Analysts, doctors, insiders and professional money managers believe Æterna Zentaris (AEZS) and Keryx Biopharma (NASDAQ:KERX) are two stocks that have very good odds for FDA approval with supporting abstracts and clinical data.
Below are some facts to consider:
Let me start with a bearish sentiment article by Adam Feuerstein of thestreetcom. I honestly laughed at this article; it was a rather absurd assumption by Adam Feuerstein, along with some vague opinion by Dr. Ratain whose track record isn't exactly worth mentioning. The only negative I could find in KERX was resolved back in February of this year.
There was some criticism from some on Wall Street that the Phase II trial of Colorectal Cancer patients and the Phase III trial differ in dosing amounts. The Phase II trial used a starting dose of 825mg twice daily for capecitabine (CAP)+ 50 mg Perifosine and the Phase III trial is using a starting dose of 1000mg twice daily of Capecitabine + 50mg Perifosine. Some analysts questioned on conference calls that this may add uncertainty to how the placebo group that receives the CAP + Placebo treatment will react, and also how dose reductions during the trial may differ and affect the patient outcomes.
CAP is usually started off with a large dose and then dose reduced to gauge the patients’ tolerance and the efficacy of the drug. KERX management has noted that it is not uncommon to drop dosage to the 500mg – 825 range. It is important to mention several key points regarding this matter. First, the approved starting dose of capecitabine is 1250mg twice daily. However, per the Phase 3 SPA, the FDA has agreed that a starting dose of 1000mg twice daily is acceptable, most likely related to the fact that at a dose of 1250mg twice daily capecitabine is believed to be toxic.
More importantly, the published literature available on capecitabine single agent activity in refractory mCRC patients (at a starting dose of 1250mg twice daily no less) indicates very little to no single agent activity. Therefore, the possibility that the control arm will be effected by the higher starting capecitabine dose (which is still lower than the approved dose) is unlikely. In addition, in the Phase 3, which is a large study with over 465 patients enrolled, the likelihood of discrepancies in capecitabine dose reductions between the two arms is also very small. In the Phase 2, the dose reductions were essentially equal.
The FDA is not about to expose 465 patients to a trial for a drug with a flawed trial design. Look at the facts : the FDA approved the Phase 3 trial design and granted the company an SPA: The enrollment, by some of the top hospitals and cancer centers in the country was rapid and oversubscribed (suggesting both the need for the drug and the belief in the clinicians at the sites that the trial potentially will show benefit); the DSMB completed its review just recently and said for the company to continue with the protocol as planned without modification; and deaths so far are occurring more slowly than had been anticipated.
Nothing can change the fact that the Phase 2 trial was small, but don't let Adam Fuerestein or anyone else convince you that the results were not impressive or were somehow contrived. If we can come anywhere close to replicating those results in the Phase 3 - and the early indications are directionally positive - we will have a drug that makes a meaningful impact on the lives of those struggling with colorectal cancer and a meaningful impact for investors.
The short position in KERX is considerably large at over 20% of the current float.
I am truly confident KERX and AEZS offer HUGE upside reward from the current ridiculous cheap prices. Based on the public clinical trials and abstracts, I predict the FDA will grant approval for Perifosine and so do several doctors. I will update in detail in a follow up article due out this weekend. Let's look at the factual Perifisone evidence by selleckchem:
Drugs developed particularly to take care of a rare medical condition are called orphan drugs and Perifosine Akt inhibitor enjoys this status in USA on the virtue of being developed for the treatment of neuroblastoma and multiple myeloma. As Akt pathway has been associated with survival and proliferation, Akt inhibition in the phosphoinositide 3-kinase (PI3K) pathway is an attractive approach for treating disorders  characterized by uncontrolled growth of cell, e.g. – cancer .
Perifosine IC50 is between 0.6–8.9 μM and Perifosine structure shows that it is a synthetic alkylphospholipid derivative. Perifosine price of $140 for a 5 mg vial makes it an affordable option for the researchers for their studies and they can buy Perifosine for laboratory uses from any Perifosine supplier. Perifosine solubility can be achieved in water (10 mg/ml) and ethanol thus makes its delivery inside the cells much easier.
Perifosine mechanism has been known to involve inhibiting Akt pathway but various other researches throw more light into the details like its ability to activate the extrinsic apoptotic pathway in lung cancer cells  and the involvement of cholesterol-rich lipid rafts in the process . It was reported to arrest cell proliferation  by inhibiting protein kinase B (PKB) pathway  and inducing p21WAF1 to facilitate this inhibition . Perifosine has been shown to induce Reactive oxygen species (ROS) generation leading to apoptosis of tumor cells .
PERIFOSINE IN DIFFERENT MEDICAL CONDITIONS:
The establishing use of Perifosine as an anti-cancer drugs and its remarkable success has made drug manufacturers take notice of it. On one hand, FDA approved a fast track status for development and use of Perifosine in treating refractory, advanced stage colorectal cancer patients and on the other hand, in a recent acquisition in 2011, Yakult Honsha from Japan paid Aeterna Zentaris $8 million for exclusive rights on Perifosine.
Its pro-apoptotic action in acute myelogenous leukemia cells sensitizes these cells to chemotherapy  and its JNK-dependent pro-apoptotic action in T-acute leukemia cells (TALC) warrants more attention to its use in these conditions .
CLINICAL TRIALS INVOLVING PERIFOSINE:
The most successful of Perifosine's clinical trials involved its use in not one or two, but many cancers as its action is focused on one of the common most pathways. It has been employed in phase I trials with a loading or maintenance dose  in solid tumors  and is sometimes given with radiotherapy to enhance its efficacy . Phase II Perifosine clinical trials in breast cancer patients  and phase II studies involving prostate cancer patients  have shown remarkable results. In multiple myeloma (MM) patients, it generated promising data in a phase I/II trial when given in combination with Bortezomib  and the results prompted its use in phase II studies in MM  where it showed notable efficacy.
After its successful use in preclinical studies on soft tissue sarcoma its phase II trials in soft tissue sarcoma  were much anticipated and Perifosine generated significant success against these cancers . It has been involved in phase II studies to treat patients with head and neck cancer and the promising results  will favor its use in next set of studies. Apart from these common yet tough to treat cancers, it has been used for the treatment of relatively rare Waldenstrom macroglobulinemia (WM) cancer where it showed a promise in translational studies  and phase II clinical trials .
Perifosine colon cancer studies saw its use as a combination drug in phase II clinical trials  and to achieve better efficacy and safety profile, various drugs have been tried in combination with Perifosine in the treatment of colorectal cancer in phase II studies . Keryx Pharmaceuticals, which has been developing Perifosine, has launched many clinical trials involving it as a treatment regime and the results of these studies are eagerly awaited. These trials include a phase III study of Perifosine in combination in MM patients (NCT01002248) and phase III Refractory Advanced Colorectal Cancer trials where it is given along with Capecitabine (NCT01097018). Another Keryx’s ongoing phase I colon cancer trial (NCT01048580) is also assessing the effect of the above combination in the patients.
On June 7, 2011, an analyst report on AEZS by Oppenheimer Senior biotech analyst Boris Peaker started coverage on AEZS and Keryx Biopharmaceuticals with a Outperform ratings. A $5.50 price target for AEZS which represents over 270% upside return. A $7 price target was placed on KERX representing over a 150% upside return from its current price.
Boris Peaker has an excellent track record and validates his price targets based on probable approval of Perifosine. Boris Peaker is an Executive Director and Senior Analyst covering the Emerging Biotechnology sector. Boris began his career as a consultant at Keeling Reeds Partners in California, working exclusively with biotech and pharmaceutical companies on, among other things, asset valuation, R&D portfolio management, M&A strategy, and royalty and equity financing. Boris holds a Ph.D. in Biophysics from Stanford University and a dual B.S. in Physics and Chemistry from SUNY- Stony Brook.
On August 12, 2011, Needham & Company Reiterates a 'Buy' on Æterna Zentaris; Busy Summer Brings Completion of Perifosine and AEZS-108 Pivotal Trials. Needham & Company reiterates a 'Buy' and price target of $5.00. A Needham analyst said, "Recently, Aeterna Zentaris reviewed financial results and company progress in 2Q11."
JMP Securities on March 16, 2011, started coverage on AEZS with an outperform rating and placed a $5 price target on the stock. JMP also started coverage on AEZS's American Partner, Keryx Biopharmaceuticals, with an outperform and $8 price target.
On November 29, 2010, McNicoll Lewis & Vlak MLV Started AEterna Zentaris at Buy with a Price Target of $5.50; Sales Revenue and Funded Phase III Trials Support Perifosine Development. McNicoll Lewis & Vlak Analyst George B. Zavoico.
George B. Zavoico, Ph.D., has over 6 years of experience as a life sciences analyst writing research on publicly traded equities. He has most recently worked at Westport Capital Markets and Cantor Fitzgerald in their research departments and has received The Financial Times/Starmine Award two years in a row for being among the top-ranked Earnings Estimators in the Biotechnology Sector. His principal focus is on biotechnology, biopharmaceutical, specialty pharmaceutical, and molecular diagnostics companies engaged in discovering, developing, and marketing drugs and value-added diagnostics for the diagnosis and treatment of cancer and cardiovascular and inflammatory/immune diseases and disorders.
Prior to working as an analyst, Dr. Zavoico established his own consulting company serving the biotech and pharmaceutical industries by providing competitive intelligence and marketing research, due diligence services, and guidance in regulatory affairs. He also wrote extensively on healthcare and the biotech and pharmaceutical industries for periodicals targeting the general public and industry executives. Dr. Zavoico began his career as a Senior Research Scientist at Bristol-Myers Squibb Co., moving on to management positions at Alexion Pharmaceuticals, Inc. and T Cell Sciences, Inc. (now Celldex Therapeutics, Inc.). . He has a B.S. in Biology from St. Lawrence University and Ph.D. in Physiology from the University of Virginia..
Given analysts' price targets, AEZS is one of the most undervalued biotechs on Wall Street. I recently met Dr. Williams, a successful medical doctor who invested in Dendreon (DNDN). He had bought under $4 a share in 2006 and sold at $50 in 2010. He is now investing in both AEZS and KERX. He told me AEZS has a splendid promising extensive pipeline, having two drugs in each of phases 1, 2 and 3. On a per-drug basis, the market has extremely undervalued the drugs within AEZS. He believes 100% Perifosine will be approved by the FDA.
Very notable: KERX insider trades on 8/10/2011 open market buy at $3.09 for 10,000 shares at a cost of $30,900, and on 3/22/2011 a 20,000 open market buy at $4.34 cost of $86,800 these purchases by insider Joseph Feczko. He invested $117,000 in KERX validating his strong belief in perifosine. Several other KERX insiders have been buying stock on the open market.
On July 16, 2010, Joseph Feczko, M.D., was appointed to the Board of Directors of Keryx Biopharmaceuticals, Inc. Joseph Feczko, M.D., 61, a seasoned pharmaceutical executive, joins the Keryx Board with broad industry experience across the spectrum of medical, regulatory and operational affairs. Dr. Feczko was, until his retirement in May 2009, Senior Vice President and Chief Medical Officer (CMO) of Pfizer Inc (NYSE:PFE) and member of the Executive Leadership Team with global responsibilities for all aspects of the company?s medical, regulatory and safety activities. Following a time in private practice, he joined Pfizer in 1982 in New York, and then worked for ten years in the United Kingdom for both Pfizer and Glaxo where his responsibilities included supervising clinical research, regulatory affairs, data management and safety reporting. He returned to Pfizer in New York in 1996, where he held positions of increasing responsibility in clinical research and regulatory affairs and safety, culminating in the role of CMO. Dr. Feczko is board-certified in Internal Medicine and a specialist in Infectious Diseases. He has a B.Sc. degree from Loyola University Chicago, and an M.D. from the University of Illinois College of Medicine.
On 8/16/11 an interesting and rather exciting article was published in the Miami herald regarding AEZS108 shows promise against bladder cancer. Also a must see is this video AEZS108 version that made it on local NBC Miami news.
This week I started a new long position in KERX, and I will continue to buy a sizable position. Investors might recall my article on KERX published in April of 2010. I was recognized by Dow Jones news and Reuters.
According to an article published Sunday on Seeking Alpha that said the stock could "easily triple within the next year." The stock has a promising pipeline, with two fast-track drugs, and has a lot of cash available, with author Jeremy Richards, the manager and director of Private Wealth Fund, saying the company greatly exceeds his standards on a cash test.
April 12 (Reuters) - KERX rose to their highest in two years Monday, a day after a media report said the stock could triple in value over the next year. Brean Murray Carret and Co analyst Jonathan Aschoff pointed to a report Sunday on the Seeking Alpha website that suggests that KERX stock could reach $14 by 2011.KERX shares, which have gained about 30 percent in the last one month, were up 21 percent at $4.20 Monday afternoon.
AEZS has a current market cap of less than $140M, it has $53M cash. Its pipeline is substantial, and I feel this company will soon see a takeover offer.
KERX also has around $53M cash with a market cap of only $185M. Last month, Adam Feuerstein at thestreetcom wrote in an article the CEO Ron Bentsur will sell the company. The CEO Ron Bentsur also said "Given the market opportunity in colon cancer, it would be very nice to sell the company," Keryx CEO Ron Bentsur told investors at the Stifel Nicolaus Healthcare Conference.
Bentsur added that KERX would consider licensing its colon cancer drug, known as perifosine, or perhaps even sell the drug on its own. Still, his "top priority" would be to find a large pharmaceutical company to acquire the company outright.
I find it rather interesting that Adam Feuerstein didn't have a negative sentiment on KERX in his article last month. I want to quote what Adam Feuerstein in this article dated Sept. 7, 2011.
"A phase III study of perifosine in colon cancer is nearing completion, with a survival analysis expected early in the first quarter of 2012. KERX had initially anticipated having top-line results from the perifosine colon cancer study ready in the fourth quarter of this year, but the study's "event rate" -- i.e. the rate at which patients are dying -- is a bit slower than KERX has initially forecast," Bentsur said.
Does this mean that perifosine is working and that the study will be a success?
"It's hard to draw conclusions" from extending the perifosine data timelines out a bit," he warned. Bentsur obviously doesn't want to fall into the nasty circle of hell that has enveloped fellow biotech chief executives who dared to predict victory in drug trials that took longer to report results than initially expected.
Perifosine is an old drug that's been around the block more than once, which should give investors some pause. But Keryx also has solid perifosine data from a phase II study demonstrating that the drug can prolong survival in advanced colon cancer patients.
In my opinion, a $15 to $20 per share buyout could easily happen for KERX next year.
In conclusion, there are far more positives facts on Perifisone weighing in favor of FDA approval than negatives.
1. Pal, S.K.e.a., Akt inhibitors in clinical development for the treatment of cancer. Expert Opinion on Investigational Drugs, 2010.
2. Cheng, J.Q.e.a., The Akt/PKB pathway: molecular target for cancer drug discovery. Oncogene, 2005.
3. Elrod, H.A.e.a., The alkylphospholipid perifosine induces apoptosis of human lung cancer cells requiring inhibition of Akt and activation of the extrinsic apoptotic pathway. Mol Cancer Ther, 2007.
4. Gajate, C.a.M., F., Edelfosine and perifosine induce selective apoptosis in multiple myeloma by recruitment of death receptors and downstream signaling molecules into lipid rafts. Blood, 2007.
5. Momota, H.e.a., Perifosine Inhibits Multiple Signaling Pathways in Glial Progenitors and Cooperates With Temozolomide to Arrest Cell Proliferation in Gliomas In vivo. Cancer Research, 2005.
6. Kondapaka, S.B.e.a., Perifosine, a novel alkylphospholipid, inhibits protein kinase B activation. Mol Cancer Ther, 2003.
7. Patel, V.e.a., Perifosine, a Novel Alkylphospholipid, Induces p21WAF1 Expression in Squamous Carcinoma Cells through a p53-independent Pathway, Leading to Loss in Cyclin-dependent Kinase Activity and Cell Cycle Arrest. Cancer Research, 2002.
8. Rahmani, M.e.a., Coadministration of Histone Deacetylase Inhibitors and Perifosine Synergistically Induces Apoptosis in Human Leukemia Cells through Akt and ERK1/2 Inactivation and the Generation of Ceramide and Reactive Oxygen Species. Cancer Research, 2005.
9. Papa, V.e.a., Proapoptotic activity and chemosensitizing effect of the novel Akt inhibitor perifosine in acute myelogenous leukemia cells. Leukemia, 2008.
10. Chiarini, F.e.a., The novel Akt inhibitor, perifosine, induces caspase-dependent apoptosis and downregulates P-glycoprotein expression in multidrug-resistant human T-acute leukemia cells by a JNK-dependent mechanism. Leukemia, 2008.
11. Ummersen, L.V.e.a., A Phase I Trial of Perifosine (NSC 639966) on a Loading Dose/Maintenance Dose Schedule in Patients with Advanced Cancer. Clinical Cancer Research, 2004.
12. Crul, M.e.a., Phase I and pharmacological study of daily oral administration of perifosine (D-21266) in patients with advanced solid tumors. European Journal of Cancer, 2002.
13. Vink, S.R.e.a., Phase I and pharmacokinetic study of combined treatment with perifosine and radiation in patients with advanced solid tumors. Radiotherapy and Oncology, 2006.
14. Leighl, N.B.e.a., A Phase 2 study of perifosine in advanced or metastatic breast cancer. Breast Cancer Research and Treatment, 2008.
15. Chee, K.G.e.a., The AKT Inhibitor Perifosine in Biochemically Recurrent Prostate Cancer: A Phase II California/Pittsburgh Cancer Consortium Trial. Clinical Genitourinary Cancer, 2007.
16. Richardson, P.G.e.a., Perifosine Plus Bortezomib and Dexamethasone in Patients With Relapsed/Refractory Multiple Myeloma Previously Treated With Bortezomib: Results of a Multicenter Phase I/II Trial. Journal of Clinical Oncology, 2011.
17. Ernst, D.S.e.a., Phase II Study of Perifosine in Previously Untreated Patients with Metastatic Melanoma. Investigational New Drugs, 2006.
18. Bailey, H.H.e.a., Phase II study of daily oral perifosine in patients with advanced soft tissue sarcoma. Cancer, 2006.
19. Knowling, M.e.a., A phase II study of perifosine (D-21226) in patients with previously untreated metastatic or locally advanced soft tissue sarcoma: A National Cancer Institute of Canada Clinical Trials Group trial. Investigational New Drugs, 2006.
20. Athanassios, A.e.a., A phase II trial of perifosine, an oral alkylphospholipid, in recurrent or metastatic head and neck cancer. Cancer biology & therapy, 2006.
21. Ghobrial, I.M.e.a., Clinical and Translational Studies of a Phase II Trial of the Novel Oral Akt Inhibitor Perifosine in Relapsed or Relapsed/Refractory Waldenström's Macroglobulinemia. Clinical Cancer Research, 2010.
22. Ghobrial, I.M.e.a., Phase II trial of the novel oral Akt inhibitor perifosine in relapsed and/or refractory Waldenstrom macroglobulinemia (WM). Journal of Clinical Oncology, 2008.
23. Vukelja, S.e.a., Randomized phase II study of perifosine in combination with capecitabine versus capecitabine alone in patients with second- or third-line metastatic colon cancer. Journal of Clinical Oncology, 2009.
24. Bendell, J.C.e.a., Randomized Placebo-Controlled Phase II Trial of Perifosine Plus Capecitabine As Second- or Third-Line Therapy in Patients With Metastatic Colorectal Cancer. Journal of Clinical Oncology, 2011.