Last week, Mentor Capital (OTCQX:MNTR) announced plans to launch an actively managed Cancer Immunotherapy (CI) Index fund shortly after New Year’s Day that will be based on the underlying Mentor Capital CI Index, which has gained 45% on an equal-weight basis since its inception on 7/10/09. MNTR.PK intends to invest a significant portion of the cash proceeds from the exercise of warrants which are currently outstanding on a stepped-price basis at $1, $3, $5, and $7 per share.
The Company also announced that $1.2 million each in initial seed funding for the CI Index will be provided in approximately equal parts by Mentor Capital management, WellCap Partners (fund administrator) , and MNTR.PK Series C warrant holders. Mentor Capital currently has about 900,000 shares outstanding and the Series C warrants were called last week at $0.65 (for a period of 45 days) to provide approximately one-third of the initial seed funding for the CI Index fund. New companies will be evaluated over time for inclusion in the index and MNTR.PK will invest on a passive basis in all of the CI Index components. The actively managed fund will seek to outperform the overall CI Index performance by establishing larger weightings among the companies it judges to have the best commercial and medical technology development potential.
Privately held Quantum Immunologics (QI) will account for the majority of the CI Fund’s initial investment, based on Mentor Capital’s existing agreement to purchase 20% of QI’s shares (187,000) through mid-2010 and the option to purchase an additional 120,000 shares based on a progressing formula that provides additional flexibility for MNTR.PK shareholders. Other potential companies of interest that are currently included in the CI Index based on current valuations, development pipelines, intellectual property (IP) / patent estate, and commercial potential include ImmunoCellular Therapeutics (NYSEMKT:IMUC) and Celldex Therapeutics (NASDAQ: CLDX).
Quantum Immunologics is a privately held company that is dedicated to improving the treatment outcome and quality of life for cancer patients through the research, development, and commercialization of innovative, cost-effective therapeutic and diagnostic products. QI’s scientific approach links the immunogenic and invasive properties of malignant cancers with a specific protein known as oncofetal antigen immature laminin receptor protein (OFA) that is uniquely expressed on cancer cells, but not found on normal cells outside of early fetal development.
QI's approach to cancer immunotherapy is similar to Dendreon (NASDAQ: DNDN) and involves sensitizing the dendritic cells (which present foreign antigens to the immune system) from a patient's blood to educate and direct the immune system to attack malignant tumor cells in a targeted effort to eradicate or stabilize the disease. The ProActive News Room website for QI includes an updated compilation of blog commentaries, news feeds, videos, articles, presentations, and report downloads for the Company – including more information on the FDA-authorized Phase I/II clinical trial for the Company’s OFA-based cancer vaccine in metastatic breast cancer vaccine that is expected to reach full enrollment and report preliminary data during 1Q10.
The recent developments at Mentor Capital provide investors with the flexibility to invest directly in the actively managed CI Index fund upon its expected launch shortly after New Year’s Day and / or invest in the already public-traded MNTR.PK stock, which will serve as both an advisor and investor in the actively managed CI Fund in addition to serving as a public proxy for QI shares based on the existing agreement to purchase at least 20% stake in the privately held cancer vaccine developer that has pending Phase I/II results from the initial cohort of breast cancer patients anticipated during 1Q10 that are expected to serve as the basis for discussing a pivotal Phase IIb/III study with the FDA.
The public-traded stock of MNTR.PK is expected to experience more actively trading and liquidity over the coming months as additional warrants are exercised and the outstanding share count increases from the current total of approximately 900,000. In addition, the Company’s agreement to purchase at least a 20% stake in QI (with pending Phase I/II results) and developments with other cancer vaccine investments made through the actively managed index fund are expected to provide additional catalysts to increase trading volume, additional warrant exercise, and additional funding for Mentor Capital to make new investments through the fund.
Disclosure: Long CLDX, IMUC.OB, MNTR.PK, QI