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pedromm
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Biotech trader since 2000 and biotech researcher.
  • CYCC What Future?
    Cyclacel Pharmaceuticals, Inc. (CYCC) is a development-stage biopharmaceutical company developing oral therapies that target the various phases of cell cycle control for the treatment of cancer.

    After ASCO, the subsequent decrease in the share price and the recent underwritten offering is now time to the shareholders ask themselves about the future value of Cyclacel Pharmaceuticals.

    In order to understand CYCC potential value, i'll first analyse their portfolio, or in the biotech sector their pipeline:

     Sapacitabine:
    • Phase III: Sapacitabine oral capsules for the treatment of elderly patients aged 70 years or older with newly diagnosed AML (acute myeloid leukemia ) under a Special Protocol Assessment agreement with the U.S. Food and Drug Administration;
    • Phase II: Sapacitabine for the treatment myelodysplastic syndromes (MDS)
    • Phase II: Sapacitabine for the treatment of non-small cell lung cancer (NSCLC)
    Seliciclib:
    • Phase II: Seliciclib for the treatment of non-small cell lung cancer (NSCLC)
    • Phase II: Seliciclib for the treatment  nasopharyngeal cancer(NPC)
    Sapacitabine+Seliciclib:
    ·         Phase II: For the treatment of solid tumors
    CYC116
    ·         Phase I: For the treatment of solid tumors

    Cyclacel Pharmaceuticals advantage is based on this solid and diverse oncology pipeline that will certainly help CYCC to add value to the shareholders, but when and at what price…?

    The question don’t have an immediate response, it depends how the company will be able to administrate their financial resources into their pipeline studies, regulatory procedures and at the end marketing successful the product “the ultimate goal”.

    In this kind of biopharmaceutical companies, their intrinsic and present value are usually related to the future potential of their novel drugs and their ability to make profits in the competitive healthcare market. Today CYCC has a market capitalization around 58million dollars and actual share price of $1.20:  it seems that the entire pipeline are not at all reflected in current price. Why?

    1.      The new drugs are not producing good results in the differents evaluation phases;
    2.      Or the results are good, but the company are not having momentum or the catalyst to increase the share price near term.

    My focus will be based on the second answer. So far, their advance drug Sapacitabine with SEAMLESS Phase 3 trial open and enrolling patients with acute myeloid leukaemia, appear to have good levels of safety and effectiveness responses in the pilot study. Accordingly the press release of 6 June 2011:

    "Based on the interim results reported at ASCO, the sequential administration  of sapacitabine and  decitabine appears safe and active in elderly patients with newly diagnosed AML".
    The treatment regimen under evaluation in this pilot study is being used as one of the arms in SEAMLESS, the registration-directed, Phase 3 study of sapacitabine in elderly patients with newly diagnosed acute myeloid leukemia (AML) who are not candidates for or have refused induction chemotherapy.  SEAMLESS is being conducted under a Special Protocol Assessment agreement that Cyclacel reached with the US Food and Drug Administration.

    However more time will be required to prove the real value of the new drug, Sapacitabine, with older patients (aged 70 years or older). And more time means that the patients still remain alive for a longer period of time. 

    My opinion is that something is not quiet clear in the current value of CYCC: if you look to AEZS, ZLCS and PPHM, for example, apart differences in the potential of their drugs, they are companies with market capitalization around 200M, 267M and133 million dollars with drugs in the phases III and phases II, more than the double of CYCC value.

    Looking also to their last balance sheet, CYCC should have now around 30 million in cash and equivalents, that puts the company in good position to go along the Sapacitabine oral capsules  Phase 3 trial. 
    However, and accordingly their rate of burning money each quarter (around 3 to 4 million dollars) i am expecting a new offering at the end of phase III and FDA filling.
    (Note: with a good phase III results this dilution could go at higher prices and i wouldn’t be suprised, if the filling of Sapacitabine oral capsules for the treatment of AML to the FDA will be achieved with a partnership and an upfront payment.)

    My opinion is that CYCC is an undervalue oncology company and the longs will be rewarded with the addressing of good phase III results by the company and the FDA filling. Therefore, the last underwritten offering at price off 1,36 could be a good entry point to the new investors.



    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in CYCC over the next 72 hours.
    Jul 08 12:42 PM | Link | Comment!
  • Santarus (SNTS) and Pharming (PHARM) Partnership
    A lot of noise is going on these days on the biotech sector. Are we entering in a new era like 2000? Or is just the bull strength working on…? At the end of the day the choices that we made as an investor will be tested.
     
    Playing this game are two companies: Santarus (SNTS.NASD) and Pharming Group (PHARM.Euronext Amesterdan). By one side we have Pharming Group that is a European small biotech company with a market capitalization around 60 million euros, and Santarus that is a company listed in Nasdaq with a market value around195 million dollars.
     
    Last September both companies sign an agreement in which Pharming sold the rights to Santarus to the commercialization of Rhucin in North America (United States, Canada and Mexico). The research of Rhucin started a few years, a human protein developed through Pharming´s proprietary technology for the treatment of patients with acute attacks of hereditary Angiodema (HAE), a disease that estimated at one racio of 1:30000 patients.
     
    The highlights of the agreement between the two biopharmaceutical companies are:
     
    • Santarus paid 15 million dollars upfront fee;
    • Santarus will pay a 5 million milestone upon the acceptance of the Rhucin Bilogic Licençe Application (BLA) by the FDA;
    • Additional payments are payable to Pharming upon completing clinical and commercial milestones.
     
    This new medicament have received unanimous positive opinion from the committee for Medical Products for Human Use (CHMP) in Europe by EMEA (equivalent to FDA in USA), making possible the use in 27 EU countries plus Norway, Iceland and Liechtenstein.
    The introduce of Rhucin (Ruconest for Europe) has already taken place in Europe and has a potential market size, according the presentation of Pharming at UBS Global Life Sciences Conference around 110 millions euros each year, and for North America could well be 150 million dollars or more.
    In the United States, at 28 December 2010, Santarus and Pharming announced the submission Of Rhucin Biologics License Application to FDA, and at 28 February 2011 both companies announced the receipt of FDA Refusal to file letter for Rhucin Biologics License Application.
    At this point the most important is to understand how Santarus and Pharming will be able to answer to the refusal, because in his letter  FDA indicated that the data was not sufficiently complete to enable a critical medical review. Actually, FDA argue that Santarus and Pharming did not “provide data for a sufficient number of subjects to support the proposed dose of 50U/Kg and lacked prospective validation of the visual analog scale used in measuring the clinical effects of RHUCIN”.
    In order to answer those facts at 5 of May Santarus and Pharming announced, after meeting with FDA, an amends of phase III clinical study: “increasing the number of patients from 50 to around 70 and a modification in the way which the primary endpoint will be assed. This modification eliminates the need for further validation of the visual analog scale”. 
    In my opinion and after following Pharming since a few years and the measures taken for the approval in Europe, there are in fact good chances of winning the final approval from FDA. This time Pharming has a partner to go along, but the new studies will require a period of time around 12 to 18 months to be completed and for that more money is needed. In the Q2 2012 Santarus and Pharming should enter with a new BLA appeal and the final decision could arrive at the end of 2012.
    At the end Rhucin has all to go forward in North America, and is already making easier the lives of those who suffer from HEA in Europe. For the investor will this partnership bring benefits and shareholder value…? Only time will tell, but for those who are planning to invest, one thing they should have for sure, Santarus has a solid core business and a handful of opportunities, for Pharming the pipeline is more reduce, but if they were capable to deal with costs each quarter until became profit the risk vs reward could be bigger.


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

    Additional disclosure: I am long in Pharming Group
    May 18 11:04 AM | Link | Comment!
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