Seeking Alpha

Grant Zeng, CFA's  Instablog

Grant Zeng, CFA
Send Message
Grant Zeng has over 10 years of professional experience in equity research and analysis. Grant joined Zacks Investment Research Inc. in March 2006, and currently is a senior equity analyst covering biotech/pharma industry. Before joining Zacks, Grant worked for TheStreet.com as a biotech analyst... More
My company:
Zacks Investment Research, Inc.
View Grant Zeng, CFA's Instablogs on:
  • 2013 Will Be A Banner Year For GeoVax

    GeoVax Reports 1Q13 Financial Results

    On May 2, 2013, GeoVax Labs, Inc. (OTCQB:GOVX) reported its financial results for the three months ended March 31, 2013 and provided a clinical development update.

    Net revenues were $797,040 for the three months ended March 31, 2013, related to its grants from the National Institutes of Health (NIH) in support of its HIV/AIDS vaccine development efforts. This compares to $854,063 of grant revenue reported for the same period in 2012. As of March 31, 2013, there is approximately $2.2 million of unused grant funds available for use through August 31, 2013 (the end of the original project periods).

    Research and development (R&D) expenses were $881,988 for the three months ended March 31, 2013, compared with $1,072,354 for the comparable period in 2012. R&D expenses include direct costs funded by the NIH grants, as well as vaccine manufacturing costs and expenses related to the Phase I/II clinical trial, of the Company's therapeutic HIV vaccine. Costs associated with the clinical trials of GeoVax's preventative HIV vaccine, being conducted by the HIV Vaccine Trials Network (HVTN), are being funded directly by the NIH and are therefore not reflected in GeoVax's financial statements.

    General and administrative (G&A) expenses were $612,943 and $512,818 for the three months ended March 31, 2013 and 2012, respectively.

    Net loss for the three months ended March 31, 2013 was $696,797, or $0.03 per share, based on 20.2 million weighted average shares outstanding, compared to net loss of $730,513, or $0.04 per share, based on 16.7 million weighted average shares outstanding for the three months ended March 31, 2012.

    As of March 31, 2013, GeoVax held cash of $1,751,436, compared to $1,035,925 at December 31, 2012. The Company strengthened its cash position through the exercise of $1.1 million of existing stock purchase warrants in the first quarter of 2013.

    We believe fundraising will be an area of focus for management for the remainder of 2013. Management has indicated that in addition to equity capital, they are also seeking other sources of funding through additional government and/or third party support of its programs.

    GeoVax is On Track to Advance its HIV/AIDS Vaccine Programs in 2013

    Therapeutic Vaccine Program

    • GeoVax completed at the end of 2012 patient enrollment for the Phase I/II "treatment interruption" clinical trial, investigating the Company's therapeutic vaccine's ability to treat individuals already infected with HIV; data expected in 2H2013. The primary goals of this 9-patient clinical trial are to document the safety and immunogenicity of the vaccine in patients with well-controlled infections. Vaccine efficacy will be directly assessed through a brief period of anti-retroviral drug cessation. These results might indicate the vaccine's potential ability to treat HIV infection either as a standalone therapy or in conjunction with an oral drug regimen.
    • In 2013, GeoVax plans to initiate a Phase I clinical trial in the treatment of HIV-positive young adults with the Company's therapeutic vaccine in combination with standard-of-care drug therapy. The NIH has recently prioritized searching for a cure for those individuals who are HIV positive. Because of the mechanisms by which current oral drugs work, if the virus is in a latent phase these drugs are not effective, thus it is impossible to totally eradicate the virus. Current approaches to a cure include using an effective vaccine and oral medication together to more effectively eradicate virus. This trial is planned to have two groups of 24 participants, one of which will remain on drugs while being vaccinated and the second of which will remain on drugs but receive placebo. The participants will be monitored for vaccine-associated reductions in viral reservoirs (recesses where the virus resides without replication). GeoVax expects this trial to be conducted by the International Maternal Pediatric Adolescent AIDS Clinical Trial Group (IMPAACT) with financial support from the NIH.

    Preventive Vaccine Program

    • First generation vaccine: The Phase IIa trial (HVTN 205) of GeoVax's first generation preventive HIV/AIDS vaccine has been completed. Results of this trial were presented in September 2012 by the HIV Vaccine Trials Network (HVTN) at the AIDS Vaccine 2012 Conference in Boston. HVTN 205 confirmed the Phase I results, with the GeoVax vaccine demonstrating an excellent safety profile and reproducible T cell and antibody immune responses. The Company expects formal publication of the full study results by the end of 2013.
    • GeoVax completed in December 2012 patient enrollment for the Phase I clinical trial testing the safety of the Company's second-generation vaccine. This vaccine co-expresses granulocyte-macrophage colony-stimulating factor (GM-CSF) as an adjuvant and achieved a much higher level of prevention of infection than unadjuvanted vaccine in non-human primate testing. The 48-patient clinical trial assesses safety and immunogenicity of the vaccine at low-dose and full-dose regimens. This trial should be completed in 2013, setting the stage for a Phase II efficacy trial to begin in 2014. GeoVax is actively discussing this study's design and protocol with the HIV Vaccine Trials Network (HVTN).

    We think GeoVax has made great progress in its HIV/AIDS vaccine clinical programs. We are especially pleased to see that the Company is planning a new clinical trial combining its HIV/AIDS therapeutic vaccine with AIDS drugs in 2013. This will provide a new big market for the Company's vaccine.

    (click to enlarge)

    Valuation is Attractive at Current Market Price

    GeoVax has developed the technology for the development of both preventive and therapeutic HIV/AIDS vaccines. The Company's vaccine candidates have completed Phase IIa and will enter into Phase IIb clinical trials soon, which are the only HIV vaccines for America/Europe entering efficacy trial.

    The Company has a modest cash burn rate ($4 to $5 million annually) due to generous government support. Down the road, we believe GeoVax will continue to seek non-dilutive government and non-government support for its HIV vaccine development. If the Phase IIb trial proves to be positive, we believe it would be likely for the Company to find a partner from big pharma or biotech companies who seek to boost or enter into the anti-HIV/AIDS market.

    GeoVax has a strong position in intellectual property. The excellent relationship with Emory University put the Company in a better position to get the most advanced vaccine technology in the first hand, therefore providing a sustainable growth engine for the Company.

    Based on the current fundamentals of the Company, we believe current valuation is attractive. With a decent pipeline and mid-stage candidates, GeoVax is only valued at about $10 million in market cap. This is a huge discount in our view. We understand that HIV/AIDS vaccines have been tough to develop and that this is a high risk area for any biotech company especially for smaller ones with limited resources. However, we think GeoVax has done great job so far in the HIV/AIDS vaccine area and is well positioned to continue to create shareholder value down the road.

    We see GeoVax as a risk reward opportunity with significant long term positive returns. We think GeoVax should be valued at $1.50 per share which represents a market cap of $30 million.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    May 03 12:41 PM | Link | Comment!
  • Distribution Agreement With Millennium HealthCare Will Boost Atossa Topline For 2013

    The Agreement

    This morning (May 2, 2013), Atossa Genetics (NASDAQ:ATOS) announced that it has signed an agreement with Millennium HealthCare Inc. (OTCQB:MHCC) for the distribution by Millennium Medical Devices of Atossa's ForeCYTE Breast Health devices, which consist of the patented MASCT pump and ForeCYTE patient collection kits.

    (click to enlarge)

    Millennium has submitted an initial order for 10,000 ForeCYTE collection kits, which it intends to market to managed-care networks, healthcare clinics and physician practices in the New York Metro Area and Northern New Jersey.

    Atossa's MASCT system is used by physicians and nurses to collect a small amount of nipple aspirate fluid for analysis by the National Reference Laboratory for Breast Health with the ForeCYTE Breast Health Test.

    The Implications

    We think this distribution agreement is a great achievement for Atossa as it will boost the Company's top line in the coming quarters.

    The ForeCYTE Test provides Atossa with two revenue sources:

    • Revenue from the sale of the MASCT System device and patient kits to physicians, breast health clinics, and mammography clinics; and
    • Service revenue from the preparation and interpretation of the NAF samples sent to the Company's laboratory for analysis.

    Atossa offers each component of the MASCT System for sale separately. The NAF sample collection device is currently priced at approximately $250 per device and the patient kits are priced at approximately $30 per kit. The cytology and molecular diagnostics testing and analysis services are billed to federal and/or state health plans at the reimbursement rates of either $384 or $1,275 per patient, depending on the complexity of the analysis performed. The Company expects that the substantial majority of patients will be billed at the $384 rate. Some patients (approximately 10%) need more complex tests, which will be billed at the rate of $1,275. This higher rate is only for those patients who have an initial test result that requires further analysis.

    Atossa bills third-party payors at higher rates, as is customary for the industry.

    Based on the above information, the initial order of 10,000 collection kits will bring about $7.5 million in revenue for Atossa.

    We think the distribution agreement with Millennium Healthcare represents an important milestone for the national rollout of ForeCYTE test.

    In January 2013, Atossa initiated the national rollout of the ForeCYTE Breast Health Test in partnership with Clarity Women's Health. Clarity distributes the Clarity-branded ForeCYTE product line with major national distributors. These distributors collectively have more than 5,000 employee sales representatives and/or independent sales representatives selling their products to a target market of 33,000 obstetric-gynecologists in the United States.

    Atossa, together with Clarity, is making steady progress in the national rollout of its ForeCYTE Test. Early responses from doctors and their patients are encouraging.

    To help ensure that more doctors and their patients have access to the ForeCYTE and ArgusCYTE tests and that patients will receive insurance reimbursement for the laboratory costs associated with these tests, Atossa entered into two contracts with third parties to facilitate the reimbursement process from insurers, one with MultiPlan, Inc. in September 2012 and another with FedMed, Inc., in February 2013:

    Atossa launched two breast health testing services in late 2011; with two new testing tools expected to be launched in 2013. We think revenue growth will accelerate in the coming years thanks to the focused marketing strategy and continued new products/services offering. We model the top line growing from $3.17 million in 2013 to $66.5 million in 2018, an impressive CAGR of 83%. We think Atossa will become profitable in 2015 with EPS of $0.05, which will grow to $1.08 per share in 2018.

    Apparently, with the growth potential, Atossa's share price has further room to appreciate.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: ATOS
    May 02 10:24 AM | Link | Comment!
  • GeoVax Is On Track To Advance Its HIV/AIDS Vaccine Programs In 2013

    On Mar 11, 2013, GeoVax Labs, Inc. (OTCQB:GOVX) announced its financial results for the year ended December 31, 2012 and provided a business update.

    Full Year 2012 Financial Results

    GeoVax reported revenues of $2.7 million for 2012, related to grants from the NIH. This compares to $4.9 million of grant revenue reported in 2011. As of December 31, 2012, there was approximately $3.0 million in unused grant funds available for use through August 31, 2013 (the end of the grant project periods).

    Research and development (R&D) expenses were $3.0 million in 2012, compared with $4.3 million in 2011. R&D expenses include $1.8 million and $3.0 million for 2012 and 2011, respectively, in direct costs funded by NIH grants; and also include vaccine manufacturing costs and costs related to the Phase I/II clinical trial of the Company's therapeutic vaccine, being sponsored by GeoVax. Costs associated with the conduct of a Phase IIa clinical trial of GeoVax's preventative vaccine (completed during 2012) and a Phase I clinical trial of GeoVax's second-generation vaccine (both trials conducted by the HVTN) are being funded directly by the NIH and are therefore not reflected in GeoVax's financial statements.

    General and administrative (G&A) expenses were $1.8 million and $3.0 million in 2012 and 2011, respectively. G&A expenses were lower during 2012 primarily due to lower legal costs, patent costs and stock-based compensation expense related to investment advisory fees and investor warrant extensions.

    The Company reported a net loss for the year ended December 31, 2012 of $2.1 million, or $0.12 per share, based on 18.3 million weighted average shares outstanding. For the year ended December 31, 2011, the Company reported a loss of $2.3 million, or $0.15 per share, based on 15.7 million weighted average shares outstanding.

    Cash balances as of December 31, 2012 was $1.0 million, as compared to $1.2 million at December 31, 2011.

    We think the earnings report is a non-event for GeoVax. Investors should be focused on the Company's progress in its clinical programs. In this regard, we think GeoVax has made great progress for its HIV/AIDS programs and is on track to further advance these clinical programs in 2013.

    Progress on Clinical Development

    • Preventive Vaccine - Phase IIa Trial. The Phase IIa trial (HVTN 205) of GeoVax's preventive HIV/AIDS vaccine has been completed. Results of this trial were presented in September 2012 by the HIV Vaccine Trials Network (HVTN) at the AIDS Vaccine 2012 Conference in Boston. HVTN 205 confirmed the Phase I results, with the GeoVax vaccine demonstrating an excellent safety profile and reproducible T cell and antibody immune responses. The Company expects formal publication of the full study results by the end of 2013.
    • Preventive Vaccine (2nd-generation) - Phase I Trial. Patient enrollment was completed in December 2012 for the Phase I trial testing the safety of GeoVax's second-generation vaccine (GM-CSF adjuvanted). GeoVax expects the Phase I trial to be completed in the second half of 2013.
    • Preventive Vaccine (2nd-generation) - Phase II Efficacy Trial Planning. Pending successful outcome of Phase I testing of the second-generation vaccine, GeoVax expects to advance this version of its preventive vaccine into Phase II efficacy testing in high-risk individuals, expected to begin in 2014. The Company is currently in discussions with the HVTN regarding protocol development and anticipates knowing more about the trial design and the government funding consortium in late 2013.
    • Therapeutic Vaccine - Treatment Interruption Study. The Company's ongoing Phase I/II "treatment interruption" clinical trial, investigating the use of its vaccine for treatment of individuals already infected with HIV, completed enrollment at the end of 2012. GeoVax expects to see data readouts from this study during 2013, which might indicate the potential use of its vaccines to treat HIV infection, either as a standalone therapy or in conjunction with an oral drug regimen.

    New Clinical Trial Planned for Combination Therapy

    GeoVax is collaborating with the NIH and planning is underway for a second therapeutic clinical trial to begin in mid-2013. This Phase I trial will investigate the use of GeoVax's therapeutic vaccine in combination with standard-of-care drug therapy in HIV-positive young adults. The Company expects this trial to be conducted by the International Maternal Pediatric Adolescent AIDS Clinical Trial Group (IMPAACT), a program supported by the NIH. Because of the mechanisms by which current oral drugs work, if the virus is in latent phase (non-replicating), the drugs are not effective, thus it is impossible to totally eradicate the virus. There is hope for a combination approach using the patient's own immune system stimulated by the vaccine, together with oral drugs to eradicate the virus -- thereby potentially offering a cure.

    We think GeoVax has made great progress in its HIV/AIDS vaccine clinical programs. We are especially pleased to see that the Company is planning a new clinical trial combining its HIV/AIDS therapeutic vaccine with AIDS drugs in mid-2013. This will provide a new big market for the Company's vaccine.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: GOVX
    Mar 12 5:54 PM | Link | 1 Comment
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.