2 Emerging Biotech Companies That Continue to Attract Attention

Includes: DNDN, NEPT, NWBO
by: M. E. Garza

Television's Business News Network, Canada’s only all business and financial news channel has just featured Neptune Technologies & Bioresources (NASDAQ:NEPT), a company making news with its krill-oil infused food products and cholesterol/hyperlipidemia treatment potential.

"What we see is a pretty attractive nutraceutical market," explained Versant Partners analyst, Doug Loe during the televised interview. Loe recently issued a buy rating and $6 price target on the stock. The Versant Partners’ report, subtitled: “Krill oil franchise poised to outperform in multiple consumer and medical markets” was the subject of some attention earlier this week.

BioMedReports recommended Neptune to our premium subscribers weeks ago when the stock was trading at $2.32 and as we told our readers earlier in the week, we are expecting more institutional buying and coverage to come into the stock shortly. Prices continued higher, up another 4.73% on Friday to $3.32.

Unlike most companies dealing with clinical studies and regulatory approvals, Neptune is a revenue generating company whose products are already marketed and distributed in over 20 countries worldwide. A recent financing left Neptune with an estimated $17.6 million in cash and total debt of $5 million.

Full coverage BNN's report can be found at this link.

This past week, we also saw some good news and gains for Northwest Biotherapeutics (NASDAQ:NWBO) after the company announced that they are partnering with Fraunhofer, the largest applied research foundation in Europe, for production of their DCVax-L for brain cancer, for clinical trials and for compassionate use cases in Europe. The stock has managed to climb each day since the announcement and the technicals show more room for growth here.

“After intensive effort for more than a year, we are excited about completing this first step in our broader European strategy, and gratified that such a distinguished and influential institution as Fraunhofer has chosen to be our partner,” explained Linda Powers, Chairman of the Board of Northwest Biotherapeutics.

We continue to assert that the stock is undervalued at these levels given their proximity to more substantial milestones and additional European news developments. Partnering with Fraunhofer in Germany appears to have given NWBO most of the benefits of a big pharma deal, without the downsides and that is causing the stock to react as well.

This week's news constitutes validation of NWBO’s DCVax platform by a very large, respected and leading health organization and the fact that it took a year to land this partnership re-affirms the fact that Fraunhofer is highly selective in who they partner and dedicate their state-of-the-art facilities to. Northwest Biotherapeutics has just been given terrific access and clout in Europe, both with regulators and with medical centers.

We knew that the company had something significant going on in Europe- the 2nd largest market for medical products in the world- but we didn’t realize they had been working so long to reach this point in building the foundation for their European program. Not even Dendreon Corporation (NASDAQ:DNDN) had anything cooking in Europe until after Provenge became the first cancer vaccine to get approval from the Food and Drug Administration.

This development also substantially expands NWBO’s manufacturing capacity; which continues to be one of Dendreon’s costly deficiencies; and it increases the pace of enrollment in their ongoing clinical trials. Note that Fraunhofer’s reach is vast and that their contractual partners benefit from over 80 research units, including 60 institutes at different locations in Germany. Having clinical trial data generated in Europe by European doctors, patients and clinicians will undoubtedly help the company when it comes time to seek approvals outside the U.S.

Dendreon's push for European regulators to approve Provenge includes a plan to provide them with "U.S. only clinical trial data," but that may not be the most expeditious way to market there. After initial conversations with European regulators, the company is crossing their fingers that Provenge will be cleared in at least some countries by 2013. Even if they succeed, one challenge for Dendreon will be to persuade European health systems to pay close to the $93,000 the company charges in the U.S. for three courses of treatment. NWBO has made no secret of the fact that ther treatments will be less expensive given their own more efficient, automated processes. These are key to the very high concentration of dendritic cells used to manufacture their own DCVax therapeutic cancer vaccines.

Also, as we pointed out recently, the news and scientific data involving NWBO’s dendritic cell vaccine platform has been flying just under the radar, but it certainly won’t be long now before more news outlets and investors find the peer-reviewed publications and research that clearly show striking extension of survival for cancer patients who were administered NWBO's immunotherapy during clinical trials.

In studies of men with advanced prostate cancer, Dendreon's drug showed to extend lives by an average of about four months. A presentation at the recent 2011 American Association of Neurological Surgeons 79th Annual Scientific Meeting was co-authored by Dr. Linda Liau, Professor and Vice Chair of Neurosurgery and Director of the UCLA Brain Tumor Program.

The data shows a much more significant extension of survival and Liau and her colleagues made quite a few headlines after presenting it- including this one from Bloomberg BusinessWeek. Those who have been following NWBO’s story will also recognize Dr. Liau’s name as the Principal Investigator for NWBO’s clinical trial of DCVax for GBM brain cancer. We fully expect to hear more from Dr. Liau and NWBO's recently re-booted clinical trials in the weeks ahead.

The clinical trial with dendritic cell vaccine reported in Linda Liau’s peer-reviewed publication in Clinical Cancer Research showed overall survival in both newly diagnosed and recurrent patients although, as with any treatment, the effect was bigger if the vaccine was given earlier in the course of disease:

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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.