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  • Japan Gives A Hug To The Cell Therapy Industry: R. Lee Buckler

    Last year, Japan rolled out the red carpet for cell therapy developers with new legislation designed to expedite development of regenerative medicine solutions for all manner of disease. In this interview with The Life Sciences Report, former regenerative medicine consultant R. Lee Buckler, now a vice president with RepliCel Life Sciences Inc., puts his consultant's hat back on to talk about Japan's hospitable stance on proposed cell therapies. He provides an update on the meaning of the new law and discusses a small cohort of companies poised to reap the advantages.

    The Life Sciences Report: Lee, you've been around the stem cell and regenerative medicine industry for quite a long time, and you have a special interest in the new legislation enacted by the Japanese Diet [parliament] back in November 2013. The intention of the law is to hasten clinical development of cell therapies and regenerative medicine therapies. A new cell therapy can get conditional approval in Japan for a limited time with clinical [Phase 2] data showing safety in humans. This new law goes into effect in November. Tell me your thoughts.

    R. Lee Buckler: The entire industry is watching Japan and this new regulatory model with an incredible amount of interest. We're on the brink of seeing more detail around the regulations.

    This initiative sets up a paradigm of conditional approval, where a company can bring an application to the Japanese regulators, and if it shows sufficient safety evidence and some evidence of efficacy, the company could get conditional approval to sell its product in the Japanese marketplace. This conditional approval would be for a seven-year window, during which the sponsor or sponsors would have an obligation to continue to file clinical data toward an eventual final market approval-a biologics license application [BLA] or the Japanese equivalent thereof. There is also some suggestion that during the seven-year window, some reimbursement will be attached to the product being sold on the market.

    TLSR: In mid-September, Pluristem Therapeutics Inc. (NASDAQ:PSTI), an Israeli company, said it was going to pursue a development strategy in Japan. It hired consultants to help the company get into that market. The company's lead indications are peripheral artery disease, intermittent claudication, critical limb ischemia and muscle injury. But otherwise, I don't see a lot of other companies initiating programs in Japan. Do you see companies from the U.S., Canada or Europe getting into that regulatory environment?

    RLB: I think most companies in the regenerative medicine industry have a tremendous desire to have a Japanese strategy right now. The problem is that a lot of companies in this sector don't have enough bandwidth, or capital, to execute on that.

    However, a few are making Japan a high priority. Currently, less than a handful of companies have a clearly articulated Japanese strategy, and only that many again have begun executing on the opportunity.

    Pluristem has made the announcement about pursuing opportunities in Japan, and Chairman and CEO Zami Aberman has done an admirable job of executing deals. The company has the partnership with United Therapeutics Corp. (NASDAQ:UTHR), which is conducting a Phase 1 study of the company's PLX-PAD [full-term placenta-derived adherent stromal cells] product in pulmonary arterial hypertension, which is a fatal disease and happens to be a very large market. Pluristem also has a nice deal in place in Korea with CHA Biotech Co. Ltd. (CHA:KOSDAQ).

    Going it alone all the way to market is not a good option for most cell therapy companies, and with the change in the Japanese regulation there is an appetite for regenerative medicine products in Japan that foreign companies in the sector need to capitalize on.

    TLSR: You said there were a few others. Give me an overview, please.

    RLB: Athersys Inc. (NASDAQ:ATHX) has announced a desire to move into Japan, and I know it is putting boots on the ground in the country to develop a strategy there. Back in January, the company announced some new Japanese patents in graft-versus-host disease [GvHD] and autoimmune diseases, such as inflammatory bowel diseases.

    The company that is potentially in the pole position in Japan at the moment, however, may be Mesoblast Ltd. (OTCPK:MEOBF) [MSB:ASE]. The company inherited a relationship with Japan-based JCR Pharmaceuticals Co. Ltd. (4552:TKY) when, in 2013, it acquired the Prochymal [remestemcel-L or allogeneic, adult human mesenchymal stem cells] product portfolio from Osiris Therapeutics Inc. (NASDAQ:OSIR). The Osiris/JCR partnership, which was put into place a number of years ago, had been stagnant until the reemergence of the Japanese market as an important one for the regenerative medicine sector. Now Mesoblast has "regenerated" that relationship, and announced on Oct. 1 that JCR would be filing a market approval application for Prochymal in Japan for the treatment of pediatric GvHD, following similar approvals in Canada and New Zealand.

    TLSR: Will a company be able to take Phase 2 data generated in the U.S. or Europe or Canada, including positive proof-of-concept and safety data, and submit that in Japan, potentially getting a seven-year conditional approval?

    RLB: That's an important question. The best intelligence I have, based on interacting with people who have been working with the Japanese, including Professor Chris Mason from University College London, indicates the answer is "yes." The Japanese government is intentionally welcoming ex-Japan data for conditional market approval in Japan.

    If a company gets conditional approval to market a product in Japan, it will also have to generate pivotal data outside of Japan, because no patients in Japan will want to risk being involved in a placebo trial when they have the option to buy the product in the marketplace. The end result of the paradigm is that there will continue to be data generated outside of Japan, which will be brought into Japan to support eventual final approval.

    TLSR: Thank you for your time.

    RLB: Many thanks to you.

    [Editor's Note: Between the time this interview was scheduled and the time it was conducted, Buckler left his consultancy firm to become vice president of business and corporate development at Vancouver-based RepliCel Life Sciences Inc., a cell therapy company.]

    This interview was conducted by George S. Mack of The Life Sciences Report and can be read in its entirety here.

    R. Lee Buckler, vice president of business and corporate development at RepliCel Life Sciences Inc., has been an executive in the cell therapy sector since 2000, beginning with Malachite Management in the Stem Cell Technologies group of companies. Most recently he was the managing director of Cell Therapy Group, a firm he formed in 2008 to do business development consulting for companies and organizations working in or interested in the cell therapy sector. His work included deal-targeting, transactions, market intelligence, competitive analyses, strategic assessments and market profile planning for companies ranging from top-tier multinationals to start-ups. Buckler served six years as executive director of the International Society for Cellular Therapy and just over two years as director of business development for Progenitor Cell Therapy. Buckler has a bachelor's degree in education, and a law degree. He is on the editorial advisory boards of the journal Regenerative Medicine and the BioProcess International magazine. He is also co-chair of the Alliance for Regenerative Medicine's Communications and Education Committee. He is an active industry commentator in publications and in social media and serves on numerous industry advisory boards.

    Want to read more Life Sciences Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

    DISCLOSURE:
    1) George S. Mack conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and he provides services to Streetwise Reports as an independent contractor. He owns, or his family owns, shares of the following companies mentioned in this interview: None.
    2) R. Lee Buckler: I own, or my family owns, shares of the following companies mentioned in this interview: None. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
    3) The following companies mentioned in the interview are sponsors of Streetwise Reports: Athersys Inc. Mesoblast Ltd. is not affiliated with Streetwise Reports. The companies mentioned in this interview were not involved in any aspect of the interview preparation or post-interview editing so the expert could speak independently about the sector. Streetwise Reports does not accept stock in exchange for its services.
    4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts' statements without their consent.
    5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer.

    6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

    Streetwise - The Life Sciences Report is Copyright © 2014 by Streetwise Reports LLC. All rights are reserved. Streetwise Reports LLC hereby grants an unrestricted license to use or disseminate this copyrighted material (i) only in whole (and always including this disclaimer), but (ii) never in part..

    Streetwise Reports LLC does not guarantee the accuracy or thoroughness of the information reported.

    Streetwise Reports LLC receives a fee from companies that are listed on the home page in the In This Issue section. Their sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734.

    Participating companies provide the logos used in The Life Sciences Report. These logos are trademarks and are the property of the individual companies.

    101 Second St., Suite 110
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    Oct 22 6:15 PM | Link | Comment!
  • Griffin Securities' Keith Markey On The Promise Of RNAi And Synthetic Biologics

    Griffin Securities has assembled a biotech portfolio weighted toward companies pursuing high-science therapeutic approaches. However, as analyst Keith Markey explains, through a combination of pipeline diversification, positive clinical data and low-cost research and development strategies, many companies are able to mitigate the risk inherent in their technologies. In this interview with The Life Sciences Report, Markey discusses near-term catalysts for some of the names he follows.

    The Life Sciences Report: Keith, Griffin Securities' portfolio seems weighted toward high-science, but high-risk, therapeutic ideas. How would you describe your investment philosophy?

    Keith Markey: We look for truly innovative products. These products come with a certain level of risk, but we believe they offer the greatest potential returns on investments. The risks associated with the stocks we follow are somewhat mitigated by diversification within a company's portfolio, as is the case with Soligenix Inc. (OTCQB:SNGX), or by the nature of the products, such as Unilife Corp. (NASDAQ:UNIS) drug delivery platforms.

    TLSR: How do you mitigate risk for those of your portfolio companies pursuing unprecedented therapeutic modalities, such as RNA interference [RNAi] and synthetic biology products?

    KM: In the case of a company like RXi Pharmaceuticals Corp. (OTC:RXII), for example, I think the risk is mitigated by the fact that the company has done extensive clinical trials and/or extensive research both at preclinical and clinical levels with its lead molecule, which targets a growth factor called connective tissue growth factor [CTGF] that plays a central role in the formation of scars.

    The other thing that RXi Pharmaceuticals is doing, unlike many of the companies in the field of RNAi therapeutics, is developing products that are relatively easy to administer to the specific areas that need to be treated. By that I mean dermatological indications, which are very easily accessible, and also the eye, for ophthalmic diseases. That's the company's way of mitigating some of the risk from the delivery point of view. Its molecules also are designed specifically to facilitate the uptake of their therapeutic payload, so that's not an issue that has to be considered separately.

    As for synthetic biology, I follow Intrexon Corp. (NYSE:XON), the leader in this field. The company happens to be associated, through collaborations, with a number of smaller companies that I follow as well, including Fibrocell Science Inc. (NASDAQ:FCSC). I don't look at Intrexon as very risky for a couple of reasons. For one, the company's work is specifically applied to developing a rather wide range of products, including medicines, chemicals and energy-related molecules that have a genetic basis, or where a genetic basis has been worked out for them.

    Synthetic biology has a long way to go to realize its full potential. But part of the story for Intrexon is that it can apply a number of different technologies to this specific field, to not only develop the right genetic basis for the therapies or the molecules it is creating, but also to develop the ability to work with various types of cells-to identify those cells and to harvest them specifically.

    TLSR: Let's start with RNAi and RXi Pharmaceuticals. At a recent investor conference, the company reported what appeared to be lackluster interim Phase 2 results for its lead candidate, RXI-109, in the treatment of dermal scarring. Are you still bullish on the drug? Do you think that the interim look may have been premature, and that significant improvement in scarring could emerge over a greater period of time?

    KM: It's quite possible that something would evolve that would show the benefit of its drug more. But I think what CEO Geert Cauwenbergh was trying to tell people was that these were results from early scars that the company had treated, and that RXi was still working out the opportune moment to administer the drug for this particular type of scarring. It had been following a protocol that had been worked out in a Phase 1 clinical trial. This is a Phase 2 clinical trial, and it was looking at patients prone to hypertrophic scars, which are nasty, rather large scars that don't form immediately after an insult, but in a delayed manner.

    The company's pictures showed both a nontreated side and a treated side of a wound. But the pictures were shown prior to Geert's presentation, on the Internet, which was not expected. People who didn't have the benefit of listening to the presentation and looking at the slides at the same time may have seen no benefit, which isn't what the story was all about. The trial was designed to optimize the treatment regimen, and the one-month data did just that-the first interim analysis showed that a delayed administration of RXI-109 yielded better results than injection near the time of the surgery.

    TLSR: What near-term catalysts do you think investors should be looking for in RXi's programs?

    KM: We should learn more about its CTGF treatment by the middle of next year. In the meantime, the company is doing some work to prepare for clinical development of other dermatological drugs, one targeting tyrosinase and the second one targeting collagenase. Collagenase is known to break down the tissue as we age, so it's going to be of cosmetic benefit. The tyrosinase product could help in lightening dark spots that have formed, café au lait-type spots that occur with aging as well. Those are interesting opportunities to look at from a dermatological perspective, and the startup of those clinical trials will hopefully get investors' attention.

    In addition, RXi has a number of different products under development for ophthalmic applications. Probably the furthest along, although it hasn't yet gone into a clinical trial, is its CTGF drug, formulated somewhat differently than for the dermatological applications. It could go into a clinical trial next year. The drug has promise against some back-of-the-eye diseases, but also for scarring that can occur in the cornea-in the front of the eye-following the removal of cataracts.

    Another source of potential interest-generating events will be possibly partnering some of its drugs for areas, such as oncology and fibrotic diseases, outside of its primary areas of interest-dermatology and ophthalmology.

    TLSR: In synthetic biology, you mentioned Fibrocell. Can you address this company?

    KM: In the medical field, Intrexon is working with Fibrocell to develop a novel treatment for individuals born with a devastating dermatological condition called recessive dystrophic epidermolysis bullosa [RDEB]. The therapy replaces a particular gene with one that is normal; it works by producing a type of collagen called collagen type VII, which binds the two layers of our skin together-the epidermis and the dermis. Without that, children-infants really-are born with skin so fragile that a slight abrasion will cause extremely painful blistering.

    TLSR: Why might investors want to pay particular attention to this company's RDEB program?

    KM: I think the RDEB program will give people a first glimpse at how effective genetic correction therapies might be, and how Intrexon's synthetic biology capabilities can be applied to that particular type of genetic disorder. We'll have to see what the duration of the response is, and how strong the response is to this particular gene correction therapy.

    TLSR: Fibrocell specializes in autologous cell therapy-fibroblast therapy. There are a few competing products on the market. There is Carticel [autologous cultured chondrocytes/developed to restore knee function], a Genzyme product that was sold off to Aastrom Biosciences Inc. (NASDAQ:ASTM). It's had disappointing sales. And there's also Dendreon Corp. (NASDAQ:DNDN) Provenge [sipuleucel-T], which has had problems in the competitive market for metastatic castration-resistant prostate cancer. In addition, autologous therapy requires a lot of physician training, and there are issues with transportation, packaging and so forth. Do you think that puts autologous cell therapy at a disadvantage? Are investors looking at these issues and holding off on investing in companies like Fibrocell?

    KM: I don't think so. Autologous cells do come with tradeoffs, yes. There has to be a tracking mechanism in place to ensure that the patient gets back the same cells that were taken from his/her body. But Fibrocell has worked out that tracking process, and talked about it with the U.S. Food and Drug Administration [FDA].

    Do investors look at other alternative therapies? All the time, I would imagine. The benefits of an autologous cell therapy, though, are that you don't have to worry about side effects you might see with allogeneic cells, or the inability of the drug to reach the appropriate target.

    In the cases of autologous cells being used for vocal cord therapy or burn therapy, which are also Fibrocell targets, I think administration of the cells will be fairly streamlined. I spoke with one of the experts involved with vocal cord scarring, who presented at the Fibrocell R&D Day recently. He said it wasn't a difficult procedure, and that a fairly large number of otolaryngologists either already perform that kind of procedure, or are at least familiar with the technique. He didn't think it would be a hurdle for the physician. In fact, cell therapy of the vocal cords could actually be carried out under localized anesthesia in an office visit. That makes it minimally stressful for the patient too, who might be an older person experiencing a loss of voice because of age.

    TLSR: Can you talk about other Fibrocell products?

    KM: Fibrocell has Laviv [azficel-T] on the market for cosmetic applications. However, the company is not actively marketing Laviv, because it is dedicating virtually all its capacity to the clinical trials to develop cellular therapies.

    Laviv was originally produced and approved back in the late 1990s, and it was on the market for a number of years. Then the FDA changed its regulatory environment, and suddenly the company had a product that was no longer approved, according to the new guidelines. As a result, Fibrocell had to pull Laviv from the market and start clinical trials all over again. Those studies underpinned FDA approval in 2011.

    TLSR: The company doesn't seem to talk about Laviv much. How is it performing on the market?

    KM: It hasn't been generating much in the way of sales. But I wouldn't be surprised if we see an increase in sales of Laviv over the course of 2015. I'm not looking for major increases though.

    In addition, Fibrocell has been working with Intrexon to improve its cell culture techniques and its ability to harvest fibroblasts from punch biopsies and from cell cultures. In addition, Dr. James Byrne of the University of California, Los Angeles, who has been affiliated with the company, presented at the R&D Day meeting on a new cell culture medium that Fibrocell now has the intellectual property around, which improves the growth of all kinds of cells-fibroblasts, hepatocytes and, interestingly, inducible pluripotent stem cells.

    TLSR: How are the company's financials?

    KM: Fibrocell has about $50 million [$50M] on hand as of June 30. It's pretty comfortable at this point. Fibrocell is still relatively small, and will have a burn rate of $5-6M per quarter. Its cash position should support operations well into 2016.

    TLSR: You also follow Synthetic Biologics Inc. (NYSEMKT:SYN). I heard CEO Jeff Riley, on a recent earnings call, say he's moving full steam ahead on multiple fronts-multiple sclerosis, anti-infectives, irritable bowel syndrome, pertussis. However, he only has $6-7M in cash on hand. With research and development [R&D] set to ramp up, how will Synthetic Biologics press ahead?

    KM: I would imagine we'll see the company return to the capital markets at some point. I don't know exactly when, but Synthetic Biologics works pretty efficiently, and some of its work isn't going to be that expensive. The balance will be how expensive and how long the clinical trials are going to be versus the number of trials underway at any given time.

    The company's pertussis product will soon begin clinical development. Both Phase 1 and Phase 2 clinical trials are expected to be conducted in 2015, and they won't require huge numbers of patients. The trials also will be-at least the Phase 2-conducted internationally, where the cost will probably be relatively low because there are far more patients with pertussis outside of the U.S. Here in the U.S., pertussis is actually an orphan indication.

    TLSR: What is the specific population that the pertussis candidate is going after?

    KM: It's actually a therapeutic, not a vaccine. The vaccine, diphtheria, tetanus and pertussis vaccine [DTaP], has been around for a long time. One of the problems that developed countries are experiencing is that the bug has been mutating over the years, partly in response to the introduction of vaccines. As a result, vaccines are less effective than 20 to 30 years ago.

    The company is testing a combination of two monoclonal antibodies developed through a collaboration with Intrexon. The monoclonal antibodies both bind to the pertussis toxin, but in different locations, to ensure they're capable of knocking out the toxin as quickly as possible and to avoid the potential for a single mutation to render the therapies ineffective.

    The number of individuals who get pertussis is significantly greater outside of the U.S. Worldwide, it killed about 195,000 individuals, largely infants, out of about 16M who were infected in 2013, according to the Centers for Disease Control. This disease really hits developing nations, but it's a disease that could, if left untreated, take the lives of a fairly high number of patients in more developed countries. Synthetic Biologics has a very interesting combination, with an orphan drug here in the U.S., and a major drug in other countries.

    TLSR: Synthetic Biologics has top-line Phase 2 data in hand for its multiple sclerosis [MS] drug, Trimesta [oral estriol]. Do you know whether it has begun partnering discussions?

    KM: It's a very competitive market. Players in the MS market, which include Biogen Idec Inc. (NASDAQ:BIIB), Teva Pharmaceutical Industries Ltd. (NYSE:TEVA), and Merck KGaA (OTCPK:MKGAY), are the most likely to show an interest in any drug that's new for that particular disease.

    But Synthetic Biologics has been talking lately about developing Trimesta internally through Phase 3, and then possibly out-licensing it to one of the major players for marketing purposes. I think it makes sense. It wouldn't take that much money to conduct the clinical trials, because Trimesta is not another drug for reducing the number of exacerbations that the MS patients suffer; it's a drug for protecting the positive function of patients who normally experience some decline in cognitive capabilities over time. That is one of the very interesting things that came out of the clinical trials.

    TLSR: Keith, are there any other companies that you'd like to discuss?

    KM: Soligenix is new to my coverage list, as of Sept. 15. The company is very interesting; it is doing some cutting-edge scientific work in the sense that it is developing a new drug that's an innate defense regulator. SGX94 [susquetide] alters the normal function of the innate immune system by dampening the inflammatory response of macrophages and slightly enhancing antimicrobial function.

    Soligenix is developing that particular product for oral mucositis, because it's largely an inflammatory disease that starts with the innate immune system's response to either chemotherapy or to radiation. I like the company's approach to this particular problem because it is focused on one of the most difficult treatments for cancer, the combination of chemotherapy and radiation for head-and-neck cancer. Almost every single person treated for head-and-neck cancer has oral mucositis-which, by the way, can be a devastating condition because it can actually halt treatment, which lowers the opportunity for a favorable outcome.

    Soligenix's particular molecule also has the ability to be used as an adjunct to chemotherapy or radiation, not just for preventing or addressing oral mucositis, but as a stimulant to enhance the activity of the anticancer therapy, since it does interact with the innate immune system and increase its activity.

    In another side of its business, Soligenix has a simpler but interesting delivery technology for a tried-and-true steroid for pediatric Crohn's patients. That particular formulation, SGX203 [beclomethasone 17,21-dipropionate] delivers the steroid into the gut for local treatment. It's a type of steroid that is broken down very quickly by the liver once it's into the bloodstream. As a result, there are not as many systemic side effects as you see with other steroids. That particular drug, in that particular formulation, is also being developed for a biodefense application-gastrointestinal acute radiation syndrome.

    That's the other part of the Soligenix story. It has vaccines, in addition to the steroid treatment, under development for biodefense applications. The two vaccines it is working on are RiVax, which is a ricin vaccine. As far as I know, it is the only corporate entity conducting trials of a ricin vaccine. And it has an anthrax vaccine. Both of those vaccines are formulated with a special adjuvant called ThermoVax, which is a heat-stabilizing form of aluminum that eliminates the need for the vaccine to be refrigerated. As such, vaccines formulated with this adjuvant may not only have biodefense applications, but also may be used for broad commercial uses, perhaps for preparing vaccines for Third World countries where thermal stability is more of a necessity.

    TLSR: We covered a lot of ground. Thank you.

    KM: It's been a pleasure.

    This interview was conducted by Michael Goodman of The Life Sciences Report and can be read in its entirety here.

    Keith Markey has been an equities analyst for more than 25 years, specializing in the biotechnology, pharmaceutical, medical device and research tools sectors. He is currently the science director for Griffin Securities Inc., an investment bank where he follows emerging healthcare companies with novel technologies. He also works with privately owned companies, helping them restructure their operations, license products under development or near commercialization, and raise funds from venture capital and high net-worth investors. In addition, Markey serves on the board of directors of DS Healthcare Group, which specializes in products that address hair loss. Previously, he held various managerial positions in the Research Department of Value Line Inc., publisher of the Value Line Investment Survey andValue Line Select. Markey began his career as a biochemist, working in the fields of endocrinology and neuroscience at New York University Medical School and Weill Cornell Medical College. His research, which involved several international collaborations and resulted in more than 30 scientific publications, contributed to the understanding of regulatory biochemistry of the nervous system and stem cell plasticity. Markey received his doctorate in neurochemistry from the University of Connecticut and a master's degree in business administration and finance from the Leonard N. Stern School of Business at New York University.

    Want to read more Life Sciences Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

    DISCLOSURE:
    1) Michael Goodman conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He owns, or his family owns, shares of the following companies mentioned in this interview: None.
    2) The following companies mentioned in the interview are sponsors of Streetwise Reports: RXi Pharmaceuticals Corp. The companies mentioned in this interview were not involved in any aspect of the interview preparation or post-interview editing so the expert can speak independently about the sector. Streetwise Reports does not accept stock in exchange for its services.
    3) Keith Markey: I own, or my family owns, shares of the following companies mentioned in this interview: Unilife Corp. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: Fibrocell Science Inc., Intrexon Corp. and Synthetic Biologics Inc. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over what companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
    4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts' statements without their consent.
    5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer.

    6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

    Streetwise - The Life Sciences Report is Copyright © 2014 by Streetwise Reports LLC. All rights are reserved. Streetwise Reports LLC hereby grants an unrestricted license to use or disseminate this copyrighted material (i) only in whole (and always including this disclaimer), but (ii) never in part..

    Streetwise Reports LLC does not guarantee the accuracy or thoroughness of the information reported.

    Streetwise Reports LLC receives a fee from companies that are listed on the home page in the In This Issue section. Their sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734.

    Participating companies provide the logos used in The Life Sciences Report. These logos are trademarks and are the property of the individual companies.

    101 Second St., Suite 110
    Petaluma, CA 94952

    Tel.: (707) 981-8204
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    Oct 09 12:51 PM | Link | Comment!
  • Three Biotech Investment Ideas That Disrupt And Diversify: Anita Dushyanth

    Good management. Promising therapies in the pipeline. Marketed products that bolster the bottom line. Investors crave these bread-and-butter qualities in small-cap biotech and medtech companies. Anita Dushyanth of Zacks Investment Research relies on the staples, but also looks for something special, something that disrupts. In this interview with The Life Sciences Report, Dushyanth describes small companies that have spiced up their offerings.

    The Life Sciences Report: Anita, now that the fall investment season is upon us, is it a good time to look for opportunities in the life sciences?

    Anita Dushyanth: Definitely yes. In 2013, the NASDAQ Biotech Index showed a gain of about 66%, and in 2014 thus far, it's been about 21%, which is not too bad. The sector has had some corrections, but it is growing. Within biotech itself, investors can consider adding small-cap companies to their portfolios, as well as established players offering new products and companies offering technologies in niches like drug delivery or pain management and therapy.

    TLSR: Where should somebody interested in investing in the life sciences look for companies? Are some countries better?

    AD: As a nation, Canada seems to be leading the world in biotechnology per capita. The Ontario region, especially, has a lot of brand-name pharmaceutical and medical device industries. Israel would be another promising country to look at, with more than 700 medical device companies. They all show a lot of promise and are in demand. In addition, the Israeli trade and labor ministry sponsors incentives and is making considerable effort to expand the country's innovative capacity in biotechnology. So far, not many of the companies from Israel have visibility in the U.S., and some of them don't have much profit yet, but they definitely have promising technologies.

    TLSR: What do you look for in a small-cap biotech company?

    AD: No two firms are exactly the same, and the value proposition that each company brings is unique. If it is a well-established company, then it's easy to go into the standard valuation metrics, get the price/earnings or price/earnings to growth ratio. That is a good starting point.

    For more nascent, small-cap companies that generate revenue but don't have any earnings, some are not public yet and don't have a track record of revenue. For those, it's not very straightforward.

    We start by looking at the company's history, evolution and fundamentals, and then go deep into a comprehensive analysis, looking at the sector addressed and how the company is situated globally or domestically. We want to know about a company's primary operations, whether it has products on the market or therapies in the pipeline, what the market potential of the products could be, whether the company offers a disruptive technology. Diversity is important: Does the company have multiple product candidates? Where is it in the business life cycle-in the development stage or the commercialization stage? Then, of course, we look at the balance sheet. The small-cap companies I cover in biotech have a very high cash-burn rate. They're often raising equity financing, and that's dilutive to investors.

    I think it also comes down to how the company has set its values. In general, a streamlined and well-articulated business plan, definite development milestones and checking off those milestones when targeted goals have been reached are telling in the assessment. Finally, I think if a company is well managed, it will get good strategic advice and be able to gain more visibility in the market.

    But the judgment comes from where the small-cap biotech is headed. It's not about straightforward metrics, but a lot of research and due diligence into the company and the sector as a whole.

    TLSR: Let's break down some of the product advances that you've spotted. Let's start with the design and development of medical devices. What do you see going on in that space?

    AD: A company in Pennsylvania is working in the diagnostics space. It is developing a technology for glucose monitoring where diabetic patients would be able to access the blood with a patch, not a poke. A handheld device employing a noninvasive technique, part of the Prelude SkinPrep System, analyzes the patient's blood chemistry using a biosensor on the patch. It takes about a minute to read. Then the system connects remotely and sends out the reading to a remote monitor, perhaps in a hospital or physician's office, that tracks the glucose levels. The system is great because I don't think any patient is happy doing a pinprick. The product is still undergoing clinical trials.

    TLSR: What about the biomechanics of the human body? Have you come across any products in that sector?

    AD: I have read about a private company, Motus Global, making a wearable device-a sleeve-for baseball pitchers. The sleeve has a sensor at the elbow, along with accelerometers and gyroscopes like those found in today's media games. The sleeves are designed to, with a minimal amount of calibration, monitor an athlete's range of motion, arm speed and the angle of the elbow, then provide a reading of the pitcher's efficiency and level of fatigue.

    TLSR: Have you identified additional companies with innovative products?

    AD: I cover a Canadian company which has a cold laser technology for pain management. That device, the TLC-1000, generates about $2 million [$2M] in revenue annually. The company has also come out with a biofeedback laser device, TLC-2000, a second-generation to its TLC-1000, which is designed to deliver the exact amount of laser energy needed to injured tissue to accelerate the healing process. It is expected to launch at the end of this year.

    TLSR: How does laser technology heal cells?

    AD: This is a superpulsed laser, so it triggers the body's immune response to start repairing itself. It is for pain management-joint pain, for example. Most often with joint injury, especially in the knee, inflammation is a side effect, which causes pain. Patients may also have some sort of nerve degeneration, which also causes pain. Laser therapy activates three biological pathways that contribute to the healing process.

    One is the nitric oxide pathway. When the tissue absorbs the laser light, it triggers a physiological process at the iron-containing and copper-containing reduction oxidation centers of the cells. This increases nitric oxide levels by about 700%, which controls downstream signaling effects, such as increased adenosine triphosphate [ATP] production. In essence, the nitric oxide causes the blood vessels to dilate, increasing blood flow to the joint. There is also more interstitial fluid drainage, so that decreases the swelling.

    The second is the ATP pathway. Small changes in the ATP levels can significantly improve the cell's operations. When tissues are exposed to this laser, an oxidative process is initiated that allows the diffusion of sodium and calcium ions to enter the cells. The calcium ions activate the mitochondrial protein within the cell to promote healing.

    The third is a lipid absorption pathway. ATP is supposed to regulate the sodium and potassium component of a cell, thereby controlling the transmission of pain signals from the pain area. By controlling ATP production, laser therapy can actually control the propagation of pain.

    TLSR: How is the laser therapy administered?

    AD: Administration is similar to electrical therapy as administered in a physical therapy center. The clinician places the laser probe over the affected area of the joint. The laser system is set to deliver a specific dose of energy for a specified treatment time at the location on the skin surface.

    TLSR: Does that have any side effects?

    AD: No known side effects have been recorded from the clinical studies.

    TLSR: How long has it been on the market?

    AD: Close to eight years.

    TLSR: Are there additional applications for the company's laser treatment?

    AD: Yes. The company uses the same laser technology for cancer therapy also, but not just the laser itself. The low-level laser activates photodynamic compounds [PDCs] using specific wavelengths of light. A PDC is activated to kill cancer cells. The cancer application is still in clinical trials; the company expects to initiate a Phase 1 clinical trial in the beginning of next year. The experiments conducted so far have had positive results, and seems to be moving in the right direction, which is very positive.

    TLSR: Is there a name for the cancer treatment?

    AD: It's called photodynamic therapy [PDT]. For the therapy, the company uses its proprietary TLC-3000 laser with a specific PDC. The compound is specific to the cancer being dealt with. The company has demonstrated success in bladder cancer, and is looking into other cancers. But I am not aware of the specific target because the therapy is still in trials. Once the results come out, we'll know which PDC is specific for a specific type of cancer and the region the cancer is in.

    TLSR: Anita, thank you for your time.

    This interview was conducted by Peter Byrne of The Life Sciences Report and can be read in its entirety here.

    Anita Dushyanth is a medical technology and devices analyst with Zacks Investment Research. Prior to joining Zacks, she has worked as a researcher in the field of bioengineering at the University of California, Los Angeles [UCLA] for more than 10 years. Her expertise includes research that delves into design and development of medical compliant devices, biomechanics of the human body, degenerative disease progression and quantitative image analysis and optimization. She has been a peer reviewer and editor for a number of journals in the field of biomedical engineering. Prior to that, Dushyanth worked as a researcher at the department of radiology and biomedical imaging at the University of California, San Francisco [UCSF]. She has completed the research work for a doctorate in bioengineering from UCLA. She holds a master's degree in biomedical engineering from Wright State University in Ohio and a bachelor's degree in instrumentation engineering from the University of Madras, India.

    Want to read more Life Sciences Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

    DISCLOSURE:
    1) Peter Byrne conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He owns, or his family owns, shares of the following companies mentioned in this interview: None.
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    3) Anita Dushyanth: I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over what companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
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