GenVec, Inc.(NASDAQ:GNVC) may be a biotech company to watch in the near term. The most immediate potential catalyst is GNVC's presentation at the ROTH 22nd Annual Orange County Growth Stock Conference on Tuesday, March 16, 2010. But more importantly, GenVec expects interim data analysis to be available in March or April of 2010 for GNVC's approach to the treatment of pancreatic cancer. GNVC's overall intellectual portfolio, however, may be the real potential value here.
On a side note, the short interest (as of 2/26/2010) is 13.7 Million shares out of a total of 125 Million shares outstanding, which can amplify a positive move in the stock should the analysis be positive. Insiders and institutions hold about 13% of the shares outstanding.
Now for a quick overview. GNVC is developing therapeutic drugs and vaccines with its flagship product, TNFerade™, currently in a randomized, controlled, Phase 3 clinical trial for first-line treatment of inoperable, locally advanced pancreatic cancer. Interim data, based on an analysis after one-third of deaths necessary to complete the trial (morbid but necessary in the eyes of the FDA), demonstrated an approximately 25% lower risk of death in the TNFerade plus standard of care [SOC] arm relative to the SOC arm alone.
Then, in January 2010, GenVec announced that 184 events (deaths) had occurred in this clinical trial. This event, which represents two-thirds of the total events expected in the trial, triggered the next interim analysis of overall survival in the trial. Again, GenVec expects data from this interim analysis to be available in March or April of 2010. Significantly for GenVec's future potential with this indication, the U.S. Food and Drug Administration [FDA] granted orphan drug designation to TNFerade for the treatment of pancreatic cancer. Orphan drug designation provides potential financial and regulatory incentives including study design assistance, tax credits, a waiver of FDA user fees, and up to seven years of market exclusivity upon marketing approval.
But TNFerade may be no "one-trick pony". The drug has been and is currently being studied for its potential use in the treatment of esophageal cancer, rectal cancer, and head and neck cancer. Utilizing GNVC's proprietary adenovector technology, TNFerade stimulates the production of tumor necrosis factor alpha [TNF], a known anti-tumor protein, in cells of the tumor. Clinical trials have been conducted and encouraging results have previously been reported in studies for esophageal cancer, head and neck cancer, rectal cancer, and soft tissue sarcomas. GNVC anticipates a Phase 1clinical trial in prostate cancer to begin in 2010.
GNVC presented data from their esophageal cancer clinical trial at the American Society of Clinical Oncology's [ASCO] 2010 Gastrointestinal Cancer Symposium. Updated efficacy and survival data showed that in the 24 patients receiving TNFerade in combination with chemoradiation, the median survival was a very impressive 47.7 months (compared to the median survival in other historical clinical trials in similar stage disease which ranged from 9.7 to 34 months).
On the vaccine front, GenVec is developing vaccines (using the same adenovector technology) for influenza, HIV, malaria, foot-and-mouth disease, respiratory syncytial virus [RSV], and HSV-2. The attention that GNVC has received (in the form of financial grant awards and contracts) for their approach to vaccine developments has been substantial:
- Two-year contract valued at approximately $2 million from the PATH Malaria Vaccine Initiative [MVI] to support the development of vaccines against malaria.
- Small Business Innovation and Research [SBIR] grant, valued at approximately $600,000 over two years, from the National Institute of Allergy and Infectious Diseases [NIAID] of the National Institutes of Health (NIH) to support GNVC's malaria vaccine program.
- Grant valued at approximately $2.5 million over three years for a Phase 2 SBIR grant from the NIAID to support the development of GenVec's vector production technology.
- Up to $2.3 million from NIAID for the fourth year NIAID executed its third option period, the fourth year, under a previously announced, five-year contract with GenVec., which will support the generation of HIV vaccine candidates with GenVec's alternate adenovirus serotype technology.
- Phase 1 SBIR grant from the National Cancer Institute [NCI] of the NIH valued at approximately $300,000. GenVec will investigate the hypothesis that the delivery of a specific gene will stimulate an antitumor response that could control cancer metastases.
- GNVC signed a four-year contract (valued over $22 million if all options are exercised.) with SAIC-Frederick, Inc. for the development of influenza and HIV vaccines in support of the Vaccine Research Center [VRC] of the NIAID.
- Department of Homeland Security [DHS] awarded a grant of $3.8 million in program funding the first year and an additional $0.7 million if DHS exercises its renewal option under the contract to continue the development of adenovector-based vaccines against foot-and-mouth disease [FMD], a major animal health problem. foot-and-mouth disease. GNVC expects a conditional license application for a FMD vaccine will be filed in late 2010.
And the Novartis worldwide collaboration (NYSE:NVS) connection has significant promise if certain milestones are met. Preclinical research in hearing loss and balance disorders suggests delivery of the atonal gene using GenVec's adenovector technology may have the potential to restore hearing and balance function. Significantly for any potential new research, there are currently no effective treatments available for patients who have lost all balance function, and hearing loss is a major medical problem as the demographics shift to more elderly in the U.S. and Europe.
This research collaboration and license agreement with Novartis is geared to discover and develop novel treatments for hearing loss and balance disorders. In exchange for the worldwide rights to GenVec's preclinical hearing loss and balance disorders program, GNVC received a $5 million upfront payment and Novartis purchased $2 million in GenVec common stock. GNVC will also will receive funding from Novartis for a research program focused on developing additional adenovectors for hearing loss. If certain clinical, regulatory, and sales milestones are met, GNVC will be eligible to receive up to an additional $206.6 million in milestone payments in addition to royalties on future sales.
As with any emerging biotech, the subject of a company's cash position comes to the fore. How much cash does the company have on hand to proceed with their various clinical trials and can they "afford" a disappointment in the FDA drug approval process. To this end, GNVC had $11 Million in cash on hand at the end of 2009 and netted another $26.2 million from a financing from institutional investors in February, 2010. The cash pot has been replenished for the future and the news of the financing has been absorbed by investors.
In summary, GenVec has a deep and broad pipeline of drug candidates, a deep-pocket partner in Novartis to pursue the development of their hearing loss research, a Phase 3 trial for the treatment of pancreatic cancer that is expected to have data analysis announced within the nest six weeks, significant cash position, large short interest (which can be considered a negative OR a positive) and vaccine research that has garnered millions of dollars in research grants. With a current market capitalization of $356 Million, GNVC should be on the aggressive biotech investor's list of stocks to watch.
Author's Disclosure: Long GNVC