Saturday, March 10, 2012

Xenoport (XNPT) Trials Succeed, Origin Agritech (SEED) Gets China Deal and Quest Energy (QELP) Merges

While FedX Q1 earnings fell, jobless claims last week declined last week and housing construction in August rose 1.5%. While the recovery begins in earnest, daily economic news is full of such contrasts giving both bulls and bears something to get excited about. Today's market is subsequently mixed as it see-saws back and forth in early trading, but Xenoport (XNPT), Origin Agritech (SEED) and Quest Energy (QELP) stocks posted gains on good news.

Picking up 26.19% ($5.16) is Xenoport Inc., (XNPT) which is currently trading on the Nasdaq in the $24.13 range. XNPT has a new market cap of $730 million. XNPT has a 3-Month average daily trading volume of 246,692 shares and it tripled that volume surpassing 882,038 shares traded by 11 a.m. EST.

XNPT and partner GlaxoSmithKline (GSK) announced today that the Phase IIb clinical trail evaluating safety and efficacy for GSK1838262/XP13512 (gabapentin enacarbil) were successful. The drug targets neuropathic pain associated with post-herpetic neuralgia (PHN) in adults.

All doses of the XNPT drug demonstrated statistically significant improvements over placebos in a 24-hour average pain intensity score. The 14-week, double-blind, placebo-controlled study enrolled 376 subjects with PHN who had been experiencing pain for at least three months following healing of the herpes zoster skin rash.

The XNPT drub is a new chemical entity and a new application for its use to address moderate-to-severe primary restless legs syndrome is being reviewed by the FDA.

BioPharmaceutical XNPT focuses on developing drug candidates that utilize the body's natural nutrient transport mechanisms to enhance the therapeutic benefits of drugs. The XNPT portfolio of product candidates also include: XP19986, for the treatment of gastroesophageal reflux disease and spasticity; XP21279, which is in phase I! clinica l trials for the treatment of Parkinson's disease; and XP21510, for the treatment of menorrhagia or heavy menstrual bleeding.

At $24.13, XNPT is approximately half its 52-week high of $50.81 set on 09-18-08 and is above its 52-week low of $13.36 set on 04-30-09. At $24.13, XNPT is ahead of both its 50-day and 200-day moving averages. XNPT is widely held by institutions. It shares out versus float ratio is at parity. Very stable.

Gaining 30.48% ($1.46) early today on its own good news is Origin Agritech (SEED) which is currently trading in $5.93 range on the Nasdaq.

SEED has a new market cap of $133 million. SEED has a 3-Month average daily trading volume of 117,751 and traded 7 times that volume by 11:30 a.m. EST topping 876,756 shares.

SEED announced today it has reached a comprehensive, worldwide agreement with the Institute of Microbiology of the Chinese Academy of Sciences (CAS) and Sichuan Biotech Engineering, Limited.

CAS and Sichuan Biotech jointly own the patent rights to an internally developed gene which is highly tolerant to glyphosate, a herbicide. The herbicide-tolerance gene, demonstrated to be extremely effective in both laboratory and field environments, is entirely new to the consumer markets and has never been commercialized. It is protected by patents granted separately by China and USA separately and that's where SEED comes in.

SEED, for the entire life of the patent, will have exclusive rights to sell and develop corn, soybean, rice, cotton and canola products that contain these technology traits worldwide, both in the territory within China and outside of China. SEED will also receive the rights to improve and further develop this herbicide-tolerant gene.

SEE! D develo ps and sells hybrid crop seeds in China. SEED offers primarily corn, rice, cotton, and canola seeds. SEED was founded in 1997 and is headquartered in Beijing, China.

At $5.93, SEED is just below its 52-week high of $6.31 set on 06-03-09 and is above its 52-week low of $1.70 set on 03-03-09. At $5.93, SEED is ahead of both its 50-day and 200-day moving averages. Its shares out versus float ratio is a little lopsided (22m/10m) and I would like to see more shares in the public float at some point.

a work in progress...

Gaining 10.70% ($0.23) this morning is Quest Energy Partners Inc., (QELP) which is currently trading in the $2.35 range on the Nasdaq. QELP has a new market cap of $49 million. QELP has a 3-Month average daily trading volume of 108,738 shares and easily topped that by mid-session.

The interesting story here is that QELP and Quest Resource Corp., (QRCP) and Quest Midstream Partners (private) are all going to merge one day (as previously announced). Until that day, whatever effects one of the publicly traded companies, affects the other.

For example, today QRCP said it has entered into a Second Amended and Restated Credit Agreement with Royal Bank of Canada and will get $8 million in new credit. That pushed shares up 11.94% ($0.07) to $0.74. QRCP also noted that it and QELP and Midstream will be called NewGasCo for the time being. It also noted that QRCP was given 6 months by Nasdaq to get its share price over a dollar for 10 straight days of trading or else...

Watching M&A activity at this level is exciting and potentially rewarding.

The NewGasCo's strategy will be to create shareholder value through the efficient development of unconventional resource plays, including coalbed methane in the Cherokee Basin of sout! heast Ka nsas and northeast Oklahoma and the Marcellus Shale in the Appalachian Basin.

Until the merger is complete, both publicly companies will operate as separate identities. I've chosen to talk about QELP today because it has substantially higher trading volumes and a greater share value.

QELP has a total of approximately 167.1 billion cubic feet equivalent of net proved reserves. QELP also operates approximately 2,438 gross gas wells in the Cherokee Basin and 27 gross oil wells. In addition, QELP has approximately 4,000 oil and gas leases covering approximately 559,084 net acres; and owned the development rights to approximately 557,603 net acres throughout the Cherokee Basin.

At $2.35, QELP is far below its 52-week high of $9.06 set on 09-28-08 and is above its 52-week low of $0.49 set on 03-03-09. At $2.35, QELP is ahead of both its 50-day and 200-day moving averages. QELP has trailing twelve month revenues of $113 million. Its shares out versus float ratio is close enough not to raise any red flags.

Sign-up for Free to Receive Future Commentary and Trading Alerts on XNPT, SEED and QELP

Best Stocks To Buy Now