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Grant S
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Research analyst with interest in Biotech and Pharmaceutical industries.
  • PBMD: CAN-003 Results Disappoint 0 comments
    Sep 30, 2013 10:53 AM | about stocks: PBMD

    PBMD: CAN-003 (Phase 2) Trial Results

    Top line results from the Phase II trial of C-Vac for the treatment of epithelial ovarian cancer disappointed the market on Sept 18. Results from the trial, while not statistically significant, revealed that the treatment protocol did not result in an increase in the median progression-free survival (NYSE:PFS), with no observed difference between the C-Vac and control groups. It is too early to draw any inferences from the trial as to the drug's effect on overall survival (OS), with the company continuing to monitor patient outcomes on the CAN-003 trial until OS data matures.

    CANVAS, a Phase 2/3 trial of C-Vac that had been designed with PFS as the primary outcome measure, has been halted in order to identify the most appropriate outcome measure of clinical benefit. The CAN-003 trial did reveal that C-Vac is generally well tolerated, that the vaccine does induce a T cell response and that no humoral (or antibody) response is evident after C-Vac administration, all positives outcomes from the study.


    The stock tumbled 50% following announcement of the CAN-003 top line results. With the CANVAS trial now being halted, an eventual approval and the associated revenues and partnering agreement cash flows are now further away than originally anticipated. Having previously estimated that an NDA could potentially be obtained by the end of 2016, and a product launch and royalty revenues beginning to flow by 2017, I am now estimating that these dates and cash flows will be pushed out by 12 months due to the delay.

    Based on the above, stock now appears undervalued at these levels (A$0.04), in my view, with my DCF model revealing a fair value of $A 0.0885 at this juncture, which weights expected revenues flowing from the treatment, based on the probabilities of C-Vac and competitor maintenance therapies currently under development coming to market.

    Valuation is not a catalyst, however, and while the stock may be undervalued, I anticipate that PBMD will be 'dead money' until further results are released. Upcoming catalysts will be the OS data from the CAN-003 trial, and top line results from CANVAS, with these announcements capable of changing the market's view of the stock.

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

    Stocks: PBMD
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