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Cancer treatment advances over the last decade have been phenomenal with great success in fighting a host of different cancers. Improvements have been made in surgical, chemotherapy and radiation treatment procedures to improve efficacy as well as the treatments' safety profiles. For many tumors and cancerous tissues, surgery and radiation are often not valid options due to associated risks. Chemotherapy and immunotherapy agents have improved dramatically with each having their good and bad points. Chemotherapy is often the more efficous of the two, however the very nature of the drug that enables it to kill cancer cells also weakens and kills healthy tissue along with it. The cytotoxic nature of the drugs often requires reduced dosages to avoid systemic side effects, but the reduced dosages more often than not means reduced efficacy. Immunotherapy treatments are progressing rapidly as evident of approvals in the last three years of Dendreon's Provenge and Bristol-Meyers Squibb's Yervoy. However, many trials underway are of an adjuvant nature rather than a first-line treatment in which the therapies utilize the patients' immunity system to fight residual and newly-formed cancer cells after a more potent first-line treatment performs the initial eradication.

Equally important as the types of chemotherapy and immunotherapy agents chosen, the methods of administration can impact the outcome of a treatment regimen. If these agents can be injected into and around the targeted tumors and tissue, their efficacy can be enhanced dramatically. However, the patient's circulatory system still carries the agents throughout their body which has a diluting effect on the treatment's efficacy and multiplies the agent's side effects. Following are some small pharmaceuticals with seemingly solid and novel approaches to administering differing chemotherapy and immunotherapy agents. It is interesting to note that there aren't as many legitimate approaches as one might think, as an internet search indicates. Investors should consider the market capitalizations of the companies mentioned, the flexibility of their product line to switch indications and utilized agents in case current indications fail, and their current pipeline progression and potential matched against the market caps. For example, is a more advanced Phase III trial worth 30 times the market cap of a comparable Phase I or Phase II company?

Delcath's (NASDAQ:DCTH) share structure was recently diluted again after a public offering of 13.3 million shares at a 37% discount to that day's closing price for a total of about $20 million dollars after warrants. Investors already having a position in the common stock are now faced with depression of their own holdings as the stock price will likely suffer unless a solid catalyst arrives in the short term. With no product marketed in the U.S. but yet a CE Mark approval to their credit, a $100 million plus market capitalization (value is variable with volatility and offering amount) may still seem expensive for this company. The company had its NDA rejected for metastatic melanoma of the liver in February 2011 sending the stock into a plunge it has yet to recover from. Delcath plans to resubmit the NDA in August of this year after substantial data analysis with final preparations now underway according to a recent company press release.

Delcath's CHEMOSTAT drug delivery system is a simple but rather novel approach to treating cancer tumors. The technology requires the affected organ to be isolated from the rest of the patient's circulatory system via balloon catheters which are inserted and inflated thereby preventing blood flow into or out of the affected organ. A high dose of the chemotherapy drug, melphalan, (in the case of the liver cancer treatment regimen) is infused into the inferior vena cava through a catheter in the femoral vein. The agent is routed directly into the affected liver where it is resides for 30 minutes at the highly concentrated dose. The chemotherapy-saturated blood is then collected and filtered to remove the agent via an external filter. The patient's blood is then returned to his body through a catheter in the jugular vein. The procedure allows a highly concentrated and therefore more efficous dosage of the chemotherapy agent at the tumor site while preventing the systemic exposure by isolation, purification and then reintroduction of the purified blood to the patient's circulatory system. The procedure is a bit involving and does require specialized training to perfect, and the system already has a rejected NDA behind it. It still remains to be seen as to the decision by the FDA to allow marketing of the product and what kind of time frame is really going to be involved. If the company does indeed reapply for NDA in August, it will be 18 months since the NDA was initially applied for. This is a suspiciously-long period for "information involving manufacturing plant inspection timing, product and sterilization validations and additional safety information that we already planned on filing with our 120 day safety update in April, as well as additional statistical analysis clarification" as was stated by the CEO as the reasons for the rejection.

OncoSec Medical, Inc. (ONCS.OB) has a novel approach to target cancer tumors while reducing systemic exposure. Rather than focusing solely on utilizing chemotherapy drugs as their choice agents, OncoSec is using an electroporation technique through its OncoSec Medical System (OMS) to attack cancerous tumors and tissues through their OMS ElectroChemotherapy or OMS ElectroImmunotherapy methods. Electroporation is a process in which a brief electric current is applied across a cell which causes a temporary but significant increase in the cell membrane's porosity. This increased porosity causes a stimulated cancer cell to be much more susceptible to chemotherapy or immunotherapy agent's affects. For this treatment protocol, a chemotherapy or immunotherapy agent is injected into the targeted tumor(s). An electric current is applied via the OMS which dramatically increases the uptake of the agent into the cells' interior where it is intended to work. The electric current is then removed, and the cells' membranes return to their original state trapping the agent inside the drug.

The rapidly-absorbed cancer agents are beneficial for many reasons. First, the efficacy is highly enhanced as the treated cells have an increase of 1000 times the porosity of the cells in their non-stimulated state which allows for rapid uptake into the cells where the agents do their work. Secondly, if the agents are tied up inside the cancer tissue and nearby margin tissue, then they are not circulating throughout the body where systemic toxicity and other issues might come into play. These two points come into play in virtually all chemotherapy and some immunotherapy drugs in which the higher dosages necessary to have good efficacy often mean a less desirable safety profile. Thirdly, in the case of agents that have very high costs associated with their use, the use of the OMS systems can greatly reduce the amount of agent required in order to have the same efficacy as their traditional application mechanism. This quickly comes into play for a highly efficous but expensive agent of choice. Theoretically speaking, 1000 times the porosity likely means 1000 times less agent to use than traditionally required? Okay, let's be more reasonable and say "only" 500 times less? With the potential for success in either its immunotherapy or chemotherapy approaches, a current $9.8 million mark could be to be highly undervalued relative to its peers.

Oncolytics Biotech, Inc (NASDAQ:ONCY) has a very unique approach to fighting cancer. It utilizes a proprietary formulation of the human reovirus named REOLYSIN. The company is utilizing the technology in varied indications thus far with its lead trial being a Phase III trial for head and neck cancer. Although not specifically targeting a single tumor, the technology is interesting and applicable here. The primary mechanism that REOLYSIN works by is via "infecting" and replicating inside of cancer cells exhibiting a so-called activated ras pathway, seen in about two thirds of all cancers. Once inside these cells and replication begins, the cells undergo an apoptosis event by rupturing which releases the viruses to infect and destroy other cells. Normal cells are supposedly not affected by the virus. An interesting side event occurring is the body's response to the ruptured cells. When the cancer cells rupture and its fragments are released into the blood, the antigens are "presented" to the immunity system which responds by attacking them with T cells and natural killer cells. The antigens presented, which in many cancers is specific to that cancer, "teach" the immunity system what the cancer cells "look" like and an immune response is generated targeting not only the cancer cell pieces left from the REOLYSIN-triggered apoptosis, but other cancer cells left in the body with the same antigen signature. According to the company, this immune response can persist for months after the virus is eliminated from the patient's body.

The company certainly has a deep pipeline with a novel approach which could give an investor a large return on investment even with its current $292 million market capitalization, the largest of the three companies discussed here. The company has also been using its novel therapy with good success as its deep and varied pipeline and market capitalization indicate. The therapy is being used as a monotherapy and in conjunction with several chemotherapy agents with good success seen in this area also, thus giving the treatment the diversity of treatment indications as well as chemotherapy agents utilized to make it one of the three "hyper novel" therapies profiled.

Analysis:

Seen above are three small pharmaceutical companies with novel approaches to targeting cancer cells via chemotherapy and/or immunotherapy agents. The three companies profiled are all construed as "development Phase" with only Delcath having a marketed product and there only in Europe where it just received its first commercial order in March, almost a year after receiving CE Mark approval. The company is also having problems with the FDA with one NDA rejection and slow resubmission of the NDA despite earlier statements by the CEO indicating the NDA resubmission would be in Q3 and then Q4 2011. The date has now been moved to Q3 2012.

Oncolytics seems to be exploring all avenues with several indications in clinicals with monotherapy approaches and synergistic chemotherapy trials underway. However, one avenue that has been overlooked is fairly critical. IF there is an issue with the safety profile of REOLYSIN in any form, although apparently not likely or anticipated, this would be hugely disruptive of virtually their entire pipeline with their "all the eggs in one basket" approach to their pipeline being totally centered around REOLYSIN. The reward of success for shareholders is good even with the highest market capitalization of the three profiled companies. However, the risk of the entire clinical pipeline being put on hold because of a questionable safety profile in any trial or worst yet an obvious safety problem which could affect the company's entire pipeline.

Earlier in its development than Oncolytics or Delcath, OncoSec has been making good progress. Its pipeline is using a multi-faceted approach with the technology utilizing chemotherapy and immunotherapy through its OMS ElectroChemotherapy and OMS ElectroImmunotherapy technologies. Although early in trials and with only limited agents used thus far (Bleomycin for the former and interleukin-12 or IL-12 for the latter), the options are virtually unlimited utilizing both already approved agents to perhaps speed up the approval process or highly efficous agents with a questionable safety profile that may be muted due to the much lower levels required utilizing the electroporation process. The market capitalization should be also considered for investment consideration as the $9.8 million value is 10 times less than Delcath's and about 30 times less than Oncolytics' valuation. OncoSec's pipeline is not as advanced as the other two, however the upside is much greater and downside likely much less than either of the other two.

This is the pharmaceutical sector and anything is possible with problems stemming from many areas of product development sneaking in and disrupting an investor's entire game plan. Conversely, surprise approvals, phenomenal clinical data, licensing deals, development suitors or buyers materializing from seemingly nowhere can positively affect the companies' and their shareholders' future. Please see these companies' respective news and pipelines on their websites. This will be an interesting year with exciting times ahead for these three hyper-novel approaches to targeting cancer.

Source: Hyper-Novel Investments For Targeting Cancer