Coronado Biosciences: Provides Investors With 2 Distinct Pipelines And Significant Market Potential

| About: Fortress Biotech, (FBIO)
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Last year, was a pivotal year for Coronado Biosciences (CNDO), and with multiple pipeline catalysts set to evolve over the coming months, 2012 is taking shape as a milestone year as well.

Coronado began 2011 as a private company, and after a brief period of trading on the OTC market, the company ended the year on the Nasdaq - without having conducted an IPO. A Form 10 filing with the SEC to convert the company's shares to common stock and become a public company was an unorthodox method of going public, but it did the trick. The quick move to the Nasdaq also ensured that Coronado could appeal to a wider scope of potential investors, as many funds and institutions will not touch a bulletin board stock, and neither will the more conservative of investors.

That said, trading on the Nasdaq also brings with it a responsibility to demonstrate a strength in the pipeline that would compel investors to buy in, and then to stick around as that pipeline developed. Investors will often find themselves asking, "What makes this pipeline or product unique, and what is the potential return should it (they) make it to market?"

As an answer to those potential questions, Coronado spent the better part of the last year consolidating two distinct product pipelines, one in the treatment of autoimmune disorders and the other geared towards cancer treatment. Both would be set to enter multi-billion dollar markets and both have demonstrated clinical success in early trials.

With the pipeline in place and with company shares trading on the Nasdaq, Coronado is ready to roll into the next phases of development.

The first product line under development, CNDO-102, is based on Trichuris suis ova (TSO), which translates as the 'porcine whipworm.' The porcine whipworm was chosen as the preferred whipworm for treatment since it cannot long survive in a human host and is eliminated from the body within weeks of introduction.

During the course of treatment, however, ova from the porcine whipworm are orally ingested twice weekly and, as a biologic, they act as a natural immunotherapy while regulating T-cells and inflammatory cytokines.

This practice has been confirmed as beneficial in numerous studies already in the treatment of various gastroenterology indications (a quick google search of the subject will return a plethora of information, including an article from Based on those early successes, Coronado is moving forward with the development of TSO in the treatment of Crohn's disease, Ulcerative Colitis, and Multiple Sclerosis.

Just a couple of weeks ago the company announced a collaborative agreement with Dr. Falk Pharma and OvaMed to develop and bring TSO to market for the treatment of Crohn's disease. Under the terms of the agreement Coronado retains rights for TSO in Crohn's in North America, South America and Japan, while Falk retains European rights. Coronado will also receive certain pre-clinical and clinical data from Falk, for which the company has agreed to pay five million euro and a royalty of 1% of net sales of TSO.

As potential catalysts relating the TSO in Crohn's, Falk is expected to receive interim data and analysis from an independent monitoring committee within the current quarter, while Coronado is planning initiate a Phase II trial for the same indication within months.

Also this year, Coronado expects to initiate a Phase II study for TSO in Multiple Sclerosis and Falk should be set to announce full results from its Phase II towards the end of the year.

For the regions in which Coronado will retain rights, the market opportunity for just Crohn's is in the billions. That number multiplies exponentially when considering the additional indications for which the company is targeting treatment with TSO.

Coronado is also developing CNDO-109 as a biologic agent against multiple cancer types, starting with is being developed for the treatment of acute myeloid leukemia (AML). CNDO-109 is being designed to activate a body's own "Natural Killer" cells to target cancerous cells without the use of toxic cytokines. A Phase I study has already been completed for safety, but efficacy results were also encouraging.

An IND has already been filed with the FDA and the company expects to initiate a Phase I/II trial mid-year.

CNDO-109 would also enter a billion dollar market, if it were to make it through the developmental phases and into commercialization.

With the swift move from private to Nasdaq-listed company, some analysts have also started taking notice.

Late last year when CNDO was trading for $10, Roth Capital initiated coverage with a 'Buy' rating and a price target of $27.

In February, when shares were trading for under seven dollars, Oppenheimer initiated coverage with an 'Outperform' and a price target of $12.00.

Griffin Securities also tagged the stock with a 'Buy' this month.

With two distinct pipelines, both gearing for multi-billion dollar markets, and with multiple catalysts due during the coming months that could draw new interest to the company, it may be worth taking a look at this company and following up with some research of your own.

Disclosure: No position.