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Grant Zeng, CFA
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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 as a biotech analyst... More
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  • Galena On Track To Advance NeuVax

    Final Results of NeuVax Phase I/II Trials Presented at the 35th Annual CTRC-AACR San Antonio Breast Cancer Symposium

    On December 7, 2012, Galena Biopharma (GALE) presented data from the completed SN-33 trial and final results from the Phase I/II trials of NeuVax (nelipepimut-S or E75) for breast cancer at the 35th Annual CTRC-AACR San Antonio Breast Cancer Symposium.

    Overview of the Phase I/II Trails

    The Phase I/II trials of NeuVax included SN-33 (Node Positive, n=97) and SN-34 (Node Negative, n=90), which evaluated a combined 187 patients with 108 in the vaccine group (NYSE:VG) and 79 in the unvaccinated control group (NASDAQ:CG).

    In terms of patient demographics, we think the vaccine and control groups were generally well-matched. Although there were some imbalances between VG and CG, they were not significant. The only statistically significant difference was ER-/PR- status (31.1% in VG vs 17.7% in CG, p=0.04).

    (click to enlarge)

    The Rational for Booster Inoculation

    Patients were initially given a series of up to six inoculations of NeuVax once a month. As the trials progressed, the physicians noticed that E75-specific immunity waned after this initial monthly primary vaccine series (PVS) and translated to late recurrences of cancer in some patients. As a result of this finding, a voluntary booster program was added to the trials to maintain long-term immunity following the initial monthly PVS.

    The booster program offered patients an additional inoculation every six months with a maximum of six boosters. Because the booster program was voluntary, not all women chose to receive the full six additional doses.

    (click to enlarge)

    The Combined SN-33 and SN-34 Results

    Trials SN-33 (NYSE:NP) (n=97) and SN-34 (NN) (n=90) enrolled clinically eligible patients who were rendered disease-free after completion of standard of care multi-modality therapy (n=187). Treatment assignment was then based on HLA type, with HLA-A2/A3 patients vaccinated and HLA-A2/A3 negative patients followed prospectively as controls for recurrence. NeuVax exhibited an excellent safety and tolerability profile, and demonstrated a durable response out to 60 months:

    • Maximum toxicity for all inoculations produced primarily Grade 1 and some Grade 2 toxicities, with injection site reactions and fatigue most common. No serious adverse events (SAEs) or cardiotoxicity were reported.
    • At 24-month: 94.3% of NeuVax patients were disease-free versus 86.8% of patients on the control arm (p=0.08).
    • At 60-month: 89.7% of NeuVax patients remain disease-free versus 80.3% of patients on the control arm (p=0.077)--a recurrence reduction of 47.7% among all patients at any dose. Multiple dose response analyses underscore the efficacy of the vaccine with statistical significance being achieved among the optimally-dosed and boosted patients.

    The SN-33 HER2 Negative Booster Results

    SN-33 was conducted in node positive patients, and was well balanced between the two arms: Vaccine HLA-A2/A3 positive (n=53) vs Control HLA-A2/A3 negative (n=44). During the conduct of this trial, Herceptin® (trastuzumab; Genentech/Roche) became commercially available for HER2 IHC Positive (3+) patients, and the trial was modified accordingly to allow these patients to receive Herceptin, and exclude this patient group from future enrollment and analysis.

    Below are the summary results from the SN-33 trial. SN-33 Intent-to-treat (NYSE:ITT) population (n=97); NeuVax (n=53) vs. Control (n=44):

    • At 24-month: 90.6% of NeuVax patients (n=53) were disease-free versus 79.5% of patients on the control arm (n=44) (p=0.1155).
    • At 60-month: 84.7% of NeuVax patients (n=53) remain disease-free versus 77.1% of patients on the control arm (n=44).

    SN-33 HER2 Negative IHC 1+/2+ patients who received boosters (n=45). NeuVax (n=18) vs. Control (n=27):

    • At 24-month: 0% recurrences for patients treated with NeuVax: statistically significant DFS for NeuVax at 100% vs. 77.8% Control (p=0.0358).
    • At 36-month: 0% recurrences for patients treated with NeuVax for a statistically significant DFS for NeuVax at 100% vs. 77.8% Control (p=0.035). Of note, no patients receiving booster inoculations had a recurrence through 36 months, which is the Phase III PRESENT study endpoint.
    • At 60-month: 5.6% recurrence rate with NeuVax versus 25.9% recurrence rate in the control arm. DFS for NeuVax at 94.4% vs. 74.1% Control--a recurrence reduction of 78.4% in the target patient population.

    This new, 60-month data analysis shows that breast cancer recurrence is greatly reduced for patients treated with NeuVax and that these results are both clinically relevant and durable over time.

    Our assessment of the booster inoculations from the data presented: the booster inoculations are well-tolerated and don't increase any side effects compared to the primary vaccine series. Further, booster inoculations appear to assist in the maintenance of long-term peptide-specific immunity. In terms of efficacy, boosted patients have better recurrence rates and improved DFS compared to patients who did not receive vaccine. This may be attributed to increased immunity induced by the booster inoculations.

    As a result of these findings, booster inoculations have been incorporated into the design of the ongoing Phase III PRESENT study.

    The Phase III PRESENT Trial is Underway

    Based on the SN-33 booster data, on Jan. 20, 2012, GALE initiated the Phase III PRESENT trial for NeuVax (E75 peptide plus GM-CSF) vaccine in HER2 1+ and 2+ breast cancer patients in the adjuvant setting to prevent recurrence.

    The PRESENT (Prevention of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment) study is a randomized, multicenter, multinational clinical trial that will enroll approximately 700 breast cancer patients. The trial design has been updated to include current National Comprehensive Cancer Network guidelines and recently received Special Protocol Assessment (NYSE:SPA) concurrence from the FDA. Based on a successful Phase II trial, which achieved its primary endpoint of disease-free survival (NYSE:DFS), the FDA has agreed that the design and planned analysis of the Phase III study adequately address the objectives necessary to support an acceptable regulatory submission for marketing approval.

    The NeuVax Phase III trial will be conducted in adjuvant breast cancer patients who are node positive, have an HLA status of A2/A3+, and have low or intermediate HER2 expression (IHC 1+, 2+, sometimes referred to as HER2 negative). These patients are not eligible to receive Herceptin (trastuzumab, marketed by Roche-Genentech) therapy that is currently approved only for patients with high HER2, or 3+ expression.

    According to the protocol, once qualified patients have achieved a complete response from current standard-of-care treatment (surgery, radiation and/or chemotherapy), they will be randomized and dosed with either NeuVax (E75 + GM-CSF) or control (placebo plus GM-CSF). Patients will receive one intradermal injection every month for six months, followed by a booster inoculation every six months thereafter. The primary endpoint is disease-free survival at three years or 139 events (recurrence of cancer). A data safety monitoring board will conduct an interim analysis for safety and futility after 70 events.

    To date, 70 sites are approved globally, with continued expansion to over 100 sites planned.

    We think the Phase III trial design is prudent based on the existing data from the Phase I/II trials. This Phase III trial is well designed and better controlled one compared to the Phase I/II trials.

    We believe NeuVax has a blockbuster potential if it finally reaches the market.

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

    Tags: GALE
    Dec 10 9:46 AM | Link | Comment!
  • Pressure BioSciences (PBIO), One Of The Most Undervalued Biotech Companies

    Pressure BioSciences (OTCQB:PBIO) is a research products and services provider for the life science industry. The Company's novel, enabling platform technology pressure cycling technology (PCT) has competitive advantages over existing technologies in the sample preparation market. PCT is being increasingly recognized by research labs and user adoption will accelerate in the coming years due to the focused marketing efforts by the Company.

    However, the Company is one of the most undervalued biotech companies in our view. Our call is based on two major factors: financial results and business development are improving and valuation is very attractive.

    Record PCT Sales Reported for 3Q12

    On Nov 15, 2012, Pressure BioSciences (OTCQB:PBIO) announced financial results for the three month period ended September 30, 2012.

    Total revenue for the third quarter of 2012 was $391,616 compared to $280,422 for the comparable period in 2011, a 40% increase.

    Revenue from the sale of Pressure Cycling Technology (PCT) products and services was $297,867 for the third quarter of 2012 compared to $217,734 for the same period in 2011, a 37% increase. Grant revenue in the third quarter of 2012 was $93,749 compared to $62,688 for the same period in the prior year.

    The Company installed eight PCT Sample Preparation Systems (PCT Systems) during both quarters. Sales of PCT-based consumables generated revenue of approximately $28,000 for the three months ended September 30, 2012 compared to approximately $21,000 for the same period in 2011, an increase of 33%.

    Operating loss for the third quarter of 2012 was $686,520, compared to $745,811 for the same period in 2011, a decrease of approximately 8%. After the exclusion of non-cash charges, operating cash burn for the 2012 third quarter was approximately $507,000 compared to approximately $658,000 for the third quarter of 2011, a decrease of approximately 23%.

    Loss per common share - basic and diluted - was $0.09 for the third quarter of 2012 compared to $0.19 for the same period in 2011.

    Third quarter of 2012 was an impressive quarter. PBIO's financial results continued to improve.

    PBIO recorded record PCT product sales of $0.30 million in 3Q12, an increase of 37% year over year. Third quarter product sales was also $0.05 million over our estimate of $0.25 million. PBIO also reported that revenue for the first nine months of 2012 exceeded $1.00 million, which surpassed the total revenue for 2011.

    For the third quarter of 2012, the Company worked hard to increase revenue while reducing its operating loss. Operating loss for the third quarter of 2012 was $686,520, a decrease of approximately 8% year over year. Operating loss also beat our estimate of $0.9 million.

    We are especially happy to see increased sales of consumables for the quarter. Sales of PCT-based consumables generated revenue of approximately $28,000 for the three months ended September 30, 2012 compared to approximately $21,000 for the same period in 2011, an increase of 33%. We expect the sales of consumables will continue to grow in the coming quarters. As we pointed before, this growth in consumables sales is very important to the Company's long term sustainable growth. We remind investors consumables are recurring revenue source to the Company with higher margin, which are associated with the installation of PCT equipments. When more and more equipments are installed, more consumables will be used. The growth of installed equipments will eventually stabilize, but the use of consumables will increase each quarter as the equipment base becomes larger. Although revenue from consumables currently accounts for only a small portion of PCT product sales (about 10%), this number will become larger going forward and make a meaningful contribution to the top line.

    Balance Sheet Boosted with the Conversion of Ironridge BioPharma Convertibles

    On November 28, 2012, PBIO announced that Ironridge BioPharma Co. has converted their remaining 200 shares of the Company's Series E Convertible Preferred Stock into shares of the Company's common stock. Following this conversion, all 500 shares of Series E Preferred Stock purchased by Ironridge in the April 2012 $500,000 registered direct transaction with the Company have been converted.

    The total number of shares of common stock issued to Ironridge for their Series E Preferred Stock investment was 1,113,033, of which 688,378 were reflected in the 11,189,612 shares issued and outstanding on September 30, 2012. In connection with the Series E Preferred Stock transaction, the Company paid the make-whole dividend with a combination of cash and common stock.

    Ironridge BioPharma Co. is an institutional investor specializing in equity investments in the life sciences sector. Ironridge is a long-only institutional investor that seeks to be a long-term financial partner. Ironridge made the investment in PBIO this past April. The funds received were used in part to support the new marketing and sales program that PBIO introduced earlier this year, which helped PBIO achieve record PCT products revenue in the third quarter of 2012, and will also play an important role in PBIO's anticipated future revenue growth.

    With the conversion, the perceived "overhang" is gone, and PBIO paid out no more shares than originally registered. The conversion not only boosts PBIO's balance sheet, but also validates the Company's PCT technology platform. This is an indication that Ironridge BioPharma is optimistic about PBIO's prospect and is willing to become its long term investor.

    Two Big Distribution Deals will Boost Product Sales in 4Q12 and Beyond

    On November 26, 2012, PBIO announced that it has signed deal with British Constant Systems Ltd (NYSE:CS). The two companies have entered into a two-way, strategic marketing, selling, and distribution agreement.

    Under the terms of the Agreement, PBIO has been awarded non-exclusive rights to market, sell, and distribute CS's unique, high-pressure cell disruption equipment and consumables in the United States, Canada, and Mexico. Meanwhile, CS has been awarded the rights to market, sell, and distribute PBIO's pressure cycling technology (PCT) based instruments and consumables in England, Scotland, Wales, Ireland, Spain, Portugal, Italy, Norway, Sweden, Finland, Denmark, and Singapore. CS currently has strong sales and distribution channels in all twelve of these countries. PBIO, on the other hand, has none. The Agreement is in effect until December 31, 2013; however, PBIO and CS expect to extend the Agreement prior to its termination.

    This is a big deal for PBIO in our view. The two companies are worldwide leaders of complementary ultra-high pressure product lines for the life sciences market. Constant Systems is a British company that has been providing niche biomedical products and services to a global client base since 1989.

    The two product lines complement each other exceedingly well. While both the CS and PBIO technologies are based on high pressure, each product line has fundamental scientific capabilities that the other does not have. PBIO's PCT Platform uses certain patented pressure mechanisms to achieve small-scale, molecular level effects. CS's technology uses different, proprietary pressure mechanisms for larger-scale, non-molecular level processing. In a number of routine laboratory applications, such as protein extraction, both effects can be critical to success. Therefore, for protein extraction and a number of other important scientific applications, laboratories will benefit by using the CS and PBIO products, either separately or together. This is a wonderful synergy of two well-respected, growing, and complementary product lines.

    Constant Systems' reach will introduce PBIO's PCT products into 12 countries where PBIO does not have current coverage. Equally important, CS' pressure-based cell disruption systems are needed by many of the same companies and scientists in North America that use or need PBIO's PCT. Therefore, revenue for PBIO could be boosted in two ways in 2013 and beyond.

    On November 7, 2012, PBIO and Cole-Parmer signed a supplier agreement. Under the agreement, Cole-Parmer will distribute PBIO's Shredder SG3™ System.

    Cole-Parmer is a leading global source of laboratory and industrial fluid handling products, instrumentation, equipment, and supplies since 1955. Its product lines, including popular brand names such as Masterflex®, Oakton®, and more, are sold through company-owned customer channel outlets and a strong network of international dealers.

    With Cole-Parmer's reputation and extensive distribution channels, sales of SG3 will be greatly boosted in the coming quarters, which will make a meaningful contribution to PBIO's top line growth down the road.

    PCT Platform Continues to Show Advantages in Multiple Studies

    Recently, PBIO announced that multiple research reports have cited the ability of the Company's PCT Platform to improve the detection of RNA, DNA, and/or protein in forensic, environmental, and biodefense applications, and in research studies focused on the discovery of biomarkers of disease. These studies were conducted in laboratories worldwide, including:

    • On Nov 2, 2012, PBIO announced that scientists from two separate research groups presented data at the recent HUPO 11th Annual World Congress (Boston, MA) indicating that the incorporation of the Company's PCT Platform into their sample preparation processes
      resulted in a marked improvement in the quality and/or efficiency of test results. These studies were presented by scientists from the Center for Biologics Evaluation and Research of the FDA and from Janssen Research and Development.
    • On Nov 14, 2012, PBIO announced that Dr. Bradford Powell, a prominent microbiologist and recognized infectious diseases expert, presented a keynote address during the opening ceremony of this year's annual Clinical Microbiology & Microbial Genomics Conference (ClinMicro-2012). In the Keynote address and a second, main session presentation in the conference, Dr. Powell presented data highlighting the advantages of the Company's powerful and patented PCT Platform that have been shown to enable significant improvements in molecular-based microbiological testing, a rapidly growing and extremely important area in laboratory medicine today.
    • On Oct 18, 2012, PBIO announced that two research groups have reported on the ability of the Company's PCT Platform to improve the detection of DNA in challenging forensic samples. The studies were presented by scientists from the Institute of Applied Genetics, Department of Forensic and Investigative Genetics, University of North Texas Health Science Center (UNTHSC) in Fort Worth Texas, and from the Harris County Institute of Forensic Sciences in Houston Texas. The study results were presented at the 23rd annual International Symposium on Human Identification (OTCPK:ISHI), being held from October 15-18, 2012, in Nashville, TN.

    We believe these findings, together with previous publications, strongly support the importance of the PCT Platform in the life sciences field, including forensics, environmental analyses, biodefense, and biomarker discovery applications. This has created increased interest in its PCT Platform in the past, and will continue to drive sales in the future.

    In terms of valuation, we think PBIO shares are undervalued based on the Company's fundaments. Currently, the Company trades around $0.20 per share with a market cap of $2.0 million. We believe this deeply undervalues the Company based on the current fundamentals mentioned above. We understand that market discounts the value of the Company because the Company has only limited revenue base and has been losing money since its inception. We also understand that the Company has a relatively weak balance sheet, and further financing will be needed soon. However, when we look at the Company and the industry in which it operates in more detail, we realize that this is a company with huge opportunity and one that can grow its revenue and earnings at a tremendous rate in the next few years.

    We are now optimistic about the Company's prospect. With a rapidly growing market worldwide, combined with its unique technology and broad range of product offering, the Company is well positioned to boost its top line and bottom line in the coming years.

    We think PBIO is more like a development stage biotech company. Our price target of $1.25 per share represents a market cap of about $14 million. As long as the Company can execute its growth strategy correctly, we believe this goal is achievable.

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

    Nov 29 1:07 AM | Link | Comment!
  • Immunovaccine Is Making Progress In Advancing Its Clinical Programs

    Positive Interim Results from Phase I Study of DPX-Survivac Reported

    On October 9, 2012, Immunovaccine Inc. (IMV) announced positive interim results from the Company's Phase I clinical trial of DPX-Survivac, an ovarian cancer vaccine candidate.

    As a reminder, Immunovaccine initiated a Phase I clinical trial of DPX-Survivac and vaccinated the first patient in December 2011. The Phase I clinical trial is being conducted in eight clinical sites in the US and Canada. The Phase I is an open label clinical trial designed to evaluate sequentially the safety of two DPX-Survivac dosing regimens in approximately 15 patients. The goal of the Phase I clinical trial is to establish the safety and immune activity of DPX-Survivac in patients with advanced ovarian cancer.

    IMV intends to use DPX-Survivac alone or in combination with low dose oral cyclophosphamide as a first line maintenance therapy following standard surgery/ radiation/ chemotherapy. The therapeutic cancer vaccine is intended to stimulate an immune response to attack the circulating cancer cells that remain in a patient's body after surgery and radiation/chemotherapy. This treatment approach has the potential to combat micro-metastases and keep the cancer in remission and prevent metastasis.

    Immunovaccine has completed the first cohort of the Phase I trial. The first cohort consists of three patients given three doses of DPX-Survivac over a period of six weeks. Results from the first cohort demonstrated that DPX-Survivac was well tolerated with no serious adverse events reported, and that the vaccine is immunogenic as a monotherapy.

    Current interim results showed that, to date, all nine patients receiving DPX-Survivac in combination with cyclophosphamide produced a targeted immune response following only one or two vaccine administrations. Patients receiving a higher dose (0.5 mL) of DPX-Survivac in combination with cyclophosphamide (n=3) produced immune responses after only one vaccination and generally exhibited higher antigen specific immunity than those receiving the combination with a lower (0.1 mL) DPX-Survivac dose (n=6), suggesting dose-related activity. Importantly, patients in the two cohorts experienced consistent immune responses that were detected at two consecutive time points. Specifically, the first three patients enrolled in the 0.5 mL dose cohort in combination with low dose cyclophosphamide demonstrated an average stimulation factor of 350 times (350x) following the second vaccination, and in one patient greater than 850 times (850x), over baseline responses.

    Additional results from the interim analysis showed that patients receiving DPX-Survivac without cyclophosphamide were capable of producing antigen specific immune responses. The interim analysis also showed the vaccine to be safe and well tolerated with no systemic side-effects or dose limiting toxicities reported to date. Adverse events were limited to expected local reactions at the site of vaccination.

    Final results from the study, including a more extensive safety and immunogenicity analysis of all cohorts, are expected by the end of the year.

    Phase II Trial of DPX-Survivac is on Schedule

    Based on existing clinical data, Immunovaccine has already received clearance from U.S. FDA and Health Canada for the initiation of a Phase II trial of DPX-Survivac immediately following the completion of the ongoing Phase I study.

    The Phase II trial will be a randomized, double-blinded, placebo-controlled study with a single vaccine dose selected based on the Phase I results. The Phase II trial will assess the clinical benefit of DPX-Survivac in patients with advanced ovarian cancer.

    The reported interim results provide important support for the ongoing DPX-Survivac development program as they clearly demonstrate that the vaccine can activate the desired immunity in target patient population.

    Based on the progress Immunovaccine has made so far and the fundamentals of the Company, we think current valuation is attractive. We encourage investors to collect shares at this point.

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

    Oct 09 1:43 PM | Link | Comment!
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