I haven't talked about my favorite microcap biotech company in a while, because there hasn't been a lot to talk about...There have been some interesting developments in the past month or so, that haven't increased the share price of the stock, even though I think one of them should have...
The first piece of interesting news has to do with a patent infringement case between Celgene (Nasdaq - CELG) and Cyclacel:
BERKELEY HEIGHTS, N.J., June 18, 2010 (GLOBE NEWSWIRE) -- Cyclacel Pharmaceuticals, Inc. (Nasdaq:CYCC - News) (Nasdaq:CYCCP - News), a biopharmaceutical company developing oral therapies that target the various phases of cell cycle control for the treatment of cancer and other serious disorders, today announced that it filed its Answer and Counterclaims to the declaratory judgment complaint filed by Celgene Corporation. Cyclacel has filed counterclaims charging Celgene with infringement of each of four Cyclacel-owned patents and seeks damages for Celgene's infringement as well as injunctive relief. The four patents directly involve the use and administration of Celgene's ISTODAX(R) (romidepsin for injection) product.
The declaratory judgment complaint seeks to have the four Cyclacel patents, which claim the use of romidepsin for injection in T-cell lymphomas, declared invalid and not infringed by Celgene's products.
The four Cyclacel patents which are the subject of this action do not involve Cyclacel's clinical development candidates or its commercial products.
(The bottom line here is Celgene is infringing on Cyclacel's patents!...not the other way around...If CELG loses this patent infringement case, they will owe CYCC a nice chunk of change...IMO)
http://finance.yahoo.com/news/Cyclacel-Answers-Celgenes-pz-2925157020.html?x=0&.v=1
On June 28, 2010 it was PR'd that:
CYCC had been added to the Russell Microcap Index:
(This means that a lot of Hedge Funds must buy shares of CYCC if they don't already own them...)
http://finance.yahoo.com/news/Cyclacel-Pharmaceuticals-pz-3695109373.html?x=0&.v=1
The most interesting development was the announcement on July 1st that:
Cyclacel Pharmaceuticals Announces FDA Orphan Drug Designation for their lead drug Sapacitabine in Both AML and MDS:
"Orphan drug designation for both AML and MDS significantly strengthens the value proposition represented by sapacitabine and enhances our opportunity to advance this promising product candidate to late stage clinical development and commercialization," said Spiro Rombotis, President and Chief Executive Officer of Cyclacel.
Orphan drug designation entitles Cyclacel Pharmaceuticals to seven years of marketing exclusivity for sapacitabine upon regulatory approval, as well as the opportunity to apply for grant funding from the U.S. government to defray costs of clinical trial expenses, tax credits for clinical research expenses and a potential waiver of the FDA's application user fee. Orphan status is granted by the FDA to promote the development of new drug therapies for the treatment of diseases that affect fewer than 200,000 individuals in the United States.
(There was a huge Volume spike that day, but not much upward movement of the share price that day or in the days that followed...Personally, I think this is HUGE news and the share price should've move north because of it, but the overall market was in dump mode during this period and the biotech sector as a whole was pretty badly beaten up...)
http://finance.yahoo.com/news/Cyclacel-Pharmaceuticals-pz-2152455345.html?x=0&.v=1
Yesterday, the company announced the date they'll release Q2 Earnings and host a Conference Call:
Cyclacel Pharmaceuticals to Announce Release of Second Quarter 2010 Financial Results:
CYCC will announce second quarter 2010 financial results on Thursday, August 5, 2010. The Company will host a conference call and live webcast at 4:30 pm Eastern time on the same day.
Conference call information:
U.S./Canada call: (877) 493-9121/ international call: (973) 582-2750
U.S./Canada archive: (800) 642-1687 / international archive: (706) 645-9291
Code for live and archived conference call is 91437070
For the live and archived webcast, please visit the Corporate Presentations page on the Cyclacel website at www.cyclacel.com The webcast will be archived for 90 days and the audio replay for 7 days.
(EarningsWhispers.com says their projected earnings for last quarter are ($0.17), which would beat the previous quarter's actual earnings of ($0.18) by a penny...Also notice in the Analysts Recommendation section CYCC is listed as a "Strong Buy":)
http://www.earningswhispers.com/stocks.asp?symbol=CYCC
And now for the charts:
As you can see, the candlestick hit the upper Bollinger Band (BB) on the daily chart for the first time in three months...Unfortunately, I never buy AT the upper BB even if the candlestick formed today is very tall, white, bullish, and closed only two cents below the high of the day...I'm not saying it can't go up any further, but this is where I usually take profits if I was actually trading in and out of this stock...Which I'm not...I own a nice block of shares bought at $1.45 on July 20th when the hourly (and daily) chart said it was time to get back IN:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=52462152
Now that I'm up nearly three grand, did I take profits today?....NO!...Why?...Because news about the SPA is nearly a month overdue from when the CEO said to expect it during last quarter's conference call...Why the delay?...Because SPA's are a back and forth dialog between the FDA and the company that creates a Phase III trial that uses the FDA's design protocols...While SPA's are not guarantees that the Phase III trial will be successful and lead up to FDA approval of the drug, it greatly increases the chances for success...I think the delay in announcing the SPA has been due to a continuing dialog between the FDA and the company that is in the process of altering and improving the Phase III trial design...So there has been another delay...So what?...If the trial is now on track to be safer and more effective, I don't mind another small delay...I truly believe that if the SPA had been denied, we would have heard about that by now...
The reason I won't sell my block of shares today is because news about the SPA could come anytime between now and the CC, and if you're not IN when this news is PR'd, you will miss out on a nice spike up, and you'll be chasing the price higher after the PR is released...Especially if the SPA is followed immediately by news of a partnership with a big pharma company to help fund and execute the Phase III trial...If that happens, I'm pretty sure we will see a very large spike up in a very short period of time...And when I see that spike, I'll probably lock in my profits as close to the top as I can, because there will be a long quiet period for news after these two things are announced...
More Technical Analysis:
Today's close gave us the highest Volume day, and the highest closing price since June 29th when they announced Orphan Status for their lead drug...Today's candle looks very Bullish, even if it is AT the upper BB...The 5MA has crossed up thru the 15MA very sharply, which hasn't happened for a long time...The CCI is getting a bit toppy by rising above the +100 line, but Stochastics isn't very Overbought yet with a reading of only 69 for the fast line, which is above the slow line and upticking very sharply...The MACD is looking Bullish with the Histogram upticking sharply today (blue bars), and the fast line did too and is above the slow line which is also upticking...
The chart below has a few more technical indicators on it: Starting with the dark green Chaikin Money Flow at the top, it's at a two month high...On Balance Volume (red line) and Accumulation/Distribution (black line) are upticking sharply, and also close to two month highs...We already covered the CCI, STO, and the MACD on the previous chart...The ADX shows the green DI+ is above the red DI- and they are diverging further apart...The green line at the bottom is the RSI - Relative Strength Index, and it's AT two month highs...
Add everything together, and these charts are screaming BULLishness!...
The only negative I can see is today's candle AT the upper BB, because it is almost always a level of Resistance...Only increasing Volume early next week will be able to start to bend the upper BB up, and allow the price to keep bumping up against it as it moves up...
The weekly chart clearly shows that CYCC is in the bottoming process...It's bouncing up off of the lower BB, this week's candlestick is a Bullish Hammer (and so was last week's, and the week before was an Inverted Hammer showing a Reversal)...It convincingly closed above the 5MA for the first time since early June...The weekly Volume doesn't look so great because each day this week preceding today had record setting low Volume, so the weekly averages out to roughly the same as the weeks before this one...The CCI has just given a Buy Signal by crossing up thru the -100 line...Stochastics is fighting it's way up out of totally Oversold territory, and the fast line has finally convincingly crossed up above the slow line, which is Bullish...The MACD Histogram (blue bars) had a nice uptick this week, and the MACD's fast line (black) looks to be finally leveling off...IF this stock continues to go up next week, the Resistance Levels ahead of it are the 15MA at $1.91 and the middle BB at $2.04 and if it can start closing above the middle BB there was some Resistance for four weeks at $2.20 from mid-May to early June...There is some more Resistance in the $2.50 -2.55 area in the beginning of May, and then it has NO more Resistance after that all the way up to the upper BB Resistance at $2.71 But if it is headed up to the upper BB on the weekly chart, by the time it takes it to get up there, the upper BB will have dropped some from what it reads now...
This weekly chart is beginning to show MUCH more Bull than Bear!...
I think we are overdue some GREAT news, and it could come as early as the pre-market session on Monday, which is a favorite time this company releases PR's...If not, we are SURE to hear something interesting later in the week, when they announce Q2 earnings numbers and hold a conference call to discuss important things going on with the company and the FDA and hopefully some real clarification about what's going on with the SPA...
Good Luck to All CYCC Investors!...
zigzagman
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