The Mission Report

The MissionIR Report - Mid-December 2012

In-depth analysis, timely updates, latest market news


Market News

Company Updates


Oil Prices Rise on Upbeat China Data, Syria Violence

Crude-oil futures rose on Friday, setting up for a weekly gain as they drew support from signs of strength in the Chinese economy and as ongoing violence in Syria fed concerns over oil supplies from the Middle East.

The move on Friday brought week-to-date gains for oil to 0.5%, with a notable portion of that advance made Wednesday, when crude futures jumped 1.1% after the U.S. Federal Reserve announced that it will undertake more asset buying.

“Talk of Chinese stimulus in the aftermath of the [U.S. Federal Reserve decision on monetary policy] perhaps means that the only thing holding back the entire commodity complex is the fiscal cliff,” said Phil Flynn, senior market analyst at the Price Futures Group, in a morning note.

In Syria, violence continued as Russia moved on Friday to clarify comments from an official a day earlier that suggested the Syrian government may be defeated by the opposition.

Reports that the U.S. might be raising its involvement in Syria “could put another geopolitical-risk premium back into the [oil] market,” said Flynn.

Friday’s advance for oil prices also came as a preliminary version of HSBC’s manufacturing Purchasing Managers’ Index hit a 14-month high.

Hongbin Qu, HSBC’s chief economist for China, said the improvement in the latest survey results confirmed that an ongoing recovery in the country was “gaining momentum, mainly driven by domestic demand conditions.”

Data from the U.S. Friday was encouraging, but at least one analyst expects slow economic growth and rising supplies will soon pressure prices.

Data covering November showed a slightly bigger-than-expected decline in the consumer price index and a rebound in industrial production.

“Improving China PMI economic data and a post-Hurricane Sandy recovery in U.S. Industrial production have temporary reversed crude’s price decline,” said Alan Herbst, a principal at Utilis Advisory Group in New York.

“But in the end, an anemic U.S. economy and growing domestic crude-oil production will win the day” and push West Texas Intermediate crude prices below $80 in the first quarter of 2013, he said.

U.S. Consumer Prices Decline in November

U.S. consumers paid less for goods and services in November, mainly because of the falling cost of gas

The consumer price index dropped a seasonally adjusted 0.3% last month, the Labor Department said Friday. Economists surveyed by MarketWatch had expected a 0.2% decline.

Excluding food and energy, core consumer prices edged up 0.1% in November. The core number is closely followed by investors and the Federal Reserve as it is seen to be a better predictor of future inflation.

The falling cost of fuel gave consumers some spare cash to spend last month on other goods and services. Retail sales rose 0.8% in November, excluding gas-station purchases, after falling in October, according to government data issued Thursday.

“People had a little more to spend in November and if the retail sales numbers are any indicator, they put it to good use this holiday shopping season,” said Joel Naroff of Naroff Economic Advisors.

A low rate of inflation also allows the Fed to continue its policy of buying government and mortgage-related debt in an effort to drive down interest rates for the purchase of homes, cars and other consumer goods. The aim of the Fed is to boost economic growth and slash the nation’s high unemployment rate.

In a separate report Friday, the Federal Reserve said industrial production rose 1.1% in November, but the bank revised the decline in October down to 0.7% from 0.4%.

In November, energy prices fell 4.1% and gasoline accounted for most of the decline. The gas index sank 7.4%, marking its biggest drop since December 2008.

For consumers, that translated into about a 3.5% decline in the price at the pump in November, according to data compiled by the AAA motor club.

Electricity prices rose for the fourth consecutive month, however. Energy prices are now just 0.3% higher compared to 12 months ago, a big reversal from earlier in the year.

Food prices, on the other hand, have been moving in the opposition direction. The food index rose 0.2% in November to nudge the year-over-year increase up to 1.8% on an unadjusted basis.

Prices rose the fastest for dairy and soft drinks, but the cost of fruits, vegetables, cereal and baked goods also increased.

Wealthy Americans Prepare for Higher Taxes

Whatever happens with the "fiscal cliff," wealthy Americans could be paying their last respects to generous tax breaks that let them pass millions of dollars to heirs and other recipients tax-free.

The exemptions, which are set to expire at year's end, allow individuals to pass on as much as $5.12 million in cash, property or other assets without paying any transfer taxes. Couples can give away more than $10 million.

The current exemptions apply to the tax on cumulative lifetime gifts, which is paid by the donor, and to the estate tax. Also covered: a separate tax on assets that people give away to grandchildren and other heirs who are more than one generation below the giver.

If Congress can't reach agreement on a package of tax increases and spending cuts before the New Year, automatic increases kick in that would limit those exemptions to $1 million in assets and increase the tax rate for assets that exceed the exemption to 55% from 35%.

Even if the increases aren't triggered automatically, some observers believe that the current tax breaks won't survive negotiations as there is increasing sentiment that the wealthiest Americans should pay more in taxes.

Accountants and lawyers have been advising affluent clients for months now to consider changing their estate plans to make use of the exemptions while they still can.

Ronald Weiner, chairman of Perelson Weiner LLP, a New York City accounting firm that focuses on high-net-worth individuals, followed the advice he gave many of his clients.

At the beginning of the year, Mr. Weiner and his wife transferred a number of assets to his children, including a second home that they placed in trust.

"It's a virtual certainty that taxes are going to go up for the affluent," Mr. Weiner said.

Republicans and some Democrats want to eliminate the estate tax altogether.

But President Barack Obama has proposed raising the top estate and gift-transfer tax rates to 45%, dropping the gift-tax exemption to $1 million and lowering both the estate tax and generation-skipping transfer-tax exemptions to $3.5 million.

"If you can afford to give something away and your estate is above $3.5 million, you have look very hard at it," said David Scott Sloan, a partner at law firm Holland & Knight LLP and chairman of the firm's private wealth services practice.

For example, Mr. Sloan has been working with one couple who have a net worth of about $40 million to transfer almost one-fourth of their assets to their children.

The couple, whom Mr. Sloan described as "self-made," had paid income and capital-gains taxes on their wealth and wanted to leave as much as possible to their descendants. Their current estate plan leaves all assets to the children after the death of the surviving spouse.

Instead, by giving the children the maximum amount now allowed under the gift exemption—$10.24 million for a couple—the pair will pay no transfer taxes on the gift, and their estate won't have to pay tax on those assets, Mr. Sloan said.

Advisers warn that changing an estate plan is a major decision that can take a considerable emotional toll and may take months to complete.

Still, Georgiana Slade, a partner who heads the trusts and estates group at Milbank Tweed Hadley & McCloy LLP, said new clients continue to ask for help setting up trusts and charitable foundations to take advantage of the tax breaks.

"I've been doing this 27 years now, and without question, since Obama was re-elected, this is the busiest I have ever been," Ms. Slade said. "I effectively told my family I'd see them on Dec. 31, at 11:59 p.m."

Cardium Therapeutics, Inc. (CXM)

In recent news, Cardium Therapeutics announced it was on the winning side of a patent decision made in Europe. This decision resolved a long-standing competition between Cardium and its licensor the University of California, and Boston Scientific (NYSE: BSX) and its licensor Arch Development, over rights to key methods for the application of cardiovascular gene therapy to the treatment of coronary heart disease. Cardium’s Generx® gene therapy candidate, which employs these key methods, is currently in late-stage clinical studies.

“The resolution of these important reviews of our gene therapy patents, and the consistent decisions in our favor including rulings by the U.S. courts of appeal, underscore the value of our patent portfolio, which we believe reflects a breakthrough approach to the treatment of coronary heart disease,” stated Dr. Tyler M. Dylan-Hyde, Chief Business Officer and General Counsel of Cardium Therapeutics.

About Cardium Therapeutics, Inc. (CXM)

Cardium Therapeutics, Inc. is a health sciences and regenerative medicine company focused on acquiring and strategically developing new and innovative products and businesses to address significant unmet medical needs. Comprised of large-market opportunities with definable pathways to commercialization, partnering, and other economic monetizations, Cardium's current portfolio includes the Tissue Repair Company, Cardium Biologics, and the company's in-house MedPodium Health Sciences healthy lifestyle product platform.

The company's lead commercial product Excellagen® topical gel for wound care management recently received FDA clearance for marketing and sale in the United States. In addition to plans to advance the product's commercialization in the U.S. and internationally via strategic partnerships, the company plans to develop new product extensions for additional wound healing applications and is working towards securing approval for marketing and sale in South Korea and through the CE Mark application process in the European Union.

Generx®, Cardium's lead clinical development product candidate, is a DNA-based angiogenic biologic designed to treat patients with myocardial ischemia due to coronary artery disease. Cardium recently initiated its Generx Phase 3 / registration study in Russia. Consistent with its capital-efficient business model.

Cardium is also actively evaluating new technologies and business opportunities. The company utilizes its team's skills in late-stage product development to bridge the critical gap between promising new technologies and product opportunities that are ready for commercialization. Cardium is dedicated to building on its core products and product candidates to continually create new opportunities for greater success. Leveraging the advantages of its capital-efficient, asset-based business strategy, the company provides a diversified and more balanced portfolio of risk/return opportunities with the chief objective of providing long-term shareholder value.

GlobalWise Investments, Inc. (GWIV)

GlobalWise Investments and its wholly owned subsidiary Intellinetics provided an update on’s successful clinic expansion growth and ongoing annuity stream billing of eDocs, a cloud-based billing software, into 215 audiology clinics throughout the country. The eDocs program was launched by on Aug. 1, 2012.

eDocs’ release has been the most successful product release on since the site’s core practice management system was launched more than a decade ago. has never before seen its users so quickly adopt an ancillary product. has rolled out eDocs into 215 clinics throughout the United States since Aug. 1, and it is expected that eDocs will be up and running in more than 1,500 clinics throughout the world by December 2013.

About GlobalWise Investments, Inc. (GWIV)

GlobalWise Investments, Inc., via wholly-owned subsidiary Intellinetics, Inc., is a leading-edge technology company focused on Enterprise Content Management (ECM) solutions for the digital age. The ECM industry continues to grow rapidly as a result of unrestricted proliferation of digital content within today's business environment. Leveraging its proprietary cloud-based computing software, GlobalWise is poised to capture a significant market share of this burgeoning industry.

GlobalWise's ECM service is delivered to customers via five unique delivery models which cover the spectrum of business needs: Cloud/Saas (Software as a Service), Hardware Vendor Integrated Service, Software Vendor Integrated Service, Premise (Client-Server), Hybrid (Premise & Cloud/Saas).This diversity gives advanced security & privacy features with an on-demand structure needed for large Tier 3 and Tier 4 businesses that are currently underserved by the market.

The Intellinetics platform defines a new industry benchmark and game-changing approach by combining advanced virtualization & automated content management with an open and service-oriented architecture using web services. The company provides strategies, tactics, and technologies used to manage paper and digital assets from capture to long-term archive, without the need for manual processes conducted by a full time employee.

GlobalWise's management boasts a combined total of over 150 years in ECM leadership and industry experience. The ECM industry is expected to exceed $5.1 billion by 2013 with Gartner predicting a compound annual growth rate of 9.5%. IBM Market Insights predicts adoption of cloud computing to grow by 26% CAGR between 2010 through 2013. Leveraging management and key department heads, Intellinetics has a strong foundation from which to capture significant market share within the lucrative $149 billion Business Software & Services industry.

VistaGen Therapeutics, Inc.

VistaGen Therapeutics recently announced its membership in the Toronto-based Centre for Commercialization of Regenerative Medicine’s (CCRM) Industry Consortium. CCRM is funded by the Government of Canada, six Ontario-based institutional partners, and more than 20 companies representing the key sectors of the regenerative medicine industry. CCRM supports the development of foundational technologies that hasten the commercialization of stem cell-based and biomaterials-based products and therapies.

“VistaGen’s membership reflects our strong association with CCRM and its core programs and objectives, both directly and through our strategic relationships with Dr. Gordon Keller and the University Health Network (UHN). Our long-term sponsored research agreement with Dr. Keller, UHN, and UHN’s McEwen Centre for Regenerative Medicine offers both a solid foundation and unique opportunities for expanding the commercial applications of our Human Clinical Trials in a Test Tube™ platform by building multi-party collaborations with CCRM and members of its Industry Consortium,” stated Shawn Singh, VistaGen CEO.

About VistaGen Therapeutics, Inc. (VSTA)

VistaGen Therapeutics 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 once-promising drug candidates that have been discontinued during late-stage preclinical development 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 predictions of potential heart and liver toxicity of promising new drug candidates long before they are ever tested on humans.

By more closely approximating human biology than conventional animal studies and other nonclinical techniques and technologies currently used in drug development, VistaGen's human stem cell-based bioassay systems can improve the predictability of the drug development cycle and lower the cost of new drug research and development by identifying product failures earlier in the cost curve. According to the Food and Drug Administration even only a ten percent improvement in predicting failure before clinical trials could save $100 million in development costs, which savings ultimately could be passed on to patients.

Using mature human heart cells produced from stem cells, VistaGen has developed and internally validated CardioSafe 3D™, a novel three-dimensional (3D) bioassay system for predicting the in vivo cardiac effects of new drug candidates before they are tested in humans. VistaGen is now focused on using CardioSafe 3D™ to generate up to two new, safer small molecule drug rescue variants every twelve to eighteen months. VistaGen anticipates that these drug rescue variants will be modified versions of once-promising new drug candidates that have been discontinued by pharmaceutical companies and academic research institutions because of heart toxicity concerns, despite substantial prior investment and positive efficacy data demonstrating their potential therapeutic and commercial benefits.


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