Agenus Call Luck, Alexion analysis

I had a bit of luck with my Agenus positive call earlier this week, but first a link to my article Seeking Alpha published yesterday:

Alexion's Rare Disease Model Analyzed

My article on Agenus might seem prescient:

Agenus: Herpes Competition And Cancer Checkpoint Prospects

You might even think my articles can move a small-cap stock. As I write Agenus is at $4.04 per share. I was near $3.12 when my article came out on the 11th around noon.

In fact Agenus and GlaxoSmithKline (GSK's) announced good data on GSK's shingles vaccine, on the 18th. Agenus contributed an adjuvant to the vaccine (which makes it work better), and is entitled to a milestone payment (amount not stated) and royalties when the vaccine is commercialized. Keep in mind that there is not yet regulatory approval and royalties for an adjuvant are not in the same magnitude as if GSK had licensed the entire vaccine from Agenus.

Still, this is Agenus's second time to have approvable results in a partnership with its QS-21 Stimulon. The other is also with GSK, for malaria.

Some of the vaccines using IP licensed from Agenus have failed. As can be expected, the price of Agenus stock goes down when a failure is announced, and up when good trial results come in. Given that today's vaccines are for diseases that are typically hard to vaccinate for (else they would have had working vaccines by the 1960's), any company working on a variety of vaccines is going to have some failures. Any success is a breakthrough.

The fact that Agenus now has 2 working vaccines provides proof of concept. Read my article to see just how broad Agenus's platform is.

I own shares of Agenus but not of GSK, though I think GSK is a good buy right now and reserve the right to buy it at any time.

On the downside Cyclacel (CYCC) announced its AML (acute myeloid leukemia) trial is unlikely to achieve statistically significant results. Nevertheless the trial will continue as there is little hope for these patients, Cyclacel's oral therapy is easy to administer and tolerate, and there is a small chance that while Sapacitabine may be no better than Dacogen in efficacy, patients may prefer it because it can be taken at home. I lost money on CYCC, but am holding onto my shares because Cyclacel also has a shot at the easier-to-treat disease myelodysplastic syndrome.

Bought Opexa, Merrimack

This is just to note that I added to my Opexa Therapeutics (OPXA) position yesterday because the stock price plunged after it withdrew an attempt to raise cash by selling shares. Clearly Opexa is a long way from FDA approval, but my guess is that cash will be found, so if clinical results remain positive some day, years from now, I'll wish I had bought more at this price. On the other hand it still represents far less than 1% of my portfolio, which is appropriate for such a risky stock.

I was researching Seattle Genetics (SGEN) and Merrimack Pharmaceuticals (MACK) to add to my coverage at http://www.openicon.com and to write about for Seeking Alpha. Look for articles, maybe, next week. I went ahead and bought a small position in MACK. Wish I had bought it a year ago! Since SGEN seems to have prices in a lot of pipeline success, I'll probably just add it to my watch list for now.

I'm a bit cash constrained. If Gilead (GILD) continues to rise I will at some point sell some to generate cash to diversify into smaller biotechnology stocks. Or maybe I'll buy myself a box of cigars and pretend that I am finally a Capitalist instead of a Worker.

I like Cyclacel (CYCC), and think it is vastly undervalued, but few people agree with me. Yet.

My Great 2013 stock investments

My portfolio did so well -- so much better than the stock indexes -- in 2013 that I have to keep telling myself, my wife, and anyone else who cares to know that this is not repeatable. This qws a once in a lifetime year.

I am a long term investor, and for the most part just held the stocks I began the year with. I did trade, trimming in and out, a bit more than usual. One stock, Onyx Pharmaceuticals, was acquired by Amgen. I added positions in just two stocks, Agenus (AGEN) and (PLX). I dropped my position in FNHC, mainly because it had a big runnup and I cover it, so I was worried about maintaining objectivity.

On the whole I was up 79%. Just plain stocks. No options, leveraging, or shorting.

So here's the list of companies I owned both at the beginning of 2013 and at the end:

Symbol	end price 2012	end price 2013	% change
ADEP	$2.38	$16.89	610%
AMAT	11.20	17.68	58%
AMD	2.40	3.87	61%
BIIB	146.37	279.57	91%
CELG	78.47	168.97	115%
CMN	19.82	33.91	72%
CYCC	6.06	4.02	-34%
DNDN	5.29	2.99	-43%
GILD	36.72	75.10	104%
HILL	0.85	3.37	296%
HNSN	2.08	1.73	-17%
INO	0.46	2.90	530%
MCHP	31.80	44.75	41%
MRVL	7.08	14.38	103%
SGI	10.23	13.41	31%
STX	29.80	56.16	88%
TTMI	9.19	8.58	-7%

I've written extensively about most of these stocks, so here I'll just make brief year-closing comments on the 3 best percentage gainers, and the 3 worst. Worst first.

Proving I am not prescient we have Dendreon (DNDN). I once made a lot of money on Dendreon, but 2013 was a rough year. Its single approved therapy, Provenge, is not doing well against competition. In addition, Provenge is very expensive to make. Even approval for sale in Europe did little for the stock.

Cyclacel (CYCC), which is in a pivotal Phase III trial for leukemia (AML) in elderly people too old to do chemotherapy, lost 34%. That is surprising because the data during 2013 was pretty good: the independent data monitoring agency allowed the trial to continue after the half-way point, indicating the data so far shows the drug to be safe and effective. It is still a gamble, but it is a company to watch in 2015.

Hansen Medical (HNSN), a maker of surgical robotic catheters, had a mediocre year as sales did not ramp as well as expected. Maybe the Q4 report will be better. The technology is promising, but I'd be surprised if they get in the black in 2014.

As to the winners, from 3rd to 1st place:

Dot Hill (HILL), up 296% this year, is a little-train-that-could story. The data storage equipment maker landed a number of new clients in 2013, got back into the black after years in the red, and looks to be headed to a good 2014.

Inovio (INO) was up 530% when people finally realized that its DNA vaccine technology could be a major breakthrough. However, they don't even have successful data from a Phase II trial yet. What works in the test tube and in animals and Phase I trials may not ever make it to commercialization. I like the company, but I'd like it better with more concrete data.

Who, at the beginning of the year, would have thought Adept Technology (ADEP) would have a 610% year? The stock started cheap because they had a bad 2011-2012, with customers cutting back on orders of their industrial robots. So they cut expenses and in 2013 introduced new lines of robots and landed new customers. The price has also been driven up by momentum traders. Check it out, but you might want to see Q4 results before you take a plunge.

I am a professional researcher, analyst, and writer. I write about my personal experience with investing for fun. You can follow me at this blog site, at www.openicon.com, or at William Meyers at Seeking Alpha.