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Oncolytics Biotech, Inc. (NASDAQ:ONCY) makes our list of stocks to watch after reaching an agreement with the U.S. Food and Drug Administration under the special protocol assessment process for the design of a Phase 3 trial examining REOLYSIN in head and neck cancers.

On Friday, Oncolytics said it's the first company to reach an agreement with the FDA on a Phase 3 trial design for an IV-administered oncolytic virus under the SPA process. The SPA is an agreement between Oncolytics and the FDA that the design and planned analyses of the Phase 3 study is adequately designed to provide the necessary data. The stock traded above it's 52-week high on Friday, but shares ticked down a bit after hours. As news spreads about this key development, interest in the company may rise as well since a license application submission for REOLYSIN would become a major development for the Calgary-based biotechnology company focused on the development of oncolytic viruses as potential cancer therapeutics.

Insiders at Cel-Sci Corporation (AMEX:CVM) had been buying up shares at open market prices just days before a vastly under researched story hit the news wires on Friday. Rumors about the latest report filings with the SEC had begun to spread and had prices for shares significantly rising above market close last Thursday after hours, but enthusiasm for the stock was dampened when the hit piece from the Street.Com took aim at them.

If you watch patterns, you've seen the same type of "bullish" insider buying activity take place on countless other occasions, but perhaps the most recent example comes from Human Genome Sciences (NASDAQ:HGSI) just days before news about BENLYSTA made shares jump significantly.

Specific details about a number of upcoming catalysts have yet to be disclosed by the company, but readers of this space know that the Cel-Sci has several pending news items due, including the unveiling of their new state-of-the-art cold fill laboratory, any number of announcements regarding their newly (FDA) fast-tracked H1N1 flu treatment human studies as well as official news about the launch of Phase III studies for Multikine.

Multikine is the company's multi-targeted, cancer immunotherapy which performed well in Phase II, but had been sidelined while said laboratory was being built to accommodate the production of the sensitive and complex biologic drug candidate platform.

Those looking for "tells," certainly point to news about the new laboratory as one such positive indicator. Would a publicly traded company spend a rumored $20-$25 million on a new lab to produce a their cancer vaccine if they didn't have enough scientific proof that the drug would perform well in Phase III? The United States Food and Drug Administration (FDA) certainly concurred with the initiation of a global Phase III clinical trial in head and neck cancer patients using Multikine back in January 2007, so this development would qualify as long awaited good news for the stock.

Upcoming news might also be related to the company's inclusion in the latest Vaccine Identification Standards Initiative. The office of the Chief Science Officer for the CDC has just added Cel-Sci to his comprehensive list of vaccine and biologics manufacturers and distributors. The company did not appear on documents previously released by the Centers for Disease Control and Prevention.

Another stock to watch is AVI BioPharma, Inc.(NASDAQ:AVII). The Wall Street Journal (see their video commentary here) and others seem to have taken an interest, as the company's drug for the worst form of muscular dystrophy moves toward FDA approval. The stock could also surge if the company becomes an acquisition target- as rumored.

Dr. Eric Hoffman, a leading Duchenne researcher at the Children's National Medical Center in Washington, said that he is very convinced this drug will work. Meanwhile, Prosensa, a Dutch company developed their own muscular dystrophy drug that is considered a promising treatment, alongside AVII's.

Marketing for such a drug is still some time away (perhaps 2012-2013) but it could bring over $1 billion in sales for the company and that makes it an attractive stock for longer term speculators.

AVI Biopharma, Inc. (AVI) has also developed the treatments for a coronary artery blockage, and for Ebola and Marburg. These drugs are also in early-stage trials. Barron's has published that it must be noted that AVI Biopharma, Inc. (AVII) has disappointed in the past, when its drug for hepatitis failed to pass the trials. The biopharmaceutical company specializes in the discovery and development of ribonucleic acid (NASDAQ:RNA)-based drugs targeting a range of diseases.

Finally, Inovio Biomedical Corporation (NYSE Amex: INO) announced interim safety and immunogenicity data from its therapeutic cervical cancer vaccine (VGX-3100) trial and that could make it a big gainer. According to the company, the vaccine was found to be generally safe and well tolerated, and achieved significant cellular and humoral immune responses at the lowest dose administered. A news report about those newly reported findings can be read at BioMedReports.

Disclosure: Long CVM

Source: 5 Biotech Stocks to Keep an Eye On