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  • Hana Biosciences: The Perfect ASCO Conference Investment Opportunity 0 comments
    Jun 3, 2010 2:20 AM | about stocks: HNAB, CTIC, SOMX, APPY, DCTH
    Hana Biosciences, Inc.

    (OTC:HNAB)

    Comparisons: AspenBio Pharma (NASDAQ:APPY), Somaxon (NASDAQ:SOMX), Cell Therapeutics (NASDAQ:CTIC), Delcatch Systems (NASDAQ:DCTH).

    Amidst an uncertain market, Hana Biosciences has positioned itself nicely for the upcoming ASCO conference on June, 7th, 2010, where it will present its phase 2 rALLy results of the additional 9 patients requested by the FDA, with the general consensus being that the results are highly positive for Marqibo, a revolutionary drug that hopes to replace the use of generic vincistrine for acute lymphoblastic lukemia (NYSE:ALL). The company has stated that an NDA is to be followed once the promising results are showcased. Many investors have placed the focus on the company’s flagship product while ignoring the potential of its oncology pipeline in Alcotrest (Breast and Lung Cancer), and Brakiva (Small-Cell and Ovarian Cancer), both of which are in phase I and could be initiated for phase II once the FDA makes its decision on Marqibo. With market cap of only $17.63M, a low float of 81 million shares, while currently sitting on only 92 million shares outstanding. For more information on Hana’s pipeline and potential, read the corporate presentation from January 11, 2010. Additionally, there are rumours that the company is coming close to becoming elligible for the recently announced Small to Mid-Sized $1B Biotech Grant. For these reasons, we believe Hana’s binary events will culminate into the perfect storm, leading to handsome gains in the next couple of weeks.

    At the forefront of the storm lies their NDA submission, as Hana looks to capitalize on their unique situation revolving Marqibo and the FDA’s requirements. Hana is benefiting from the fact that the Marqibo NDA has already been submitted by Inex Pharmaceuticals in the past resulting in a non-approval, thus requiring the additional 9 patient rALLy study to satisfy the FDA’s conditions. Due to Inex’s inability to foster the necessary cash to conduct the additional trials, they decided to pass over this novel drug to Hana. The general concensus among the biotech industry is that most drugs never make it on their first try with the FDA, especially smaller players, and when Hana bought Marqibo from Inex they got a big bonus, a CRL where “the FDA provided a list of deficiencies that needed to be addressed prior to re-applying for approval”.  For more information, visit this article courtesy of BioSpace.com.

    Sign-up for Free to Receive Future Commentary and Trading Alerts on HNAB.

    If all goes as it should, Hana could be one of the biggest “BioShockers” of the year.

    It looks like the perfect storm is now brewing for Hana Biosciences (OTC:HNAB). In December, this penny bio stock took a major hit for no reason other than an impatient investor sell off.

    Despite the negative afterthoughts of a possible dilution following the NDA submission, the company should have more cash available through Deerfield Management, who has a seat on the board of directors. There is chatter amongst several trusted expert sources that a partnership or private / institutional investor financing could be on the way should results be highly positive, especially considering the predicted market potential of its flagship product is$2.5B annually.

    Going into what should be a very positive year with a new drug application (NDA) filing for their drug Marqibo after successful trial results, this stock is prime for some major movement in the near future; first a reset to the $60-80 cent level, then a move higher as the NDA is filed. We have big expectations as this meeting at the ASCO will most likely be the binary event that decides the company’s survival, and several sources have confirmed that the data should be positive.

    The December publication of results from the rALLy trial in acute lymphoblastic leukemia (ALL) in second relapse shows that the drug was highly efficient as a single-agent in a very sick patient population who have few other options. There are no safety concerns beyond what is expected for this type of drug. The FDA has a history of approving ALL treatments based on phase II single-arm clinical trials, and Hana intents to use the results of the rALLy trial in their NDA filing later on this year.

    Marqibo is a new form of a trusted cancer drug, vincristine sulfate, in a liposome delivery vehicle. This delivery mechanism enables higher doses of the drug to be used while reducing the side effects.

    The 2nd relapsed adult ALL market alone is $100M with 65% penetration, see the company’s slide number 23. The choice of second relapse adult ALL is a good strategy to enter the market. The drug was previously scrutinized by the FDA’s oncology drug advisory committee in December of 2004 for another indication,aggressive non-Hodgkin’s lymphoma previously treated with at least two combination chemotherapy regimens. At the time, the drug was owned by Inex Pharmaceuticals. The NDA in 2004 was also based on phase II clinical trials, and although it showed equivalence, it did not show superiority to other current treatments – Inex had chosen the wrong pathway for approval.

    It is important to note that the committee members were otherwise very positive to the drug and no safety questions were raised. This time around, the rALLy trial has shown a major advantage to the patients over historical data, and the primary investigator for the rALLy trial is none other than Dr. Susan O’Brien, a leading expert on leukemia treatment with strong clinical trial experience.

    FDA Updates

    Marqibo, vincristine sulfate liposomes injection, expects to submit NDA mid-2010 seeking accelerated approval for Marqibo based on phase 2 RALLY study results for treatment of adult acute lymphoblastic leukemia (ALL) ando ther data in solid tumors, planned pre-NDA meeting 2Q10, will present complete pivotal Phase 2 data at ASCO 06/07/2010

    Menadione Topical Lotion – A topical compound for skin rash associated with Epidermal Growth Factor Receptor inhibitors such as Tarceva, Erbitux, and Vectibix, expects to provide intellectual property (NYSE:IP) update mid-2010, present top-line proof-of-concept date mid-2010, also to begin phase 2 study 2H10.

    On 12/7/09, HNAB.OB announcd data from its pivotal phase 2 RALLY clinical trial for Marqibo (vincristine sulfate liposomes injection) for treatment of adult acute lymphoblastic leukemia (ALL) in second relapse. The analysis of the first 56 evaluable subjects demonstrated an overall response in 36% of the subjects and a complete hematologic recovery (CRi) in 21% of subjects. The estimated median overall survival in complete responders was 7.3 months. 50% of the complete responders were able to receive potentially life-saving stem cell transplant. 50% of the complete responders had remission durations longer than the duration of their prior remission. In addition, Marqibo was generally well-tolerated with a low incidence of early death. Based on the RALLY trial data, other published Marqibo data in adult ALL, and supportive data in lymphomas and solid tumors, HNAB.OB plans to submit a New Drug Application (NDA) seeking accelerated approval for Marqibo in 2010. In addition, final data on all 65 subjects enrolled and dosed in phase 2 RALLY trial willbe presented in 2010.

    Strong Clinical Pipeline

    Marqibo® (vincristine sulfate liposomes injection, OPTISOME™)
    A Novel Targeted Nanoparticle-encapsulated Anti-Cancer Compound currently for Acute Lymphoblastic Leukemia (ALL) and Melanoma. Marqibo® has a robust safety database (over 600 patients) and has been extensively evaluated in lymphoid blood cancers such as non-Hodgkin’s lymphoma (NHL) and ALL. Hana has ongoing (or planned) clinical trials which may enable an accelerated approval in 2 indications. Future clinical trial development possible in multiple indications including NHL and melanoma. More Details »

    Alocrest™ (vinorelbine liposomes injection, OPTISOME™)
    A Novel Targeted Anti-Cancer Compound for Breast and Lung Cancer. Alocrest™ has completed a Phase I dose-escalation trial demonstrating promising anti-cancer activity as well as acceptable and predictable toxicity. More Details »

    Brakiva™ (topotecan liposomes injection, OPTISOME™)
    A Novel Targeted Anti-Cancer Compound for Small-Cell Lung Cancer and Ovarian Cancer. Preclinical data demonstrate the value of Brakiva™ over conventional topotecan. More Details »

    Menadione Topical LotionA Topical Compound for Skin Rash Associated with EGFR Inhibitors. Treatment with EGFR inhibitors such as Tarceva®, Erbitux® and Vectibix® are associated with an acne-form rash involving the face, neck and upper torso in approximately 75% patients. 50% of patients who manifest skin toxicity experience significant discomfort. This results in drug discontinuation or dose reduction in at least 10% and up to 30% of all subjects. Drug delivery is targeted to the normal location of the EGFR-containing skin cells at the dermal/epidermal junction without interfering with EGFR inhibition systemically at the level of the tumor. More Details »

    Technical Analysis

    From a technical standpoint, Hana couldn’t be more well positioned for a major run-up come June’s ASCO rALLy results and their much anticipated Marqibo NDA.

    The Relative Strength Index (RSI) shows a stock that has been oversold for the entire 2010 year, and as a general market rule-of-thumb, what goes up must go down, and consequently, vice-versa. Sooner or later the money flow will begin to pour back into the stock, whether based on the positive results and NDA news, or simply on daily trading chart patterns.

    Heavy support presently exists at $0.22, with minor resistance at $0.30, which once broken could se the stock engage in a “Blue Skies” breakout pattern all the way to the $0.60 price per share, representing more than a 100% from current levels. The long-term negative trend line from July’09 has also begun to slope upwards at the start of 2010, showing that investors are gaining confidence in the company despite the overall bearish market trend.

    Bollinger Bands have also tightened up nicely, paving the way for a breakout given that buy volume begins to pour in. Despite the stock remaining in limbo around the mid $0.20s, the liquidity has gradually increased thus adhering to investors looking for both short-term and long-term trading patterns and opportunities.

    Lastly, MACD divergence in co-relation with Full Stochastics currently reiterate the undervalued and oversold conditions of the company which should change rather quickly.



    Disclosure: Long HNAB
    Stocks: HNAB, CTIC, SOMX, APPY, DCTH
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