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Investing in small biotechnology companies is a high risk, high reward endeavor and risk management in this space is crucial as entire investments can be wiped out with non-favorable data and/or press release. At the same time, in a relatively short period of time, investors can realize a several-fold increase in their investment(s) with promising data and/or press release-ten to fifteen-fold increases in share price are not unheard of. So how can an investor who wants to take part in such a volatile sector minimize the risk and stack the odds in their favor? Part of a successful risk mitigation strategy is to find companies with robust pipelines. One of the main, if not the main, criteria of successful future biotech investing is finding companies with strong, free flowing pipelines with promising drug candidates.

Antares Pharma (AIS) and Immunomedics (NASDAQ:IMMU) are two biotech companies with market capitalizations of less than 300 million dollars that have strong pipelines with promising drug candidates.

Antares Pharma

Antares Pharma focuses on topical gel-based and self-injection pharmaceutical products. Their unique drug delivery systems improve existing treatments by decreasing side effects and increasing efficacy and patient compliance. The company has three drug delivery systems: the ATD Advanced Transdermal Gel Delivery system, the Easy Tec oral disintegrating tablets, and injection technology platforms such as Vibex disposable pressure assisted auto injectors and Vision reusable needle-free injectors. Big pharma has taken notice of their technology as TEVA (NYSE:TEVA), Pfizer (NYSE:PFE), and Watson (WPI) are partnering with Antares. Antares currently has two FDA approved products-Tjet/Zomajet for HGH deficiency and Elestrin for Menopause. Tjet/Zomajet is partnered with TEVA, Ferring, JCR in different territories and Elestrin is partnered with Jazz Pharmaceuticals (NASDAQ:JAZZ). With 10 programs under development, 9 of which are in partnership with some of the biggest names in pharma and the generics market, Antares has one of the more robust pipelines among its peers.

Product

Partner

Indication

Clinical Trial Status

Tjet/Zomajet

TEVA, Ferring, JCR

HGH Deficiency

FDA Approved

Elestrin

Jazz

Menopause

FDA Approved

Oxybutynin 3% Gel (Anturol)

Watson, Daewoong

Over Active Bladder

NDA Approved

Vibex Epi

TEVA

Allergic Emergency

Filed ANDA

Vibex 2

TEVA

Undisclosed

Filed ANDA

Pen 1

TEVA

Undisclosed

ANDA

Pen 2

TEVA

Undisclosed

NDA

Vibex MTX (methotrexate)

Antares

Rheumatoid Arthritis

NDA

NestraGel

Population Council

Contraception

NDA

Undisclosed

Pfizer

Undisclosed

NDA

Antares has a market capitalization of 254 million and currently trading at $2.49 with a 52-week range of 1.50 - 2.88. The company has approximately 26 million in cash and short-term investments with no debt.

Immunomedics

Immunomedics is another small biotech company with a big pipeline. They are focused on developing monoclonal antibodies for treatment of diseases such as cancer and autoimmune disorders. Immunomedics currently has 12 programs in their robust pipeline with their lead compound, epratuzumab, showing great promise in the treatment of systemic lupus erythematosus or lupus. The Lupus Foundation estimates that lupus afflicts 1.5-2 million Americans with the majority of the cases affecting women. It is a chronic, debilitating, and potentially fatal autoimmune disorder. Epratuzumab has the potential to become the blockbuster that Benlysta from Human Genome Sciences (HGSI) may never be.

Epratuzumab is a humanized anti-CD22 monoclonal antibody that binds and modulates B-cell function without significant depletion of these immune system cells. In the EMBLEM trial-a phase IIb study that randomized 227 patients to one of six intravenous regimens-epratuzumab demonstrated efficacy by the fourth week. By week 12, patients randomized to the 600 mg weekly dose showed a significant response by improvements in their BILAG A/B scores to BILAG D in six body systems when compared to placebo.

Immunomedics has initiated two phase III studies, EMBODY 1 and EMBODY 2, to evaluate epratuzumab in patients with moderate to severe systemic lupus erythematosus. The data from these trials will continue to impress as it did with the EMBLEM study. With strong data, FDA approval and availability of epratuzumab should occur in 2015 with significant uptake by clinicians.

Epratuzumab is only one of many drug programs in the pipeline of Immunomedics. Their entire pipeline is listed below.

Product

Indication

Status

Epratuzumab

Systemic Lupus Erythematosus

Phase 3

Epratuzumab

Lymphoma

Phase 2

Y-90 Clivatuzumab

Pancreatic Cancer

Phase 2

Veltuzumab

Non-Hodgkin's Lymphoma

Phase 2

sc Veltuzumab

Immune Thrombocytopenic Purpura

Phase 2

Sc Veltuzumab

Rheumatoid Arthritis

Phase 2

Milatuzumab-Dox

Multiple Myeloma

Phase 1

Milatuzumab

Chronic Lymphocytic Leukemia

Phase 1

Vmab plus Y-90 Emab

Diffuse Large B-Cell Lymphoma

Phase 1

Veltuzumab

Chronic Lymphocytic Leukemia

Phase 1

Pretargeting TF2

Colorectal Cancer

Phase 1

Labetuzumab-SN-38

Colorectal Cancer

Phase 1

Immunomedics has a market capitalization of 260 million dollars and currently trading at $3.42 with a 52-week range of 2.85-4.47. The company has 21 million in cash and equivalents and no debt.

Disclaimer: All information is provided for informational purposes only and does not serve as investment advice or an offer of management services. There is no guarantee that the information is accurate. All information is subject to change, amendment, and correction without any notice. Any mention of current and past results does not indicate any future expectations or results. All investments are associated with risks and loss of money. Consult with a professional tax, accounting, legal, and/or investment advisor before making any investment decision.

Source: Small Biotech Companies With Big, Promising Pipelines