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(Editors' Note: This article covers a micro-cap stock. Please be aware of the risks associated with these stocks.)

Brain cancers are among the most deadly and hard-to-treat types of cancer in existence. Roughly 12,000 to 14,000 people in the United States alone have primary malignancies in the brain and nervous system. Approximately 1,500-2,000 of these brain cancer patients die each year. The approximate 5-year survival rate for these types of cancers is ~33% across all ages and races. This statistic has not been improved very much over the last few decades.

Glioblastoma is the most common form of primary brain cancer and represents approximately 50% of neoplasms in the brain tissue of adults. Even if the tumors are benign, they can cause death in many cases due to their proximity to vital regions of the brain. Incidence is on the rise, largely due to a surge in the elderly population.

Treatment for gliomas is tricky after a patient undergoes surgical resection of the primary tumor. Radiation therapy is commonly used to slow the cancer, although patients are left with only a handful of adjuvant therapies after this. One commonly used drug is bevacizumab, which is a monoclonal antibody that binds to vascular endothelial growth factor (VEGF) to inhibit angiogenesis - or new blood vessel growth. Another commonly used drug is temozolomide, a cytotoxic agent that was designed specifically for brain cancer.

Altogether, we estimate that the US glioblastoma drug market is worth approximately ~$650 MM in annual revenues.

Other adjuvant chemotherapies are also being used, although there is major need for improvements in this specific field. The following two companies are attempting to address this unmet need:

1.) DelMar Pharmaceuticals (OTCQB:DMPI)

DelMar is a biopharmaceutical company that is developing VAL-083 - a first in class small-molecule chemotherapeutic that is currently being developed as an adjuvant therapy for glioblastoma. Investors should note that this compound, which was originally developed by the National Cancer Institute (NCI), has demonstrated activity in a number of different types of cancer. This implies that VAL-083 may have potential in other prominent cancer indications.

Earlier this year DelMar presented promising Phase I/II interim data at the American Association for Cancer Research (AACR) 2013 annual meeting, which showed that the drug was tolerable and acceptable at previously tested dosages. The maximum tolerated dose (MTD) has yet to be established.

DelMar presented at ASCO 2013, and announced a decision to split the Phase I/II study into two - one for the refractory glioblastoma indication and one for metastatic brain cancer.

The expected completion date of the trial is in March 2014, although primary data collection should be completed in January 2014. This implies that we should definitely see the data before the end of H12014. Also worth noting is a potential for fast-track designation, which would allow the drug to be brought into pivotal late-stage trials immediately after completion of the current study.

2.) CytRx Corporation (NASDAQ:CYTR)

CytRx is a biopharmaceutical company currently focused on the development of Aldoxorubicin (INNO-206). Aldoxorubicin is a modified version of the chemotherapeutic agent doxorubicin, and utilizes the protein albumin as a drug-delivery device. As is the case with many other drugs that improve the delivery of cytotoxic agents, aldoxorubicin is designed to increase efficiency of delivery to malignant cells while reducing damage to healthy tissues.

Aldoxorubicin may be a particularly exciting drug for the treatment of Glioblastoma multiforme ((GBM)), which is a highly aggressive, deadly brain cancer that is extremely difficult to treat. Surgery and radiation therapies generally prolong survival, although the blood-brain barrier makes it very difficult for chemotherapeutic agents and other cancer drugs to reach the tumor cells.

In proof-of-concept studies using xenograft mouse models, it was shown that aldoxorubicin penetrates into GBM malignancies better than doxorubicin and significantly improves survival rates. CytRx is hoping to prove these results in a Phase IIb GBM trial that should be initiated before the end of the year. Success in this trial would be a huge deal for the company and its investors, and would lead to a breakthrough designation application by CytRx for GBM. While only 25 out of 57 applications were successful this year, drugs that receive this status enjoy an expedited and clear path to final FDA approval.

The most mature aldoxorubicin programs are targeting 1st and 2nd line treatment for patients with soft tissue sarcoma (STS). Investors are anticipating data from a 1st line STS patient trial before the end of the year, which aims to establish aldoxorubicin's superiority over doxorubicin with progression-free survival (PFS) data from a pool of 105 patients. The first Phase III trial for the 2nd line indication is expected to commence in Q1 2014.

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Source: 2 Biotechs Targeting Brain Cancer