for the gB, gH, and gL antigens also contained HLAs that have previously been reported to contribute to the suppression of viremia and amelioration of disease. In summary, the elicitation, identification, and characterization of extensive T cell responses driven by Inovio's CMV SynCon constructs will provide an important tool for guiding clinical development of a CMV vaccine. Further ongoing work will determine how many of the 10 antigens will be selected and taken further for clinical development as well as assess the induction of antibody responses to prevent CMV infection.
Hepatitis B

Hepatitis B is a disease characterized by inflammation of the liver. It is 50 to 100 times more infectious than HIV and is spread primarily by direct contact with human blood, semen, or bodily fluid from an infected individual. Hepatitis B contributes to an estimated 620,000 deaths worldwide each year.

Vaccine: Undisclosed Therapeutic
Antigen: Undisclosed
Phase: Pre-clinical

Pre-clinical Study Results:
In October 2011 Inovio entered into a product development collaboration agreement with its affiliate, VGX International Inc., to co-develop Inovio's SynCon therapeutic vaccines for hepatitis B and C infections. Preclinical trial data reported that the hepatitis B vaccine successfully generated strong T cell and antibody responses that led to the elimination of targeted liver cells in mice. These results indicate the DNA vaccine's potential to treat hepatitis B infection and prevent further development of the infection into liver cancer in humans.
Multiple Cancers

Vaccine: INO-1400 Therapeutic
Antigen: hTERT
Phase: Pre-clinical

PhI. Launch planned for 2014.

Human telomerase reverse transcriptase (hTERT) is an attractive DNA vaccine target in cancer immunotherapy. High levels of hTERT have been detected in more than 85% of all human cancers, while normal cells showed undetectable levels of telomerase expression.

Immunological analysis indicated that the hTERT is a widely applicable target recognized by T-cells and can be potentially used as a universal cancer vaccine.

Inovio has developed a highly optimized synthetic hTERT DNA vaccine with two mutations designed to target multiple cancers expressing the antigen hTERT, including non-small cell lung carcinoma, breast cancer, melanoma, and prostate cancer.

Pre-clinical Study Results:

The hTERT DNA vaccine has induced strong and broad hTERT-specific CD8+ T-cell immune responses in rodents and non-human primates in preclinical studies. When delivered with electroporation, Inovio's DNA cancer vaccine was able to break tolerance and elicit strong and broad hTERT-specific immune responses with the potential to eliminate tumor cells in monkeys, whose TERT is 96% similar to human TERT. Overall, Inovio's DNA hTERT vaccine showed immune responses that were more than 18-fold higher than the previous best- results of a peer's hTERT DNA vaccine delivered with electroporation. Because high levels of hTERT expression are found in 85% of human cancers, regardless of type, Inovio's cancer candidate holds the potential to perform as a "universal" cancer therapeutic based on early, but unprecedented, results from preclinical trials.
Ebola and Marburg Filoviruses

There is no approved vaccine or therapy available against these highly virulent pathogens that have killed up to 90% of the people they infected. Because these viruses could potentially be easily transmitted, result in high mortality rates and cause a major public health impact, various agencies are seeking solutions for public health preparedness. A DNA vaccine could offer faster design and manufacturing timelines than traditional vaccine approaches, but particularly important, Inovio's SynCon products offer the potentially preemptive advantage of enabling a design to provide broad protection encompassing multiple families of these so-called filoviruses.

Vaccine: Undisclosed Preventative Antigen: Undisclosed

Phase: Pre-clinical

Pre-clinical Study Results:

Using Inovio's proprietary SynCon design approach, Inovio researchers developed a polyvalent DNA vaccine consisting of three consensus plasmids to broadly target variant virus strains within three distinct families of Ebola and Marburg viruses. In the first part of this study, following two vaccinations using Inovio's proprietary CELLECTRA electroporation device, 100% of vaccinated guinea pigs were protected from death following a virus challenge. The researchers observed significant increases in neutralizing antibody titers and strong and broad levels of vaccine-induced T-cells, including "killer" T-cells, and subsequently conducted a test in mice using only one vaccination - this single dose also fully protected the animals from death following a virus challenge. In addition, unlike the non-vaccinated animals, vaccinated animals were protected from weight loss.
Peripheral Arterial Disease (PAD)

Finding an effective therapy for PAD and CLI is imperative because the current standard of care relies primarily on palliative drugs and amputation. PAD affects 8 - 12 million Americans and is associated with a 20 - 30% risk of cardiovascular death within five years. CLI is a more severe stage of PAD affecting over one million people in the US. Up to 20% of CLI patients will die within 12 months of diagnosis; the five-year mortality rate exceeds 70%. The disease is characterized by ischemic rest pain-severe pain in the legs and feet while a person is not moving-or non-healing sores on the feet or legs as well as gangrene. Major limb amputation occurs in up to 40 - 50% of CLI patients within 12 months of diagnosis.

Vaccine: Undisclosed synthetically optimized hypoxia-inducible factor-1 alpha (HIF-1a) gene Therapeutic

Antigen: n/a Phase: Pre-clinical

In this study, the gene sequence for HIF-1a was synthetically optimized to enhance expression of the growth factor. This DNA therapy was then delivered using Inovio's CELLECTRA constant current electroporation device, which has been shown to enhance the delivery of DNA plasmids by a 1000 fold using a millisecond pulse. A total of 39 mice were divided into 3 groups: (1) one group receiving HIF-1a DNA delivered with electroporation (EP) (n=13); (2) one group receiving HIF-1a DNA without EP (n=14) and (3) one group receiving a control empty plasmid (pVAX) delivered with EP (n=12). The left femoral artery in each mouse was tied up surgically to simulate an arterial blockage. The right legs were not treated and served as internal controls. The mice were then observed and scored for their limb function. Blood flow in their legs was measured by laser Doppler perfusion imaging.

Pre-clinical Study Results:

The results demonstrated that EP delivery of synthetically optimized HIF-1a plasmid DNA significantly improved blood flow in the left hind legs and reduced necrosis (premature cell death) in a mouse model of hind limb ischemia when compared to the results from the two control groups. The treatment also improved survival from severe limb damage and amputation, reduced tissue damage, and increased the number of new capillaries and formation of larger collateral vessels.
Chikungunya virus

CHIKV is an emerging mosquito-borne virus indigenous to tropical Africa and Asia. Acute illness is characterized by fever, arthralgia (pain in a joint), conjunctivitis (eye inflammation), rash, and sometimes arthritis. Relatively little is known about the antigenic targets for immunity and no licensed vaccines or therapeutics are currently available. Considering the potential for pandemic spread, understanding the development of immunity is paramount to the development of effective vaccines against CHIKV.

Vaccine: CHIKV Preventative
Antigens: E3+E2+E1
Phase: Pre-clinical

In this study, the research team isolated CHIKV from an acutely infected human patient and used this newly isolated virus to develop a virus neutralization assay and a challenge stock. The CHIKV challenge stock was used to establish a mouse infection model and study disease development. The candidate CHIKV vaccine developed by the researchers and tested in the mouse and macaque models is a SynCon(TM) synthetic DNA vaccine consisting of a single consensus envelope construct that expresses all three of the CHIKV envelope glycoproteins (E3+E2+E1). The vaccine is delivered by in vivo electroporation.

Pre-clinical Study Results:

The vaccine induced robust antibody and T-cell immune responses and provide 100% protection of mice against a challenge with this tropical infectious disease. Additionally, vaccine studies in rhesus macaques demonstrated generation of strong neutralizing antibody responses which mimicked those observed in CHIKV-infected human patients who subsequently recovered from this disease. These results demonstrate the ability of Inovio's DNA vaccine to provide protection and protective immune responses in two different preclinical models.
Animal Vaccine Studies
Foot and Mouth Disease (FMD)

Vaccines: Various Preventative
Antigens: FMD clades A, O, C, and Asia

Inovio recently announced that it had designed and tested in animals a set of multi-subtype synthetic vaccine candidates for FMD clades A, O, C, and Asia. Following administration of these synthetic vaccines using Inovio's proprietary vaccine delivery technology in swine and sheep, all the vaccines induced strong antibody and T cell immune responses. Inovio's patented SynCon vaccines cannot cause the targeted disease, providing a safe approach to potentially protect against FMD and reduce its serious impact on global food supply and commerce.
Perinatal mortality of piglets

Vaccine: LifeTide SW 5.0 growth hormone releasing hormone (GHRH) therapy

Regulatory Marketing Approval in New Zealand

LifeTide is a once-in-a-lifetime treatment for female pigs (sows) that has demonstrated significant decreases in perinatal mortality of piglets from treated sows compared to untreated sows. The treatment, which increases the number of weaned piglets and results in greater overall meat production, was previously approved in Australia. (VGX Animal Health Inc. - Inovio subsidiary)
Cancer in Dogs

Vaccine: VAH-5000D Therapeutic
Antigen: Tert
Phase: Pre-clinical

In mouse experiments, vaccinations with a highly optimized TERT DNA vaccine delivered by electroporation induced strong TERT-specific T cell immune responses. Furthermore, vaccination with the TERT vaccine delayed the growth of implanted tumors in mice and increased the survival rate of mice with tumors. (VGX Animal Health Inc. - Inovio subsidiary)

Table III. Intellectual Property Rights to Synthetic Vaccines for Specific Diseases - Not Yet Reported On

Clostridium difficile, or C. difficile

Cancer - new cancer therapeutic vaccines targeting Wilms' tumor gene or WT1.

Chemokine and cytokine molecular adjuvant technologies

RSV (respiratory syncytial virus)

MRSA (methicillin-resistant staphylococcus aureus)

[Tommy]

Disruptive Material: Where You Might Invest In What Will Change The World

http://seekingalpha.com/article/1457071-disruptive-material-where-you-might-invest-in-what-will-change-the-world

"Soon, even the developed world will be an emerging market hungry for a bigger, better, faster, lighter and more flexible future". -Biz Bluetree

For fabricators of planes, trains and automobiles, of skyscrapers, schools and hospitals - infrastructure, household-appliances and computers - the materials steel, aluminum, plastics and copper, and eventually silicon owned the 20th century.

These materials built nations, enabled populations, birthed economies and for some created fortunes. They are the materials that propelled civilization and helped sustain life as we know it.

But, that was then. This is now. Now there's a new kid moving into the neighborhood and he's playing for all the marbles.

Graphene is the name, a processed derivative of graphite. It's going to make smart investors rich, and some fearless ones even richer. Graphene is stronger than steel, more highly conductive than copper, and lighter than a feather. And graphene is truly the first two-dimensional material in the world.

Since its discovery in 2004 by scientists Andre Geim and Konstantin Novoselov in a Manchester University laboratory - using Scotch tape and graphite from a pencil - institutional and commercial research on graphene has exploded making the disruptive material subject of over 100,000 academic papers.

Geim and Novoselov were awarded the Nobel Prize for their find, and later, in 2008 wrote in the journal; Science, that they had carved tiny electronic circuits out of graphene, where each transistor was barely larger than a single molecule.

Keynote speaker at the International Solid State Circuit Conference, ISSCC, James Meindl - professor of microelectronics at the Georgia Institute of Technology, while making precise predictions about the future of silicon electronics in 2010 - described what is most likely to come next.

"Beyond silicon microchip technology, he said, revolutionary developments in nanoelectronics, perhaps centering on graphene, may evolve.''

That was 3 and 5 years ago. A lot has been realized since then.

As of September 2012, more than 2000 graphene and graphene related patents have been applied for or awarded. IBM (IBM) has already developed a 100Ghz graphene transistor and Nokia (NOK) is on its way to break-through products continuing the current graphene research it started in 2006.

Perhaps you'll realize graphene exposure with IBM (IBM) or Nokia (NOK).

Graphene takes the form of a two-dimensional honeycomb lattice of carbon atoms - one atom thick. Think about that. And at 200 times the strength of structural steel, graphene is unlike any other material ever measured.

Nanotubes photo (and paragraph below) courtesy graphenomenon.com

"Rolled sheets of graphene form hyper-conductive carbon nanotubes. These nanotubes work around the primary limiting factor in microchip processing speed by taking chip architecture into the third dimension. There is a lower limit on the size of the essentially flat transistors that make up silicon-based microchips - the devices that allow information processing in everything from phones to computers. Graphene, carbon nanotubes can effectively stack transistors on top of one another on microchips, allowing for exponentially more transistors on a chip without increasing the size. More transistors means more operations per second, which means more processing power and faster processing speeds."

And, too, it won't be long before we hear about flexible electronics and begin using them in our everyday lives. Imagine being able to download high definition media to your smart phone in mere nanoseconds, then rolling up your phone and sticking it behind your ear like a pencil.

Graphene will make both the fast and the flexible possible.

Can you imagine rolling up your giant flat screen TV to bring with you on a picnic? Or watching NASA launch a satellite into space the size of a battleship that weighs less than the kitchen sink? This writer's personal interests are those possibilities realized when 3D printing is combined with 2D graphene.

With the unstoppable march of progress, and this field being less than 10 years old, interestingly enough swift advances are just around the corner. Soon, even the developed world will be an emerging market - hungry for a bigger, better, faster, lighter and more flexible future.

The basic route of graphene from mine to product is shown in the diagram below, along with some of the players that may be worthy of your investment dollars, courtesy of graphenetracker.com.


(Click to enlarge)

It's also important to realize, each of graphene's eventual applications can potentially become a life changing break-through in its own right, as uses for the super substance will prove limitless as will investment opportunities. The impact graphene will have on how we humans function day to day will continue to change and advance how humans function day to day.

Now that a case has been made for this material of the future, our article will continue by looking at facilitators, explorers and miners who unearth the raw material graphite by which graphene is produced. And those companies involved in manufacturing graphene applications and products. We'll look at where one might invest in the future and also what might be best to avoid.

And here's the rub.

1) According to the U.S. geological survey of 2012, [pdf] more than half of the world's graphite reserves lie in China, while significant resources are found in India, Brazil, Canada and Romania.

2) Both the European Union and the United States have already declared graphite a supply critical mineral.

Although natural graphite was not produced [pdf] in the United States in 2011, approximately 90 U.S. firms, primarily in the Northeastern and Great Lakes regions, used it for a wide variety of applications. The major uses of natural graphite in 2011 were estimated to be refractory applications and crucibles combined, 33%; foundry operations and steelmaking combined, 26%; brake linings, 7%; batteries and lubricants combined, 5%; and other applications, 29%.

But this is about to change.

The increasing demand for lithium ion batteries alone could make a case for increased graphite production and supply. But there are even more modern uses for graphite not discussed in the 2011 figures above.

1) We know the use of lithium ion batteries is ever increasing in electronics devices, but with electric cars on the rise even more will be needed. (As an aside: there is many times more graphite in ion batteries than lithium.)

2) While realizing more green cars on the road we must look at Fuel Cell Cars that use significant amounts of graphite (80kg) per car. And the Fuel Cell car is here now as Hyundai (HYMLF.PK) has just begun production of the first commercial fuel cell vehicles.

3) Increased use of the Vanadium Redox Battery that stores and disperses energy from renewable sources like wind and solar generated power is on the rise.

4) Then there are the smaller, safer, and less costly to build and operate Pebble Bed Nuclear Reactors where uranium fuel is embedded in graphite balls. It takes 3,000t of graphite to start a Pebble Bed Reactor and 600t to 1,000t per year per 1,000MW. China has one such operating prototype reactor and the state owned Huaeng Group is building two more as of this writing, but plans exist for 30 more to be built and in operation by 2020.

Such is the case for critical supply demand for graphite going forward, but these examples don't even figure in the advent of graphene and the additional graphite needed. And graphene will prove the game changer.

No doubt it is the future, but as of today the graphene industry is an infant. There are no pure plays for investing in graphene or the graphite from which it is made. No commodities market. No ETFs. Just individual speculative resource and equity plays. Though this will change as today is today.

So let's take a closer look at what investors seeking exposure to graphene have to work with at present.

Favorite choices here are the future graphite suppliers, those explorers and miners on line to produce great amounts of quality, high-technology-grade graphite but, first on the list is an equipment innovator that provides the equipment and technology to process graphite into graphene. It is largely done by means of a process called chemical vapor deposition CVD, and hence the name of this company.

CVD Equipment Corporation (CVV) CVD is a 30 year-old U.S. company based in New York. They design, develop, and manufacture custom Chemical Vapor Deposition Systems. To clarify, chemical vapor deposition is the controlled decomposition of gases under specific temperatures and pressures used to deposit a material onto a surface.

CVD has a market cap of $59 million and is currently trading at $10.05 per share, up 0.90% at the time of this writing. The company shows total assets of $43.3 million and a debt of $8.3 million that is associated solely with company owned buildings.

CVD is recognized as a segment leader and having just upgraded their facilities and added staff, are poised for significant growth in the second half of 2013 and beyond.

Aixtron (AIXG) Among the leaders in the field of nanotechnology, and with 4 research and development facilities on three continents Aixtron with its MOCVD (metal organic chemical vapor deposition) processing equipment is worth closer scrutiny. Aixtron could play an important role in the advancement of graphene.

The Explorers and Miners

There is no shortage of players in the graphite explorer/miner space, but only a hand-full of these hopefuls has filed an NI-43-101. And even less have Preliminary Economic Assessments, PEAs. And only one has a completed Bankable Feasibility Study, BFS.

So when looking for an investment opportunity on this junior circuit the field is thin. Among the choices are:

Focus Graphite (FCSMF.PK) Canadian mining company readying their primary asset, the Lac Knife graphite deposit in northeastern Quebec, Canada, for production in 2014.

Focus Graphite owns 40% interest in another Canadian company, Graphoid, Inc., a processor and research-developer of graphenes for applications in commercial and other products.

Graphoid and CVD Equipment Corporation have just come to terms on a JV partnership agreement that should spell good things for all involved parties.

Northern Graphite (NGPHF.PK) Canadian mining company worthy of consideration. The Bissett Creek project in Ontario, Canada with a projected 70 year mine life is their primary asset.

Northern Graphite is also the only company among graphite juniors to obtain a Bankable Feasibility Study.

China Carbon Graphite Group (CHGI.OB) Is an established Chinese mining company. However, the Chinese government has placed an export tax and instituted a licensing system to restrict exports of graphite in trying to encourage value added processing at home. This company and its government will be upstaged in the long run. Avoid.

There are also several one-year-young graphite mining hopefuls trading on the OTCBB that are, in this opinion not worth your time.

Conclusion: From medicine to military, sports to space, consumers to industrials … Graphene will transform the world in profound ways, and at its best could well own the 21st century by doing everything other materials do and doing them better.

So for this investor's money the smartest way to play the graphite/graphene revolution is at the beginning of the supply and processing chain. These are smaller companies whose primary focus is graphite/graphene.

In this opinion, the small resource or small facilitation companies have the bigger profit margin upside. A larger company whose focuses are broader may only see a less significant bump from their graphene involvement.

But you might want to consider the larger facilitators, or speculate on who it might be that comes up big in the consumer or industrial space with a latest break through application or smart device or other - as increasing dividends may be your interest. Will it be Apple (AAPL)? Nokia? Samsung? Sony (SNE)? BASF (BASFY.PK)? SanDisk (SNDK)?

We may only need know who makes the best use of graphene.

[FollowNoOne]

Great board for investment ideas. Following....

[Tommy]

12 Disruptive Technologies That Are Changing The World

http://www.businessinsider.com/mckinsey-technologies-that-will-disrupt-our-world-2013-5#ixzz2gwxPjdO4

It's hard to predict exactly what technologies and trends will transform our lives. Few understood just how powerful the Internet would be, dismantling entire industries and creating millions of jobs.

So what's the next big thing? Where will the jobs be, and how can companies carve out a competitive advantage in the global economy?

McKinsey's Global Institute discusses this in its latest report, Disruptive Technologies: Advances that will transform life, business, and the global economy. It came up with a list of 12 technologies that could have a potential economic impact between $14 trillion and $33 trillion a year in 2025. The authors write that "some of this economic potential will end up as consumer surplus; a substantial portion of this economic potential will translate into new revenue that companies will capture and that will contribute to GDP growth. Other effects could include shifts in profit pools between companies and industries."

The 12 disruptive technologies include: mobile Internet, automation of knowledge and work, Internet of things, cloud technology, advanced robotics, autonomous and near-autonomous vehicles, next-generation genomics, energy storage, 3D printing, advanced materials, advanced oil and gas exploration and recovery, renewable energy.

Here's the breakdown of the 12 technologies and their potential for impact:



And a great chart showing how these technologies will affect the world:

[Tommy]

50 Disruptive Technology Stocks of 2013

http://www2.technologyreview.com/tr50/2013/

[Tommy]

The Five Most Disruptive Technologies at CES 2013

http://www.forbes.com/sites/larrydownes/2013/01/12/the-five-most-disruptive-technologies-at-ces-2013/print/

Belkin's WeMo uses Crowdsourced "Recipes" for Smart Homes

The future is already here, William Gibson wrote. It’s just not evenly distributed.

At this year’s Consumer Electronics Show, I was looking for the future in the form of disruptive technologies—the ones not yet ready to change the world, but maybe in a few years, or perhaps, as it turns out, in six months. I was looking, in other words, for technologies that exemplify what I coined The Law of Disruption: social, political, and economic systems change incrementally, but technology changes exponentially.

As the gap between what technology can do and what humans can absorb gets wider, the new stuff seems increasingly weird. I was looking for the weirdest.

I found plenty of disruptors at CES, but they weren’t evenly distributed over the nearly two million square feet of exhibit space that spills out from the Las Vegas Convention Center and several nearby hotels. To find them, I had to look, literally, around the edges. I skipped over the giant, flashy exhibits front and center in the giant exhibition halls, with 3D everything, pulsing music and impossibly attractive women, and headed to the small booths at the farthest edges, the ones manned by just two clearly over-caffeinated guys: the innovator and the VP of Everything Else.

Better yet, seekers of disruption could skip the booths altogether and head for the hospitality suite of a nearby (or not) hotel, one which doubles as the crash pad of the entire development team, who code, do demos, and sleep in uneven shifts. Or to one of a dozen or more hackathons that sprung up around town, where developers who may not even have a place to crash stay up all night developing an app on a fixed timetable whose only strategic imperative is that it’s cooler than someone else’s.

Back to those guys in a moment. For now, I can sum up the bulk of the show in one word: more. More as in more pixels (Ultra HD TVs), more connections (connected homes, connected cars, connected people), more apps (all your apps, everywhere, and all your devices), more inches (displays), more sensors (self-organizing robots), more me (customizable everything).

Or maybe instead of more I mean Moore, as in Moore’s Law, the driving principle that explains and unifies absolutely everything at CES. Every twelve to eighteen months, unlike any other commodity in history, computing power get faster, cheaper, and smaller, driving disruptive change increasingly faster than our incremental brains can handle it.

The more this year was largely focused on inputs and outputs. Inputs as in new ways of interacting with technology through voice, touch, sensors of all kinds, and even eye movements. Outputs as in new ways of feeding back information after it has been sent up to the cloud, mixed, processed and analyzed, and sent back down, whether to tablets, smartphones, game devices or other smart things – cars, refrigerators, headsets, eyeglasses, light bulbs—even a fork that vibrates and blinks if you eat too fast.

Like the fork, everything is “smart”—meaning it’s connected wirelessly to everything else, and can take in and send back information to and from the cloud any way the apps wants. Some find that level of increasingly predictive, adaptive, and responsive human-device interaction reassuring. Others find it creepy. Fortunately for the CES crowd, the creepiness wears off fast. Just in time for the next wave of disruptions, anyway.

The faster part of Moore’s Law explains the emphasis on more. But the cheaper and smaller are what really drive the disruptors. In televisions, for example, the continuing drop in price and size for OLED chips (LEDs based on organic compounds that emit light when triggered by electrical impulses) means it’s now cost-effective to stuff enough of them into a display to make a picture that is not only Ultra HD but which is also thin enough to be bent. Samsung showed off the first curved TV screens, and at a keynote, brought out prototypes of fully flexible displays.

Cheaper and smaller also upend traditional rules of start-up development. Two different 3D printers that melt plastic wire to produce prototypes and even usable products captured the imagination of this year’s attendees. But the two companies, 3D Systems and MakerBot, came at the consumer market from radically different starting points.

3D Systems developed its mass market product the old-fashioned way, spending years building expensive, industrial equipment that produces prototypes for high-end product developers. As they waited for the price and quality of 3D printing to reach levels affordable for consumers, serving niche vertical markets kept the company funded and allowed it to develop deep expertise in 3D printing technology.

MakerBot, on the other hand, never bothered with a strategy, or even with a business, before going directly to consumers. The company was founded, an enthusiastic rep told me in their far-flung booth, by a couple of guys from the hacker activist community, who started by cobbling together off-the-shelf component parts and offering them to the enthusiastic do-it-yourself tinkerers at conventions called Maker Faires.

3D Systems has expertise in the core technologies, but MakerBot is much closer to the mass market users. It’s not clear which if either will win in the emerging market of self-assembling things, but in the end, expertise in the core technology always becomes a liability. It’s natural to think like your customers, and that can blind you to the possibilities of the disruptively cheaper if only briefly inferior new technology.

In both cases, getting consumers just meant waiting for Moore’s Law. Except in the case of MakerBot, they didn’t wait so much as come up with their idea at the moment it became just barely feasible.

There’s more—much more—of this kind of counter-intuitive thinking going on at the edges of innovation. For now, here are the five most disruptive ideas I saw–this week, anyway:

1. Fighting the power – Computing of course has gone completely wireless, but several vendors offering variations on wireless power suggest that energy may just be another form of bits. Powermat has been around since 2006. Fulton Innovation, another wireless power innovator, now offers a product that can conductively charge a smartphone even when the charger isn’t in physical contact with–let alone connected to–the device. Nearby is good enough

But the more disruptive innovation was PowerTrekk, which provides you with your own personal hydrogen fuel cell. Scoop up some water, and a cartridge filled with basic chemicals extracts the hydrogen to charge a small battery, leaving sand as the residual product. The product, which will go on sale this spring at REI for about $200, is today just at the NPR Pledge Drive premium stage, but could represent a breakthrough in energy generation.
Hydrogen fuel cell development has been going on for years, focused on high-end markets for charging vehicles. Development costs are high, progress has been slow, and environmental concerns are hard to define or alleviate. PowerTrekk offers the same basic technology, but on such a small scale that it can use simpler chemistry and inert materials.

2. The Intelligent Home – There are now competing standards to wirelessly connect devices in the home, including appliances, lights, thermostats, and even pet doors. That’s a sure sign of rapid maturation in an industry that didn’t even exist a few years ago. As a winning standard emerges, expect innovation and consumer adoption to accelerate.

The most impressive development here is Belkin’s WeMo, which adds plug-in intelligence to devices like light bulbs and appliances that are otherwise immune to Moore’s Law. A simple visual programming language lets you define conditions and their impact: for example, alert me when a motion sensor detects my dog on the couch, and then turn on a speaker so I can correct his behavior wherever I am. Everything is controlled from an app on whatever device you want.

But what’s even more disruptive about WeMo is the way the product is being developed. Belkin is crowdsourcing the invention of new “recipes” for its “If This Then That” rules, and encourages users to share the results. Based on popular choices, the company updates the basic toolset, adding, for example, a standard trigger based on lookups of when sunrise or sunset occurs on any given day.

3. The Interface of You – Several disruptive products focused on new uses for your eyes, either as an input device or as a replacement for more limited peripherals like a computer mouse. Vuzix, which has long developed high-end head-mounted displays for vertical markets including the military, demonstrated a low cost, lightweight, hands free smartphone display that clips onto the ear of your dominant eye.

More remarkable was Tobii, which has been working for over a decade in the development of eye tracking technology. At CES, they demonstrated a USB device that allows the movement of your eyes to substitute for pushing a mouse around a pad. After a quick one-time calibration, the Tobii Gaze lets you select items and scroll just by looking at them. (I played a hands-free version of Asteroids, for example, where just looking at a moving rock blasted it to smithereens.) As you get used to controlling interactions with Gaze, the mouse seems increasingly artificial—a bad metaphor for something that didn’t need to be a metaphor after all.

Perhaps the most emblematic story of the new interfaces, however, was Oculus Rift. The company is making a next generation virtual reality headset for video games, which can already be used with existing software but whose real potential lies in games that are designed to take full advantage of its immersive potential. (The demo, I confess, made me dizzy after a few minutes. But I am not the target demographic.)

While Tobii and Vuzix soldiered on through increasingly smaller, cheaper, and faster technology until they finally reached a combination that moved them from industry verticals to the consumer market, Oculus Rift followed a very different approach. Its founder, Palmer Luckey, was until last year a community college student who obsessively bought outdated, industry-specific virtual reality gear off eBay, hoping to find something suitable for gaming.

But what had been expensive features of the specialized gears translated into constraints for gaming. So eventually, he hacked together his own solution using off-the-shelf component parts, including two cell phone screens and a pair of ski goggles.

With enthusiastic encouragement from game industry veterans, the start-up launched a Kickstarter campaign on August 1. A month later it had raised nearly $2.5 million from 10,000 backers. It’s now producing a zero generation product for game developers at a price of $300. (Many of the obsolete products Luckey bought on eBay originally sold for thousands.)

4. You’re the Doctor – Basic biometric sensing and monitoring devices keep getting smaller, cheaper, and more robust, with bracelets and clip-ons that measure your blood pressure, heart rate, breathing, walking and sleep patterns, syncing everything to the cloud and then bringing it down via apps to whatever devices you want. The monitors are also beginning to test more of the external, as well as internal environment, measuring air quality by particulate count, for example.

To some, relentless checking of vital statistics might seem obsessive or creepy. No matter. The health and fitness tech industry is avoiding these philosophical and psychological issues by focusing on population segments with very specific needs for monitoring—athletes, children, and the elderly.

Philips Lifeline has added cellular capability to its fobs, for example, so elderly users can call for help even when they’re not in radio transmission range of their home system. The iBaby monitor, likewise, alerts an iPhone app when motion or sound is detected, and its camera can be remotely controlled so you can get a closer look at your child wherever you are. The Withings Baby Monitor even transmits your voice back to its device, letting you can soothe the baby remotely if necessary.

For athletes, I especially liked the PerformTek Sensor, which builds the sensing technology into your music earphones, with the double benefit of more accurate data (the skin around your ears is especially thin) and the elimination of an additional device to attach to yourself. From your ears, the sensor gets heart rate, aerobic fitness, speed, pace, cadence, distance and calories burned, and sends it off to a smartphone app.

It’s early days, but the trend here is nothing less than the demystification of arcane medical knowledge. Up until now, the only way to measure or interpret information about your health was to visit shamanistic professionals (i.e., doctors, nurses, hospitals). Now, for better or worse, you can start to build a database of contextual, holistic information about yourself without any invasive procedures, uncomfortable devices or mystical human intermediaries.

The future is one in which the data is used to diagnose and treat. Someday, for example, monitors and sensors might tell me when I need to stop writing and take a fifteen minute walk to increase my productivity. Analysis of everyone’s data may help develop better interventions and treatments for common problems in health and climate-controlled environments.

5. Technology that Knows You Better than You Know Yourself - In Eureka Park, a special CES area for start-ups, I saw two different technologies that each made use of sensory data to predict human responses and behavioral preferences in provocative ways.

The first came from Audible Magic, which has patented technology for content “fingerprinting” that lets media companies and websites like YouTube automate the process of locating and removing unlicensed user uploads of copyrighted materials.

The company is now leveraging that expertise to provide supplemental content on tablets and computers, the so-called “second screen” in entertainment. A smartphone app listens to what you’re watching on TV, identifies it, and offers related content. In the demo, the app synched an episode of Million Dollar Money Drop to a home play-along game that followed the episode precisely, letting you go beyond simply yelling at the television.

The second is Affectiva, a spin-out from the MIT Media Lab, which uses facial “coding” to measure emotional response. In the demo, the laptop’s camera is used to monitor facial expressions during two competing television commercials (AT&T and Verizon). The data is analyzed in the cloud, and the app then reports in detail how the user responded emotionally to each ad, including which one was preferred. (I responded without much enthusiasm to both ads at exactly the same level, which I was told hadn’t happened once all week.)

Affectiva has been using its technology in market research for advertisers and ad agencies, but the app-based version offers the potential to expand the applications dramatically, including user interface design and testing. Or imagine if every display had a built in camera looking back, and with the user’s permission coded responses to everything. Focus groups, who may not actually say what they feel, would be unnecessary. Instead of small samples, advertisers could gauge actual responses from everyone, and in real-time.

Why would consumers participate? Facial coding offers the potential to customize ads to eliminate the ones you don’t like, which, for obvious reasons, advertisers don’t want to show you in the first place. Based on your response, discounts, promotions or coupons could be offered. It’s win-win.

It sounds creepy, but facial coding needn’t identify the consumer to be useful. In fact, widespread use would reduce the need for advertisers to connect individuals with identifying information, which after all are just proxies used to predict what ads will be effective with whom. Here we actually know. Still, expect a privacy panic to break out if the technology moves into mainstream use.

***

Many of the most interesting products I saw, of course, will never make it to commercial success, and few look today like anything that could undo the rules of an established industry. But all of them signal big changes and unintended consequences.

And as Moore’s Law keeps doubling ever-bigger numbers, the timeframe for disruption gets shorter. So for most of these, we’ll at least know sooner rather than later who will come up with the winning combination of product and business model.

Special thanks to my fellow traveler Ivy Lee for scouting out some of the best examples. You can follow me on Twitter at @LarryDownes, or just read my facial expressions to see what I’m thinking.

[Tommy]

4 Innovative Companies With Disruptive Technologies

http://seekingalpha.com/article/1317651-4-innovative-companies-with-disruptive-technologies

Innovation drives the advancement of society. Where would we be were it not for the ideas, discoveries, and inventions that have helped facilitate the very function of modern day life? In the same sense, the markets have always existed for the purpose of funding and developing companies that harness the spirit of innovation. For this reason patient investors can often partake in the success of bringing about new technologies into reality.

As an active investor in development companies, I always strive to find some of the most innovative companies in their respective fields. Disruptive technologies serve as potential investments if they are capable of providing a unique comparable advantage, which can help a company corner a niche market. The following four stocks are some of these names:

Pacific Biosciences of California, Inc. (PACB) - PacBio RS

With its high-flying competitors being Life Technologies Corp. (LIFE) and Illumina Inc. (ILMN), one comparable look at the stocks of these three companies and an investor might be quick to dismiss Pacific Biosciences in this market space. Yet as I described in my article found here, it would be errant not to look down the road when it comes to what the Pacific Biosciences is able to deliver. The PacBio RS is able to provide molecule sequencing and analytics in real time, a superior advantage over what is currently possible. The technology is also capable of lowering the time per run and currently generates the longest read lengths out on the market.

Though complex to understand for most investors, in short this essentially means that the company's primary product has a significant advantage when it comes to analyzing complex sequencing challenges. When the company originally came out of the gate with a third-generation sequencing technology, the PacBio RS was initially struck with numerous bugs and kinks that initially hurt the company's sales. Yet over the course of 2012, the PacBio RS has worked out these problems and is rapidly proving to be a superior system that has yet to be realized by the market.

Intermolecular, Inc. (IMI) - High Productivity Combinatorial Platform

The average investor may see a boring technology when it comes to the HPC platform, but for businesses it's a step into a time machine. Intermolecular specializes in increasing research and development productivity, particularly for high-tech industries. Utilizing the patented HPC platform, Intermolecular allows for experiments to be performed at speeds 10 to 100 times faster than traditional methods. This is because the platform combines several processes and can perform up to 192 experiments onto a single substrate.

As described in my article found here, why this matters is because competition is becoming ever more intense in the modern era. Development time can make or break a company. Intermolecular has already partnered with some of the largest companies including IBM and First Solar (FSLR). What makes Intermolecular a long-term investment is that the company ultimately earns royalties on the intellectual property it develops for these established leaders. With partners paying for the research, and the company gaining off of the results, the earnings are likely to snowball as IMI optimizes this business concept of a "win-win" scenario.
Solazyme (SZYM) - Sugars-To-Tailored-Oils Platform

The world is heavily reliant on all kinds of oils, and yet there are very few ways in which we derive them. We drill for existing reservoirs, squeeze it out of crops, and slaughter animals to gain it, and yet in each of these instances humanity has largely been dependent on what is given.
Solazyme's heterotrophic fermentation process utilizes engineered microorganisms that can be customized to produce a wide spectrum of oils with specific uses. The company can replicate existing oil profiles, but has increasingly been finding ever higher value in developing tailored oils that simply do not exist in nature. Because it's able to control saturation, carbon chain length, and functional groups, the company can create superior oils that industry knows it can use but has never been able to source.

Though often mistaken as a mere biofuel play, Solazyme's comparative advantage actually lies entirely in its ability rapidly evolve the oils of today. It does so in ways that existing genetically engineered oilseed producers such as Monsanto (MON), DuPont (DD), or Syngenta (SYT) are simply unable to compare in regards to degree, scope or development time. Currently constructing its first large scale facilities for commercial production with partners, Solazyme has yet to gain the market's support despite significant top-line revenue growth lying in wait as the next year comes around.

Google (GOOG) - Google Glass

Perhaps it may be premature to acknowledge Google's latest pet project as an innovation that can bring about disruptive change. After all, the mainstream consumer has quite often preferred Apple's (AAPL) fashionable products over the tech-related functionality Google has often come to represent. Yet Google Glass could possibly mark an innovative entry into a new market space altogether.

As GigaOM's Katie Fehrenbacher notes in her article found here, Google Glass may break the world into the Internet of Things - the ability to manipulate objects in the interconnected real world. For a company so dedicated to expanding connectivity, such an evolution from mere data to functionality in the real world could prove to make a meaningful impact on society. It may be seem foolish to believe it can all be accomplished through Google Glass (and it likely is), but don't count Google out just yet when it comes to opening up the door for the next wave of innovation.

Final Thoughts

It goes without saying that companies often trade on much more than mere concepts. From a practical standpoint, each of these companies carry varying levels of risk and reward that may or may not be realized by the market at a given time. The following are a few quick thoughts in regards to the present investment potential of each:

PACB - The company remains very far away from profitability with no upcoming catalysts to change that in the foreseeable future. However, the company is beginning to ramp up sales. With its current progress and the popularity of the sector Pacific Biosciences could even stand to be a possible buyout candidate at these levels.

IMI - With an average volume of about 60,000 shares, Intermolecular is a company that has yet to garner much attention. Yet the company now carries a $432 million market cap and a price-to-book ratio of 5.11. The company is not undervalued, but with a clear ramp towards increasing earnings potential it appears to be a stable investment to consider. The ability to profit on the efforts of partners remains an enticing business model.

SZYM - With such a large increase to the top line expected to occur within the next two years, it remains a mystery why the market has turned the blind eye to Solazyme. The company's large manufacturing facilities are coming online in late 2013 and early 2014. These are likely to generate revenues in the several $100s millions range compared to the $10s millions range now being achieved from research and limited product revenues alone. The company eventually expects double-digit margins as well and CFO Tyler Painter was even quoted as expecting a relative total operating margin of 25% for the company in the interview found here.

GOOG - With its $268 billion market capitalization, it's near impossible to believe that a single product can move the company's stock in a meaningful fashion. The company remains in very good financial shape and while it may be able to benefit from a possible wave of innovation found in disruptive technology, Google Glass would simply not be the sole reason one buys this company alone.