Sign Up NowThis Month's Tiny Gems - April 2014

FX Energy, Inc. (FXEN)
Sandstorm Gold Ltd. (SAND)
Verastem, Inc. (VSTM)
Zogenix, Inc. (ZGNX)

 

 

 

FX Energy, Inc. (FXEN)

 

Headquartered in Salt Lake City, FX Energy, Inc. (FXEN) is an independent oil and gas company focused on Poland, where the company aims to take advantage of underexplored hydrocarbon producing areas by leveraging its large land position, strong technical team, and number of attractive gas prospects. The company’s Polish operations are headquartered in Warsaw. FX Energy also has “modest” oil production and oilfield service activities located in the United States.

 

Exploration efforts in Poland are primarily focused on the Rotliegend sandstones of the Permian Basin where the company has identified a core area consisting of approximately 853,000 gross acres. FX Energy holds interests in approximately 1.8 million net acres throughout Poland, and was one of the first independent oil and gas companies to acquire a large land position, initiate a focused exploration and development program, and begin producing hydrocarbons in Poland. Producing wells in the Fences concession area are now providing significant cash flow that FX Energy plans use to expand exploration and production efforts throughout the country.

 

The company’s U.S. operations provide a modest amount of cash flow and are not capital intensive. These operations consist mostly of shallow, waterflood oil-producing wells in the Southwest Cut Bank Sand Unit of Montana. As of December 31, 2013, FX Energy’s U.S. reserves (all of which were proved reserves) were estimated at 461,000 Bbls of crude oil with a SMOG Value of approximately $8.2 million. At year-end 2013, U.S. reserves were approximately 6% of total proved reserves on a gas equivalent basis. The company’s oil wells produce approximately 133 Bbls of oil per day, net to its interest. From its field office in Montana, FX Energy also provides oilfield services, which provided approximately $1.2 million in full-year 2013 revenue.

 

FX Energy’s broader focus is to increase revenues in its core area and further explore and evaluate its acreage in Poland. While continuing to concentrate the majority of its efforts and resources on the Fences concession, FX Energy is also increasing efforts in other exploration blocks in Poland.

 

 

 

Sandstorm Gold Ltd. (SAND)

 

Sandstorm Gold Ltd. (SAND) finances gold mining projects through an arrangement called “gold streaming,” in which Sandstorm makes an upfront payment to a mining partner that needs capital to build their mine, refinance their obligations, complete an acquisition, or for various other reasons. In exchange, Sandstorm receives a contract which stipulates the purchase of a certain percentage of the gold produced from the mine, for the life of the mine, at a fixed per unit cost.

 

The gold streaming business model allows Sandstorm to focus on accretive growth while creating an attractive gold investment for the public, and minimizes the downside risks typically associated with mining investment because there is no obligation for Sandstorm to contribute additional capital after the upfront payment is made. Furthermore, Sandstorm’s ongoing cash costs are permanently fixed.

 

For the fourth quarter and full year ended Dec. 31, 2013, Sandstorm reported record revenues of $15.8 million and $59.8 million, respectively. Based on the existing gold streams and including attributable production relating to the company’s NSRs, forecasted 2014 attributable production is between 40,000 to 50,000 gold equivalent ounces, increasing to approximately 60,000 of gold equivalent ounces per annum by 2016. The company attributes this growth largely to its portfolio of gold streams with mines, most of which are either currently producing or expected to commence production by 2015.

 

Sandstorm was founded by company president and CEO Nolan Watson and Executive Vice President David Awram who, prior to Sandstorm, were the first two employees of Silver Wheaton, the largest in the world. Sandstorm has acquired a portfolio of eight gold streams and 27 gold royalties, of which 13 of the underlying mines are producing gold. The company’s plan is to grow and diversify its low cost production profile through the acquisition of additional gold streams.

 

 

 

Verastem, Inc. (VSTM)

 

Verastem, Inc. (VSTM) is a clinical-stage biopharmaceutical company focused on discovering and developing drugs to treat cancer by the targeted killing of cancer stem cells, an underlying cause of tumor recurrence and metastasis, and thereby reducing the initiation of new tumors. The company is developing small molecule inhibitors of signaling pathways that are critical to cancer stem cell survival and proliferation – its current programs are: FAK, PI3K/mTOR, and Wnt.

 

Research by Verastem’s scientific cofounder Robert Weinberg and others demonstrates the central role Focal Adhesion Kinase (FAK) signaling has for the development and survival of cancer stem cells. FAK activity appears to be critical in disease progression and establishment of new tumors – hallmarks of cancer stem cells. The company’s small molecule FAK inhibitors preferentially target cancer stem cells and reduce this tumor-initiating capability.

 

The PI3K/mTOR signaling pathway is a key regulator in cancer progression and the survival of cancer stem cells. Using high-throughput screening based on proprietary technology, Verastem has identified the dual inhibition of both PI3K and mTORC1 and mTORC2 preferentially kills cancer stem cells.

 

The Wnt signaling pathway has been established a key regulator of cancer stem cell development and survival. Verastem is collaborating with Eisai to develop novel inhibitors of the Wnt pathway for the treatment of cancer by the targeted killing of cancer stem cells. This program is in pre-clinical development.

 

 

 

Zogenix, Inc. (ZGNX)

 

Zogenix, Inc. (ZGNX) is developing and commercializing products for the treatment of central nervous system disorders and pain with a focus on innovative solutions for unmet medical needs. Established in 2006, Zogenix’s overarching goal is to offer patients safe and effective treatments and to provide them with education on appropriate use of each product.

 

The company’s first commercial product, SUMAVEL® DosePro® Needle-free Delivery System, was launched in January 2010 for the acute treatment of migraine and cluster headache. The product is an improved version of an existing formulation, sumatriptan injection, combined with Zogenix’s user friendly DosePro technology. The company’s proprietary DosePro technology platform has a wide range of applications designed for self-administration of subcutaneous pharmaceuticals and biologics.

 

Lead product candidate Zohydro ER™ is an oral, single-entity (without acetaminophen) novel extended-release formulation of various strengths of hydrocodone. Zohydro ER is intended for administration every 12 hours for the management of moderate to severe chronic pain.

 

Zolgenix’s second investigational product candidate, Relday™, is a proprietary, once-monthly subcutaneous formulation of risperidone for the treatment of schizophrenia. The company reported positive single-dose pharmacokinetic (PK) results from the phase 1 clinical trial of Relday in January 2013. Zolgenix concurrently announced a plan to extend the current Phase 1 study to include a 100 mg dose of the same formulation and to accelerate development by utilizing needle and syringe delivery. Results from the extended phase 1 clinical trial are expected during the second quarter 2013.