Bad News in the Cards for CytRx
As many of you are aware, I endorsed CytRx as the result of a Thaumaturgical analysis on September 21, 2014. I took out a position in the company at $2.66 a share and have been disappointed by the results. My reading revealed that investor sentiment toward the company would change to the positive in Q3 – which did occur thanks in part to the granting of 3 orphan indications by the FDA, and that everything would go the company’s way in Q4 of 2014. So, what happened?
Well, my process is exceptionally accurate at detecting large movements of thought – especially of a negative nature, such as clinical trial failure, but can’t be expected to detect the death of a single patient, before the fact, in a non-study group that would be used to place a partial clinical hold on all CytRx trials. And that is exactly what happened.
Therefore, I did another reading just three days ago. I’d love to do a video on this, but for expediencies sake I’m simply going to tell you that I’m selling my shares – hopefully today for a small profit. I’m doing this because my reading revealed bad new on the way of a legal or regulatory nature. This will result in shareholder loss.
At this time, I can’t tell you if that means an action by the FDA relative to the partial clinical hold. Alternatively, it could mean that CytRx has received and is sitting on negative information that will likely come out before the year has ended. Is that information related to trials or to legal proceeding currently underway? I’m not sure. But they won’t be able to sit on this information as they might have planned.
Note, as in all things on this site, these comments are of a speculative nature so please read my disclaimer.
In Q1 of 2015, I see money coming into the company and an air of achievement surrounding its operations. I also see a controversial, but short-lived victory for shareholders. The possibilities here are quite varied. The victory could be on behalf of shareholders who have filed suit against the company for damages relative to the stock touting scandal. There may be a settlement reached that’s advantageous to both the company and wounded parties. But this won’t be a victory for those who bought in like I did in the 2’s or 3’s.
Alternatively, there could be a mixed bag of news that the company utilizes to its own advantage – especially as fund raising is concerned to pay for any settlement reached.
No matter what the future holds new investors such as myself should keep three things in mind.
1. Partial clinical holds are no joke and could result in discontinuation of presently underway trials and huge shareholder losses.
2. According to the company, there will be damages paid on those lawsuits. The only question will be, how much?
3. There has been no insider buying of shares since the stock touting scandal broke.
My strategy with CytRx should I retain my shares remains the same – sell the news!!! Take any profit on positive news events off the table and reinvest when the stock falls upon either bad news relative to the court proceedings or upon short pieces by short position holders.
Again, I’m looking to sell my shares now ASAP.
Not as Positive on Nektar
I’m also concerned about results from the soon to report BEACON study involving Nektar’s cancer compound NKTR-102. As many of you know from Seeking Alpha, I’ve been bullish (and profitably so) on Nektar. Recently, however, I’m deeply cautious about the BEACON study results. Please be aware of this.
Ocata Will Be Worried Sick in Q1 2015
I recently endorsed Ocata Therapeutics on Seeking Alpha. That was before the target date for up-list to the NASDAQ with an accompanying equity raise had come and passed. I now see the company in suspension, unable to conduct a successful offering of common stock and unable to up-list as a result. I’ve now removed my position and wait for these two events to happen before re-initializing.
This is a company that with proper support could be a big gainer, but that might not happen if the larger forces at play are uncooperative.
Amarin Will Have a Big Q1 2015
I’m buying more of these deeply depressed shares. And expect to be rewarded in Q1.
That’s it for now.