ResApp Health (RAP.AX) - Not at its peak after a 1500% rise over the past 9 months

ResApp is a small Australian company developing an exciting iPhone App to detect respiratory disease.
This App aims to compete against today's respiratory disease diagnostic tools such as the stethoscope, imaging (x-ray/CT scan), blood and or sputum test.

I ran a Times Revenue Multiple valuation model for this stock using their research data and got a share price target of  $0.85 - $0.66. This presents an attractive over 150% upside from today's price.

Clinical results to date suggest this App has a very high chance of winning FDA approval. This App was able to correctly detect lower respiratory tract involvement in 97% of cases initially missed by experienced clinicians using a stethoscope. The App was also able to differentiate between viral and bacterial pneumonia with around 90% accuracy.

MD take-up of this new diagnostic tool will likely be modest since doctors have used the stethoscope for a very long time. However the uptake in the telehealth market will likely be very high. For my modeling I have given 10% market penetration by MDs and 80% by telehealth markets. 
Coming catalysts include an imminent telehealth partnership announcement, an initiation this quarter of a pivotal clinical study, and a FDA decision in Q4'16.
The risks with this investment include the potential for a similar App competitor to emerge.

Below are information slides from ResApp's last investor presentation:

This is ResApp's 12-month share price chart -

This investment should only be considered by risk adverse investors. Considering the already staggering share price increase large price retractions are possible.
My pricing model says there is still significant upside potential here.


Disclosure - I have no position in this stock but may initiate a long position in the coming weeks

My Neuren Pharma valuation model after their negative PH2 TBI results

This is Neuren's PH2 TBI results Press Release



Disclosure – NEU.AX is a very small AU/NZ biopharma company that carries substantial risk. While its potential returns may be high its losses may also be high.
I am long NEU.AX.
I do not short stocks.

Neuren Pharmaceuticals (NEU.AX) - Awaiting TBI Phase 2 results

Clinical results are now imminent for Neuren's Phase2 trial in TBI (Traumatic Brain Injury - moderate to severe). Positive results in this indication would significantly boost Neuren's market value. This indication has a large 1 million US & EU potential patient population and its without an FDA approved disruptive drug.

Below is my Valuation Model with assumptions. It shows NEU.AX undervalued by as much as 200%.

Last year, I wrote about Neuren's drug here.


This next slide is from Neuren's latest investor presentation:

The status of Neuren's second TBI trial (mild or concussion) has become uncertain. This latest investor presentation does not provide a program timeline update, results were expected in 2Q16. The presentation states enrollment is proving difficult and the trial is under review.

Disclosure – NEU.AX is a very small AU/NZ biopharma company that carries substantial risk. While its potential returns may be high its losses may also be high.
I am long NEU.AX.
I do not short stocks.

Neuren Pharmaceuticals (NEU.AX) - my valuation says over 150% upside

Neuren Pharmaceuticals (NEU.AX) is a small Australian/NZ bio-pharmaceutical company with excellent upside potential.

Below is my valuation model with assumptions –

 

Up-coming catalysts:

·       Results expected for 3 x Phase2 clinical trials.

o   Fragile X Syndrome – December 2015

o   Traumatic Brain Injury (moderate to severe) – Q1 2016

o   Traumatic Brain Injury (mild - concussion) – Q1 2016

From 30th July 2015 -

NEU’s lead drug candidate is called Trofinetide - an analog of a molecule which is derived from IGF-1 and occurs naturally in the brain. According to NEU, IFG-1 in the brain is critical both for normal development and for responding to injury and disease. This drug candidate aims to treat patients with neurodevelopmental and neurodegenerative disorders as well as patients with brain injuries.

Trofinetide is in clinical testing for 4 separate disorders all at Phase2. They are Rett Syndrome, Fragile X Syndrome (FXS), Traumatic Brain Injury (TBI) - moderate to severe, and TBI – mild or concussion.

Currently there are no FDA approved drugs to treat these conditions. Some drugs that are approved for other indications are used to treat selected symptoms, but they are only modestly effective and none are disease-modifying. NEU will receive favorable FDA treatment because their drug is thought to be disease modifying for patients without other effective treatment options. NEU have already received Orphan Drug and Fast Track designations for Rett Syndrome and FXS. TBI (concussion) has also been given Fast Track designation. However the FDA denied a Breakthrough Therapy Designation for Rett Syndrome.

NEU presented positive Phase2 results for Rett Syndrome in late 2014. Trofinetide showed clinical benefit with excellent safety and tolerability attributes. At the higher dose of 70mg/kg, their drug showed significant clinical effectiveness compared to a placebo.

NEU believes their Phase2 trial also showed their drug’s effectiveness may be improved upon by increasing its dosage level and lengthening the treatment duration.

Just announced, NEU has agreed with the FDA to conduct a new small tolerability clinical trial in children and adolescents to test higher doses of Trofinetide in a younger population and to confirm dose levels for their up-coming Phase3 trial. This new small trial will de-risk Trofinetide in Rett Syndrome but unfortunately it will add time and cost money.

The positive Phase2 results of Trofinetide in Rett Syndrome bode well for its chances of success in FXS. These two diseases are similar in that they are both caused by a mutation of the X chromosome. FXS Phase2 results are expected in December 2015.

FXS is the more lucrative indication. Its potential patient population in the US and EU is around 160,000. Rett Syndrome has a smaller patient population of around 33,000. Should NEU get positive Phase2 results for FXS its share price could instantly double. Results are expected this December.

Other important catalysts for NEU this Q4 are expected results for their two TBI Phase2 trials. Positive results for these indications would be transformational for this small company.

I have not placed a value on NEU’s two TBI indications. It is too early to make a call about their efficiency. These TBI indications are very lucrative should NEU's drug prove to be effective here. The global TBI market is estimated at more than $4 billion.

I think Trofinetide will be priced around $15-$20k per year which would place it at the high end of the price range for single molecular drugs. But given their targeted indications do not have FDA approved treatments they should be justified charging the high premiums. NEU say on their website, they estimate current direct costs for medical services of Rett patients at more than $20k per year. Which leads me to think they intend pricing their drug near the $20k per year mark. For my valuation model I have used a lower price of $15k per year.

NEU’s share price fell sharply and suddenly in March this year on bad news. The FDA denied Trofinetide Breakthrough Therapy designation for Rett Syndrome. The FDA did not consider Trofinetide showed strong enough efficiency to grant the lucrative designation (NEU's efficiency was measured at p=0.023). NEU’s share price was trading near $AU0.18 before the fall now NEU is trading at much lower levels near $AU0.09. I consider the 50% price fall a market over-reaction. 

NEU has cash reserves of $17.7 million as of 30^th June 2015. This reserve should be enough to allow them to complete their on-going Phase2 trials. However they will require additional funds to progress their drug's development to Phase3. I suspect NEU will do a capital raising in December this year following their FXS Phase2 results. They may not need to take this action should they be successful in finding a partner to fund their Phase3 trials.

NEU’s drug candidate is showing promise in treating serious neuro disorders, an unmet need that affects people and their careers around the world. The market looks to have heavily under-valued this company. With important catalysts due later this year I expect NEU's valuation to increase to a fairer value around $0.22.

Disclosure – NEU.AX is a very small AU biopharma company that carries substantial risk. While its potential returns may be high its losses may also be high.
I am long NEU.AX.
I do not short stocks.    

2015 ASX Stockmarket Game1 - my tips

Game1 begins on the 26th of Feb and runs till the 10th of June, 15 weeks.
Here's the link to the game:

http://www.asx.com.au/education/sharemarket-games.htm

3 prizes to be won -
1st wins $8,000
2nd wins $6,000
3rd wins $4,000

Hopefully this year's competition will be better and fairer than last years.
This comp had a trade execution flaw that allowed competitors to make unrealistic trades.
Becky, the winner of the last game, achieved a portfolio return of over 250%. Her return was completely unrealistic considering we were trading in a negative market and no single stocks returned anywhere near 250%.

The game organizers tell me they have fixed the flaw and the game will be now more realistic. Time will tell!
   
I will be constructing my fund with performance stocks. Performance stocks, with strong positive trends, tend to do well when the general market is buoyant. The ASX Index is off to strong start in 2015, up 14% since December's low, check the chart below:

I ran my technical performance screen and came up with the following short-list of stocks - which is kind of long really.

Medicals
ANN SRX CSL RHC RMD COH FPH

Materials
EVN NST SYR SIR NCM RRL AWC ORA


Real Estate
LLC WFD ABP GMG BWP

Energy
CTX ZNZ AWC

Other

TAH MFG PTM HGG REC EGP SGH IVC HVN

This list is my starting point for choosing stocks for my portfolio.
I will look to minimize my portfolio diversification to give myself a chance at achieving a really high return. 
Beware this type of strategy can also give you really low returns.

I will probably choose 4 stocks from a single sector.

Good luck!
& hope to see you on the Leader-board

Strong Australian Healthcare Stocks

The Australian Healthcare sector is continuing its positive trend. Check its 1-year chart below:

 














The index has performed strongly over the past 4 months, gaining over 24%. I continue feeling bullish about this sector and will be looking to enter into more positions though Russia's ruble problems have me on edge.

Below is my updated watchlist:

SRX.AX, CUV.AX, IPD.AX, SOM.AX, CAJ.AX, FPH.AX, NAN.AX, API.AX

NEU.AX, UNS.AX, RVA.AX, PXS.AX, PME.AX



RHC.AX, COH.AX

IMC.AX, PGC.AX, LCT.AX, BLT.AX, AVH.AX

Note - Of the mentioned stocks I am already long on NEU, UNS, FPH, BLT, AVH, LCT, & SRX. I do not enter in short positions.

ASX Sharemarket Game 2 2014 - dubious winners announced!

I cannot believe the portfolio returns of the announced winners!

I sent this email to the games organizers.

"Hi,

I find this games results very unbelievably.
A portfolio return of over 300% with no shorting available and no individual stock returning near 300%. And all this return in a negative market environment, and performed by only a handful of funds that were managed by novices!?
Please this is too much to believe and accept and that's coming from a trader with over a decade of experience.
Have you checked all the trades and their date and time stamps and verified they were not retrospective? Is your site secure enough? was it possibly hacked? do the winners/novices have a background it IT?
I would like to think you have already made these investigations but am still not convinced about the legitimacy of their portfolio returns.

I was in your top30 after several weeks of the comp but stopped playing after I saw the dubious returns of the handful of leaders, I thought then they were cheating and am not convinced they weren't.

Looks like they earned over $18,000 with their exploits!

I and my friends will not be playing your game next year unless you can convince us that the game is fair.

Regards,
Branko Krstevski."

ASX Sharemarket Game 2 2014 - update

After a month in this competition Becky from NSW is our clear leader with a huge portfolio return of 65.4%. Second is Jakem from Victoria with am impressive return of 41.4%. The All Ord Index has returned 5.6% over this same time-period.

I am ranked 28th with a return of 18.4%. I am pleased to have climbed onto the Leaderboard but am still a long way from the summit so I will be sticking with a most aggressive strategy to try and get to the summit. This competition has only 1 prize for the winner so finishing second or last all pay the same. Check my performance summary below:

I am currently fully invested in my favorite biotechnology sector. My two largest holdings are MSB.AX (Mesoblast) and SRX.AX (Sirtex).

Mesoblast is my best performer, since August this stock is up over 36%. The catalyst for their sharp price movement was their company announcement that they had entered into an agreement with The US National Institute of Health to run a 120-patient trial in end-stage heart failure using their adult stem cell therapy.
Not sure how much higher this stock will run in the short term, I will continue to hold it until it shows weakness. From a longer-term investment perspective I think this stock has tremendous potential. Below is their 12 month chart:

Sirtex has been trending strongly also, its August return was over 24%.
Sirtex's price has benefited from strong sales growth of their liver cancer treatments. They also have more liver cancer treatments being trialed in their pipeline. I like this company's short and long term prospects.

I wont disclose any more of my holdings for now, I am chasing the main prize!


Note - The mentioned stocks are traded in a stock market game simulator. Real money is not used.

Australian Healthcare Stocks Watchlist - updated

The Australian Healthcare sector is continuing on a positive trend. Check 1-year chart below:

 











The index performed particularly well this month gaining nearly 11% from its monthly low.  I still feel bullish about this sector and will be looking to enter into more positions.

Below is my updated watchlist:

FPH.AX, GXL.AX, AZV.AX, RHC.AX, OBJ.AX, SIP.AX

SRX.AX, BIT.AX, COH.AX,

MSB.AX, CUV.AX, BNO.AX, UNS.AX, PGC.AX, ACR.AX
LCT.AX, BLT.AX, AVH.AX, NEU.AX

Note - Of the mentioned stocks I am already long on FPH, GXL, BLT, AVH, & NEU. I do not enter in short positions.

2014 ASX Stockmarket Game2 - my tips

The Game2 contest begins this week, Thursday the 7th of August. And it runs for a little over 3 months, till 19th of November. Here is the link to the game:

http://www.asx.com.au/education/sharemarket-games.htm


I will be constructing my fund with momentum stocks as the ASX Index is trending positively as is the US's Nasdaq, check charts below:

 
Momentum stocks usually do well under these market conditions. I have listed below my latest stock shortlist:

GXL.AX GEM.AX APN.AX VOC.AX IPP.AX MQA.AX CFR.AX

SIP.AX SRX.AX IGO.AX SKI.AX AWC.AX
OGC.AX SAR.AX SIR.AX SYR.AX WSA.AX NST.AX

ACR.AX ROC.AX KAR.AX SEA.AX EGP.AX EWC.AX TTS.AX

some bottom feeders next:
aax asl brl cda kcn pdn rfe
ari mrm pbt sbm wdr

This time we can choose stocks from the entire ASX300 list. We have a couple of days left to finalize our picks.


Remember there is only 1 prize, the winner takes all, a cool AU$8,000. So I will be minimizing my diversification to give myself a chance at achieving a really high return. 
Beware this type of strategy can also give you a really low return.

Good luck!
& hope to see you on the Leader-board

Australian Healthcare Stock Watchlist - updated june2014

Below is my updated ethical Watchlist.

I have adjusted my screener to include the 90 largest capped Australian listed companies. This list shows the stocks with the best momentum and a few speculative stocks that I like on the last line.


FPH.AX, GXL.AX, AZV.AX

SIP.AX, ALT.AX, CMP.AX, SRX.AX, CUV.AX, BIT.AX

GBI.AX, MDG.AX

more speculatives:
BNO.AX, ELX.AX, BLT.AX, ADO.AX, CZD.AX, PGL.AX, AVH.AX, NEU.AX, LCT.AX

happy investing!

Note - I now own AVH.AX, BLT.AX, NEU.AX, & FPH.AX and I may initiate other positions in the next couple of days.

Australian Healthcare Stocks - Updated Watchlist

Below is my new Watchlist:

FPH GXL MYX

SRX BKL PME ADO

SHL RHC GLH CAJ PHG

BLT LCT IVX AVH TIS PRR NEU


The Australian Healthcare Index is traveling positively, check chart below. I am looking to move out of cash in the coming days.

 

 happy investing!

Note - I now own AVH.AX, BLT.AX, NEU.AX, & FPH.AX and I may initiate other positions in the next couple of days.

Australian Biotechnology Stocks

Below is my Watchlist.

FPH MYX CAJ PHG PBP
ADO SIP
BKL CUV BIT
AVH TIS

Australian Biotech stocks are traveling nicely unlike their American cousins.
US biotechs have seen a major sell-off over the last couple of months.  
The Proshares Biotechnology Index (BIB) is down nearly 40% since its late Feb highs. Check chart below.

Note - I do not own any of the mentioned stocks though I may initiate several positions in the next couple of days.

2014 ASX Stockmarket Game1 - update

This competition is a 1week old now.

The early leader is Stockbrah from NSW with a 6.8% return, close in second position is Applejack from TAS.

My fund is off to a strong start. I am ranked 106th just off the Leader-board.
Below is my performance summary;

1st prize is $3,000.

2014 ASX Sharemarket Game1

This contest begins this week on the 27th of Feb. Here is the link to the game:
http://www.asx.com.au/education/sharemarket-games.htm

I will be constructing my fund with momentum stocks as the ASX Index is trending positively, check its chart below. The Index is breaking above its 5450 level.

 
Momentum stocks usually do well under these market conditions. I have listed below my latest stock shortlist:

RHC AAD TPM AZJ CSR AMC TGR REA GEM SHL CSL
DMP BGA JHX ORI NVT
SRX ACR NCM AWC



I will be minimizing my diversification to give myself a chance at achieving a really high return. Beware this type of strategy can also give you a really low return.
But since there is only 1 prize ($3,000) may as well go for broke.

Good luck!
& hope to see you on the Leader-board.  

2014 ASX Sharemarket Game 1 - starts 27th Feb

This year's Game 1 starts on the 27th of Feb and runs till the 11th of June.
There is only 1 prize of $3,000.

I ran my "Krstevski Screen" over the competition stocklist (over 120 stocks). The list below is what popped out. I look for stocks with strong positive price movements (momentum).

RHC TPM AZJ CSR MQG AMC TGR AAD REA

JHX ORI DMP NVT BGA

BRU AWC NCM

and here's some cellar-dwellers:
ASL MML OZL PNA RRL SIR SLR WEB WTF AUT KAR PDN ACR AAX BLY MRM

I will refine and publish my watchlist closer to the start of the comp.

Good Luck!

Australian Healthcare Stocks Watchlist - Feb2014 update

SHL RHC CSL GXL FPH AHZ
PBT PME ADO SOM IPD
TIS
AVH CUV IVX LCT NEU


Be wary about buying into Australian stocks at the moment, the All Ordinaries Index is trading below its 65-Day running average.

Warning - These Healthcare stocks a very volatile and can burn you quickly.
Disclosure - I am already long on PBT RHC GXL NEU & AHZ.

ASX Stock Market Game2 - Update 1st Nov 2013

2 weeks to go in this competition and we have a congested Leaderboard so its set-up for an exciting finish. We have new leaders, Thanapontk from Victoria leads with a return of 28.5%. Second is Malbi from Victoria with a return of a 27.2%. This is against the Australian All Ordinaries Index return of 10.4%.

My prospects of winning are almost over. After breaking into the Top20 last week now I am down to 255th in the rankings with a 13.4% return.

In an act of desperation, to catch the leaders, last week I shifted to a day-trading strategy. And let's just say it hasn't been effective. And I will add that I have never had success day-trading nor do I know anyone who has. Except of-course for the commission collecting trading houses.
Having said all that I will persist day-trading for the next couple of weeks.

This morning I have 4 holdings; LNC RRL PDN & PRU


My National performance summary
Your portfolio value was $56,726.42
Total number of ranked players 9874
Your ranking was 255
Average player value $51,131.18
% of players in profit 70.58%

Australian Healthcare stocks - updated watchlist

This Sector is travelling well as is the general market. The stocks below are largely momentum picks which can do really well when the market is moving positively.

SHL RHC CSL GXL MYX CAJ SOM OSP NEU CGS VSC BRC PHG
PBT API CGS IVX AHZ



Note - I own several of these stocks and may buy more shortly.
Warning - do not try trading these stocks at home they are very volatile.

ASX Stockmarket Game2 - update

One month left in this year's ASX Investment competition.
Codex from Victoria holds a large lead over the rest of the competitors. He has returned 27.8%, second is thanapontk from Victoria with a return of 23.3%.

I have slipped off the leaderboard this week, from 30th to 225th now (10.6% return). I was in a cash position over the last two weeks fearing a strong negative market move over the US Debt limit stand-off. But Australia's market has been largely unaffected by this US circus and as a result my portfolio has stalled.

I am back fully invested now with half my positions in risky stocks. I have a big margin to make-up if I am to catch our leader.

Below are some strong momentum stocks for your consideration;
FLT REA TPM RMD AAD ALL CWN AZJ CSR BLD DOW DMP TGA ORG
SEK SYD DLX SHL SUL

These are more volatile stocks;
OKN LNC LYC SIR BRU

And these are the dogs that you could consider if you're too far off the leaders;
OZL MML PDN WEB MML NCM PRU SLR AAX BLY



National performance summary
Your portfolio value was $55,306.91
Total number of ranked players 9793
Your ranking was 225
Average player value $50,329.81
% of players in profit 61.23%