Sonus Pharmaceuticals: Tocosol Approval Looks Promising

| About: Sonus Pharmaceuticals, (SNUS)

Sonus Pharma (SNUS) is on the verge of a major catalyst in the form of pivotal Phase 3 clinical trial results for the company’s lead cancer drug candidate Tocosol Paclitaxel, which management expects to release during the third quarter of this year – meaning that investors will not have to wait much longer. The company’s unique Tocosol formulation is an emulsion derived from vitamin E that is designed to reduce side effects, shorten the IV infusion time from three hours to 15 minutes, and improve the solubility of the existing cancer drug paclitaxel.

Beyond their lead drug candidate, Sonus also develops Tocosol Camptothecin, which is in a Phase 1 trial initiated in September 2006. This compound is analogous to Tocosol Paclitaxel, as it is designed to be more effective, better tolerated, and more convenient to administer than the existing formulation. The company was recently awarded a patent for their next-in-line modified cancer drug candidate, which builds upon the company's existing intellectual property and preclinical pipeline compounds.

Phase 2b data for the company's Tocosol formulation of paclitaxel demonstrated a lower incidence (37%) of neuropathy (manifested as numbness and tingling) compared to two existing formulations, which had higher neuropathy side effect rates of 71% for Abraxane and 60% for Taxol. Abraxane is an albumin-based formulation of paclitaxel made by Abraxis Bio (ABBI) which was also designed to improve the solubility and reduce the side effects of the original Taxol formulation from Bristol Myers (NYSE:BMY).

The company’s pending Phase 3 trial examines Tocosol in the treatment of metastatic breast cancer, but the compound has shown promising activity in Phase 2 studies for other solid tumors such as non-small cell lung cancer, ovarian cancer, and metastatic bladder cancer -- providing additional upside market potential beyond the initial indication for metastatic breast cancer. I expect Tocosol will demonstrate at least comparative effectiveness to Taxol with a lower incidence of side effects, resulting in FDA approval some time during the latter half of 2008, which should leave Sonus investors singing a happy tune.

Disclosure: Author has a long position in Sonus

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