WINDSOR, ON / ACCESSWIRE / January 7, 2016 / The Wealthy Biotech Trader (or "WBT"), an investment newsletter focused on showing everyday investors new opportunities in rapidly growing, little-known biotech, pharmaceutical and medical device stocks releasing impressive news and making market moves, would like to start the year by releasing a list of stocks that we feel short sellers may be on the wrong side of the trade, which could cause these tickers to make a huge run upwards - most likely caused by a "short squeeze" (click here for what this means).
We will get into the details below, but first, here is the list:
1) Endonovo Therapeutics, Inc. (OTCQB: ENDV)
2) Akebia Therapeutics, Inc. (NASDAQ: AKBA)
3) Epizyme, Inc. (NASDAQ: EPZM)
4) Trevena, Inc. (NASDAQ: TRVN)
Endonovo (OTCQB: ENDV): is an interesting player in the regenerative medicine space aiming to commercialize their non-implantable bioelectronic device, which they have coined "Immunotronics," for treating and preventing liver failure, a disease affecting about 80,000 worldwide. Typically when a patient develops liver disease they are usually terminal (unless they receive a transplant).
ENDV feels they have a way to treat inflammatory conditions in the liver and regenerate the patient's existing liver (among other organs in the future), using their devices which are based on technology originally developed at NASA. Astronauts uncovered that when they passed through the earth's magnetic poles, cellular growth increased. Very interesting. ENDV's scientist took this thesis one step further and discovered that extremely low frequencies, delivered via square and trapezoidal waveforms, among other key characteristics of their technology are most effective in producing a cellular response. The result may be that inflammation is decreased, while cell growth is increased.
The commercial application for this device could be huge and typically medical devices are quicker to market than drugs with a much lower development cost.
We are keen on ENDV for the fundamentals, but a curious price move in December piqued our interest even further. The stock shot to $1.00 from $0.08 a few days before the company bought back a toxic note, leading the Wealthy Biotech Trader to believe either the funder started selling ahead of his appointment to convert into shares and had to buy back in, or the market makers shorted ahead of the planned liquidity of this same note conversion, which they would then bid for that newly converted stock - easy and profitable for the note holder-- and the market maker makes the spread between when they started shorting and where they bid for the new stock and someone sells it to them (the fund that converts the shares).
The company has made it known that they do not intend to let any of these note holders convert, and if any market makers have shorted ahead of this, they may be in harm's way. This ticker could have just seen the first of several waves of aggressive short covering, also known as a short squeeze (this is just a hypothesis, but highly plausible). Any further nudges to the upside on this Company could start a momentum train as the public deposited float is so small and we suspect there is a large naked short position.
Akebia Therapeutics, Inc. (NASDAQ: AKBA) is next on the list of interesting companies with high short positions prime for a "short squeeze". AKBA is a biopharmaceutical company, focused on delivering innovative therapies to patients with kidney disease through hypoxia-inducible factor (HIF) biology. Akebia has completed Phase 2 development of its lead product candidate, vadadustat (formerly AKB-6548), an oral therapy for the treatment of anemia related to CKD in both non-dialysis and dialysis patients.
Reasons we like this name:
1) They are treating kidney disease, an indication on our "hot list" as it falls into the category of "bullish on aging population stocks"
2) The chart is at the latter stage of a bullish inverted head and shoulders pattern, and if the stock clears through $13.00 it could head to $30+
3) Insiders bought $4,200,000 worth of stock in the past 6 months
4) 17% of the share float is short and the stock's options have a put call ratio of 2.75 - both are off the charts bullish - (click here to learn what put/ call ratios mean for predictive investing)
Trevena, Inc. (NASDAQ: TRVN) is a name that has almost 9% of its float shares shorted and has a put call ratio of 2 both fairly bullish. TRVN is a clinical stage biopharmaceutical company that discovers, develops and intends to commercialize therapeutics that use a novel approach to target G protein coupled receptors, or GPCRs. Using its proprietary product platform, Trevena is developing four biased ligand product candidates it has identified - TRV027 to treat acute heart failure (Phase 2b), oliceridine (TRV130) to treat moderate to severe acute pain intravenously (completed Phase 2), TRV734 to treat moderate to severe acute and chronic pain orally (Phase 1), and TRV250 for acute migraine and other CNS disorders (preclinical).
TRVN already appears to be in full break-out mode after issuing positive news regarding its post-operative pain drug TRV 130. With the stocks old resistance/ new support at around $9.00, this looks to be a great entry to potentially benefit from positive news for their migraine or heart failure indications.
Next is the most highly shorted stock on our list: Epizyme, Inc. (NASDAQ: EPZM). EPZM is a clinical stage biopharmaceutical company creating novel epigenetic therapeutics for cancer patients. Epizyme has built a proprietary drug discovery platform that the company uses to create small molecule inhibitors of chromatin modifying proteins (CMPs) such as histone methyltransferases (HMTs). Using its proprietary platform, the company has built a pipeline of programs led by its novel inhibitor of the EZH2 HMT, tazemetostat.
With nearly 60% of the share float shorted, this one has to be nearing a bottom soon mathematically speaking. It also has a put call ratio of 2.7 which is also very high into the bullish category. The chart appears to be in an absolute tailspin, and from a bit of research it appears to not be due to negative news announcements, but most likely due to placements of stock sold at a fairly steep discount to the market. EPZM seems to have a few "indication irons" in the fire, so this one could pop at any time, and the huge short interest could stoke that fire - a buy in the $10 range could pay off nicely for a short pop or a long hold. Although it was difficult to figure out what programs the company is working on as their "programs" tab on their website is quite esoteric.
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SOURCE: The Wealthy Venture Capitalist
