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In March I announced that I had sold all of my position in Oncothyreon (NASDAQ:ONTY) after information became public that Merck KGaA (NYSE:MRK), ONTY's partner for the clinical development of Stimuvax, had halted all trials of the product after a patient had contracted encephalitis in one of the trials.

Stimuvax is one of the new breed of cancer 'vaccines' being tested in multiple common forms of cancer, including breast and lung cancer.

The share price of ONTY has remained relatively stable since the news, and although I don't fully believe that the stock is out of the clear just yet, I thought it was worth starting a new position based on the future potential of Stimuvax and the possibilities that the trials could resume at some point in the short to mid term future. The company has indicated that the case of encephalitis is not related to Stimuvax treatment, but the medical regulatory agencies will still need to sign off on that theory before the trials could resume.

Additionally, it's still too early to tell whether the lapse in the trials could negate any data that were already gathered. I would have to presume, however, and this is just my own speculation, that there would have been enough data collected over time to get an idea of just how well Stimuvax was performing; maybe not enough to bring before the FDA for approval, but enough to give Merch KGaA and Oncothyreon the confidence to move forward with the advancement of the product.

There's still quite a bit up in the air regarding the resumption of the trials, but the potential of Stimuvax still holds true and the company is not in immediate need of a cash-raising event, so I'm liking this one again as a mid to long term accumulation pick.

There will be another Provenge out there sooner or later, and there's no reason to believe that Stimuvax couldn't make ONTY another Dendreon (NASDAQ:DNDN) in due time. I'm no Doctor, but I'm speculating that the one case of encephalitis in a patient that received more doses of cyclophosphamide than other patients will not stop Stimuvax in its tracks.

Aside from Stimuvax, Oncothyreon also has two products in Phase I at the current time.

Disclosure:
Long ONTY.

Source: Oncothyreon: Why I'm Buying Back In