Ziopharm Oncology (NASDAQ:ZIOP) is a biopharmaceutical company engaged in the development and commercialization of small molecule and synthetic biology approaches to new cancer therapies.
I see at least 5 reasons to buy this stock under $6.
1. Insider Transactions
On January 23rd Board Member Kirk Randall bought 1,923,075 shares of Ziopharm with his company Intrexon at $5.20 share price. Kirk Randal currently owns 9,896,236 shares by Intrexon Corporation, 1,346,462 shares by Kapital Joe LLC and directly 42,577 shares of Ziopharm. Forbes listed Kirk Randal in 2009 as the 468th richest person in the world, with a net worth of $1.5 billion.
2. Late Stage Clinical Pipeline
Palifosfamide (Zymafos(NYSE:R) or ZIO-201) is a novel DNA cross-linker that in preclinical study has been shown to bypass resistance mediated by aldehyde dehydrogenase (ALDH), in addition to conferring a favorable toxicity profile compared to other in-class agents. Palifosfamide, administered intravenously, is currently in a randomized, double-blinded, placebo-controlled Phase 3 trial for the treatment of metastatic soft tissue sarcoma in the front-line setting. The company is also currently completing a Phase 1 study of palifosfamide in combination with standard of care for addressing small cell lung cancer; an investigational new drug application has been accepted for the oral form of palifosfamide.
DNA-based therapeutics (synthetic biology), in partnership with Intrexon Corporation, include two clinical-stage product candidates, both of which are DNA IL-12 using the RheoSwitch Therapeutic System(R) to be turned on/off by an oral activator ligand and are currently in Phase 1. Additionally, multiple INDs are expected in the next 12-24 months resulting from preclinical and discovery work underway to advance multiple antibody, immunotoxin, and protein decoy candidates, systemic delivery and a next generation RheoSwitch Therapeutic System(R).
Indibulin (Zybulin(NYSE:TM) or ZIO-301) is a novel, oral tubulin binding agent that is expected to have several potential benefits including oral dosing, application in multi-drug resistant tumors, no neuropathy and a quite tolerable toxicity profile. It is currently being studied in Phase 1/2 in metastatic breast cancer.
Darinaparsin (Zinapar(R) or ZIO-101) is a novel mitochondrial- and hedgehog-targeted agent (organic arsenic) currently in a solid tumor Phase 1 study with oral administration and has been developed intravenously for the treatment of relapsed peripheral T-cell lymphoma.
3. Positive Preliminary Data
On February 13, 2012 the company announced positive preliminary overall survival (OS) data from the company's randomized, controlled Phase 2 trial of palifosfamide plus doxorubicin vs. doxorubicin alone (PICASSO) in patients with unresectable or metastatic soft tissue sarcoma.
"These Phase 2 survival data are promising and important. The data are particularly relevant given the cross-over permitted for patients treated with doxorubicin alone. Having previously demonstrated a statistically significant PFS improvement, these positive survival data are good news for patients who have soft tissue sarcomas," said Robert Maki, MD PhD, Professor of Medicine, Pediatrics and Orthopedics, and Sarcoma Center leader at Mount Sinai School of Medicine, New York, NY. "I look forward to the potential of these data translating to the ongoing pivotal PICASSO 3 trial, which is appropriately powered for progression-free and overall survival."
Ziopharm is currently evaluating palifosfamide in an international, randomized, double-blinded, placebo-controlled Phase 3 trial in front-line metastatic soft tissue sarcoma, and completing a Phase 1 study in solid tumors, including small cell lung cancer (SCLC). Palifosfamide is entering into an adaptive Phase 3 trial in extensive SCLC expected to initiate in the second half of 2012. Additionally, an investigational new drug application has been accepted for the oral form of palifosfamide.
4. PICASSO 3 Trial Data At 2H 2012
The Phase 3 trial is in front-line metastatic soft tissue sarcoma, entitled PICASSO 3, and is an international, randomized, double-blinded, placebo-controlled trial with a targeted enrollment of 424 patients. The study is designed to evaluate the safety and efficacy of palifosfamide administered with doxorubicin compared with doxorubicin administered with placebo, with no cross-over between the arms. Progression-free survival is the primary endpoint for accelerated approval, with overall survival as the primary endpoint for full approval.
5. Enough Cash To Last Until 2H 2013
As of December 31, 2011, the company had approximately $104.7 million in cash and cash equivalents, compared to $60.4 million in cash and cash equivalents as of December 31, 2010.
Net cash used in operating activities was $38.8 million for the year ended December 31, 2011 compared to $19.7 million for the year ended December 31, 2010.
On January 20, 2012 the company announced the pricing of an underwritten public offering of 9,650,000 shares of its common stock at a public offering price of $5.20 per share.
The company anticipates that their cash resources will be sufficient to fund our operations into the second half of 2013.
The next major catalyst for this stock are the PFS data results from the pivotal PICASSO 3 trial which are expected in the second half of 2012. I believe that this stock will start climbing higher in anticipation of these results. This stock has seen some very strong insider buying at $5.20 just recently which tells that the management is very confident about this company and its trials. I recommend buying the stock under $6. The inverse head and shoulder pattern in the above chart points an upside target of at least $7.50. I believe that the $7.50 target is very possible after the PICASSO 3 trial results. The company is well funded for the next 18 months.
Disclosure: I am long ZIOP.