[Updated 5/19/10 in brackets below]
Biovest International (BVTI.PK) appears to have the next potentially marketable cancer immunotherapy in its lymphoma treatment vaccine, BiovaxID.
Doctors and scientists have tried for half a century to develop a vaccine that harnesses a patient’s own immune system to fight cancer, but until this year, no one has produced such a vaccine that could be approved by the U.S. Food and Drug Administration (FDA).
With the FDA’s April 2010 approval of Dendreon’s (DNDN) prostate cancer vaccine Provenge, however, a new era in medicine has begun. Biotech investors are now looking for the next approvable immune treatment for cancer.
Biovest is the only other company ever to have positive phase 3 clinical trial data for a therapeutic cancer vaccine.
In the plenary session of the 2009 American Society of Clinical Oncology (ASCO) meeting, Biovest presented results of its eight year pivotal, randomized, multi-center, double-blind, controlled phase 3 study. In the trial, BiovaxID significantly prolonged disease-free survival in follicular non-Hodgkin’s lymphoma.
http://www.accentia.net/media/pr/biovestpr053109.html
Few investors are paying attention to vaccine maker Biovest or its majority owner, Accentia Biopharmaceuticals (ABPIQ.PK), because both companies are in Chapter 11 bankruptcy and are on the pink sheets. Institutional investors currently show no interest, as they are generally required to avoid bankrupt stocks. This poses an opportunity for retail investors.
Both Biovest and Accentia are close to emerging from bankruptcy with their common stock preserved. Biovest filed its reorganization plan with the bankruptcy court on May 14 to that effect, and Accentia is expected to follow suit by June 4, 2010.
Biovest’s reorganization plan includes removing [reducing to 6.3%] the [35%] royalty it would otherwise owe others on future vaccine sales. Interest and principal on its renegotiated debt are not due until maturity dates ranging from 24-40 months from the close of bankruptcy. A 9.99% interest in Biovest is to be given to its largest secured creditor, Laurus Master Fund, in exchange for canceling all warrants. And 17.6 million shares of Biovest will be given, in a swap for debt, to its parent, Accentia, which already owns about 76% of Biovest. Further conversion of debt to equity is available to certain other creditors if they opt in by a voting deadline soon to be fixed.
Biovest’s current market cap is $154M, low relative to the company's apparent potential, with 96M shares outstanding.
The next step is for creditors to accept the reorganization plans, followed by the court’s approval of the plans. These events should happen within the next 1-3 months.
Disclosure: Long BVTI.PK, ABPIQ.PK at time of writing. No company affiliation.