PROT Alert – Biotech Stem Cell Breakthrough Stock Pick

Posted by Admin on October 19, 2011 under Penny Stock Alerts Blog | Read the First Comment

Hello penny stock pick fans!

It was a bad day in the stock market with tech stocks getting hit the most. Apple disappointed investors when it missed earnings and fell more than 5% while the NASDAQ was down about 2%.  Could it be time to do the unthinkable and short AAPL?!  Extremely risky, and probably best done through options, but it’s a high-risk play that could pay off.  Unlike most others, I feel Apple IS Steve Jobs.

While the markets and especially tech, were all down today, biotech fared a little better.  XBI, a biotech ETF, fell by only 1%.

It’s a loss, but a loss that was less than the market average, which shows strength.  The biotech stock we’re looking at tonight outperformed them all, and this small biotech company closed up 10.77% today.

Tonight’s stock is…PROT – Proteonomix Incorporated.

About PROT:  Proteonomix, Inc., is a biotechnology company focused on developing therapeutics based upon use of human cells and their derivatives. The company’s products include Proteoderm, an anti-aging skin cream based on a proprietary and patented matrix of proteins that reduce wrinkles; UMK-121, a treatment for liver disease using a combination of two or three approved drugs to mobilize particular bone marrow stem cells; and StromaCel, a treatment for cardiac patients within two weeks of a myocardial infarction using stem cells derived from donor bone marrow and administered through IV solution to repair heart tissue. Its products also comprise NC-138, a proprietary matrix of proteins, which act on the skin to enhance activities that reduce wrinkles. The company was formerly known as National Stem Cell Holding, Inc. and changed its name to Proteonomix, Inc. in August 2008. Proteonomix, Inc. was incorporated in 1995 and is based in Mountainside, New Jersey.

The most important point is that this company is heavily involved in stem cell research. Stem cell therapy holds a great deal of promise for the treatment of diseases previously regarded as incurable.

Many of the currently incurable diseases associated with aging are caused by the degeneration of specific cell types in the body. These diseases include cancer, heart disease, diabetes, and autoimmune conditions. Liver disease is another promising research area for stem cell therapies that PROT is pursuing.

PROT is making significant progress on the development of a post myocardial infarction treatment, StromaCel™ Cardiac Treatment.   Post myocardial infarction means “after a heart attack.”

PROT’s treatment is taken intravenously in the first 14 days following a heart attack to assist in rebuilding the underlying vascular tissue, which is often destroyed during a heart attack.

This helps to increase the speed of the cardiac muscle recovery.  PROT is currently seeking funding to begin the application so they can begin clinical trials on this promising treatment. Clinical trials are the first step to commercial development. There is a large potential market for PROT’s StromaCell – each year more than 1 million Americans suffer a heart attack.

New drug applications in the US can take years, and millions of dollars, to get through the approval process. After today’s close, the company announced that it is moving forward with Offshore Testing of StromaCel!

In the press release, PROT noted that it had been approached by a potential partner interested in the possibility. This presents a less expensive path towards FDA approval and US availability of the drug. By moving some of the testing offshore, PROT could lower the costs, but follow rigorous safety standards so that they can then get US approval later. This is a great strategic move, and the savings could be significant for a small company. With a market cap under $5 million, the savings achieved by going offshore could offer an enormous amount of shareholder value.

Scientists at Proteonomix are also looking at overall health and wellness, potential markets with incredible growth. Products are being developed for skin rejuvenation and anti-aging. While this may not be as technically glamorous as other areas of research, these products offer just as much profit potential. The anti-aging skin cream market is worth about $1.2 billion a year in sales. As baby boomers become senior citizens, many will refuse to accept the natural aging process and that market should grow.  My mom gets botox, and even the old man got it last week!  Sshhh…hopefully they won’t read this.

Nobody wants to get wrinkly…

A subsidiary, Proteoderm, has developed a full line of anti-aging skin care cosmetics based on stem cell derivatives. PROT’s Proteoderm is the first company to use a matrix of proteins originally derived from non-embryonic stem cells, Matrix NC-138, to harness the anti-aging potential of stem cells in cosmeceutical products.

Proteoderm does not use enzymes, collagen or growth factors which are the ingredients of other anti-aging cosmeceuticals and Proteoderm does not utilize embryonic stem cells as a source for its anti-aging skin care products. The Matrix NC-138 line of skin care products includes a cleanser, exfoliator, day cream, night cream, and under eye serum. These products are very close to coming to market, as you can see on their site. http://www.proteoderm.com/

This is a very busy company and PROT is seeing encouraging results in its diabetes research. They have been conducting R&D efforts for several years on a treatment for all forms of diabetes. Recent breakthroughs that the company reported have been positive and they had previously announced that they are moving towards funding large animal trials in anticipation of Phase 1 trials.

On Monday, PROT announced another research development – it has decided to examine the possibility of licensing its stem cell diabetes related technology to another company in light of continued progress toward its trial of UMK-121, a stem cell treatment for patients awaiting liver transplant to overcome End Stage Liver Disease (ESLD).

If successful, this will allow PROT to obtain new capital that it can apply to the ESLD research.

There over 60,000 Americans suffering from ESLD. I don’t pretend to understand what UMK-121 does exactly, but the company says that “The pre-clinical studies were conducted in rodents and a large animal model to confirm the potential of the UMK-121 technology to mobilize Stromal Stem Cells (”SSCs”) into the peripheral blood of animals, thereby making the SSCs available for therapeutic uses.” That sounds impressive.

Equally impressive is the volatility that we can see in the stock chart. Volatility is how day traders make money, and a chart like the one we have with PROT is a pretty exciting one for day traders.   We can see a pattern of PROT being resilient…long bearish candles immediately reversed with a bullish pattern that unfolds over a few days.

Monday’s big drop was followed by today’s big gain.

From the close of $0.72, PROT could quickly hit the 50-day moving average at $0.79. That’s a possible short-term 10% gain…but that’s certainly not enough to get me excited.

The only resistance beyond 79 cents is at around 95 cents – a potential gain of 32% with no resistance in sight.

Even the resistance at 95 cents doesn’t look too strong, so the upside here could be enormous.

If PROT can break out above the 80 cent level, the gains could really add up to something huge.

PROT sold off in September by more than 50% from high to low, but the accumulation/distribution indicator remained strong throughout the sell-off. This indicator is one that technicians use to determine whether buyers or sellers are driving the price action and the indicator’s strength shows that there were still buyers in the stock as the decline took place. That’s bullish, and shows big potential for short-term gains.

However, you can see PROT did get hammered pretty hard, so be sure to use extra caution.  With a tight stop, the risk/reward ratio of PROT looks very worthwhile to me, but only with a tight stop.  Watch for upward momentum, book profits when you can, etc, etc.  Just my amateur opinion.

You can see PROT bounced back to an even HIGHER price just a few trading days later, which is very impressive, but still use caution.

Although, I can’t help but get excited when I see those who bought at the low when PROT was getting crushed, made a gain of almost 100% within a few trading days!

We could see strong volume tomorrow morning. PROT has had news every day this week. You can read the news releases at http://finance.yahoo.com/q/h?s=PROT.OB+Headlines. There’s no way to know what the flurry of activity means, but management does seem to be especially busy this week, and the news sounds very high-potential.

Management at PROT includes a mixture of finance guys and scientific experts. The CEO was instrumental in launching a number of successful IPOs and executing other deals while he was Vice President at Americorp Securities in the mergers and acquisitions department. He’s been with PROT since 2006, and seems to understand that the business side is just important as the R&D.

Having a CEO with such a prominent Wall Street background is a VERY good thing for investors.

PROT has a strong chart, extraordinarily high-potential products in development, big after-hours news, and I’m also seeing some buzz for them online tonight from others besides myself.

Could get REAL interesting tomorrow, I’ll have more in the morning.

Until then,

PSA – Penny Psycho

www.pennystockalerts.com

Don’t ever invest based on what I say, do your own research and consult with a licensed professional before investing, only invest what you are prepared to lose. Any statements and opinions given are amateur and biased and should be treated as such. Past performance does not indicate future performance in any way. Check the latest SEC filings before investing, and research other information on the risks of investing in low priced companies at www.sec.gov

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