Eye on Accentia Biopharmaceuticals

Last Thursday, Genitope (GTOP) released news that it Phase 3 Clinical trial for its anti-cancer vaccine MyVax did not meet its primary endpoint. The next morning there were numerous reports discussing two other companies that are releasing Phase 3 data for their own NHL anti-cancer vaccines. The two companies slated to report phase 3 data are Favrille (FVRL) and Biovest International (BVTI.OB). Accentia Biopharmaceuticals (ABPI), who is the majority shareholder of Biovest International, had this to report in regards to Biovest's NHL anti-cancer vaccine.

Accentia's BiovaxID differs significantly from MyVax and other recombinant products. BiovaxID is a hybridoma-produced full copy of the tumor specific antigen that has demonstrated in a Phase 2 study at the National Cancer Institute and in an independent study at the University of Navarra to elicit an immune response in 80% of patients.

According to Dr. Steve Arikian, M.D., Chairman and CEO of Biovest International, the majority-owned subsidiary of Accentia that holds the worldwide exclusive rights to BiovaxID, "We believe that a strong immune response from a broad population of lymphoma patients requires a complete copy of the tumor specific antigen to induce long lasting disease free survival. This is why we have consistently demonstrated an 80% immune response."

Accordingly, Accentia reaffirms its confidence in the clinical efficacy of BiovaxID and that the ongoing unblinding will demonstrate a statistically significant effect. Accentia believes that the unblinding of its pivotal Phase 3 study will provide strong evidence supporting the appropriateness of BiovaxID for accelerated approval in the U.S. under subpart E and conditional approval in the EU. The company is also examining molecular remission data for the purposes of detecting early recurrence of the cancer prior to clinical evidence on physical exam and CT scans. The Company believes that this molecular data will provide additional evidence of efficacy for BiovaxID. The Company intends to prepare an application for accelerated and conditional approval in the U.S. and EU, respectively.

From what I understand, this drug was the first of the three NHL anti-cancer vaccines to be fast-tracked by the FDA. I believe if they can prove their vaccine is effective it could be a generous windfall for Accentia shareholders.

Putting the anti-cancer vaccine aside, before they release the unblinded data for Biovaxid they will be releasing unblinded data for their Fast tracked Phase 3 clinical trial of Sinunase for the treatment of Chronic Rhinosinusitis. CRS is a disease that is estimated to affect up to 39 million Americans. Apparently there are zero FDA approved treatment for CRS. Through research at the Mayo , they believe that it is a common airborne mold, fungus, from which a large part of our population is affected by.

The lead drug in Sinunase is Amphotericin-b. Amphotericin-b has been FDA approved for over 20 years to be injected into the body in fairly high doses. Yet, when applied to the skin it is not easily, if at all, absorbed into the body. Basically, the drug is flushed into the sinuses and is expected to kill the fungus that the Mayo clinic believes is causing the Eosinophils in tissue to migrate into the mucus attacking the fungus causing the CRS.

An amazing statistic is that currently there are over 200,000 prescriptions of Amphotericin-b written every year by doctors off-label to treat CRS. At a cost of around $2400.00 per year that is over $400M a year in potential instant revenue for Accentia if the trial proves effective.

With 2 Fast-tracked phase 3 clinical trials putting data out in the first 4 months of 2008, the opportunity is very real. Both drugs have the potential to be blockbusters. With Accentia's stock trading near $2.50.00 per share and a tiny $80M market cap, in my opinion if they show positive results on Sinunase we could see the stock near $20.00 right away and if Biovaxid proves effective we will see it near $30.00.

By the way, take a look at their other drug, Revimmune, which you may see in a Phase 3 trial starting in mid 2008 for the treatment of MS. I won't go into Revimmune just yet until we see the results of the two trials in early 08.

Disclosure: Author has a long position in ABPI