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MICRO CAP HOT TOPICS

October 2, 2013

Upcoming Q4 Events Bode Well for Nuvilex Shareholders

The fourth quarter of the year is typically a good one for micro cap stocks due to seasonal and macro issues and this year should be no different.  For Nuvilex, Inc. (OTCQB – NVLX - $0.12 – Spec Buy) shareholders, the last 3 months of the year should be extra sweet.  From the macro perspective, micro cap stocks tend to generate their greatest stock performances in the latter part of the year and the ensuing start of the next year. That is especially the case with many small biotechs as they outline goals and objectives for the coming year. However there are two additional factors which may drive the industry segment to an even higher than normal level.

At present, the Russell 2000 Index is heavily weighted in the financial services, consumer discretionary, and technology industries, while health care is only the 5th greatest weight.  This is interesting considering 4 of the top 10 performers of the index are health care stocks and 2 of the top 10 holdings are in health care. This dichotomy indicates to investors that there is no broad ownership in health care or biotech at this time and that the current positions may have a fairly meaningful concentration.

Given that just yesterday S&P Capital downgraded the financial services sector weighting and the seasonality of consumer discretionary stocks declines in the early part of the year, we expect a major shift in industry weighting during Q4. As a result, investors should prepare for a sector rotation to the health care and specifically the biotech arena, this quarter.  Separately, one of the most opportunistic of the major oncology-focused biotechs, Celgene Corp. (NASDAQ – CELG) just made a $10M investment in Acceleron Pharma (NASDAQ – XLRN), a cancer treatment developer. This latest move is one in a recent series made by big pharma into smaller firms and Nuvilex likely remains on the list of qualifying candidates going forward.

On the micro front, Nuvilex investors may also be rewarded by upcoming milestones such as the pending closing of the diabetes technology treatment rights acquisition which was originally announced in 3Q13. This deal should immediately boost the Firm’s valuation, upon closing. Plus, investors can expect to receive progress reports regarding the Firm’s advanced clinical trials initiatives such as the production of the live cancer-drug-activating cells that will form part of the treatment to be used in its pancreatic cancer studies and the GMP facility in which the actual encapsulation of those cells will take place. 

All in all, with seasonality, sector rotation, and key milestone news ahead, Nuvilex’s stock appears to have the wind at its back, which is good news for shareholders.

For more information, refer to our previous sponsored PLPL Reports, Updates and Hot Topics by visiting www.GoldmanResearch.com

Senior Analyst: Robert Goldman
Rob Goldman has over 20 years of investment and company research experience as a senior research analyst and as a portfolio and mutual fund manager. During his tenure as a sell side analyst, Rob was a senior member of Piper Jaffray's Technology and Communications teams. Prior to joining Piper, Rob led Josephthal & Co.'s Washington-based Emerging Growth Research Group. In addition to his sell-side experience Rob served as Chief Investment Officer of a boutique investment management firm and Blue and White Investment Management, where he managed Small Cap Growth portfolios and The Blue and White Fund.

Analyst Certification
I, Robert Goldman, hereby certify that the view expressed in this research report accurately reflect my personal views about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the recommendations or views expressed in this research report.

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