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Over the last few years investors have picked apart the biotechnology space in search of drugs and/or treatments with high sales potential. Large pharma have been quick to acquire smaller companies that have focused on new age therapies that meet large unmet needs. This has resulted in massive valuations for biotechnology companies in the developmental space; such examples of the bullish valuations in clinical biotechnology include those in weight loss, hepatitis, diabetes, and the massive cancer space. In fact, some suggest that biotechnology has been more innovating in the last five years than at any period over the last 30 years-and with a number of potentially breakthrough drugs and treatments, in late stage trials, it could become a great space for long-term investors.

It makes sense that there could be unrealized, under-the-radar treatments for particular diseases due to the large number of breakthrough drugs that have hit the market. One space in particular that intrigues me is therapies for the treatment of melanoma, which is the most serious form of skin cancer. Cancer is a broad space of potential treatments, but because of its size (and complexity) along with innovating treatments with immunotherapy and stem cell targeting therapies, it appears as though we have, in some ways, neglected the possibilities that could arise from an efficient therapy in a very large market that treats melanoma, especially considering how close a number of companies are to eliminating the dangers of the disease.

At this time, the most common form of treatment for melanoma is surgery, followed by radiation or chemotherapy for later stages and for recurrent cancers. Bristol Myers' (NYSE:BMY) Yervoy is a game changer in the treatment of melanomas that have spread and that cannot be surgically removed. Yervoy further demonstrates a new class of cancer drugs that uses the immune system to fight the disease. While in clinical trials, Yervoy was shown to decrease the risk of death by about one-third, and is now believed to have the capabilities to treat a number of different cancers. During the company's most recent quarter, the CEO said, "for YERVOY, we had strong stable demand in the U.S., and I am particularly encouraged by improving U.S. trends in recent weeks and increased adoption in the European markets," which are encouraging remarks for a new drug, that further illustrate a high level of demand for effective melanoma treatments. This may explain why other large drug companies are seeking acquisitions and are hoping to capitalize in the space, such as Amgen (NASDAQ:AMGN) and its $1 billion purchase of BioVex for its Phase 3 candidate OncoVex, a very promising yet high-risk treatment that is now known as T-VEC. According to a research report from zacks.com, the results from the Phase 3 trial are expected by the end of 2012.

In light of Yervoy's early success, investors may look to other melanoma treatments that could be affective and provide patients with a more successful treatment option for cancers that cannot be surgically removed. GlaxoSmithKline's (NYSE:GSK) combination of dabrafenib and trametinib has succeeded in early trials where other drugs have failed, and has the potential to target a very large market. In its Phase 2 study, patients lived 7.4 months before seeing any progression in the disease, with a subset of optimal dosed patients reaching nearly 11 months in the same study. This combination could become a treatment of choice for patients, and could return an enormous amount of revenue in the not-so-distant future.

The treatment of melanoma is a space that I am watching closely, and the range of potential treatments is wide due to the size of the market and the number of patients diagnosed with melanoma on an annual basis. There are large companies (such as the ones I have already discussed) and then there are exceptional companies such as Vical Incorporated (NASDAQ:VICL) with a Phase 3 candidate that treats both stages 3 and 4 of melanoma, which are both known to spread. There is even, OncoSec Medical (OTCQB:ONCS), a company that has a patented technology, the OncoSec Medical System (OMS), utilizing a process called electroporation, which is used in combination with potentially any approved melanoma therapy to increase its uptake. Via their OMS ElectroOncology process, it requires less of the vaccine, but makes the therapy even more effective, with fewer side effects. The early trials of this device show that it is safe and effective, and can increase uptake by over 1,000 fold. When you take into consideration the new line of more efficient drugs, and then you combine the potential of a device that increases its effectiveness and decreases the harmful side-effects of cancer treatments, you now have a revolutionary technology with unheard of potential. The company itself is undervalued, and if regulators will acknowledge its effectiveness (since there is no similar technology), then there is a significant amount of upside for this company.

The trends of those diagnosed with melanoma are simply mindboggling. In 2009, there were 63,000 diagnosed, with 8,650 deaths. But in 2012, the National Cancer Institute estimates an even higher number of people diagnosed with melanoma, at 76,250 and 9,180 deaths. Thankfully, there are steps that we can take to protect ourselves from this disease, such as proper sun care. However, the trends still show the number of people being diagnosed is rising, despite cancer awareness being at an all-time high, and the treatment of cancer seeing a great deal of progress over the last few years. Each of the treatments that I have discussed are innovative and have the ability to change the trend, from the already approved Yervoy, to OncoSec's device that increases the effectiveness of any treatment. We are now seeing progress in a market that is not only massive, but is in dire need of effective therapies. If we look at the pipeline for melanoma treatments, it appears as though we have found a number of effective treatments that can provide a long-term solution to a growing problem.

Disclosure: I am long OTCQB:ONCS.

Source: Melanoma Treatments Look To Benefit From Large Market