TapImmune Tackles Ovarian Cancer In Fast Track Phase II Clinical Trials

| About: TapImmune, Inc. (TPIV)

Summary

Fast Track Label and Orphan Drug Designation granted for Ovarian Cancer indication following positive data.

Phase II trials in TPIV 200 with a partner brings TapImmune closer to a $111.9 billion market.

Positive early data in ovarian cancer draws FDA attention to TPIV 200.

Bigger studies may reveal less efficacy or adverse side effects.

Undervalued TapImmune has made significant progress in the last 12 months.

Ovarian cancer is lethal, ranking fifth in cancer deaths in women, more than any other cancers of the reproductive system. It is aggressive and diagnostic delays due to lack of early detection make ovarian cancer deadly. Reoccurrence is rampant. More than two-thirds of women die. TapImmune Inc. (OTCQB:TPIV), a promising immunotherapy company, tests its unique vaccine TPIV 200 in ovarian cancer; early results proved astonishing. Now TapImmune moves forward to bring TPIV 200 to the next level in a larger study for this mortal disease.

Underlining the importance of a new safe and effective treatment, FDA just bestowed TapImmune its valued Fast Track label for TPIV 200, which provides special treatment to move the drug more quickly through the regulatory process with expedited review when considering TPIV 200's application for approval. Last December, TapImmune got another coveted FDA blessing - Orphan Drug status for TPIV 200. Both designations point not only to a high level of FDA confidence in TPIV 200, but also to the tremendous need for better treatment in a disease with dire consequences.

Treatment with TPIV 200 targeting folate receptor alpha (NYSE:FRA), expressed in 95% of ovarian cancers, passed a Phase I successfully, done at the legendary Mayo Clinic with data shown at the American Society of Clinical Oncology (OTC:ASCO). Results were outstanding: 20 out of 21 clinical trial subjects proved the drug to be safe, easily tolerated, and, remarkably, 100% had a successful immune response.

A Phase II protocol using TPIV 200 with a checkpoint inhibitor (proteins that aid the immune system) has been approved and discussions with pharmaceutical partners are underway. Checkpoint inhibitors, PD-1 the most popular made famous by Merck & Co. (NYSE:MRK) and Bristol-Myers Squibb (NYSE:BMY), have raised skepticism among clinicians who see only 40% of patients responding. Scientific thinking believes combining them with other drugs will enhance effectiveness.

The TPIV 200 antigen (inducers of an immune response), developed by Mayo Clinic's star ovarian cancer researcher Dr. Keith Knutson, hits tumors hard and activates the human immune system to mobilize defenses. After licensing the TPIV 200 technology to TapImmune, Dr. Knutson agreed to conduct mid-stage studies in ovarian cancer - a strong testimony to his belief in the drug's future.

TapImmune's drugs upregulate immune system T-cell components CD4 and CD8, releasing proteins to attack what the body see as something toxic, like cancer. Subsequently, an immune response is prompted and cells that produce antibodies come to the rescue. In addition to ovarian cancer, other of TapImmune's immunotherapy vaccines will be studied in triple negative breast cancer; these trials are funded by a Department of Defense grant of $13.3 million and a Phase II is planned at Mayo Clinic.

Standard of care, typically chemotherapy or surgery, must change. While considered one of the most curable cancers, misdiagnosis is common; 75% of ovarian cancer cases are discovered too late because in its early stages the disease shows no symptoms. The majority of patients afflicted with late stage ovarian cancer relapse, branding it with a five-year mortality rate of a whopping 55%.

Current estimates from the World Health Organization (WHO) put the worldwide number of women with ovarian cancer at over 2 million (2012 figures). In the US, roughly 21,000 women develop ovarian cancer each year; numbers in Europe are even larger. Treatment for ovarian cancer in the US can be as high as a staggering $200,000 per year per case, considering not only drug costs but also doctor and hospital bills, comprising a market size of $4.2 billion.

The demand for better drugs will spur the worldwide oncology market, expected to reach $111.9 billion by 2020. Biologic-based therapies like TPIV 200, due to targeted tumor action and low toxicity, should be in a good position to participate.

Women suffering from endometriosis (infection of the uterine lining) may be at high risk for ovarian cancer; results were validated from studies based on genomics, immunobiology and hormone levels. Endometriosis, affecting approximately 5 million women of reproductive age in the US alone, may not be detected due to lack of symptoms with up to 11% diagnosed after the fact. As early testing techniques develop, this global market is expected to expand to $1.3 billion in 2017. TapImmune, with TPIV 200, would well benefit.

Given its dangerous nature, there is a deep sense of urgency to create new drugs for ovarian cancer with many clinical-stage companies in Phase I, all searching for effective treatment options. Anti-cancer generics or antibody-based therapy (moving toward generic as patents expire) now dominate the market. Given its wake-up call, FDA spent a busy 2015 granting Orphan Drug status to small biotechs researching cures for ovarian cancer - Oncolytics Biotech Inc. (OTCQX:ONCYF) in February; Oncos Therapeutics Ltd in June; ImmunoVaccine Inc. (OTCQX:IMMVF) in July; Atara Biotherapeutics, Inc. (NASDAQ:ATRA) in December; and TapImmune in December. Several chemotherapy-type drugs directed toward ovarian cancer also received the designation: Novogen Limited (NASDAQ:NVGN) in April, and Cerulean Pharma Inc. (NASDAQ:CERU) in May. The list continues.

One of the marks of a company with promise is its ability to draw seasoned talent to its board. Such is the case with TapImmune upon the recent appointment of Rick Wasserman as an independent director. Mr. Wasserman, with decades of experience running small, entrepreneurial firms, specializes in guiding them at pivotal points in their business with hands-on assistance in many areas - operations, finance, equity valuation, and corporate governance. His contribution to TapImmune should prove valuable.

In the three months ended September 30, TapImmune had cash of $6.1 million on a balance sheet tipped heavily to the current liability side due to outstanding warrants but shored up with paid-in capital from investors in the primary market via fund raising. There is no debt. Naturally, research expenses rose substantially although general operating costs moderated. For the nine months ended September 30, net loss was $16.9 million, or ($0.46) per share versus net loss of $30.1 million, or ($2.27) per share in last year's comparable period.

Middle-stage clinical trials may not reflect earlier results; safety is not an issue, but whether the drugs work or not is. Bigger populations of patients may reveal shoddier results or bad side effects (TPIV 200 was shown safe with no adverse events in smaller studies). TapImmune's market capitalization is $37.8 million and like most small stocks with light trading, shares could be subject to price swings and market manipulation. With its current cash position and burn rate of approximately $3 million to $4 million per year, including ongoing clinical trials, TapImmune has little runway and must return to capital markets soon. Dilution to existing shareholders upon additional financing is always an issue, and performance of early-stage biotechs live or die on binary events.

TapImmune has been receiving favorable attention lately, as the world of oncology recognizes the value of immunotherapy over chemotherapy in treating cancer. In the past year, much has been accomplished - a large government grant, Orphan Drug and Fast Track designations for TPIV 200, discussions with strategic partners, a $4.9 million money raise, and good clinical results. For all its past achievements and future potential, TapImmune remains at a ridiculously low valuation, giving investors an opportunity to pick up shares at bargain-basement prices.

Disclosure: I am/we are long TPIV.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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