An amazing morning today for trading Novogen (NVGN) and Marshall Edwards (MSHL) as positive news of a cancer drug licensed by NVGN to MSHL sent the stocks soaring and an MCG Capital (MCGC) upgrade by Stifel Nicolas gave the private equity firm a much needed boost. All three gainers stood out as the markets were once again zig-zagging on the mixed news that the Conference Board said its consumer confidence index fell to 53.1 in September, down from 54.5 in August, and much lower than the reading of 57 that economists expected and the uptick news from the Standard & Poor's/Case-Shiller home price index that home prices rose for the third month in a row in July.
Gaining as much as 47.86% ($1.23) in early trading this morning is Novogen Limited (NVGN) http://www.novogen.com/ currently trading in the $3.65 range on the Nasdaq. NVGN has a new market cap of $74 million. NVGN has a 3-Month average daily trading volume of 61,382 and easily topped 7 times that volume this morning surpassing 442,876 shares traded.
LICENSING
The huge gain by NVGN today is based on news that its cancer drug, NV-128, lacks toxicity. NVGN NV-128 is an analog of triphendiol and phenoxodiol, both of which are investigational drugs that have been licensed by NVGN to Marshall Edwards, Inc., (MHSL) an NVGN subsidiary.
NO TOXICITY
As the licensee, MHSL's NV-128, demonstrated that the efficacy of the drug in animal xenograft models is achieved without apparent toxicity. NV-128 is a novel flavonoid small molecule mTOR inhibitor, capable of inhibiting both mTORC1 and mTORC2 pathways which are central to the aberrant proliferative capacity of both mature cancer cells and cancer stem c! ells. Th e data demonstrated that NV-128 has much greater safety than some other mTOR inhibitors in mice bearing human ovarian cancer xenografts.
In additional data released today by Marshall Edwards Inc., the Company reported that NV-128 was judged to be without cardiac toxicity, further indicating the likely safety of NV-128 in clinical use for humans.
THE NVGN PIPELINE
NVGN consumer healthcare products include a range of natural products specifically for women's health; Vinalac, a probiotic formula to help prevent childhood allergies, such as eczema in children at risk of an allergy; Aliten for weight control; and Trinovin, for the enhancement and maintenance of men's health. NVGN primarily focuses on oncology, cardiovascular, dermatological, and anti-inflammatory programs. NVGN's drug programs include Phenoxodiol, a Phase III investigational drug for late stage, chemoresistant ovarian cancer and prostate, and cervical cancers; Triphendiol, a Phase I signal transduction inhibitor for the treatment of cholangiocarcinoma or bile duct cancer, and stage Phase IIB through stage IV malignant melanoma; and GLYC-101, a Phase II product for the treatment of wounds following laser ablation, burn wounds, surgical wounds, venous ulcers, and diabetic ulcers. Novogen's programs also include NV-143, NV-04, NV-27, NV-07 and NV-52 (visit the NVGN site for details).
At $3.65, NVGN is below its 52-week high of $7 set on 05-18-09 and is above its 52-week low of $1.23 set on 03-11-09. At $3.65, NVGN is ahead of both its 50-day and 200-day moving averages. Its shares out versus float ratio is near-parity.
Marshall Edwards Inc. (MSHL) and N! V-128
The other company benefiting from the NV-128 drug is Marshall Edwards (MSHL) http://www.marshalledwardsinc.com/ gaining over 108% ($0.66) this morning. MSHL is currently trading in the $1.28 range on the Nasdaq. MSHL has a new market cap of $93 million. MSHL has a 3-Month average daily trading volume of 89,900 shares and this morning it soared past 34 times that volume topping 3,129,497 shares traded.
MSHL is involved in the clinical development and commercialization of its phenoxodiol drug candidates for the treatment of cancer; triphendiol, a signal transduction inhibitor for the treatment of pancreas and bile duct cancers, and melanoma; Other NVGN licenses to MSHL include NV-143. MSHL is also conducting a Phase II prostate cancer clinical trial using phenoxodiol.
At $1.28, MSHL is below its 52-week high of $2.55 set on 09-30-08 and is above its 52-week low of $0.25 set on 03-10-09. At $1.28, MSHL is ahead of both its 50-day and 200-day moving averages. MSHL is majority owned by insiders and its outstanding shares versus float ratio (73m/17m) is very lopsided. I would like to see more shares in the public float for stability.
MCGC: A 52-Week High Today.
Finally, gaining 20% ($0.70) this morning is MCG Capital Corporation (MCGC) http://www.mcgcapital.com/ currently trading on the Nasdaq in the $4.10 range. MCGC has a new market cap of $317 million. MCGC has a 3-Month average daily trading volume of 328,309 shares and it easily doubled that volume two hours into today's session.
The jump in MCGC value today came from an upgrade by research house Stifel Nicolaus from 'Hold' to 'Buy'. Upgrades are good for MCGC. Last month, on August 5, resear! ch house Keefe Bruyette upgraded MCGC from 'Underperform' to 'Market Perform' following Q2 09 results released the day before.
MCGC reported a Q2 09 net loss of $5.9 million, or $0.08 per share, which represented a $63.6�million improvement over the net loss of $69.5�million, or $0.96 per share, reported for Q2 08. This improvement was attributable primarily to a $68.3�million reduction in the net investment loss recognized on the fair value of MCG's investment portfolio, partially offset by a $4.8 million or 36.9%, decrease in net operating income.
MCGC is a private equity firm specializing in investments in middle market companies. NCGC invests in companies having revenues between $20 million and $200 million and EBITDA between $3 million and $25 million.
At $4.10, MCGC is above of its 52-week high of $3.63 set on 09-18-09 and is above its 52-week low of $0.46 set on 11-20-08. At $4.10, MCGC is ahead of both its 50-day and 200-day moving averages. MCGC has trailing twelve month revenues of $113 million. MCGC is widely held by institutions. Its shares out versus float ratio is near-parity.
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