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Dendreon (NASDAQ:DNDN) shocked the investing world last month after reporting positive Phase III results for it's prostate cancer immunotherapy treatment Provenge.

Although the company still must overcome the hurdle of FDA approval, investors are out searching for the next Dendreon, and VFC's Stock House, as always, is here to help.

One possibility is Oncothyreon (NASDAQ:ONTY), a company written off by many speculative investors a couple of years ago after changing it's name from Biomira (BIOM) and subsequently conducting a reverse stock split.

ONTY has since then rebounded from a stock price of below a dollar to it's current level of just over three.

Oncothyreon's claim to fame is the Stimuvax vaccine, currently in a Phase III trial to measure it's effect in treating patients with 'unresectable stage III non-small cell lung cancer.' The company has licensed Stimuvax to Merck KGaA in a partnership that grants Merck (NYSE:MRK) worldwide marketing and distribution rights while paying Onconthyreon various milestone payments and a royalty on net sales.

There has been no significant news released regarding Stimuvax that would have sparked the recent rise of the stock price, however, on March 18th Rodman & Renshaw initiated coverage of ONTY with a rating of 'Market Outperform.' This initiation of coverage undoubtedly drew new investor interest to the stock.

Aside from the Simuvax vaccine, Oncothyreon also has a pipeline of three cancer-fighting small molecules undergoing clinical trials. The most advanced of the three, PX-12, is currently in a Phase II trial while the others, PX-478 and PX-866, are still in Phase I.

In a quarterly report released Thursday, the company showed significant cost reductions and a narrowing of losses due to the transfer of all clinical trial and production responsibilities to Merck.

ONTY is not nearly as well known a stock as Dendreon's, but any positive news regarding the Phase III 'START' trial could significantly move the stock.

Additionally, if Phase III results are positive I wouldn't be surprised to see Merck buyout the smaller Onconthyreon to avoid the milestone and royalty payments, but that is pure speculation on my part.

Cancer immunotherapy vaccines may be the breakthrough that the world has been waiting for in regards to how we treat cancer, and while investors can benefit handsomely from their success, let's not forget that the most significant gain is made by the patients that may soon be able to fight their illness without the vicious side effects of chemotherapy and radiation treatments.

Investing in cancer immunotherapies is very risky, as most immunotherapy treatments have failed to prove effectiveness in clinical trials. However, Dendreon's skyrocketing stock price shows what is possible if one succeeds.

Disclosure: VFC is long ONTY.

Source: Looking for the Next Dendreon? Consider Oncothyreon