The Mission Report

The MissionIR Report - September 2014

In-depth analysis, timely updates, latest market news


Market News

Company Updates


3 Things to Know about the Alibaba’s IPO

Chinese tech giant Alibaba is gearing up for a market debut that could set new records, reports CNNMoney’s Sophia Yan. Now that it's just around the corner, here are three things you need to know before the big splash:

1. It's any day, folks

Hangzhou-based Alibaba is expected to launch its initial public offering early in the week of Sept. 8, according to media reports.

The company could then start trading as soon as Sept. 18 or 19 on the New York Stock Exchange. The firm will trade under the "BABA" symbol.

An Alibaba spokesperson declined to comment.

The world's largest e-commerce company, Alibaba had sales of nearly $250 billion last year on its two most popular online shopping sites, Taobao and Tmall. The pair of sites handle 80% of China's online retail sales and receive more than 100 million visitors a day.

Alibaba also dabbles in online payments, cloud computing and investment products. Recent acquisitions suggest it's also making a big move into entertainment.

2. Super size it!

Analysts say Alibaba could be worth as much as $200 billion. That's almost the market cap of Amazon (AMZN, Tech30) and Ebay (EBAY, Tech30) combined; or four times more than Lockheed Martin (LMT), the world's largest defense firm.

With those numbers, it's perhaps no surprise that the Chinese company's market debut might raise even more than Facebook's $16 billion IPO in May 2012.

Just last week, Alibaba announced that profits tripled to nearly $2 billion in the most recent quarter.

3. Delays possible

Alibaba is a behemoth, but that hasn't prevented the firm from racing toward its IPO.

Still, the timing could yet change. The company is reportedly settling final issues with U.S. regulators, and won't be able to pull the trigger until the Securities and Exchange Commission has signed off.

After securing regulatory approval, Alibaba will pitch itself to investors to generate enough buzz to ensure a solid performance for the shares when they start trading.

Lingering concerns may include how the firm structures deals, and whether shareholders will have enough say in the company's direction.

Investors may also be put off by accounting problems at Alibaba Pictures, the firm's recently-acquired film division. (CNNMoney)

Dollar General Raises Bid for Family Dollar, Threatens to go Hostile

Dollar General Corp raised its bid for Family Dollar Stores Inc. to $80 per share, or $9.1 billion, and warned it may turn hostile and appeal directly to shareholders if the new offer was rejected, reports Reuters.

The No.1 U.S. deep-discount retailer also said it would pay a break-up fee of $500 million if the deal ran foul of competition law, the reason Family Dollar had cited for its rejection of the earlier $8.95 billion offer.

Family Dollar opted instead for an $8.5 billion cash-and-stock bid from Dollar Tree Inc.

Family Dollar's shares were up almost 1 percent at $80.52 in premarket trading on Tuesday, above Dollar General's offer, suggesting some investors held hopes of higher offers.

Shares of Dollar General, which increased its all-cash offer by 2 percent, were up 2.3 percent.

"In the event you refuse to engage with us regarding our revised proposal, we will consider taking our persuasive and superior proposal directly to your shareholders," Dollar General Chief Executive Rick Dreiling said in a letter to Family Dollar's board on Tuesday.

Dollar General also said it was willing to sell up to 1,500 stores to clear the antitrust review, up from the 700 it had proposed earlier.

The company said it hired Richard Feinstein, a former director of the Bureau of Competition at the Federal Trade Commission, to further "validate its antitrust analysis".

Playing down antitrust concerns, Dollar General said its documents would show that the products it offers are not unique as they are also available at most mass retailers, drug and grocery stores.

It also said that Wal-Mart Stores Inc, and not Family Dollar, was the primary driver for the company's pricing decisions.

Dollar General and Family Dollar offer goods at multiple price points, while Dollar Tree sticks to a $1 or less format.

The Dollar Tree bid is friendlier to Family Dollar's management.

Chief Executive Howard Levine, son of Family Dollar's founder, would remain CEO of the Matthews, North Carolina-based company were it to be bought by Dollar Tree.

If Dollar General succeeds in buying Family Dollar, Levine is widely expected to lose his job, although this has not been confirmed. (Reuters)

4 Reasons Why You Shouldn't Fear September

September has historically been the worst month for the market, reports CNNMoney’s Paul R. La Monica.

So with stocks near record highs, should investors be worried about a big September swoon once the Hampton Jitney returns to Wall Street after Labor Day?

Many experts say no. Here are 4 reasons why.

1. September has a bad reputation. Yes, September is often a terrible month for the market. The numbers (and the Stock Trader's Almanac) don't lie. The S&P 500 has recorded an average drop of 0.5% in September since 1950.

But recent history may be more important to consider. During the past five Septembers, stocks have enjoyed solid gains every year except in 2011 -- the month after Standard & Poor's cut the credit rating of the United States and while the euro debt crisis was in full swing. (September 2008 was, of course, a month to forget as well.)

When stocks have gone down in September, it's not because it was September. It was because there was bad news to justify a sell-off. Which brings me to my next point ...

2. The U.S. still looks healthier than the rest of the world. The economy bounced back in the second quarter after a horrible first quarter. The job market is heating up. Earnings growth has been decent and revenues are actually on the upswing too -- a sign that businesses are benefiting from actual demand and not just cost-cutting.

"When push comes to shove, Corporate America is doing really well," said John Norris, managing director with Oakworth Capital Bank.

Yes, there are lots of scary things going on around the globe. ISIS. Ukraine. Ebola.

But Norris said investors often tend to look inwards when global risks are mounting. And American investors aren't the only ones who realize this.

3. The rest of the world loves the U.S. too. U.S. stocks aren't the only financial asset in the middle of a bull market. American bonds have continued to rally this year, defying expectations for a big pullback that many experts were predicting as the year began.

The yield on the 10-year Treasury is hovering around 2.34% as investors keep buying bonds and push rates lower. The yield at the beginning of 2014 was slightly above 3%.

Shouldn't bond prices be plunging and yields soaring as investors pull money out of these so-called safer assets and plow them back into stocks? To quote my kindergarten-bound son's new favorite saying: What the heck?

Simply put, investors in Europe and Asia are interested in U.S. bonds and stocks because of geopolitical turmoil. Anthony Valeri, market strategist at LPL Financial, says that the threat of deflation in Europe is a key reason why U.S. assets are more attractive.

"Europe has a strong gravitational pull on the market right now," Valeri said.

China and Japan, which each own more than $1 trillion in U.S. government debt, may keep buying bonds as well. Due to such strong foreign demand, Sharon Stark, chief market strategist with D.A. Davison, said that she would not be surprised to see the 10-year yield fall as low as 2.15% in the next few weeks.

4. Investors STILL doubt the bull market. This is key. Even though the S&P 500 is staying near the gaudy sounding level of 2,000 and private startups like Snapchat, Uber and Airbnb are commanding valuations above $10 billion, most stocks are still trading at reasonable, if not exactly cheap, levels.

This is not a bubble like 1999. And that's because many investors have remained on the sidelines due to memories of the financial crisis. CNNMoney's Fear and Greed Index, a measure of seven gauges of market sentiment, has been in Fear mode for the past month.

"Unlike the late 90s, people think stocks are still risky. Everyone has the bad taste of 2008 in their mouth," said Marty Leclerc, chief investment officer of Barrack Yard Advisors.

Now this may not mean that stocks are going to have a huge rally in September. Valeri said a brief pause for the market makes sense as traders come back from vacation, the corporate news cycle picks up and volume increases.

At some point, the people who keep questioning the market may have no choice but to hold their nose and jump in. Stark points out that investors waiting for bond rates to rise and stocks to fall "have left a lot of money on the table."

As cliche as it may sound, sometimes you just can't fight momentum -- even if it doesn't seem to make sense.

"The psyche for the market is for stocks to go up," Norris said. (CNNMoney)

VistaGen Therapeutics, Inc.

VistaGen Therapeutics, Inc. (VSTAD) recently received an approval notice from the Canadian Intellectual Property Office regarding the company’s Canadian Patent Application No. 2,487,058 entitled "Mesoderm and Definitive Endoderm Cell Populations." This patent, which is licensed exclusively to VistaGen by the Icahn School of Medicine at Mount Sinai in New York, will further expand the company’s intellectual property (IP) portfolio for pluripotent stem cell culture systems that produce human cells of the endoderm lineage, including liver, lung, pancreas, parathyroid and thyroid cells.

Paired with the company's recently announced Notice of Allowance for related Canadian Patent Application 2,684,022, this most recent Canadian patent allowance supplements VistaGen's IP relating to several key pluripotent stem cell research projects the company is contemplating in Canada, including innovative projects involving liver safety, liver toxicity-based drug rescue, customized drug discovery assays for therapies to treat liver disease and diabetes, and exploratory nonclinical studies for potential regenerative medicine applications involving beta islet cells and other cells of the endoderm lineage.

About VistaGen Therapeutics

VistaGen is a stem cell company focused on drug rescue, drug discovery and regenerative medicine. We believe better cells lead to better medicines™ and that the key to making better cells is precisely controlling the differentiation of human pluripotent stem cells, which are the building blocks of all cells of the human body. For over 15 years, our stem cell research and development teams and collaborators have developed proprietary methods for controlling the differentiation of human pluripotent stem cells and the production and maturation of numerous specific types of adult human cells that we use, or plan to use, to reproduce complex human biology and disease and assess, in vitro, potential therapeutic benefits and safety risks of new drug candidates, including new chemical entities we are focused on producing through drug rescue. These are intended to be novel, proprietary and safer variants of once-promising small molecule drug candidates discovered, developed and optimized for efficacy by pharmaceutical and biotechnology companies, the U.S. National Institutes of Health, or academic laboratories, but discontinued prior to FDA approval due to unexpected heart or liver safety concerns.

VolitionRx (VNRX)

As VolitionRx advances toward European CE market approval and the clinical launch of its products, the company has invested in automated sample testing technology to speed up workflow. VolitionRx installed a Tecan EVO200 automated liquid handling system in its Namur, Belgium laboratory to significantly accelerate the company’s large scale clinical studies. The robot will increase the throughput and rate of blood sample analysis by up to five times that of the current manual methods. Tecan EVO200 will be used in a stand-alone mode though VolitionRx is in the process of establishing a Laboratory Information Management System (LIMS) to integrate the robot into a wider laboratory automation system. This will provide a seamless workflow incorporating blood sample recognition, testing, data capture, and quality control as part of a quality management system.

VolitionRx also recently outsourced large-scale production of its NuQ® kits to complement the increased sample processing capabilities of the EVO200 system.

Installation of the robot is particularly significant considering that the company increased by 3,000 (to 14,000) the number of prospective blood samples to be included in its on-going colorectal cancer clinical trial to evaluate the validity of VolitionRx's proprietary NuQ® panel as a first-step screening tool for colorectal cancer. The trial has been expanded by 42% since it initially commenced. The additional blood samples are being collected by Professor Hans Jorgen Nielsen, Professor of Surgical Oncology at the Department of Surgical Gastroenterology at Hvidovre Hospital, part of the University of Copenhagen, and collaborators at seven additional Danish hospital departments.

The company’s next key milestone will be the release of the first data from its pivotal Danish trials at the Aegis Capital Corp. 2014 Healthcare & Technology conference, September 10-13 in Las Vegas.

About VolitionRx (VNRX)

VolitionRx is a life sciences company focused on developing blood-based diagnostic tests for different types of cancer. The tests are based on the science of Nucleosomics which is the practice of identifying and measuring nucleosomes in the bloodstream – an indication that cancer is present.

VolitionRx's goal is to make the tests as common and simple to use, for both patients and doctors, as existing diabetic and cholesterol blood tests. VolitionRx's research and development activities are currently centred in Belgium as the company focuses on bringing its diagnostic products to market first in Europe, then in the US and ultimately, worldwide.

Stellar Biotechnologies, Inc.

Stellar Biotechnologies recently reported financial results and operational highlights for the third quarter ended May 31, 2014.

As of May 31, 2014, cash and cash equivalents were $14.8 million compared to $ 7.9 million at year-end August 31, 2013. The Company believes current cash will be sufficient to meet estimated working capital requirements and fund planned program development through 2015.

Third-quarter revenues were $102,581 compared to $73,214 in the comparable period of 2013. Sales were positively impacted by the company’s completion of the NSF phase IIB grant during the first quarter of 2014. Net income was $1.81 million compared to net loss of $1.17 million for the comparable period in 2013.

On the operational side, Stellar reported achieved the following:

Collaborations and KLH Supply Agreements: Stellar KLH™ is currently used by the company's biopharma partners as the carrier molecule in certain new immunotherapies in clinical development for cancer, autoimmune disease and inflammatory disease. Those programs continued to progress in 2014 and Stellar met all contract requirements related to supply and/or development of KLH protein for those product candidates. In addition, Stellar continues to strengthen its collaboration expansion with biopharma companies as their immunotherapy programs advance in the clinic to later stages of development and potential regulatory submissions. These strategic collaborations represent multiple commercial pathways for Stellar including future growth of core business sales and close involvement in the development of new KLH-based immunotherapies.

C. diff Active Immunotherapy Program: During the first half of 2014, Stellar successfully advanced its C. diff active immunotherapy program in key preclinical areas including early process development and the scale-up and transfer of essential manufacturing methods to a contract manufacturing organization (CMO). The goal of this stage of product development is to establish scalable processes necessary to support GMP production of a PS-KLH conjugate vaccine candidate. In the second half of 2014, the Company will focus on completing certain IND-enabling milestones such as identification of appropriate PS-KLH formulation, demonstration of dose ranging and safety, intermediary scale-up and manufacturing of test material in preparation for clinical production.

About Stellar Biotechnologies, Inc.

Stellar Biotechnologies, Inc. (OTCQB: SBOTF) (TSX VENTURE: KLH) is the leader in sustainable manufacture of Keyhole Limpet Hemocyanin (KLH), an important immune-stimulating protein used in wide-ranging therapeutic and diagnostic markets. KLH is both an active pharmaceutical ingredient (API) in many new immunotherapies (targeting cancer, infectious diseases, and immune disorders) as well as a finished product for measuring immune status. Stellar Biotechnologies is unique in its proprietary methods, facilities, and KLH technology. We are committed to meeting the growing demand for commercial-scale supplies of GMP grade KLH, ensuring environmentally sound KLH production, and developing KLH-based active immunotherapies.


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