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Intrinsic Value Asset Management (IVAM) was founded by Ken Luskin after a fifteen-year career with Wall Street investment banks Morgan Stanley, Smith Barney, and Bear Stearns. IVAM has been managing separate accounts since January, 1998. IVAM is a licensed investment advisor in the state of... More
  • Immune Therapy Is A Paradigm Shift: Vical Is The Best Pure Play 6 comments
    Aug 6, 2013 2:12 PM | about stocks: VICL

    (VICL)

    Paradigm shifts have historically created tremendous wealth for the few trailblazer companies that are best able to take advantage of new technologies, so as to meet societal demands.

    When petroleum replaced whale oil John D. Rockefeller became the wealthiest person in the US. When the personal computer became ubiquitous, Bill Gates became the richest person in the US. In addition to these people, there were and are countless others who became immensely wealthy from carefully investing into the best companies within the new paradigm.

    Immune therapy will be a paradigm shift in the treatment of solid tumor cancers. But, like other past paradigm shifts, it is very important to understand which companies will benefit the most, over the long term. Otherwise, an investor can get stuck owning stock in the losers, such as Commodore or Atari, rather than the big winners Microsoft and Oracle

    Understanding Immune Therapy

    Current cancer drugs are meant to directly destroy tumor cells. Unfortunately, most of these substances cause horrible collateral damage to other parts of the body. Most solid tumor cancers mutate often, such that after a short period of effectiveness, conventional cancer treatments stops working on the remaining cancer cells. Immune therapeutics are meant to work on the immune system, and not directly on the cancer.

    Differing approaches

    This video helps explain the different approaches in creating immune therapeutics.

    Basically, immune therapies are either specific or non specific.

    The problem with non specific therapies is collateral auto-immune damage. Yervoy's adverse effects can be so severe that some patients die from the complications.

    The problem with most specific immune therapies, such as Dendreon's Provenge, is that they require very expensive cell based manufacturing, and can only be used on the specific individual for which they were designed.

    Vicals' Allovectin-7 is specific, but without cell based drawbacks

    Allovectin-7 is a specific immune therapy, but without the high costs of cell based therapies.

    Also Allovectin-7 is not individualized, and therefore can be manufactured and stored for any patient, like most conventional biologics.

    Furthermore, Allovectin-7 is not specific to Melanoma, and can be used in any solid tumor cancer.

    Because Allovectin-7 has zero grade 3 or 4 side effects, it is far superior to non specific systemically administered substances.

    Unlike many current conventional treatments for solid tumors, Allovectin-7 actually fully cures some patients of their Metastatic Melanoma. In the patients that do not respond to Allovectin-7, at least there last days are not spent vomiting and suffering from chemo and radiation poisoning.

    Repeated injections of Allovectin-7 trains the Immune System

    The beauty of Allovectin-7 is that it is based on Vical's proprietary plasmid DNA platform.

    By injecting any solid tumor cancer, the immune system is able to recognize those cells as foreign. Then the cytotoxic T-cells can be trained to target many of the tumor-associated antigens that the cancer cells are expressing , but have not been recognized in the past.

    Allovectin-7 encodes for only one major histocompatibility complex antigen, HLA-B7 . Repeated Allovectin-7 injections leads to a systemic immune response to numerous other antigens that are expressed on the cancer cell's surface, but have not previously been recognized.

    Because the plasmid DNA is absorbed into the tumor cells, it can be injected repeatedly without reducing its effectiveness, because it avoids being targeted and neutralized by the immune system.

    Allovectin-7 will work syngeristically with the Checkpoint Inhibitors

    The already FDA approved checkpoint inhibitor Yervoy ( durable response rate= 10.9%) , was just a footnote at the recent American Society of Clinical Oncologists meeting this June, because of the off the charts PD-1 data ( durable response rate = ~ 40%) that was presented.

    Because of the PD-1 drugs, that won't have approvable data until late 2015, many believed that Allovectin-7 would not be commercially successful long term. But, that is a very naive view of the immunotherapy landscape.

    Unless cytotoxic T-cells are previously activated and have infiltrated a tumor,( video of Dr. Michael Atkins discussing PD-1 limitations) the PD-1 drugs will not be effective.

    Because Melanoma is much more immunogenic than most other cancers, the percent response rates dropped down dramatically, to the teens and low 20's, in other solid tumor cancer data presented at the American Society of Clinical Oncology.

    Allovectin-7 causes cytotoxic T-cells to become activated and to infiltrate solid tumor cancers.

    Therefore, Allovectin-7 and the PD-1 inhibitors need each other to further the boost their respective responses. (Release the Brake; Step on the Gas)

    Allovectin-7 showed very impressive results in the phase 2 cohort that received more than one cycle of therapy( 30.6% durable response rate, and median overall survival of ~30 months).

    The Allovectin-7 super long duration phase 3 implies a 40 month median overall survival and durable responses rate of ~ 40%.

    Therefore, Allovectin-7 is approximately on par with the PD-1 inhibitors in Metastatic Melanoma. But, I expect that the Allovectin-7 will produce far superior results in other solid tumor cancers as a mono therapy.

    There is only one Allovectin-7! There are no other late stage specific immune therapy substances that can compete with the long duration of survival and implied durable response rate of Allovectin-7.

    Allovectin-7 strong potential for use in other solid tumor cancers = large part of predicted $35 Billion/year opportunity

    There are 2 companies with late stage PD-1 inhibitors. But there is only one substance, Allovetin-7 , that can elicit the required cytotoxic T-cells to activate and infiltrate a solid tumor, so the PD-1 inhibitors can be effective.

    In theory, Allovectin-7 should be even more effective relative to the PD-1 inhibitors, in all the other solid tumor cancers.

    Avastin and chemo rarely cure anyone who has metastatic solid tumor cancer.

    Allovectin-7 has no serious side effects beyond flu like symptoms, that indicate the therapy is working.

    When tens of millions of metastatic cancer patients all over the world, are faced with the choice between a potential cure with no serious adverse effects, and conventional cancer agents that make people feel like dying, while curing nobody....... well I think you know the answer.

    When Governments and other "payers" are faced with numerous expensive complications caused by black box warning substances, or an immune therapy that has zero complications...

    I think you can figure out what type of therapeutic regimen will be strongly favored.

    Immune system cancer drugs tipped to be a $35 billion market

    Vicals Allovectin-7 results will be announced this month

    Vical is the type of stock that long term investors should consider buying now to own for the long term.

    I emphasize the short term fuse on Vical's shares, based upon my prior Seeking Alpha article,

    Analysis of Vical's Allovectin-7: Best Results Ever in a Melanoma Phase 3 Trial.

    The super long duration of the phase 3 is implying results that will cause the shares of Vical to gap upwards immediately following the release of data this month.

    Novel Vaccine based approach causes skepticism despite obvious survival benefits

    Allovectin-7 is a Vaccine based approach, that has never before proven successful in treating cancer. Therefore, most of the medical community and Wall street are quite dubious about Allovectin-7's prospects. Before man could fly, few believed it was possible. Despite the obvious super long longevity of the Allovectin-7 phase 3 patients, unproven technologies tend to have few people that understand them, with a commensurate number of investors.

    Why Allovectin-7 is misunderstood, and still under the radar screen

    Despite the excitement about Immune Therapy at the American Society of Clinical Oncologists meeting 2 months ago, which caused some Wall street analysts to predict a $35 Billion/year opportunity, there are only a handful of Oncologists that understand the key concepts and basic functioning of the Immune System.

    Since most Immunologist were trained in the area of allergies and communicable diseases, very few understand much about oncology.

    In other words, there are very few medical professionals that are experts in both Oncology and the Immune system.

    Most of the medical community and Wall st understand the basics of Monoclonal Antibody technology, which is what the FDA approved Yervoy immune therapy is based upon, as is the upcoming PD-1s, that caused the $35 billion/year prediction.

    But, very few understand how vaccine technology, that is the basis of Allovectin-7, causes systemic immunity to cancer.

    Many in the medical community and Wall st do not understand that the Allovectin-7 phase 2 top line results greatly understate its efficacy. This is because R.E.C.I.S.T. criteria forced 61.4% of the patients out of the study after only a few treatments. The 49 patient cohort from the phase 2 that received more than a just a few treatments had a durable response rate of 30.6%, and a median overall survival of approximately 30 months. Vical received modified R.E.C.I.S.T. criteria for the phase 3, such that all Allovectin-7 patients will receive at least 12 shots over an 18 week time period. Therefore, the super long duration of the phase 3, has good evidence from the 49 patient cohort. Unfortunately, most medical professionals, nor those on Wall st, understand this key information.

    The Allovectin-7 phase 3 was in only one major US cancer center. There were 88 sites spread throughout the western world. Therefore, even if someone was able to get inside info from one of the site investigators, that would not help them, because there are so many other sites.

    The Vical CEO has done a relatively poor job of communicating the key facts about Allovectin-7, that I have collected from various public sources, and presented in my Seeking Alpha analysis.

    Vical has been run as a communicable disease Vaccine company,( the Chairman was head of Merck Vaccine, and the CEO was COO) and is staffed with medical professionals in that area, but not in oncology in general, nor in the investigated indication of Metastatic Melanoma.

    Physicians prefer to listen to other Physicians. Vical did not need a physician specializing in Oncology up till now, because Allovectin-7 was already in a pivotal study, and they were not involved in any other human development programs in this area.

    The lack of a staff Physician to communicate with the Melanoma community about Allovectin-7 has greatly diminished any deep understanding.

    Therefore, there are very few in the medical community that have a deep understanding of Allovectin-7, and those that do, are currently restricted from discussing it in public.

    Bottom line, Allovectin-7 is a groundbreaking Immune Therapy, that is not yet well understood by the medical community, nor by Wall st.

    Nevertheless, the key facts in the phase 2, and the super long duration of the phase 3, fully support the conclusion that Allovectin-7 will become an extremely successful Immunotherapy.

    These key facts, combined with Allovectin-7s far superior adverse effects profile, provide strong support for the conclusion that it will be at least on par in participating in the expected market $35 billion market size, predicted for the PD-1 immune therapeutics.

    .

    Disclosure: I am long VICL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Themes: long-ideas Stocks: VICL
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Comments (6)
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  • see punjabi
    , contributor
    Comments (358) | Send Message
     
    Let's see how the data comes out next week or this month and that will dictate which way vicl will be heading. If positive data, stock will skyrocket and one clear example is dndn that traded in high 50's after phase 3 data and approval. However, dndn story is different as the profit margins were very low in teens as the cost associated in developing the therapy for individual patients was huge but that will not be the case with vicl.
    7 Aug 2013, 02:02 AM Reply Like
  • Alp Bugra Basat
    , contributor
    Comments (50) | Send Message
     
    "Since most Immunologist were trained in the area of allergies and communicable diseases, very few understand much about oncology.

     

    In other words, there are very few medical professionals that are experts in both Oncology and the Immune system."

     

    I do disagree: Simply check out Sloan Kettering faculty website. They has a department dedicated for cancer immunotherapy: http://bit.ly/195F3aU Lots of out there..

     

    My understanding from your words is that you are not in science. Sorry.
    8 Aug 2013, 10:18 AM Reply Like
  • Intrinsic Value Asset Manag...
    , contributor
    Comments (195) | Send Message
     
    Author’s reply » Sloan Kettering is one of the FEW.

     

    Sloan Kettering is one of the BEST in this area in the world.

     

    Dr. Walchuk is the KEY Doc in this area.

     

    Dr. Walchuk is one of the most recognized experts in this area.

     

    Dr. Walchuk is RESTRICTED from discussing Allovectin-7 and most other immune therapies, unless he is commenting in the public domain.
    8 Aug 2013, 05:56 PM Reply Like
  • Alp Bugra Basat
    , contributor
    Comments (50) | Send Message
     
    I don't understand what you mean by saying "FEW"

     

    MD Anderson, Scripps, Fred Hutchinson, Fox Chase, Dana-Farber, Johns Hopkins, Yale, UCSF, UCSD, UCLA, Caltech, MIT, Mayo Clinic... There are more out there...
    9 Aug 2013, 07:49 AM Reply Like
  • Intrinsic Value Asset Manag...
    , contributor
    Comments (195) | Send Message
     
    Author’s reply » How many of those Doctors are consultants to Wall st?

     

    Out of those that are, How many have studied the intricacies of Allovectin-7?

     

    How many know that the 49 patient cohort from the phase 2 had a Durable Response Rate of 30.6%.....???

     

    How many KNOW about the super LONG duration of the Phase 3?

     

    How many UNDERSTAND the implications of the super LONG duration of the phase 3?

     

    How many are able to discuss an ongoing trial?

     

    How many want to start predicting the results of a study BEFORE the results come out?

     

    NONE!

     

    They will ALL wait for the actual results, then they will comment!

     

    Its just a couple more days...

     

    You will be sorry that you did NOT pay attention to the HARD numbers, and the elegant science.
    9 Aug 2013, 09:04 AM Reply Like
  • Alp Bugra Basat
    , contributor
    Comments (50) | Send Message
     
    http://on.mktw.net/11Y...

     

    What's up baby? Next time try flipping coins, you will have more chance.
    12 Aug 2013, 06:23 AM Reply Like
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