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As we look forward to cancer research developments in 2012, let's first take a quick look back to 2005. In that year, Genentech, which was acquired for $46.8B in 2009 by Roche (OTCQX:RHHBY), presented findings for their now blockbuster cancer fighting drug Herceptin to a packed room at ASCO's Annual Meeting. Herceptin was found to reduce the risk of recurrence 46% in women with early stage over expressing HER2 breast cancer, according to results reported for the first time from the large scale international HERA study.

Results from HERA showed that Herceptin significantly improved disease free survival at two years, from 77.4% in the observation group to 85.8%. Lisa Hutchinson, the Editor of Nature ReviewsClinical Oncology, wrote at the time that the Herceptin report "received rapturous applause and a standing ovation" from physicians and other attendees at the ASCO session.

Herceptin is a humanized monoclonal antibody that binds to a specific epitope of the HER2 protein on the breast cancer cell surface. Herceptin is a HER2+ breast cancer therapy designed to treat aggressive HER positive metastatic and adjuvant breast cancer. Adjuvant therapy is used after primary treatments, such as surgery or radiation for early stage invasive breast cancer. This additional treatment may reduce the risk that cancer will return.

The IHC test gives a score of 0 to 3+ that indicates the amount of HER2 receptor protein in tumors. Women with IHC positive scores tend to respond favorably to Herceptin. Samples with strong HER2 over expression, IHC 3+, indicate eligibility for Herceptin therapy. This population makes up approximately 25% of HER2/neu breast cancer patients.

In the first six months of 2011, Roche reported worldwide sales of Herceptin at $3.5B. Approximately 70% of Herceptin's global sales come from adjuvant therapy for women with early-stage HER2 breast cancer following surgery. Immunological agents in development that target patients that exhibit lower expression of the HER-2/neu protein can fill an unmet medical need, and potentially earn far greater sales than Herceptin if they move on to win FDA approval.

During December's San Antonio Breast Cancer Symposium, cancer immunotherapy took another significant step in that direction when interim Phase II results were revealed for Antigen Express' AE37 HER2/neu peptide breast cancer vaccine. Antigen Express is a wholly owned subsidiary for Generex (OTCQB:GNBT) Biotechnology. Here are highlights from the SABCS presentation:

+ Disease-free survival in the low HER2 expressing patients, or the larger percentage of breast cancer patients who are not eligible for Herceptin, was 88.6% in the treated group, n=53, versus 71.9% in the control arm, n=78, at a median follow-up of 22 months.

+ The AE37 vaccine elicits statistically significant peptide specific in-vivo and ex-vivo immune responses, which are maintained for 12 months after completion of the vaccine series, while there have been no proliferative changes for control patients.

+Vaccine patients had statistically significant increases in DTH reactions, while controls had no response.

+ 99% of local and systemic toxicities were grade 2 or less. There have been no grade 4-5 local or systemic toxicities.

+ AE37 represents the only HER2-based peptide vaccine currently being studied in a randomized trial, and its use is not restricted to patients with a particular type of HLA peptide.

There are currently over 250 patients enrolled in the well designed Phase 2 study, the largest breast cancer adjuvant vaccine trial conducted to date. As a result of these findings, Antigen Express announced that they are "assessing the data for potential opportunity to move forward with a Phase 3 clinical development program following an End-of-Phase 2 meeting with the FDA for AE37, which Antigen Express believes, if confirmed, could occur in the first half of 2012". The company will seek a special protocol assessment SPA approval from the FDA. The current ongoing, controlled, randomized, and single-blinded Phase 2 clinical study will continue as planned to enroll a total of 300 women. Further Phase II results, providing a catalyst moment for GNBT's stock, are due within 2012.

Antigen Express is seeking a large Pharma partner to help fund the pivotal Phase 3 clinical development program in women with breast cancer that express low to moderate levels of HER2. A randomized, controlled, double blind study in 1000 HER 1+ 2+ node positive and high risk node negative patients across the US, Europe and Asia is projected to start later in 2012, once a large Pharma partner is in place.

The AE37 cancer vaccine has also been studied in a completed Phase 1 trial with prostate cancer patients demonstrating appropriate dosing and immune activation similar to that seen in the breast cancer trials. Antigen Express is gearing up to move AE37 more rapidly into larger Phase II clinical trial in men with newly diagnosed HER2 positive prostate cancer, which are currently being designed with leading oncologists in prostate cancer. HER-2/neu is over expressed in 11% of ovarian cancers, 39% of prostate cancers, 7 – 34% of gastric cancers, 10 – 82% of pancreatic adenocarcinomas, and is expressed at some level in the majority of epithelial-derived cancers. The potential market for a HER2-based peptide vaccine, such as AE37, is much larger than women with early stage breast cancer or men with newly diagnosed HER2 positive prostate cancer.

Beyond these known developments, a November 2011 patent application reveals plans to further research into combination therapy of AE37 with Herceptin by the Henry M. Jackson Foundation for the Advancement of Military Medicine. The patent details a Phase I study protocol that currently includes 102 disease-free breast cancer patients that over express HER2, IHC 3+, further expanding AE37's potential market grasp. In the patent, the researchers of the study, who are independent of Generex and Antigen Express, state in regards to the study's outcomes that "the in vivo DTH data strongly suggest that AE37 in combination with Herceptin should be more effective at reducing breast cancer recurrence and increasing disease-free survival time than Herceptin alone".

Investing in small biotechs comes with great risk, and each investor is responsible to themsleves to conduct their own due diligence. Generex had previously outlined plans to conduct a reverse stock split of GNBT shares sometime in the near future, only in conjunction with a move to a major exchange, to spin out Antigen Express, while retaining controlling interest, and the spin-out will be accomplished by the issuance of one or more dividends of Antigen Express stock to Generex stockholders. The company has not publicly altered these intentions, and shareholders are awaiting an update on these key areas.

What we may be witnessing is a new era in therapeutic cancer vaccines where the earlier setbacks seen in the overall industry make way to success stories, as Herceptin's success has done for the monoclonal antibody market, as I wrote to an industry leader last year. "I do believe that the cancer vaccine market will follow after the monoclonal antibody market. Once there is a clear cut success story, then all the big pharmas will race to secure their own cancer vaccines to bring to market," expressed Col George E Peoples MD, FACS, Director, Cancer Vaccine Development Program, in a response email. I am increasingly hopeful that Antigen Express' AE37 will prove to be the revolutionary vaccine that leads the way.

Disclosure: I am long OTCQB:GNBT.

Source: Generex's Antigen Express Makes Progress In Early Stage Breast Cancer