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CVTrader is a self-taught investor who started trading in early 2000 at the height of the tech bubble. Having learned many lessons in the subsequent downward ride, he adopted a value-oriented, comparative analysis-guided investing strategy. With a Ph.D. in biological science and working... More
  • Access Pharmaceuticals: a New Player in the Oral Mucositis Market 1 comment
    Mar 23, 2010 11:33 PM | about stocks: ACCP, SCLN, AMGN

    Access Pharmaceuticals (OTCQB:ACCP) caught my attention when I was researching on SciClone Pharmaceuticals (NASDAQ:SCLN). SciClone is a profitable biotech firm with several interesting drug candidates including one in Phase II trial for severe oral mucositis (OM) in cancer patients undergoing chemoradiation therapy (for my analysis on SCLN, click here). Access actually has one product for this indication that is ready to launch in the US. So I decided to do some more research on it and also on the overall OM market.

    Mucositis is the painful inflammation and ulceration of the mucous membranes in a patient’s mouth and/or gastrointestinal tract. It is often caused by high-dose chemo- and radiation cancer therapies. In head and neck cancer patients receiving radiation therapy, the incidence of World Health Organization (WHO) grade 3 or 4 oral mucositis approaches 100%. Incidence of WHO grade 3 or 4 OM can be as high as ~75% in patients undergoing hematopoietic stem-cell transplantation. In all other types of cancers, the incidences vary but can range from ~5% to ~40%. The market for management of OM has been estimated at >$1 Billion a year.

    The current recommended management for OM is good oral hygiene, pain relief by mouth wash/gel and use of Kepivance for prevention. Access is ready to launch MuGard, a viscous, mucoadhesive rinse which forms a protective coating to the oral mucosa thus reducing pain. It was approved by US FDA in 2006 and was launched in Europe in 2009 by Access’s partner, SpePharm. US launch is currently underway and Access intends to seek a partner to co-promote this product. The commercial future of MuGard is clouded by the fact that a couple of similar products are already on the market.

    Gelclair is marketed by EKR Therapeutics. It was approved in 2001 and works by forming a barrier that protects the nerve endings that cause pain. Caphosol, marketed by EUSA pharma was approved in 2003. Since these two companies are privately held, no sale figures are publicly available. A third product, OraMagic Rx was approved in 2006, currently sold by MPM medical, a subsidiary of RBC Life Sciences (OTCQB:RBCL). From its 2009 financial report, it had total sale of $24.9 million which included all of its nutritional supplements, wound care and pain management products. Specific OraMagic sale number was not given, but I guess it represented less than 10% of it total sale, so <$2.5 million in 2009. On its retail website, OraMagic Rx can be had for ~$1-$3/oz.

    Access’s MuGard works very similarly to these three products, and had largely similar efficacy in clinical studies. One slight advantage of MuGard is that it can be safely swallowed, but that probably won’t be the deciding factor for patient acceptance. Access likely will have a tough battle to win market share.

    SciClone on the other hand, has a product candidate (SCV-07) that is different from the above-mentioned mouth rinse/gels. It is developing a peptide inhibitor of STAT-3 signaling which is believed to prevent OM through its immuno-modulation activity. But first SciClone has to demonstrate SCV-07 is non-inferior to these mouth rinse in clinical efficacy which had been shown to be effective in >40% of patients. The trial result is expected to be out soon. I believe the commercial future of SCV-07, if it can eventually win regulatory approval, is much brighter. As of right now, oncologists have only limited options in their arsenal to prevent the occurrence OM in chemoradiotherapy-treated cancer patients.


    The only FDA-approved drug for this purpose is Palifermin (trade name Kepivance), a human recombinant keratinocyte growth factor (KGF). KGF stimulates the growth of cells that line the surface of the mouth and intestinal tract thus better preparing them against the damages of chemoradio-therapy. It was originally made by Amgen (NASDAQ:AMGN) and was approved in 2004. Now it is marketed by Biovitrum (OTC:BIOVY), a Swedish company. Palifermin had a 2009 worldwide sale of ~$15 million. It was recommended by the European Society for Medical Oncology (ESMO) for both the prevention and treatment of OM in their 2009 guideline. I expect its sale will increase significantly in coming years.

    In summary, OM is a niche market that has a substantial growth potential. Premium products are scarce, but lower-tier segment is crowded with multiple products. Access pharma’s MuGard will bring in much needed revenue but the impact is likely going to be small. However, this is not to say Access is not a good investment for it has some very interesting product candidates in its pipeline. I intend to write another article on this regard in the near future. I like SciClone because its SCV-07 targets the higher-margin segment, of course it still has a long way to go to be approved. But even without any new approvals, it's profitable with its existing product ZADAXIN for treatment of hepatitis.

    Disclosure: No position on any of the stocks mentioned.
    Stocks: ACCP, SCLN, AMGN
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  • CVTrader
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    Author’s reply » Today I had some time and read Access Pharma's 10-K which was filed with SEC Yesterday. Basically royalty revenue was $37K for the entire 2009, and I believe it is solely due to European launch of MuGard. The rate of royalty was set at 20%, and the product was marketed from April of 2009, so that gives me an annual sale of roughly $220K. As I mentioned in my article, the revenue stream from MuGard is insignificant for Access. Today's price drop kinda supports that.


    10-K annual report can be found here:
    24 Mar 2010, 12:44 PM Reply Like
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