There will be over 1.6 million new cases of cancer diagnosed in the U.S. in 2012 with close to 600 thousand people expected to die from the disease this year. Numbers are more staggering on a global scale; according the World Health Organization (WHO) in 2008 alone there were over 12.7 million cases of new cancers diagnosed, and 7.6 million deaths related to the disease. About half of the cancer deaths are from 5 cancers - lung, stomach, liver, colorectal, and breast. On a positive note, with advancing treatments and early detection, the 5 year survival rate from cancer is up 67% over the past 10 years. Older technologies of systemic poisoning via chemotherapy or radiotherapy have gradually given way to more targeted means of therapy administration, which not only increases the effectiveness of the therapies, but also dramatically increases the safety profiles of the therapies used. Following are three companies, which I believe to be of great investment potential that has core business foci on targeted therapies. Although the three companies are very different and in different stages of development, each utilizes targeted therapy administration to target cancer cells while attempting to minimize exposure of healthy tissues.
Immunotherapy has become a major focus in treating many of today's most aggressive cancers, and new treatments using targeted immunotherapy are being developed and are in various phases of development. Also known as biologic therapy or biotherapy, this type of therapy uses or trains the body's immune system to target such cancers as breast, lung, colon, and skin. There are generally two methods of immunotherapy, stimulating the immune system to be able to battle the disease, or by adding certain proteins, called antibodies, into the immune system cells designed to either stop the cancer cells from growing or kill the cancer cells. Galena Biopharma Inc. (GALE) a small biotechnology company based in Lake Oswego, OR develops targeted biotherapeutics for cancer patients. Its lead therapy candidate, NeuVax, began enrollment earlier this year in a Phase III trial under the Food and Drug Administration's (FDA) Special Protocol Assessment as an adjuvant therapy for women having the protein human epidermal growth factor receptor 2 negative (HER2-) that are not eligible for Herceptin. HER2 is a protein that promotes the growth of cancer cells. HER2+ is a more aggressive type of breast cancer than HER-, but accounts for only 25% of the breast cancer patients. Herceptin, which was developed by Genentech, a subsidiary of the Swiss Pharmaceutical giant Roche (RHHBY.OB), is prescribed to women with the less common but more aggressive HER2+. Galena's NeuVax, an E75 peptide derived from HER2 combined with the immune adjuvant granulocyte macrophage colony stimulating factor (GM-CSF), is focused on the HER2-, which accounts for about 50% of the breast cancer sufferers. NeuVax stimulates CD8+ T cells to target cells having the HER2- protein expression. Roche's Herceptin sales are $1.66 billion annually, and that only accounts for 25% of the breast cancer patients. If NeuVax receives FDA approval in treating treat low to intermediate HER2- negative patients it could find itself with a drug as financially successful, if not more so than Herceptin.
Galena stock has had an excellent run, up 257% YTD. However, in the past week of trading it has given up over 17% of its price, largely due to overall market sentiment, which may provide for good entries at current prices for this promising biotech. On November 13th Galena posted a net loss for Q3 2012 of $6.3 million, or $0.09 per share. Net loss for the first nine months of 2012 came in at $31.2 million, or $0.52 per share. Galena is trading at $1.67 per share; meanwhile analysts' consensus has the target price at $5 per share. This stock appears to be oversold and undervalued. If NeuVax Phase III interim data is indicative of possible solid topline results, the share price will likely respond and meet, or likely even exceed the analysts' target price; therefore I see this stock as a buy.
LTSL Chemotherapy Drug Administration
Celsion Corporation (CLSN) an oncology drug development company based out of Lawrenceville, NJ, has developed a new delivery system using Lysolipid Thermally Sensitive Liposomes (LTSL) to deliver a cancer fighting drug. The LSTL's are filled with doxorubicin, a proven chemotherapy agent, and is then delivered intravenously and pared with radio frequency ablation that produces a slightly above normal body temperature which causes the LTSL membrane to melt releasing the Doxorubicin at the tumor site. The company's most advances clinical candidate is called ThermoDox and is being developed for treating liver cancer for patients not eligible for surgery. If clinicals continue to prove promising, ThermoDox could be one of the next big cancer fighting drugs, especially when one considers that there are roughly 750,000 new cases of liver cancer diagnosed annually, and The World Health Organization predicts that by 2020 liver cancer will be the No. 1 cancer in the world, overtaking Lung cancer. What's interesting about ThermoDox is the company is not developing a new chemotherapy drug but a new way of delivering a proven chemotherapy. ThermoDox is in a Phase III trial consisting of 700 patients with primary liver cancer, and the company hopes to have topline data by January 2013. ThermoDox has already been given priority status by health regulators in the United States and elsewhere, and if the data proves positive and the approval process moves along without delays Celsion believes it could see ThermoDox, its first drug, approved by the end of 2013.
Once Phase III data is released, Celsion will be looking for licensing deals with companies to sell ThermoDox in Asia, Europe and emerging markets. Though the company plans to market ThermoDox in the U.S. itself, Michael Tardugno CEO of Celsion also sees that positive data may lead to serious discussion about licensing the drug in the U.S. too. Mr. Tardugno commented on possible licensing deals, "There's more than one multi-national company ... that have initiated diligence." ThermoDox is also in Phase II studies consisting of up to 109 patients with recurrent breast cancer that has spread to the patient's chest wall. Phase II builds on positive Phase I studies which demonstrated strong evidence of either stable disease, partial response or complete response.
Celsion is a $231 million market cap company, and has seen its stock jump 288% YTD. On November 12th the company posted a net loss of $6.0 million, or $0.18 per share. For the first nine months of 2012 the company reported a net loss of $18.3 million, or $0.55 per share, compared to a net loss of $17.1 million, or $0.72 per share, in the same period of 2011 R&D costs dropped roughly $1.9 million to $3.5 million Q3 as opposed to $5.4 million in Q3 of 2011. In August Griffin Securities, who has a buy rating on Celsion, raised its 12 month target price from $10 to $18 per share. Given the positive results of ThermoDox, and its possible use for a wider array of cancers including breast and pancreatic cancers, if ThermoDox is approved by the FDA this stock could easily exceed the target price. Though I am bullish on Celsion's stock, I do urge caution at this time the company is not making a profit so if there are delays in the approval it could have a negative effect on the stock price.
Radiogel Targeted Radiotherapy Administration
Advanced Medical Isotope Corp. (ADMD.OB), a microcap company based in Kennewick, WA is one of the few companies filling the void for the much needed and short supply of medical isotopes in the U.S. However, it is also developing a new method of delivering cancer fighting isotopes as a means to fight cancer through radiotherapy. The promising therapy is called Radiogel, which ADMD obtained through a licensing agreement with Battelle Memorial Institute, a private non-profit science and technology development company. Radiogel is a biodegradable polymer that delivers Yttrium-90 microspheres directly into the tumor as an injection. What makes Radiogel most interesting is how it targets cancer cells by keeping the radioactive isotopes localized in one area, thereby keeping systemic exposure to a minimum. When the polymer is injected to the targeted cancer site it is in a liquid form. However, once the polymer warms to body temperature, it transforms into a gel trapping Yttrium-90 microspheres in place allowing the high energy beta particles to irradiate the cancer cells in the targeted tumor. Being able to predominantly target the cancer cells, Radiogel has been able to maximize the overall radiation dose to the targeted area with little of the radiation reaching nearby healthy tissue. One of the exciting aspects of this targeted method is that since it can be administered with an injection or during surgery. Therefore, the therapy can be delivered to cancer tumors that normally could not be removed surgically from the patient's body. Radiogel is designed to treat radiation-resistant solid cancers and has applications for cancers of the brain, liver, kidney and pancreas, and appears to be promising for tumors in the eye. Advanced Medical Isotope Corp. estimates that once Radiogel is on the market sales should reach between 5-15 million, with future sales estimated in excess of 75-100 million. Any updates on its regulatory process will likely garner the company much attention, especially if a timeframe on clinicals is mentioned.
Advanced Medical Isotope Corp. is a nano cap company with a $13.8 million market cap. Its stock is up almost 80% YTD yet still might be a bargain as in the last three months the stock has slipped somewhat. Today it trades just below $0.18 per share and appears to have found its bottom and has been on a slight upward trend rising 20% in the last month or so. Being a true nano cap company with no real earnings, this stock will move up or down dramatically on positive or negative news and thus can be a very volatile investment, as shown by its low steady volume followed by spikes upward in volume. However, this little company has potential to move upward on news of either of its two catalysts - producing and delivering medical isotopes, and its Radiogel technology. And though I do like that there is a much demand for a U.S. medical isotope producer, and once operational should produce revenue for the company, it's the future of Radiogel technology that piques my investment interest. Radiogel, once on the market, seems to have great earning potential and might interest a larger biopharmaceutical company to either partner up or buy out the company. Therefore, I see Advanced Medical Isotope Corp. as a buy at this price level.
Above I briefly summarized three companies that I believe could provide investors with solid gains if upcoming clinical data or other events indicate hope in these companies' product lines. Each of these companies should be considered as development-phase with the obvious associated risks of poor data or poor financials, either of which could impact share price negatively. However, the upside potential for each of these is good with any positive reported developments. Interested shareholders should consider the companies' charts, current financials, pipeline progression and targeted market groups and then make comparisons to each of the companies' market capitalization and ascertain if and why type of investment to make in these promising biotechs. As targeted cancer therapies are further validated, all of these companies' share prices may appreciate by association. However, I believe each of these has more to offer than just by being part of a sector of growing, targeted therapies. I believe each of these can possibly provide for significant gains from current levels via its own merit. Each was worthy of my research, and I believe is worthy of other investors' consideration with many upcoming catalysts likely coming from each.