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Ray Dirks has been a respected analyst on Wall Street for decades. Ray has written two books,” The Great Wall Street Scandal” and “Heads You Win, Tails You Win”, published by McGraw-Hill and Bantam Books respectively. Dirks opened his own securities analysis firm after gaining much attention in... More
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  • CEL-SCI Is A Rare Value Opportunity In Cancer Immunotherapy Stocks

    Cancer immunotherapy is scorching hot. At no time in medical history has a new cancer treatment been so widely researched and highly paid for. Over the last 50 years, the only medicine for cancer has been radiation and chemotherapy, and a few monoclonal antibodies with side effects not much better, barbaric compared to this new wave of ways to combat the disease.

    Leading this charge is CEL-SCI Corporation (NYSEMKT:CVM), far above competitors, in Phase III clinical trials with Multikine, a potent cocktail of immune system activators for head and neck cancer (and other infectious diseases). After a misstep with an incompetent contract research organization (CRO) to run studies, the company regrouped and hired two global oncology experts - Aptiv Solutions and Ergomed, the latter which, also serving multi-billion dollar Sanofi (NYSE:SNY), will contribute up to $10 million to the development of Multikine for its cancer indication in exchange for a very small royalty payment when the drug is approved and on the market. I credit the savvy of Cel-Sci's CEO, Geert Kersten, long-time advocate of the technology, for inking this terrific deal.

    Ergomed, true to a unique model for filling clinical trial beds, helped Cel-Sci report its third consecutive month of record patient enrollment so far this year in the head and neck cancer study, bringing the total to over 400. Cel-Sci's goal is 880 subjects and looks on track to complete this number by year end. The latest clinical center to join the trial is Aintree University Hospital in the UK, led by a specialist in head and neck cancer from a prestigious facility in Liverpool, bringing on board another country very close to the company's goal of 100 clinical sites in 25 countries.(click to enlarge)

    Investors should be impressed. The Multikine Phase III study is aimed at patients with advanced head and neck cancer, but not yet treated, a more difficult pool to choose from. Head and neck cancer, a horribly disfiguring disease, inflicts 600,000 new people worldwide every year and accounts for almost 10% of new cancer cases in the US. Globally, the market size is $3.2 billion. There is a clear need for alternatives to scarring surgery, not to mention the devastating effects of standard chemotherapy.

    Multikine's clinical trial endpoint is a 10% improvement in overall survival with subjects treated with the drug versus standard of care, not a hard hurdle to meet. When accomplished, approval applications for Multikine can be made in all the countries where clinical trials are held, giving Cel-Sci a wide global reach for upcoming sales.

    With a market cap of just $85 million, CEL-SCI is blatantly undervalued as a Phase III cancer immunotherapy company. Look at recent transactions for cancer immunotherapy: Cellectis SA (Pending:CLLS), an IPO backed by high-powered underwriters, recently raised nearly $230 million and stands with a market cap of $1.1 billion, spurred to new heights with an up-front payment from Pfizer, Inc. (NYSE:PFE) of $80 million.

    Juno Therapeutics (NASDAQ:JUNO), another newcomer in cancer immunotherapy barely out of Phase I, took investors for $265 million last year. Bellicum Pharmaceuticals, Inc. (NASDAQ:BLCM), in early trials went public at $140 million with a current value of $681 million. Kite Pharma, Inc. (NASDAQ:KITE), another recent public offering, trades at a $2.8 billion market capitalization, based solely on an early-stage cancer immunotherapy hopeful, in head and neck cancer.

    A close peer to Cel-Sci, Inovio Pharmaceuticals (NASDAQ:INO) doing studies in head and neck cancer caused by human papilloma virus (HPV) and only in Phase I/IIa boasts a valuation of $609 million. ImmunoGen, Inc. (NASDAQ:IMGN), early in Phase I for head and neck with a cancer immunotherapy, has investors paying $10 per share with a market cap of $871 million. Transgene SA (TNG.PA:Paris) is enrolling for Phase II in HPV-induced cancer, developing a vaccine for head and neck - market cap is $230 million.

    ZIOPHARM Oncology, Inc. (NASDAQ:ZIOP) is in Phase II with immunotherapy for solid cancers with a value of $1.2 billion. Puma Biotechnology (NYSE:PBYI), in various stages of clinical trials with one drug, PB272 for breast cancer, is valued by investors at $7.4 billion. Celldex Therapeutics (NASDAQ:CLDX), in mid-stage trials for brain cancer using immunotherapy would, if successful, sell to a market much smaller than Cel-Sci's yet is valued at $2.4 billion.

    Big Pharma is throwing big dollars around for cancer immunotherapy. Bristol-Myers Squibb (NYSE:BMY) pays $800 million for privately-held Flexus Biosciences with milestones leading up to $1.25 billion, and struck a deal with Rigel Pharmaceuticals (NASDAQ:RIGL) for exclusive rights to develop drugs from Rigel's technology to inhibit tumor growth, costing Bristol around $340 million. AbbVie Inc. (NYSE:ABBV), spun off from Abbott Laboratories (NYSE:ABT) agreed to buy Pharmacyclics Inc. (NASDAQ:PCYC) for a stake in their new cancer immunotherapy drug Imbruvica, at an astounding $21 billion.

    Multinational giant Johnson & Johnson (NYSE:JNJ), the Band-Aid and Tylenol company, and Novartis AG (NYSE:NVS), known best for its diabetes products, both backed cancer immunotherapy purveyor Aduro Biotech (Pending:ADRO) for a recent IPO that sent the stock soaring at its opening, priced at $17 and opening at $32.

    Cel-Sci has been unfairly ignored in this race for cancer immunotherapy drugs. This stock has seen momentum and I expect more. In early March, shares jumped when the company announced record patient enrollment in February, with volume 200% above average trading. Cel-Sci's news keeps getting better. Besides head and neck cancer, Multikine drew attention from the US Naval Medical Center in San Diego resulting in a deal under the government's coveted CRADA (Cooperative Research and Development Agreement) to study the drug for sexually transmitted disease - apparently a big problem in the armed forces. The University of Maryland also investigates these conditions for Cel-Sci in a Phase I trial. All said, this company has a broad reach for its potential to work with the body's immune system to attack tumors.

    Success in any of Cel-Sci's clinical trials for Multikine, a pivotal-stage cancer immunotherapy drug, could reward the stock with a huge jump in hundreds of millions of dollars in valuation.

    RAY DIRKS suggests that Readers/Investors place no more than 1% of the funds they devote to common stocks in any one issue. It's best to diversify.

    Apr 23 1:38 AM | Link | Comment!
  • Global Rollout Of LabStyle Innovations' Dario™ Diabetes Management Platform Brings $12 Billion Market Into The Digital Age

    Israel-based LabStyle Innovations Corp. (OTCQB:DRIO) combines a smart phone with the need to manage a disease that is reaching epidemic proportions - namely diabetes - and what you get? A block buster product that is simple and elegant that uses the patients' own smart phone to monitor and manage diabetes.

    The company has just begun the global rollout of its Dario Diabetes Management System. This product is about to transform the daily management of diabetes, while doing so, it's an opportunity for investors to participate in the up side.

    Dario is a platform that combines an all-in-one blood glucose meter, smart phone application for Apple and Android devices, website application with treatment tools to support more proactive and better informed decisions by patients, doctors and healthcare systems. The stylish and compact self-monitoring system combines a lancet to obtain a blood sample, a proprietary disposable test strip cartridge and a smartphone-driven glucose meter. In addition, Dario provides patients, caregivers and clinicians both real-time and historic patient data resulting in better patient performance and improved health. The smart phone is now a glucose monitor.

    With no cure yet available to eradicate diabetes, management of the disease is a growing market. More than 382 million people are living with diabetes worldwide and the number is expected to grow to 592 million by 2035.

    The global blood glucose monitoring market is expected to reach $12 billion by 2017. The total cost of diabetes in the United States alone was $245 billion in 2012. The nascent market for mobile health monitoring and diagnostics was worth an estimated $650 million in 2012, dominated by cardiac monitors that work in conjunction with smart phones. According to Transparency Market Research, this market is expected to grow at a CAGR of 43% to $8 billion by 2019, led by growth in the mobile glucose monitoring segment. Although $8 billion is a healthy number, two other research firms have published far larger numbers, with Grand View Research estimating the market at $49 billion by 2020 and BCC Research puts it at $21.5 billion by 2018. As the Apple watch is set to launch this month, we are now living in an era when wearable and mobile technology integrate into every other part of our lives including disease management.

    LabStyle Innovations is going after this market with its proprietary, market-leading Dario system. Dario offers millions of diabetics a way to self-manage their disease and thrive by monitoring their activities and managing their blood sugars. The U.S. Patent and Trademark Office granted LabStyle a patent covering core functions of the Dario. The company is pursuing patent applications in multiple countries covering the specific processes related to blood glucose level measurement.

    Dario just launched in the United Kingdom, New Zealand, Netherlands, and Australia, resulting in LabStyle reporting its first revenues from the product in its recent earning release for the period ended December 31, 2014. It plans to launch in Canada and Italy in the second quarter. In addition to launching in these key markets, LabStyle has diligently pursued reimbursement from payers, and received reimbursement approval in the United Kingdom, Australia and Italy. Management knows having a great product is the key to regulatory approval and market acceptance, but getting paid is paramount.

    In addition to reimbursement for the Dario platform from insurance companies or governmental payers, LabStyle also expects multiple additional revenue streams from service fees for diabetes behavioral programs designed to improve clinical outcomes. Data will also be monetized through meta-analysis for insurers, tele-care providers, and clinical study platforms.

    Dario has already received regulatory approval in Europe, and FDA approval in the U.S. is expected this year. LabStyle has publicly reiterated as recently as March 25th that it expects to launch Dario in the U.S. in 2015. Management's confidence may stem from results of a recently completed clinical study of 368 patients in the U.S. The study results showed that usability of the Dario Diabetes Management Solution is simple and intuitive. Data from the study indicates that Dario is highly comparable to its predicate device and in fact surpassed other glucose meters. This is exactly what the FDA is looking for in a 510k application for device approval.

    The company in my opinion is highly undervalued. At these current prices, it is a great opportunity to potentially get 10x times your money. I recommend putting a small portion of one's risk capital into this stock, which has significant triggers upcoming with U.S. FDA approval and U.S. market launch expected in 2015.

    (click to enlarge)

    Apr 09 1:38 AM | Link | 1 Comment
  • Pluristem's PLX Cell Therapy For Muscle And Tendon Regeneration Will Revolutionize Sports Medicine

    With football season underway, my thoughts run to player injury and how it keeps good athletes off the field with few options for recovery except the stale advice and medicine doctors offer. Rotator cuff damage is a good example. Surgery is invasive and has serious consequences. Rest and recovery takes months. Whether or not talent will be restored is always a question. Enter the questionable treatments: Regenexx, is a privately-held company pandering to sports superstars with promises of stem cell therapy that can't be substantiated. However, there is an answer - Pluristem (NASDAQ:PSTI), a leader in cell therapy, will soon conduct Phase I clinical trials for rotator cuff muscle and tendon regeneration that could bring sports medicine, already a $21 billion industry growing faster than the US GNP, into a new era. Pluristem's cell therapy has already shown efficacy in orthopedic medicine. In a successfully completed Phase I/II trial conducted at Germany's Charite University in Berlin under the auspices of Germany's Paul-Ehrlich Institut, the German equivalent of the FDA, Pluristem's PLX cells showed a 500% improvement over placebo in healing gluteal muscle injury.

    The background to Pluristem's human clinicals in orthopedic medicine is impressive. Preclinicals for rotator cuff injury were done by Dr. Scott Rodeo of New York's Hospital of Special Surgery, who is also physician to the New York Giants and US Olympic Swimming Team. Results were successful enough for him to announce that PLX cells have a very good chance of accelerating tendon healing. Pluristem has assembled a very impressive Scientific Advisory Board comprised of Orthopedic Key Opinion Leaders, Doctors who are at the top of their field from institutions including the University of Oxford, Charite Hospital in Berlin, Boston University and Cornell University.

    Almost 2 million Americans need surgery each year to repair rotator cuffs, the most common damage to the shoulder in active people. About one-third of patients are dissatisfied with results. Rotator cuff operations aren't cheap and normal activity cannot be resumed for four to six months. Surgery on large tears often cause muscle atrophy that is many times irreversible. Because of these drawbacks, professional athletes, regular recipients of rotator cuff injury, are leading the search for better options.

    Stem cells appeal to sports luminaries because they penetrate the swollen wound of a torn muscle or ligament and their anti-inflammatory properties promote faster healing of injuries that keep them out of the game. However, FDA regulations condone only the use of autologous (from the individual) cells with strict procedural limitations, forcing most athletes to seek treatment overseas, where rules are more lax.

    Los Angeles Angel Bartolo Colón received one of professional baseball's top honors, the Cy Young Award in 2005, but due to rips in the ligaments of his shoulder nearly quit in 2009, driving him to the Dominican Republic for a stem cell procedure. A few months later Colon was pitching at the top of his game for the New York Yankees with a 93-mile-per-hour fastball. Other professionals have followed his lead, reasoning that even if the treatment didn't work any health risks would be small because the cells involved are autologous.

    Kobe Bryant, one of the NBA's best players and Olympian, sought stem cell treatment in Germany for a torn knee. Rehabilitation was quick, and Bryant went on to play a stellar 2012 season praising the power of cell therapy.

    Bart Oates, center for the New York Giants during their Super Bowl XXI and XXV wins, sought stem cell treatment in Mexico, as did Peyton Manning, one of the greatest quarterbacks in football history, and Terrell Owens. Oates stated that many players leave the gridiron with lingering injuries that plague them for life, looking desperately for medical treatment that improves joint mobility. Stem cell therapy seemed like a good answer. However, US-based orthopedic surgeons have no control over the quality of stem cells given in other countries and worry about the legality of the clinics.

    Whether injected stem cells rejuvenated Colon's arm or restored joint flexibility to others is an open question. Science takes a different view, citing FDA warnings that unapproved autologous stem cell treatment given to athletes could form tumors as the cells multiply and roam to other parts of the body. Animal studies show regenerated tissue from the body's own source is not durable. Scar tissue could develop and cause tendons or ligaments to stick to skin, pulling an even bigger tear in an already serious wound. There is a strong call for more clinical research.

    Stem cell charlatans give false hope to professional athletes who respond to pressure from owners, coaches and team sponsors demanding top performance. Ignored is the importance of a thorough review process for safety and effectiveness, and proof that manufacturing is in line with regulations. In 2011 three men were arrested in the US and charged with 15 counts of criminal activity related to making, selling and using stem cells without FDA approval. The three defendants allegedly received more than $1.5 million from patients seeking treatment. Scandals like this only support Pluristem's integrity to follow proper regulatory channels.

    Dozens of orthopedic stem cell institutes are sprouting up across the country and more orthopedic doctors are embracing cell therapy, treating hundreds of major sports figures. Believing in the healing properties of stem cells, the Jets' Chris Johnson earlier this year visited the Andrews Institute in Gulf Breeze, FL for treatment to help rebuild a torn meniscus. Bone marrow was extracted but because the FDA forbids any additional processing of cells they were immediately injected into the knee, limiting the number of stem cells to maybe 100,000 - far lower than the amount Pluristem could deliver - and apt to produce poorer results.

    Pluristem's allogenic cells are an off-the-shelf treatment derived from human placentas. This means patients don't have to go through the painful process of extracting stem cells from their bones. What makes Pluristem's cells unique is that because they are from the placenta they are immuno-privileged. The placenta is designed by nature to not create an immune reaction in the mother. Therefore, it also does not trigger an unwanted immune response in the patient receiving the cells. When approved, Pluristem's PLX cells should make an already flourishing sports medicine industry skyrocket.

    PLX cells from a world-class, multi-country approved manufacturing facility would be easy to get, store, and use. Injections are done intramuscularly so pain and inconvenience is minimized. Clinical data backing up claims and the simplicity of the procedure would grab the attention of every orthopedic surgeon answering requests from their athlete patients. The fear of sketchy treatment will be eliminated. Best yet, players would not have to undergo painful bone marrow extraction, avoiding a procedure that has a lot in common with treating leukemia.

    For a $210 million market cap company on track to enter a multi-billion dollar market with explosive growth, Pluristem is a steal. This is in addition to the many other indications addressed by their vast pipeline, also targeting big medical money. PLX cell therapy is far superior to what top athletes now have at their disposal to fix sports injuries; further, players would reap the benefits of fast, durable healing without fear of unpleasant after-effects. Valuation is ridiculously low. By my estimates, shares should be trading between $20-$25 with a present-day market cap of up to $1.7 billion, still far below peers who sport thinner pipelines and lots of 'me-too' drugs that adds nothing to medicine's progress. In light of this, it is my opinion to aggressively accumulate Pluristem shares.

    Oct 16 3:30 PM | Link | 3 Comments
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