If you have an interest in Callisto Pharmacueticals, you need to take the time to read yesterday’s letter to shareholders from CEO Gary Jacobs. It sums up the state of the company and its pending therapies perfectly- far better than I could do it myself.
The short term gyrations of the market aside, I believe everyone with a long term perspective would agree the company, over time, has considerable upside potential from current levels.
Biotech stocks like KAL tend to trade up and down based on two major elements: 1. Regulatory and clinical progress, and 2. Wall Street’s appetite for biotech.
If biotech is hot, all ships tend to rise with the tide. The perfect storm is when you have great clinical data, good regulatory progress as it relates to the FDA, and a healthy Wall Street appetite for biotech.
In the case of KAL, it would appear this year will be committed to PhaseI/IIA trials on their two leading drugs. That would suggest market moving events could be clinical data. Down the road, if the data suggests the drugs work, the company could be designing what they call “Pivotal Trials”. This is where the company works directly with the FDA to design a trial in which the drug would get approval if the results were good. That is the kind of regulatory progress that the market can love.
I have had a few questions on their “going concern” note in their audited financials. I am not concerned. They have enough money for the immediate future. The company has demonstrated its ability to raise cash as needed. If they raise too much at their current stage of development, it could be too dilutive to shareholders. Better to raise it in smaller amounts as needed.
Those who follow the OTC Journal know I am a big believer in buying 61.8% retracements. Want to see a perfect one:
Look at the bounce off the $1.30 mark. This is a perfect 61.8% retracement as measured from the November low. To me, this says the stock’s uptrend of the last six months remains intact.
Any further sell of below this level would be a potential sign of a trend reversal. For now, it looks very positive. Biotechs in general have been correcting of late, and you can find a lot of 61.8s in the biotech stocks.
Click Here to read today’s shareholder letter. If you are a shareholder, it provides very precise information of what you own.
Comments and questions are welcome.
Boy! when is this thing going to do something. they should be in the sleep aid buisness.
Editor: The biotech tide rises and falls. Everything is getting its brains beat out right now. When the market turns back to biotech, this one will pick up again.
any news on this one? it jumps back and forth between 1.36 and 1.42
Editor: Really nothing new. They are developing cancer drugs, and early clinical data is outstanding. I believe the stock is holding up very well in this market. I have the SSL at $1.30. There is very little volume, which indicates to me all the remaining shareholders are long term believers and holders. This stock will probably do very little until the market turns its attention back to biotech, which I believe will be in the Oct to Jan time frame. We are setting up for a big move in Q4.
Is this stock a buy since it has dropped to $1? I already have some shares but is now a time to accumulate?
Editor: Yes- I absolutely believe it is. You’re simply betting the market will improve in the Fall and biotech will trade better. Furthermore, the company will be further along in its clinical trials.Â
Are still confident with Kal (accumulate now)?
Any update with VTSI and TLPE?
What about opening a position of FMLY at these levels now?
Thank you for your reply.
Bye, Carlo.
Editor: KAL seems to me to be a pretty good buy. I still like that one. We just need biotech to come back. FMLY I won’t go back to until they have paid off all their convertible debt, do the massive reverse split they are going to have to do, and generate some real residual income. TLPE I am so/so on- the company’s numbers are good, but convertible debt with that one is a supply problem as well. I don’t think it’s bad, I just think there could be better places for your money.Â
Is it dead?
Editor: Highly unlikely- they have good science. They will probably need to raise more money now.Â
Do you have any comments on the Item 3.01. Notice of Delisting or Failure to Satisfy a
Continued Listing Rule or Standard; Transfer of Listing.
Editor: On something like this I take my cue from the market. The stock sold off $.10, which in my view is not a huge deal. I expect they will figure out a way to keep their listing status.Â
Any News? Is it, in your opinion, a good entry price?
Editor: They announced they have commenced the Phase II trial for Antiprimod, and the stock is perking up a bit. I also noticed ACTC, another biotech microcap I folllow is perking up as well. This could be an indication that the biotech microcap world is going to start behaving a bit better. It has been out of favor the last three years with the energy boom taking center stage. These are both great long term holds. If this sector starts behaving well, all of these ships will rise with the tide.Â