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The biopharmaceutical sector is living a speculation moment. The general feeling among investors is that great advances with the fight against cancer are going to be produced and the existing medication will be improved. Some companies conduct promising studies against cancer. It is speculated that before 10 years we could have a substantial improvement in the partial cure of the most deadly cancers. Meanwhile, other companies are trying to improve the current medication for the struggle of chronic pain.

There are three companies that are making some spectacular progress in their studies. Peregrine Pharmaceuticals (NASDAQ:PPHM), Zalicus (ZLCS) and Celsion Corporation (NASDAQ:CLSN).

In the next article I will write about the reasons to take a speculative position in these companies.

1. Peregrine Pharmaceuticals

It is a biopharmaceutical company engaged in the research and development of monoclonal antibodies for the treatment and diagnosis of cancer and viral infections. Its products in clinical-stage development include bavituximab, a phosphatidylserine-targeting antibody, which is in Phase II clinical trials for the treatment of front-line and second-line non-small cell lung cancer (NSCLC), and pancreatic cancer; and Cotara, a DNA/histone-targeting antibody that is in Phase II clinical trial for the treatment of recurrent glioblastoma multiforme. The company is also developing bavituximab in combination with ribavirin, which is in Phase II clinical trial for the treatment of patients with genotype-1 hepatitis C virus infection.

In addition, it has sponsored trial programs that evaluate bavituximab for the treatment of patients with liver cancer, second-line castration resistant prostate cancer, HER-2 negative metastatic breast cancer, and locally advanced or metastatic NSCLC. Further, the company, through its wholly-owned subsidiary, Avid Bioservices, Inc., offers integrated current good manufacturing practice (cGMP) as well as commercial and clinical manufacturing services in the United States, including contract manufacturing of antibodies, recombinant proteins, and enzymes; cell culture development; process development; and testing of biologic for biopharmaceutical and biotechnology companies under cGMP. It has license, research, and development agreements with the University of Texas Southwestern Medical Center at Dallas, Affitech A/S (OTC:AFFTY), Merck KGaA (OTCPK:MKGAY) and Stason Pharmaceuticals.

Peregrine Pharmaceuticals, Inc. focuses on selling its products in the United States and internationally in collaboration with marketing partners or through a direct sales force. The company was founded in 1981 and is based in Tustin, California.

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New catalyst

Last Friday, Peregrine Pharmaceuticals trading halted for several hours because the company was about to announce an improvement in the data of one of its studies.

Finally, the company reported that studies of Bavituximab in phase II for lung cancer doubled the life expectancy of the patients.

Treatment Arm
Placebo
plus docetaxel
Bavituximab
(1 mg/kg)
plus docetaxel
Bavituximab
(3 mg/kg)
plus docetaxel
Bavituximab (Pooled Data) plus docetaxel
Number of patients (per protocol population) 38 40 39 79
Median Overall Survival Hazard Ratio (p-value) 5.6 months
--
11.1 months
.512 (.0286)
13.1 months
.539 (.0714)
12.1 months
.524 (.0154)
Overall Response Ratep-value 7.9%
--
15%
.3262
17.9%
.1895
16.5%
.2069
Progression Free Survival Hazard Ratio (p-value) 3.0 months
--
4.2 months
.571 (.0794)
4.5 months
.65 (.1921)
4.2 months
.605 (.067)

- The strong clinical data submitted are a significant step forward to initiate phase III and should be able to obtain the designation SPA by the FDA.

Next Catalyst

- Phase III of bavituximab.

Fundamentals Analysis

Short interest

(SOURCE)

Analyst Research

(SOURCE)

Financials

The company reported the second-quarter financial results on September 10 with the following highlights:

Revenue $4.25MM
Net Income ($7.66MM)
Cash $18.99MM

Chart Analysis


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- Rsi marks an overbought. The stock is in a bullish channel. The MACD marks an upward trend.

2. Zalicus Inc

It is a biopharmaceutical that discovers and develops treatments for pain and immuno-inflammatory diseases. An important component of the company's business strategy is collaboration. Zalicus forms collaborations with pharmaceutical and biotechnology companies, as well as U.S. government agencies, to support the development and marketing of select product candidates generated by their discovery technologies.

This small pharmaceutical company has agreements with major companies in the sector, such as Covidien (COV), Novartis (NVS), Sanofi (SNY), Hydra biosciences and the U.S. Army Medical Research Institute for Infectious Diseases.

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New Catalyst

- The company has just announced the approval by the FDA of Exalgo in doses of 32 mg. (Exalgo is owned by Mallinckrodt). With these news Zalicus ensures more incomes for royalties.

- Zalicus initiated the first of two Phase IIa studies with Z160, a first-in-class, oral, state-dependent, selective N-type calcium channel blocker, for the treatment of chronic neuropathic pain.

Next Catalyst

Expected Timing Product Event
Q4 2012 Z160 Initiate 2nd Phase II clinical trial
Q1 2013 Z944 Initiate Phase II clinical trial
H1 2013 Sodium Channel Initiate Phase I clinical trial

- Prednisporin in Phase III and Ionic channel or cHTP will be released before the end of this year.

For further information, please read my previous article on this issue.

Fundamentals Analysis

Short interest

(SOURCE)

Analyst Research

(SOURCE)

- On 11 September 2012, Canaccord Genuity reiterates a "Buy" on Zalicus with price target of $3.00.

Ritu Baral, analyst of Canaccord Genuity, said:

Reiterate rating and price target despite Synavive Ph2b miss -- discontinuation shifts focus to pain programs that we think have significantly more promise ... After today's Synavive Ph2 miss and program halt ... ZLCS will focus on Ph2 Z160, a novel, oral N-type Ca2+ channel blocker for neuropathic pain, and Ph1 pain drug Z944, a novel, oral T-type Ca2+ channel blocker.

Financials

The company reported the second-quarter financial results on August 7 with the following highlights:

Revenue $2.83MM
Net Income ($10.32MM)
Cash $46MM

Chart Analysis


(Click to enlarge)

- Rsi marks an oversold. The white candlestick represents a buying pressure. The MACD marks a downward trend.

3. Celsion Corporation

This biopharmaceutical is an innovative oncology drug development company singularly focused on improving treatment for those suffering with highly difficult forms of cancer. They are working to develop and marketing more efficient, effective, targeted chemotherapeutic treatments based on their unique heat-activated liposomal technology. Their method is an elegant approach that delivers high concentrations of anti-cancer agents directly to the tumor site. The promise of this drug technology is to maximize efficacy while minimizing side-effects common to cancer treatment.

Celsion is developing its study in Phase III Thermodox. This treatment approach is designed to deliver high concentrations of anti-cancer drugs directly to those cancer cells that survive RFA. In conjunction with ablating the center of the tumor, RFA simultaneously activates ThermoDox to release its encapsulated doxorubicin, killing the remaining viable cancer cells throughout the heated region, including the tumor margins. Celsion approach, while increasing the delivery of the drug at the desired tumor site has the potential to reduce drug exposure distant to the tumor site and associated side effects.

Celsion, through Special Protocol Assessment Guidance, has reached an agreement with the U.S. FDA for a pivotal Phase III clinical trial program in the treatment of HCC. This global trial with sites in the USA, Hong Kong, Canada, Taiwan, Korea, China and Italy is currently enrolling approximately 600 patients in the study designed to demonstrate the efficacy and safety of ThermoDox with RFA compared with RFA alone in HCC.

Pipeline Portfolio


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Next Catalyst

- Clinical Data of ThermoDox in Phase III for primary liver cancer (the HEAT study).

Fundamentals Analysis

Short interest

(SOURCE)

Analyst Research

(SOURCE)

Financials

The company reported the second-quarter financial results on August 13 with the following highlights:

Revenue $0
Net Income ($6.10MM)
Cash $11.70MM

Chart Analysis


(Click to enlarge)

- The MACD marks an upward trend. RSI is in a good position. The stock is in a bullish channel.

*Chart data sourced from stockcharts, all other data sourced from Nasdaq.com as well as the web of the previously mentioned company.

Source: 3 Best Biotech Stocks For This Week (Part I)