This was the early method of performing a lobotomy. And just 50 years ago, they were carried out not only on severely mentally ill people, but also on moody teenagers, or housewives who’d lost their enthusiasm for domestic work. Seriously. Over 40,000 Americans were lobotomized, often with catastrophic results.

Thankfully, they’re a thing of the past. But it made me think about how medicine has changed over the years and what practices were once acceptable. Just a few hundred years ago, for example, you wouldn’t have questioned the “doctor” for putting leeches on you any more than you do today for prescribing an antibiotic.

What other common medical practices will be outdated in the years to come – and more importantly what will replace them? As someone who follows the health care sector, I believe I have the answer to the next big thing in health care: Immunotherapy and regenerative medicine…

How Immunotherapy is Changing the Playing Field

Immunotherapy has been around for decades in the forms of vaccines, allergy shots, etc. It involves introducing something into the body to create an immune response. For example, when you receive a flu shot, you’re essentially training your body’s immune system to respond to specific infectious agents.

And then there are more serious diseases – like cancer.

Over the past few years, we’ve seen new cancer medicines receive approval, with even more in development.

With greater technology and intensive ongoing research, we may one day look back at chemotherapy (the equivalent of carpet-bombing your body in order to kill cancer) as barbaric as we do lobotomies.

And with regard to immunotherapy drugs, the body’s immune system specifically targets the cancer, typically resulting in fewer side effects than chemotherapy.

Several well-known cancer drugs already employ this technique – for example, Genentech’s Avastin and Herceptin and Bristol-Myers Squibb (NYSE: BMY) and ImClone’s (now Eli-Lilly) joint-partnership with Erbitux. All three have become blockbuster drugs for these companies.

Three Small-Cap Firms That Could Cash in on Immunotherapy

But there are also many small-cap health care companies engaged in immunotherapy research, which stand to make piles of money for shareholders if they develop a successful drug. Here are some names to look into…

• Dendreon Corp. (Nasdaq: DNDN): Prostate cancer is the most common cancer among American men and is the second-highest cause of cancer deaths. Dendreon’s leading drug candidate for prostate cancer, Provenge, could be approved in 2010.
• Cel-Sci Corp. (AMEX: CVM): The company’s Multikine drug, which treats head and neck cancer has completed Phase II trials and its scientists are currently working on an H1N1 flu drug, too.
• Northwest Biotherapeutics (OTC BB: NWBO): The firm has several drugs in various phases of clinical trials for brain, prostate and lung cancers, including DCVax-Brain, DCVax-Prostate and DCVax-LB for non-small cell lung cancer. It also has DCVax-Direct, which treats ovarian, head and neck cancer.

Three “Regenerators” for Your Health Care Sector Watchlist

In addition to immunotherapy drugs, the field of regenerative medicine is also flourishing and holds some excellent growth potential, as we’re still in the early stages of understanding the power of stem and other regenerative cells. Here are a few names to kick off your research…

• Cytori Therapeutics (Nasdaq: CYTX): The company already has a product approved in Europe (Celution 800/CRS) and Asia (Celution 900/MB) for breast reconstruction following a partial mastectomy. The firm is currently running clinical trials in several cardiac areas, too.
• StemCells Inc. (Nasdaq: STEM): The company currently has clinical trials in progress for drugs that treat diseases of the central nervous system and liver.
• Geron (Nasdaq: GERN): It’s involved in both immunotherapy research for cancer and stem cell investigation in spinal cord injuries.

Keep in mind that most of these stocks are very small, so their trading can be volatile. In addition, they may need to raise funds to aid research and development, so do your due diligence.

However, I’m confident that over the coming years, firms like these will be at the forefront of new, more effective and safer ways to treat some of the world’s worst diseases.

Hoping your longs go up and your shorts go down,

Marc Lichtenfeld

Source: How to Profit from Immunotherapy & Regenerative Medicine

Sometimes the best way to see where you are going is to look where you have been. Of course every financial commentator always covers his backside by telling you “past performance is not an indication of future returns,” just as he whips out charts of historic action.

With the second quarter in the history books, we can learn who were the winners and the losers and work to uncover any important patterns or indicators. The results may be surprising.

I will start with the top three gainers, all listed on the Nasdaq exchange.

Dendreon (NASDAQ:DNDN) wins top honors with a quarterly gain of 495%. The biotech company that was trading for just $2.55 per share in March is now going for close to $24 today after stretching as high as $27.40 in recent weeks. The surge came thanks to positive news from the company’s prostate-fighter Provenge.

The exchange’s next top gainer is MAP Pharmaceuticals (NASDAQ:MAPP) with quarterly gains of 481%. Its wealth-generating propensity came on the news that the company’s migraine drug met four critical endpoints. Most of the company’s movement came last month when shares soared from the $3 range to a high of close to $14.

Finally, the third-place winner, with gains of 340% is Fuqi International (NASDAQ:FUQI), a precious metal jeweler in China. As the country’s economy showed signs of strength, Fuqi surged from $3.31 to close to $20 per share.

Two drug companies and a gold player in the winners. If you visit TFN with any regularity, you are not surprised by the news.

How about the losers?

Earning the Nasdaq’s worst-performance award is Star Scientific (NASDAQ:STSI), a manufacturer of “less-deadly” tobacco products.

Its precipitous decline came after word broke the company lost a patent lawsuit against a behemoth competitor, Reynolds America. In just the first half of June, shares of the company dropped from over $5 to just north of a buck a share. In all, the company lost 79% of its value during the year’s second quarter.

Trailing closely is yet another biopharm player, Anadys Pharmaceutical (NASDAQ:ANDS). When word the company’s Hepatitis C treatments were not up to par hit the Street, shares began shedding value like a dog shakes off a heavy rain.

The company lost 73% of its value in the past three months.

Rounding out the Nasdaq’s losers is yet another biotech, Sequenom (NASDAQ:SQNM). It lost 72% of its share price after it announced “employee mishandling” of data made Down syndrome testing results unreliable.

Two more examples of the volatility associated with the speculative biotech industry. It is proof one news event can make or break these fast-moving companies, sometimes permanently.

Pay attention here

Finally, after compiling a list of losers for the NYSE, it is obvious those leveraged short ETFs are some of the most dangerous investment tools out there. Far worse than the default swaps so many investors love to hate.

When the markets surged from their March lows, the last investment you wanted in your portfolio was the Direxion Financial Bear 3X Short (NYSE:FAZ). Designed to use leverage to create gains tripling an intraday drop in the market, the ETF created losses of 77% for the folks that unwisely bought into the fund with a buy-and-hold strategy.

This is perfect proof that these funds are dangerous when not used properly and it exemplifies why no investor should hold a leveraged short position for more than a few hours, let alone an entire quarter.

As the math shows, even if you get the trend right, you can still lose an awful lot of money.

The last three months were filled with stories of great gains and strong losses. Most intriguing is the gap between so many biotech companies.

Pick the right ones (which we appear to be quite good at here at TFN) and you can make out like a bandit. Go with the wrong one and, well, the numbers speak for themselves.

For my take on what the current quarter’s list of winners and losers will look like, click here.

Source: The Second Quarter’s Biggest Winners… and Losers

• Standard & Poor’s yesterday (Monday) reduced the credit rating of Royal Bank of Scotland PLC (ADR: RBS), lowering the rating of both the Edinburgh-based bank’s long-term and short-term debt. “The rating actions reflect Standard & Poor’s expectation that RBS’s financial profile may continue to weaken,” the analysts said, citing a “combination of mixed earnings prospects, deteriorating credit risk in its key geographies, and difficult market conditions” in which to shore up its capital, Bloomberg News reported. RBS stock sank over 20% on the downgrade.

• Shares of biotech firm Dendreon Corp. (DNDN) soared 33% yesterday (Monday) on news of a good drug trial. Provenge, Dendreon’s experimental prostate cancer drug, reduced the risk of death in 20% of trial participants, Reuters reported. Dendreon shares gained $1.73 to close at $6.93.

• Eli Lilly & Co. (LLY) announced yesterday (Monday) that it plans to buy ImClone Systems Inc. (IMCL) for $6.5 billion in a deal that values the biotech firm at about $70 share. This latest offer from Eli Lilly beat out Bristol Myers Squibb Co.’s (BMY) competing bid of $62 per share. However, Bristol Meyer’s will receive approximately $1 billion in cash for its 17% stake in ImClone, The New York Times reported.

• AgFeed Industries Inc. (FEED) announced yesterday (Monday) a $10 million share repurchase program to commence immediately. AgFeed, which does most of its feed and hog production business in China, will fund the share buyback with current cash reserves, Trading Markets reported.

• Bank of America Corp. (BAC) yesterday (Monday) reported third-quarter results earlier than planned, and revealed a 68% drop in profit, as well as plans to boost capital by selling stock and halving its dividend. Profit fell to $1.18 billion, or 15 cents per share, for the July-to-September period from $3.7 billion, or 82 cents per share, in the same period last year.

• U.S. Treasury Secretary Henry M. Paulson selected Neel Kashkari, a former Goldman Sachs Group Inc. (GS) executive and current assistant secretary to be the interim head of Treasury’s new Office of Financial Stability, The Associated Press reported. Kashkari will be in charge of the office created by the emergency legislation enacted Friday to fund the largest government bailout. Paulson was the head of Goldman before joining the Bush administration in 2006.

Source: Global Investing Roundups Tuesday, October 7th, 2008