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Cytosorbents Corporation Message Board

  • robert.vince robert.vince Oct 5, 2012 7:39 AM Flag

    A nice little Seeking Alpha article on ctso

    Every wise individual investor or day trader has a plan or ultimate goal with each purchase he makes whether for a 2-day "flip" or a "runup" to a binary event such as a PDUFA or clinical data presentation. One can peruse stock boards and forums and get a general feel for the overall tone of a stock's potential by weighing the extremes of obvious short and long position investors and then more strongly considering the more middle-ground posters giving casual opinions backed with links and facts. Apart from the obvious SEC filings, company news releases and analyst opinions, there is another interesting source by which to obtain information in the form of small pharma and/or biotech bloggers. While many of these bloggers may post wild expectations for share price gains and losses via exorbitant sales projections or clinical results, there are some who are more midstream and post all their findings, both good and bad, and allow their readers to make their own decisions based on the facts presented. I consider myself a more middle ground blogger. However, I do find myself getting a little more enthusiastic about some small pharmaceuticals more than others due to the hope they may potentially bring in the form of treatments for indications with unmet needs, especially in cancer treatment therapies.

    I have been writing biotech-related and small pharmaceutical blogs for several years, well before I wrote the first of my more than 50 articles I now have in this current venue. My scientific background does not necessarily give me the formal education necessary to have first-hand knowledge of the healthcare sector, but it does give me the ability to use the scientific method to research, formulate hypotheses and make predictions based on my research as pertaining to clinical trial data and possibilities of regulatory success. In order to present some transparency and to help readers understand how at least this one particular blogger trades and invests, I have decided to unveil some of my own personal trading portfolio and some of my trading strategy. Like most investors, I have no formal training necessary to give investment advice. Instead, I have learned through my own research, trial and error (more of the latter) and the scientific method to perform technical analyses of stock charts and fundamental analyses of small pharma earnings to make my final determinations for investment ideas.

    My trading portfolio does not include my long-term investments that I have "bought and forgotten". Those long-term investments are in the form of mutual funds and large capitalization stocks with stable earnings, solid dividends and charts I am more comfortable watching and interpreting. Rather, my trading portfolio consists of many small pharmaceuticals and other companies I believe to be undervalued and or trading undervalued due to various reasons. Each of these companies either has a major catalyst upcoming to present a trading opportunity or has been recently sold off, and I believe it to potentially recover for solid gains. Please understand that my level of risk tolerance is higher than that of many investors and traders. However I do trade these methodically, deliberately and with a plan. The holdings I present are not done such to promote, but are rather to allow investors to have insight into my trading methodology and to perhaps introduce them to some new possibilities. The companies introduced may give the readership a few ideas for some securities that I believe to have positive risk/reward ratios not for the long term necessarily, but certainly for short or mid-term plays.

    Cytosorbents Corporation (CTSO.OB) has always been a favorite of mine and is actually one of the first companies I actively traded. When I first discovered the company it was called MedaSorb Technologies, but the company announced its name change in May of 2010 to its current name. Cytosorbents is a small medical device company that is focused on its biocompatible highly porous bead filtration cartridges to filter various components out of patients' blood. The possibilities for the extracorporeal filter are numerous, and the company has one regulatory approval to its credit by receiving the CE Mark in March of 2011 for one variation of its platform, the Cytosorb device to remove cytokines. Elevated cytokines in patients can be due to any of numerous reasons ranging from critical injuries to influenza. Elevated cytokine levels can lead to inflammation, organ failure, immune dysfunction and death. The 2011 marketing approval in Europe opened the doors for the company to begin limited marketing of its first and only approved product, of which it is only generating limited revenue.

    There are numerous reasons I like the company. First, I try to invest in treatments I understand at least somewhat, and I am very familiar with the technology that Cytosorbents is utilizing. The filter device is actually more complicated than it may sound, as it has been developed to retain a certain particle size range of molecules, and allow all other size molecules and cells to pass through partially or totally unretained. As a chemist, I utilize a variation of the concept in the form of Gel Permeation Chromatography (GPC), or more specifically, size-exclusion chromatography. The porous beads in the filter are of such a pore size to allow the larger molecules and cells to simply bounce off the beads and pass on through the filter quickly. Meanwhile, the smaller molecules simply pass around or straight through the beads, also taking a quicker path through to the filter effluent. Meanwhile, the targeted size molecules take the much longer path through the beads' network of passages and pores and are consequently retained efficiently in the timeframe that the filtration is employed. In theory, an extended time of filtration would ultimately start allowing these particles to work through the porous beads and result in no filtration, but the filters are taken offline before this point and discarded as biowaste.

    A second reason I like my position in Cytosorbents is due to the expandability of its product line. With the porous beads engineered to target discreet particle size ranges of molecules or even elements, the platform's potential is significant as the company has already expanded its use in the form of a HemoDefend filter to clean transfused blood of many antibodies, free hemoglobin and inflammatory mediators that can often cause blood transfusion complications. Additional resins have been designed to remove chemotherapy agents, aid in drug detoxification and a host of other possibilities.

    Although still largely in a development phase with its pipeline, the company has had much interest from many sources adding to the company's financials to further research in a host of indications. Recent awards to help shore up the company's cash position and also provide some validity to its platform include:

    An up to $3.8 million DARPA award, depending on milestones achieved, to aid in treating sepsis.
    An up to $1 million grant from the U.S. Army to treat burn, trauma and smoke inhalation in large animal models. These types of injury are the most prevalent in the military as well as civilian populations.
    An up to $488,958 grant for the treatment of sepsis and other critical care illnesses from the Federal Qualifying Therapeutic Discovery Project (QTDP) Program.

    Although I see the long-term potential for Cytosorbents, I do trade in and out of the security on dips and spikes in the share price and try to maintain a base number of shares in the event of a surprise catalyst such as a product licensing, partnership or outright buyout. The company's stock currently trades in a fairly tight range from its current support of $0.13 to an upper value of $0.16 since July, so wise and patient entries are encouraged with a close watch on the stock's trading behavior while stop limits are advised. When investing in or trading CTSO, please remember to take into consideration that this is an OTCBB-listed company and has the implied risks inherent with less liquidity and more potential manipulation than its big board counterparts. The company is still operating at a loss and requires investment dollars and grants like those mentioned above to fund its clinicals.

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