Prima BioMed (PBMD) is an oncology focused biotech company currently developing an immunotherapy treatment for cancer which can be specifically tailored to a patient's unique biology. The new field of immunotherapy encompasses treatments which work to enhance a person's immune system by enabling it to recognize and attack cancer cells more effectively. While the current cancer treatment standard of chemotherapy is sometimes effective, it is always highly toxic and typically works to not only kill some cancer cells but destroy a high percentage of the patient's immune system as well. Further concerning is new research on chemotherapy out of the University of Alabama which suggests that chemotherapy can work to make cancers more aggressive over a longer-term period of time while also promoting metastasis. Clearly western medicine is due for an upgrade. The new field of immunotherapy, which only a handful of companies are working in, could fit the bill. According to Citigroup analyst Andrew Baum, immunotherapy sits to likely become the biggest drug class in history with potential sales growth up to $35B within the next 10 years. If this prediction does materialize, then cancer immunotherapies would surpass annual sales of the current highest selling drugs, statins, which are prescribed for high cholesterol.
PBMD, which is the current leader in developing personalized immunotherapy treatments, is looking to focus its direction specifically on treating cancer. The company's therapy called CVac works by first taking a patient's white blood cells and maturing them into dendritic cells (immune cells). From there these cells are exposed to the antigen Mucin-1 which is found to be overly expressed in cancer cells and stimulates the activation of T-Cells and CD8 cells which kill cancer cells. After further processing, the patients' cells are then injected back into their body containing higher quantities of Mucin-1 which can then amplify the immune system's activation of cancer killing T-cells. Currently, PBMD is working on 5 clinical trials for its CVac immunotherapy which can be viewed below:
Ovarian Cancer (Remission patients after 1st line of chemotherapy)
Ovarian Cancer (Patients who progressed on CAN003)
Ovarian Cancer (Remission after 1st or 2nd line therapy)
Ovarian Cancer (Patients with no further options)
Terminal Cancer Adenocarcinoma (Breast Cancer, Ovarian Cancer, Colon Cancer, Lung Cancer, Esophageal Cancer, Fallopian Cancer)
In terms of PBMD's cash, I find the company to be in a significantly strong position with a bit over $30M currently. Likewise, the company's current market cap of $115M appears to be extremely undervalued in comparison to other companies in the immunotherapy sector. Current development stage immunotherapy companies such as Celldex (CLDX), and Dendreon (DNDN) both are valued between $770M and $1.6B. Considering that PBMD's is currently running numerous clinical trials for cancer which are so far showing to be effective in treating the disease, a significant upside correction appears to be in store for the company.
|Immunotherapy Company||Market Cap|
Since beginning its numerous trials in an effort to treat cancer, PBMD's CVac has shown significant signs of anti-tumor activity as well as disease stabilization after a patient's cancer has progressed. What is further promising about the therapy is that it not only acts as a potential stand-alone treatment for cancers, but may also show efficacy when used in conjunction with chemotherapy treatments. Upcoming catalysts for the company include: 1) Final clinical data from the company's Phase II Ovarian cancer trial prior to this year's end. 2) The completion of a companion Mucin-1 diagnostics test 3) CVac manufacturing scale up, and 4) The completion of the company's Phase II/III CANVAS trial for CVac in conjunction with chemotherapy. While the company clearly shows promising upcoming catalysts, on the downside, the stock currently trades at a low volume of 23,286 shares per day. This can have the potential to scare away funds and institutions from investing due to low liquidity. Due to what appears to be a lack of public exposure, PBMD has not yet caught up to the standard valuation for competitors in the immunotherapy space. That being the case, I see PBMD currently to be an extremely undervalued cancer immunotherapy stock with significant share price and market share upside.