The Mission Report

The MissionIR Report - Mid-September 2011

In-depth analysis, timely updates, latest market news


Market News

Company Updates


VistaGen Therapeutics, Inc. (VSTA) Able to Use Non-Embryonic Stem Cells for Rescuing Promising Drug Candidates

Few advances in the history of human health have raised as much hope as the development and application of pluripotent stem cell technology. It's an enthusiasm based on the fact that pluripotent stem cells, unlike adult cells, have the remarkable ability, under the right conditions, to be transformed into all sorts of different cells, which can then be used for more efficient research, testing, and ultimately the replacement of damaged tissues and cells for the treatment of heart failure, Parkinson's disease, cancer, and other life threatening conditions. A key point is that there are different kinds of stem cells, though with similar capabilities.

Embryonic Stem Cells (ES Cells) are pluripotent stem cells derived from excess embryos, eggs that have been fertilized in vitro (IVF) and donated for research purposes with the informed consent of the donors. These embryos did not develop inside the body, and consist of only about 100 cells, long before organs, tissues, or nerves have developed. ES Cells have well-documented potential to differentiate into any of the over 200 cell types found in the human body (that is, they are pluripotent).

Induced Pluripotent Stem Cells (iPS Cells) are derived from adult cells, typically human skin or fat cells, that have been genetically reprogrammed to behave like ES Cells. This is done by forcing the cells to express the genes necessary for maintaining the differentiating ability found in ES Cells. Although ES Cells and iPS Cells are similar in many respects, including the important ability to differentiate into other types of cells, scientists are still determining if there some ways in which they are not alike.

VistaGen Therapeutics is a biotechnology company primarily focused on using advanced stem cell technologies for rescuing previously researched drugs. These are drugs that may have had millions of dollars in research behind them, with proven efficacy, but were blocked because of possible toxicity issues, usually heart or liver toxicity. In some cases this is due simply to the inability of existing assays to provide adequate toxicity data. Such drugs offer immense potential if they can be brought back to life through today's state-of-the-art testing methods being made possible by VistaGen's proprietary pluripotent stem cell technologies.

For example, VistaGen's human heart cell bioassay system, CardioSafe 3D, can provide clearly predictive heart toxicity data on drug candidates before they are ever tested in humans. CardioSafe 3D is based upon a combination of proprietary and exclusively licensed stem cell technologies, including technologies developed over the last 20 years by renowned Canadian scientist, Dr. Gordon Keller, and Dr. Ralph Snodgrass, VistaGen's founder, President and Chief Scientific Officer. It's a superior approach designed to eliminate the possibility of toxicity surprises such as occurred with Merck's Vioxx or GlaxoSmithKline's Avandia.

VistaGen's additional advantage is that the Company has developed the ability to use iPS Cells as well as ES Cells for their applications, and in fact has not had to use excess embryos from IVF clinics for over 7 years.

5 Reasons the Government Should Be Run Like a Business

One of the worst-run businesses in the United States is also the largest business in the nation. The federal government is in financial disarray. It spends more than it makes and its investments are not based on sound financial principles.

The question often asked is should the U.S. government be run like a business? Should it abide by the same rules that all businesses in the United States must follow?

The answer for most Americans is a resounding "yes," but how would that make our current government different than it is today?

First, a big step for the government would be to spend less than it makes. The federal budget has a number of "unfunded liabilities," including Social Security, federal pensions, Medicare and Medicaid, which are preventing positive cash flow. Unfortunately, when the positive side of the income statement decreases as it has in the last four years, the expense side does not. And because many of those liabilities have cost of living adjustments, they are rising every year. Curbing those expenses or putting a cap on them would be a great step towards solvency.

Second, businesses do not have an unlimited checkbook, nor should the Federal Reserve. Right now, the government can print money at its discretion and as we have seen, it does more often than we care to remember. Printing money means there is more cash on hand to go around, which sounds good, but it dilutes the value of U.S. currency and therefore causes inflation. That means it will require more of that diluted money to purchase goods and services.

Third, the government should asses all of its employees according to their work flow, production, and output. And if any employees are not pulling their weight, they should be let go. But, we all know that will not happen. It is almost impossible to lose your job if you work for the government.That is not how a business is run.

Fourth, the benefit plans offered by the U.S. government are not balanced. Its health plan with all of its options is phenomenal, while its 401(k) plan (the Thrift Savings Plan or TSP) with its five investment options is awful. Having meaningful but fair, competitive, and economical employee benefits helps both the employee and the employer. It also could save us some tax dollars.

Finally, sometimes businesses need to realize that they are not productive or financially stable in one area or another. When that is the case, they should cease operations in that area. For example, the U.S. Post Office has been struggling for years, but nothing has been done about it. This is definitely one area in which our government could become more efficient. They could sell off that unit by making it a private entity. It would likely be more competitive and more efficient and not put such a burden on the federal budget.

As you probably already know, big businesses are not always easy to run, but you also know that if you are leading a large company, you must always watch your revenues and expenses and make good business decisions by looking into the future. If our government officials, both Democrats and Republicans, would begin to do that, we would have a better economy, a more productive nation, and be the global power we once were.

Hedging 4 Big Retirement Risks

Heading into retirement can raise a slew of scary questions. Will unexpected expenses throw off your retirement plan? Could a market crash decimate your carefully built nest egg? Most important, do you have enough money to last you through your golden years?

Retirement risk No. 1: Longevity

Back in 1935, when Social Security was first established, the average life expectancy was only about 61 years. That number has been rising ever since, to 78 currently, according to Stephen Horan, head of private wealth management for the CFA Institute and co-author of "The New Wealth Management." Moreover, once you've already made it to age 65, you're likely to live until 81 or 83 years old.

A healthy diet, exercise and a history of long-lived ancestors can boost your life expectancy still higher. So even if you think you're going to live until age 85, you need to plan for the possibility you'll make it to age 95 or 100, Horan says.

"Overwhelmingly, the biggest one is the risk of outliving your money," says Ken Fisher, chief executive officer of Fisher Investments. "Most people underestimate the amount of time they're going to live, and they invest as if they're going to die in 10 years."

Retirement risk No. 2: Inflation

Another key risk is inflation, the inevitable increase in the cost of goods and services, including housing, clothing, food, electronic devices and health care. Even with very low rates of inflation, say 3 percent a year, you would lose half of your purchasing power over two decades, Mervine says. "That's probably the biggest risk to investors' long-term ability to make ends meet," he says.

To guard against inflation, you can invest in inflation-protected securities or other investments that will gain value as overall prices climb. For instance, stocks in your portfolio aimed at growth rather than income will provide a hedge against inflation, says Michael Reese, Certified Financial Planner and founder of Centennial Wealth Advisory based in Traverse City, Mich.

Retirement risk No. 3: The market

When you hear the word risk, the danger that usually springs to mind is market risk. That's the scenario in which you've amassed a healthy portfolio of stocks and bonds only to see it plummet in value because of a market crash or other disruption to the global financial system.

The solution: Diversify your portfolio among a healthy mix of stocks, bonds, commodities and real estate, with no outsized holdings in one company's stock. On the stock side, a portfolio would be allocated among several asset classes, geographic regions and companies of various sizes. It should reflect a combination of value, growth and dividend-paying investments. On the fixed-income side, it would be invested mostly in government and investment-grade corporate bonds with varying terms and durations.

"Diversification is one of those free lunches," Mervine says. "The more diverse a portfolio, the better."

Retirement risk No. 4: Reinvestment

Don't overlook the possibility that your investments will mature at an inconvenient time. It's not unusual for a bond to be called earlier than you expect, at a time when interest rates are too low to replace that investment with a similarly profitable one, Mervine says.

The cure: a healthy variety of maturity dates. "You need to think about not having all your investments coming due at the same time," he says. "Every year you'll have something coming due that can be repositioned into the longer-term interest rates."

VistaGen Therapeutics, Inc.

VistaGen Therapeutics provided a comprehensive update on the Company's strategic plans to develop and commercialize its technology platform and lead small molecule CNS drug candidate. After thirteen years and more than $41 million carefully employed, VistaGen is now introducing itself to the public market. The Company is focused on three large market opportunities to leverage its versatile stem technology platform and CNS drug development capabilities.

VistaGen has been tremendously resourceful, advancing a cutting-edge technology discovered during the first era of stem cell research to create a portfolio of proprietary technologies with incredible therapeutic and commercial potential in multiple applications. To view the full update, which includes detailed information on VistaGen's various technologies as well as upcoming initiatives, visit the following link: VistaGen Provides Comprehensive Update

About VistaGen Therapeutics, Inc.

VistaGen Therapeutics, Inc. is a biotechnology company applying stem cell technology for drug rescue and cell therapy. Drug rescue combines human stem cell technology with modern medicinal chemistry to generate new chemical variants ("drug rescue variants") of promising drug candidates that have been discontinued during preclinical development ("put on the shelf") due to heart or liver safety concerns. VistaGen also focuses on cell therapy, or regenerative medicine, which includes repairing, replacing or restoring damaged tissues or organs.

VistaGen's versatile stem cell technology platform, Human Clinical Trials in a Test Tube™, has been developed to provide clinically relevant indications, or predictions, of potential toxicity of new drug candidates before they are ever tested on humans. VistaGen's human pluripotent stem cell-based bioassays more closely approximate human biology than conventional animal studies and nonclinical in vitro techniques and technologies currently used in drug development.

Using mature human heart cells produced from pluripotent stem cells, VistaGen leveraged its Human Clinical Trials in a Test Tube™ platform to develop CardioSafe 3D™, a three-dimensional (3D) bioassay system for predicting the in vivo cardiac effects of new drug candidates before they are tested in humans. The Company now plans to leverage CardioSafe 3D™ to build a pipeline of new, safer, variants of promising drug candidates that have been "put on the shelf" by pharmaceutical companies because of toxicity concerns, despite positive efficacy data signaling their potential therapeutic and commercial benefits.

VistaGen is also developing LiverSafe 3D™, a predictive liver toxicity and drug metabolism bioassay system, and is preparing to initiate pilot preclinical development of cell therapy programs focused on autologous bone marrow transplantation and heart, liver and cartilage repair. Each of these development programs is based on the proprietary human pluripotent stem cell differentiation and cell production capabilities of the Company's Human Clinical Trials in a Test Tube™ platform.

FluoroPharma Medical, Inc.

FluoroPharma Medical recently announced subscriptions from select accredited investors for gross proceeds of $1.6 million in a private placement offering. The proceeds from this financing together with the previously announced financing in May 2011 aggregates $5.3 million. Noble Capital Markets acted as placement agent and Sichenzia Ross Friedman and Ference acted as counsel on the transaction.

"We are pleased that we can continue to fund the advancement of our portfolio of compounds," stated Thijs Spoor, FluoroPharma's Chief Executive Officer. "This step will allow the company to significantly advance its clinical development." Dr. David Elmaleh, Chairman of the Board of Directors and the inventor of the technology added, "the company has previously reached significant milestones and we expect to continue to focus our efforts on executing FluoroPharma's strategic plan."

About FluoroPharma Medical, Inc.

FluoroPharma Medical, Inc. is a biopharmaceutical company focused on discovering and developing patented Positron Emission Tomography (PET) imaging products to improve patient management by evaluating cardiac disease at the cellular and molecular levels. The company is currently advancing two products in clinical trials to fulfill critical unmet medical needs. The agents will provide clinicians important tools for detecting and assessing pathology before clinical manifestations of disease.

The company's proprietary molecules labeled with the radioactive isotope of fluorine combined with PET scanning provide non-invasive, highly specific and efficient assessment of heart metabolism and physiology. FDG, mainly used in oncology, is the primary commercial labeled PET molecular imaging agent. FluoroPharma's cardiovascular program targets the historically largest potential market of nuclear medicine.

Molecular imaging fulfills numerous unmet needs in diagnosis by enabling visualization, characterization and measurement of biological processes at the molecular and cellular level. Unlike traditional imaging modalities – MRI, CT, and Ultrasound – that reveal the anatomical manifestation of disease, PET provides insight into physiology and can detect disease before anatomical manifestation is identified. The market for molecular imaging agents currently exceeds $1.7 billion annually and promises rapid growth for the foreseeable future.

FluoroPharma's comprehensive technology platform was developed by scientists at the Massachusetts General Hospital and Harvard Medical School. To date, the company has been issued four US patents and has seven applications pending in addition to strong international protection. With a highly competent management team in place and the necessary resources to advance clinical development, FluoroPharma is well positioned to capitalize on its superior imaging technology.

Net 1 UEPS Technologies, Inc.

In recent news, Net 1 UEPS Technologies announced its financial results for the fourth quarter and full fiscal year ended June 30, 2011. The Company reported revenues of $97.4 million for the quarter, a year over year increase of 42% in US dollars and 28% in constant currency. GAAP earnings per share for 4Q 2011 was $0.15 versus GAAP loss per share of $0.37 a year ago. Revenue for fiscal 2011 was $343.4 million, a year over year increase of 22% in USD and 13% in constant currency compared to fiscal 2010. GAAP earnings per share during F2011 was $0.06 versus earnings per share of $0.84 a year ago.

As of June 30, 2011, Net 1 UEPS had cash and cash equivalents of $95 million, down from $154 million at June 30, 2010. The decrease in cash was due primarily to the use of approximately $124.3 million to fund a portion of the KSNET purchase price and the payment of STC of $14.7 million incurred related to dividends paid from South Africa to the United States connected with the KSNET transaction. During 4Q 2011, the company repurchased $1 million worth of shares under a $100 million authorization.

About Net 1 UEPS Technologies, Inc.

Net 1 UEPS Technologies Inc. is focused on providing its Universal Electronic Payment System ("UEPS") as an alternative payment system for the unbanked and under-banked populations of developing economies. The company's system enables the estimated four billion people who generally have limited or no access to a bank account, to enter into electronic transactions with each other, government agencies, employers, merchants and other financial service providers.

UEPS works by using real-time smart cards that have offline functionality, unlike traditional payment systems offered by major banking institutions that require immediate connectivity to a network. This offline capability allows users of the Net 1 system to enter into transactions at any time with other card holders, even in the most remote areas, as long as a portable offline smart card reader is available. In addition to payments and purchases, UEPS can be used for banking, healthcare management, international money transfers, voting and identification.

Net 1 also focuses on the development and provision of secure transaction technology, solutions and services and offers transaction processing, financial and clinical risk management solutions to both funders and providers of healthcare. The company's core competencies around secure online transaction processing, cryptography and integrated circuit card technologies are mainly applied to electronic commerce transactions in the telecommunications, banking, retail, petroleum and utilities market sectors.

Currently two analysts offer coverage of the stock with "Strong Buy" ratings and price targets ranging from $10.00 – $15.00. As of last report, the company had total assets of $781.6 million, with $95.3 million in cash and equivalents, and $216.2 million in liabilities. Investor sentiment is almost entirely bullish with less than 1% of the float sold short.


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