MEDICAGO INC. (TSX:MDG)

Medicago is raising $17 M, through issuance of 34 M shares at a price of $0.51. There was no price discount to the market, with only a quarter warrant priced at $0.75. Although the 34 M share dilution is bringing the number of outstanding shares close to 200 M, financing terms were pretty good. There is a lot of interest in Medicago and in this financing.

This is not surprising given the numerous milestones Medicago is set to achieve in 2011: completion of pandemic influenza vaccine Phase II trial, Phase I influenza seasonal vaccine trial, and completion of the DARPA-sponsored manufacturing facility.

In addition, Medicago is likely to land a partnership and/or more research deals in the future. Recently Novavax, a $280 M market-cap, influenza vaccine company in similar stage of clinical development as Medicago, has landed two major deals. First a $179 M development contract with U.S. Dept. of Health and Human Services, and a licensing deal with LG for South Korea.

Recent research report by Roth Capital Partners set a 12 month price target for Medicago at $1.41. Target was based on future earnings potential and strong possibility of a partnership for Medicago. Report commented on Medicago's interim phase II results, which seemed better in direct comparison with competitors.

Following the latest financing, Medicago's market cap will be close to $100 M, meaning the company is undervalued compared to its peers. I view this as a good buying opportunity for a 100% return within 6 months.

BIOASIS TECHNOLOGIES INC. (TSXV:BTI)

I recently got an update from Rob Hutchison, Bioasis CEO, on company’s progress. The company is progressing well with its two ground-breaking technologies: the Cognitest, Alzheimer’s disease blood test, and the Transcend blood brain barrier (BBB) crossing vehicle. After months of hard work, the company will start reporting on progress on multiple fronts.

The company is likely to soon announce results of its first drug conjugate for the Transcend program. Results are also expected on the National Research Council of Canada's evaluation of Bioasis’ compound's ability to cross the BBB.

The Cognitest is also on track for more news releases. At the end of February the company announced that the commercial test has been fully developed, and it is now in clinical trials to statistically prove the accuracy of the test. The trial should last another 30 to 60 days, at the end of which we should have our first glimpse at the accuracy of the test. The magic number we’re looking for in accuracy will be 80%+.

Following the clinical trial, the company can apply for the CE Mark certification (European regulatory requirement) as early as July of 2011.

Bioasis is working on two holy-grail type technologies with a great blue sky potential, in the huge $98 B central nervous systems diseases market. The stock is a good pickup at these levels.

KANE BIOTECH INC. (TSXV:KNE)

Kane has gone from an obscure company trading at $0.07 to a very hot biotech stock in less than two months time. After being named one of world's top ten "most innovative companies" by The Fast Company magazine, Kane has attracted significant attention with their recent road-show.

With completion of bio-compatibility tests, the DispersinB, biofilm-dispersant wound care product, is now ready for the clinical trials stage. Note that the DispersinB spray is a device, hence the clinical trial should be a single trial that will take roughly 1 year to complete. The total cost of the trial should be around $1.5 M.

Kane already has research agreements with the U.S. Army, and several other companies. As the company continues to achieve further milestones, there is a good chance of a partnership or a licensing deal. This biotech story is getting hot and is a great pickup in the low teens.

ICO Therapeutics (TSXV:ICO) and Chemaphor (TSXV:CFR)

A lot of folks are asking for updates on these two companies. The truth is there aren't any significant updates at this time.

In my last conversation with Ico's management, the company said they were preparing for the start of Phase II trial for ICO-007 diabetic macular edema drug. They couldn't elaborate on the funding or potential partnership deals and said they were hoping to have news on the latest developments soon.

Chemaphor has successfully launched their Avivagen animal health brand, with Oximunol chewable tablets now on sale. This is a great milestone, but I am waiting to see sales figures and the financial situation. The stock has been trending lower and I would not be a buyer here until we see a turnaround.

TB