The increasing incidence for many forms of cancers is alarming. The risk of developing melanoma, the most dangerous form of skin cancer, is now six times higher than it was in the 1970s. A recent study showed that the number of melanoma cases between 1970 and 2012 for women under 40 years of age has increased more than eight times. The number of melanoma cases seen in men of the same age group increased more than four times over the same period. Similarly, it is estimated that there will be 226,160 new cases of lung cancer in 2012, which is nearly triple the number of new cases in 1970.
There is clearly a strong case for developing nontraditional cancer treatments that are minimally invasive in order to avoid side-effects and damage to healthy tissue caused by traditional methods, such as radiotherapy, resection and chemotherapy. There are several approaches that novel pharmaceuticals are using to address the issues related to efficacy and the safety profiles of traditional treatments for many cancers. Below are three novel companies with platforms focusing on targeted approaches for treating cancer. These targeted approaches hope to address the issues of increased efficacy by focusing treatment agents at high levels at the tumor sites while reducing marginal and systemic exposure to the agents.
Electroporation's Investment Potential
One relatively new method of administering targeted anti-cancer agents with minimal exposure to healthy cells is called electroporation. This process applies an electrical current to the area between two electrodes, causing tumor cells to become more porous and absorb more of the pre-injected anti-cancer agents. When the current is removed, the tumor cells reseal trapping the agents inside. Electroporation is more effective and costs less (less of the anti-cancer agents need to be used due to the increased efficiency of cellular uptake) than traditional injected agents, while ensuring that the healthy tissue surrounding the tumor and the rest of the body is exposed to much-reduced levels of the agent. There are two exciting biotech companies utilizing electroporation: OncoSec Medical (OTC:ONCS) and Inovio Pharmaceuticals (INO).
OncoSec Medical currently holds total cash of $6.57 million and no debt. The company's clinical programs for skin cancers have made good progress, according to previously completed studies using its novel treatment approach in both of its product applications. Two phase II clinical trials for OMS ElectroImmunotherapy are set to report interim data towards the end of this year. A third phase II trial was initiated in early July for cutaneous T-cell lymphoma. The company is working on two different approaches: Its proprietary electroporation platform ElectroImmunotherapy, now branded ImmunoPulse, and ElectroChemotherapy, now branded NeoPulse. NeoPulse delivers bleomycin (an approved chemotherapy drug) to the tumor or site of the cancer. The end result is less time in the hospital, fewer surgical procedures and a better outcome for patients, according to data released by phase II trials. Phase III data from the treatment of head and neck cancer included a re-examination of the trial data from studies conducted by Inovio Pharmaceuticals and was abandoned in 2007 because of possible safety concerns. The company says the data shows that the treatment is both safe and effective.
OncoSec Medical's second approach to fighting skin cancer, ImmunoPulse, delivers an IL-12 Plasmid DNA Construct to the interior of the tumor cells. The construct instructs the cells to produce IL-12, which is a protein that galvanizes an immune response. The treatment instructs the body, which normally ignores cancer cells, to regard them as enemies and attack them vigorously. The company says that it has observed an increase of up to 4,000 times in the absorption rate of the agent relative to normal dermal injections, and that DNA IL-12 and electroporation are comparable to meet, and even exceed in some cases, the efficacy of approved treatments such as Bristol-Myers Squibb's (BMY) Yervoy and Genentech's (RHHBY.PK) Zelboraf. While both of these treatments (ImmunoPulse and NeoPulse) look promising, approval for either treatment would be a game changer in cancer treatment.
Inovio Pharmaceuticals has connections with OncoSec. OncoSec was started in March of 2011 when its founder led an employee spinoff of the technology, clinical data, and intellectual property of the proprietary Inovio electroporation platform under license. According to the founder, Inovio has invested a significant amount of time and money on the development of the technology, and OncoSec has been able to leverage this foundation.
Inovio, with total cash of $19.44 million and no debt, is engaged in the development of vaccines based on DNA for use in fighting cancer and infectious diseases. The company's SynCon technology enables it to design universal DNA-based vaccines capable of providing protection against new and unmatched virus strains such as influenza. These vaccines are delivered through its proprietary electroporation platform. Its clinical programs include phase II studies for cervical dysplasia, leukemia, and the hepatitis C virus, and phase I studies for influenza and HIV. The company has also developed many generations of DNA-based vaccine delivery systems based on electroporation, made of electrical pulse generators and needle electrode applicators.
In January 2012, the company announced that its synthetic vaccines for influenza type A H3N2 and type B had achieved protective antibody responses in immunized animals against multiple unmatched strains. Previously, the company had reported that its H5N1 synthetic vaccine achieved hemagglutination inhibition (HI) titers against six unmatched strains of this influenza subtype in a phase I human clinical trial. Typically, H3N2, H1N1, and type B influenza strains in each year's seasonal influenza vaccine are updated annually, but only provide protection against a single strain within each of these categories. When the selected strain mutates, as viruses tend to do, the annual vaccine may not provide adequate protection as we have seen with the 2009 swine flu H1N1 outbreak. There is a need for a universal vaccine able to provide long-term protection against all existing and new strains within the different types of influenza. Inovio has designed vaccine constructs based on influenza HA, NA, and NP proteins from strains H1N1, H2N2, H3N2, and H5N1, which are the types most relevant to seasonal outbreaks among people, as well as the less common type B influenza. Unlike conventional vaccines, synthetic vaccines do not need to match a virus to provide protection, meaning that they do not have to target a specific virus in order to be effective in fighting a virus.
This will change the traditional mode of protecting against infectious diseases by providing long lasting effective prevention against both known and unknown virus strains.
A universal flu vaccine would have enormous market potential, but there is still a long way to go and much to be achieved. OncoSec Medical is focused on developing electroporation as a platform for delivering drugs that have already been approved, while Inovio has a much more ambitious goal of developing universal vaccines from scratch. Both Inovio and OncoSec are trading at dips and present a good entry point for investors looking for exposure in the biotech sector.
Novel Chemotherapy Investment Potential
Celsion (CLSN), with a market cap of $147.2 million, total cash of $24 million and total debt of $5.1 million, develops oncology drugs through its proprietary heat-activated liposomal technology. Celsion is a targeted cancer treatment company. The company is currently focused on ThermoDox, a cancer drug which is currently under phase III clinical trials for the treatment of liver cancer. The drug is also under phase II clinical trials for the treatment of colorectal liver metastasis and under phase II clinical trials for the treatment of recurrent chest wall breast cancer.
ThermoDox takes an old chemotherapy drug, doxorubicin, and puts it into a new delivery method with the use of heat. In a recent interview with Reuters, CEO Michael Tardugno said "Certainly this is a $1 billion drug." ThermoDox could fill a huge void in the treatment of liver cancer, as it will be used to treat liver cancer patients not eligible for resection surgery. During the Reuters interview, Tardugno also said "There's a chance if we execute perfectly here that we could be seeing an approval by the end of 2013." While there is a big market opportunity for ThermoDox in Europe and the U.S., the greatest market potential can be found in China, where there are over 400,000 new cases of liver cancer recorded each year.
Celsion is up 147% so far this year, after a strong rally back in June. The company is currently trading at $4.40, and investors interested in buying Celsion should consider setting a tight stop limit at $4.25.
Promising Immunotherapy Investment
Celldex Therapeutics (CLDX) is another targeted therapy company and the first antibody-based combination immunotherapy company. Its pipeline has a number of drugs under development for the treatment of cancer and other diseases that are difficult to treat. These drug developments are based on the company's antibody focused Precision Targeted Immunotherapy (PTI) Platform, which is a complementary portfolio of monoclonal antibodies, antibody-targeted vaccines, and immunomodulators used to create disease-specific drugs. As of June 30, 2012, the company had cash and cash equivalents of over $78 million, which is expected to support planned activity into 2014.
The company has released encouraging clinical data and could be an interesting play on cancer treatment. In May, Celldex revealed interim data from an EMERGE study of CDX-011 (an antibody drug conjugate) in heavily pre-treated breast cancer patients. According to a Celldex press release, "CDX-011 also demonstrated strong response rates in patients with triple negative breast cancer across all levels of GPNMB expression (CDX-011 ORR of 21%; IC ORR of 0%), where treatment options are extremely limited. In addition, in patients with triple negative breast cancer who also highly express GPNMB, greater activity was observed (CDX-011 ORR of 36%; IC ORR of 0%)." This is promising data, and very important if the levels can be sustained. But the overall results of the study were not particularly impressive. The sample was small, and critical issues such as safety have not been satisfactorily resolved. More complete data is expected by the end of the year.
There has been no substantial change in the company's most advanced program, the cancer vaccine rindopepimut in glioblastoma, and enrollment for the phase III Act IV and phase II ReACT study is progressing. Unfortunately, glioblastoma studies are difficult studies to enroll. Doctors are willing to support experimental therapies, but this is not a very common type of cancer, and small companies find it difficult to get approval for new sites. It is difficult to estimate the market potential of the drug pipeline, and because these drugs are specialized, they can only expect to get a part market share in the overall market. However, the company has a surprisingly large early-stage pipeline, with drugs in human trials (CDX-1401, CDX-1127, and CDX-301) for solid tumors, lymphoma, and stem cell transplantation, and another drug (CDX-1135), that is about to begin a trial in renal disease.
Celldex has been on a bullish run lately, currently trading around $5.97, above its 52-week high of $5.87. Investors interested in buying Celldex should consider setting a tight stop limit at $5.56.
I am left wondering why Celldex was spun off by Medarex, now owned by Bristol-Myers Squibb, and why Pfizer (PFE) terminated the partnership for rindopepimut. Biotech investing is complicated and risky, and in this case, the risk is compounded by a focus on difficult to treat cancers. Investors should watch the profiled companies closely for new developments and buying opportunities. There are risks inherent in each along with the upside potential. Investors should perform additional research to ascertain pipeline potential, regulatory progress, targeted market potential and financials to ascertain risk/reward and if any of these promising companies are a good fit for their portfolios.