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GenVec’s TNFerade Nears NDA Status (NASDAQ:GNVC)

|Includes: GenVec, Inc. (GNVC)

GenVec, Inc.

(Public, NASDAQ:GNVC)

StocksHaven Investments profiles a clinical stage biopharmaceutical company developing gene-based therapeutic drugs and vaccines. Its lead product candidate, TNFerade biologic (TNFerade), is being developed for use in the treatment of cancer, and is currently undergoing Phase III trials which are expected to be completed by Q1 2010. In addition to its therapeutic product development programs, GenVec is working with collaborators to develop new applications for its technology through its vaccine development programs. The Company is developing a vaccine in animal health against foot-and-mouth disease and preventative vaccines for malaria, human immunodeficiency virus (HIV), respiratory syncytial virus, and Herpes Simplex Virus Type 2 (HSV-2). Surrounded by cash infusions through grants, mutual and institutional investors, multi-purpose products with billion dollar market potential, and an already flowing revenue stream – GenVec is one company you shouldn’t pass by.


About

Genvec Inc. is a clinical stage biopharmaceutical company. It develops gene-based therapeutic drugs and vaccines in the United States. Its lead therapeutic product candidate, TNFerade biologic, is under Phase III trial for first-line treatment of inoperable, locally advanced pancreatic cancer. The company is also evaluating TNFerade biologic, for the treatment of various cancers, including esophageal cancer, rectal cancer, and head and neck cancer. In addition, it is developing TherAtoh, a preclinical program involving the delivery of the human atonal gene for the production of therapeutic proteins by cells in the inner ear. Further, GenVec uses its proprietary adenovector technology to develop vaccines for infectious diseases, including HIV, malaria, foot-and-mouth disease, respiratory syncytial virus, and HSV-2. It has strategic alliances and research contracts with the U.S. department of homeland security, the U.S. department of agriculture, PATH’S malaria vaccine initiative, the U.S. naval medical research center, and the Vaccine Research Center of the National Institute of Allergy and Infectious Diseases of the National Institutes of Health. The company was founded in 1992 and is based in Gaithersburg, Maryland.

Products

TNFerade™ represents a novel approach to treating cancer in combination with radiation and/or chemotherapy by introducing tumor necrosis factor-alpha (TNF-alpha), a potent anti-cancer protein, directly into tumors. Pancreatic cancer is the lead indication for TNFerade™. They are conducting a 330-patient randomized, controlled Phase III clinical trial (the PACT study) designed to assess the safety and clinical benefit of using TNFerade™ in combination with standard of care treatment in patients with locally advanced pancreatic cancer. In addition to the Phase III PACT study, TNFerade has been and is currently being evaluated for its potential use in other indications such as head and neck cancer, esophageal cancer, and rectal cancer.

Each year in the United States, about 42,470 individuals are diagnosed with this condition and 35,240 die from the disease.

Pancreatic cancer has one of the highest fatality rates of all cancers and is the fourth highest cancer killer in the United States among both men and women. [ source ]

FDA Fast Track Designation for Treatment of Pancreatic Cancer

GenVec, Inc. announced that TNFerade has been granted Fast Track product designation by the U.S. Food and Drug Administration (FDA) for its proposed use in the treatment of locally advanced pancreatic cancer. The designation is based on GenVec having provided evidence of the potential to improve survival in patients with pancreatic cancer. Drugs designated for Fast Track are intended for the treatment of a life-threatening condition and have demonstrated the potential to address unmet medical needs. Fast track designation does not apply to a product alone but to a combination of a product and specific indication. This designation provides for expedited regulatory review. Should events warrant, GenVec will be eligible to submit a U.S. biologics license application (BLA) for TNFerade on a rolling basis. Under certain conditions, this permits the FDA to review sections of the BLA prior to receiving the complete submission.

Positive Results from Phase II Trials

29 patients were treated at University of California Irvine Comprehensive Digestive Disease Center between 1/2003 and 11/2008; 20 patients with TNF + SOC and 9 patients with SOC. In the TNF + SOC treated group mean age was 64.8 (range 50-80); 15 male; 12 tumors were Stage II, 8 Stage III. In the SOC treated group mean age was 65.9 (range 52-84); 5 male; 6 tumors were Stage II, 3 Stage III. Kaplan-Meier survival analysis showed the overall median survival was 14.7 months in the TNF + SOC treated group and 11.1 months in the SOC treated group. Conclusions In patients treated at a single institution in two similar trial settings, TNF + SOC resulted in a median survival of 14.7 months vs. 11.1 months for patients receiving only SOC. These results are encouraging and are consistent with results across both multicenter trials that show a trend towards improvement in survival following the addition of TNFerade Biologic to SOC.

Recent Case Report Discusses Advantages of TNFerade

“In lieu of the poor outcome despite all currently available therapies, there is increasing interest in novel approaches such as gene therapy for locally advanced pancreatic cancer. The potent antitumor activity of TNF-alpha is well demonstrated in literature; however, severe systemic toxicity has precluded its widespread clinical use. Gene therapy with TNFeradeTM aims to maximize the local antitumor effect of TNF-alpha while minimizing systemic toxicity. TNFeradeTM is an E1-, partial E3- and E4 deleted replication defective adenovirus 5 vector carrying a radiation-inducible immediate response Egr-1 (early growth response) gene promoter ligated upstream to the transcriptional start site of human TNF-alpha cDNA. This construct allows maximal TNF-alpha gene expression under the regulatory control of locally targeted radiation therapy. Hence, there is a spatial and temporal control of the radio sensitivity and cytotoxicity. Radiation alone has variable effects on the shrinkage of pancreatic cancer. While infusional 5- FU traditionally may cause tumor shrinkage with radiation, the impressive response to therapy in our patient is likely due to TNFeradeTM. There was a significant decrease in the inflammatory response around the tumor which was in close proximity to the superior mesenteric artery and significant tumor fibrosis on pathologic examination which is a described effect of TNFeradeTM therapy.” Read the full report here.

World Media Awareness of Pancriatic Cancer Rising

Two world-renowned public figures have recently been diagnosed with Pancriatic Cancer: Patrick Swazy (Movie Star) & Steve Jobs (CEO, Apple Inc.). This just goes to show the unmet needs of the disease, and that even the wealthy are not effectively receiving treatments which work. This represents an optimal time for TNFerade to step in and take charge as the lead product for this muti-billion dollar industry.

TherAtoh Atonal therapy is a product concept to restore hearing or balance function through the regeneration of critical cells of the inner ear. Hearing and balance require specialized cells of the inner ear called sensory hair cells. During embryonic development a gene termed atonal (ATOH) induces the generation of these cells. GenVec has shown preclinically that the production of the ATOH protein results in the formation of new inner ear sensory hair cells, and the restoration of hearing and balance function.

There are currently no effective treatments available for patients who have lost all balance function, and hearing loss remains a major unmet medical problem.

The market potential for this product is truly mammoth, as the cost of medical care for patients with balance disorders has been estimated to exceed $1 billion per year.

Vaccines

HIV Vaccine

In collaboration with the Vaccine Research Center/National Institute of Allergy and Infectious Diseases/National Institutes of Health, GenVec is developing a vaccine candidate to protect against the three most common types of HIV-1 virus found around the world, clades A, B and C.  The vaccine candidate utilizes GenVec’s proprietary adenovector delivery technology and 293-ORF6 production cell line and is designed to generate a broad spectrum of immune responses including neutralizing antibodies and cytolytic T cell immunity characteristic of the most effective vaccines.

The Vaccine Research Center is managing the clinical development of this program.  The vaccine candidate (VRC-HIVADV014-00VP) is being evaluated  alone and in combination with a plasmid DNA vaccine prime.  In October 2005, the VRC announced the initiation of Phase II testing for this vaccine candidate.  In addition, six Phase I trials have completed enrollment with more than 150 healthy participants having received the adenovector vaccine candidate.

Vaccine Research Funding Worth $50M

In 2004, GenVec announced an expanded collaboration to include the development of a second-generation vaccine candidate. This program is being funded through a subcontract managed and administered by SAIC-Frederick, Inc. worth up to $50 million.

Malaria Vaccine

In collaboration with the Naval Medical Research Center (NMRC), and with additional research support from the Malaria Vaccine Initiative (NYSE:MVI), GenVec is developing multi-antigen vaccine candidates, produced using GenVec’s proprietary 293-ORF6 cell line, designed to attack both the blood and liver stages of malaria, a complex parasitic disease. The intention is to generate a broad spectrum of immune responses including neutralizing antibodies and cytolytic T cell immunity, characteristic of the most effective vaccines. This approach toward eliciting a broad spectrum immune response and attacking multiple stages of the life cycle has shown promise in pre-clinical animal models.

In January 2007, the NMRC initiated Phase I testing of a vaccine candidate jointly developed with GenVec at its clinical trials center. The first phase of this study is designed to evaluate the safety and immunogenicity of two doses of the vaccine candidate in healthy volunteers.  After safety evaluation and confirmation of the optimal dose, the second (challenge) phase of the study will evaluate the protective effects of the vaccine following exposure to malaria.  The ability to safety challenge human volunteers provides a unique opportunity for assessing the efficacy of candidate vaccines prior to the initiation of field trials.

Foot and Mouth Disease

In collaboration with the U.S. Department of Homeland Security and the U.S. Department of Agriculture (USDA)-Agricultural Research Service (NYSE:ARS), GenVec is developing candidate vaccines and anti-viral agents to prevent the spread of FMD.  FMD has been identified as a key potential threat to the U.S. economy and the country’s food supply, whether infection were to occur as a result of bioterrorism or by accidental exposure to the disease.

In studies with DHS, ARS and GenVec, GenVec’s proprietary adenovector system and cell line was utilized to safely produce, for the first time on the U.S. mainland, an effective FMD vaccine. Preliminary testing by DHS scientists has shown that this vaccine candidate effectively prevented clinical disease (symptoms) in cattle when they were challenged with the FMD virus.  Results from these challenge studies were reported on November 11, 2005, at the 8th National Meeting and 1st International Meeting of Researchers of the Livestock Sciences by Marvin Grubman, Ph.D., USDA-ARS, Plum Island Animal Disease Center, who conceived and developed this vaccine approach. The DHS Targeted Advanced Development group at Plum Island Animal Disease Center, led by Laszlo Zsak, D.V.M., Ph.D., is also collaborating with ARS and GenVec in the development of the vaccine.

In addition, anti-viral candidates are being developed to prevent the spread of FMD from the time an outbreak occurs until the vaccine has generated a sufficient immune response to protect the animal.

Without a marked vaccine that can be safely manufactured in the U.S., options for responding to an FMD outbreak in the U.S. are more limited. The curtailment of meat and meat products for domestic supply and the stoppage of meat exports would have severe economic consequences. For example, in its January 2003 Final Report as required by the Animal Disease Risk Assessment, Prevention and Control Act of 2001, the USDA’s Inter-Agency Working Group notes that the 2001 outbreak of FMD in the United Kingdom resulted in the slaughter of some 4 million animals and a loss to the British economy of between $3.6 and $11.6 billion. The report also notes that U.S. exports of cattle, sheep, hogs, and many of their products varies annually from $6 to $10 billion, that many of these exports would face restrictions during an FMD outbreak, and that if even one area of one state was affected by FMD, trade restrictions would be imposed on the nation as a whole, at least during the initial stage of the outbreak.

Vaccine Grants and Funding

  • GenVec expanded an existing contract with the PATH Malaria Vaccine Initiative (MVI) to support the development of vaccines to fight malaria through MVI and USAID funding. This contract is valued at approximately $2 million over two years.
  • GenVec received a Small Business Innovation and Research (SBIR) grant from the National Institute of Allergy and Infectious Diseases (NIAID) of the National Institutes of Health (NIH) to support the Company’s malaria vaccine program. This grant, valued at approximately $600,000 over two years, will be used to identify new immunogenic antigens for malaria vaccine development.

Experienced Management & Board of Directors

GenVec truly stands apart from other biotechs simply due to its well-rounded and experienced management team. Paul H. Fischer, Ph.D. has served as President and Chief Executive Officer and as a director of Genvec, Inc. since 1996. Prior to joining GenVec, he was Executive Vice President of Research and Development with Oncologix, Inc. (now Antigenics, Inc.), a biotechnology company. Previous experience included Manager, Cancer Research at Pfizer, Inc., a pharmaceutical company. Dr. Fischer received his B.S. in Biology from the University of Denver, his Ph.D. in Pharmacology from the University of California at San Francisco and performed post-doctoral research in Pharmacology at Yale University School of Medicine and was an associate Professor of Human Oncology at the University of Wisconsin.

Now if the CEO’s Pharmacology post-doctral research at one of America’s top unversities, Yale, is not enough to instil confidence in you, take a look at the rest of the company’s celebrated and accomplished individuals at the helm. Full list available here via Reuters.

Financial Analysis

GenVec ended the second quarter of 2009 with $12.6 million in cash and investments. [ source ]

“Based on existing contracts and collaborations, we anticipate revenues for 2009 will be between $15.0 million and $18.0 million. We project our cash burn to be between $8.0 million and $11.0 million for the 12 months ending June 30, 2010,” commented Douglas J. Swirsky, GenVec’s Senior Vice President and Chief Financial Officer. “In spite of the difficult economic times, GenVec continues to make strides in its therapeutic and vaccine programs. We look forward to sharing additional data from our pivotal trial in locally-advanced pancreatic cancer early next year.”

Additionally, GenVec was one of the few companies within the biotech industry to receive the maximum Buy Rating from Reuter’s Analyst Recommendation System.

Major Institutional & Mutual Fund Owners

GenVec ranks among the best of any companies we have ever profiled when it comes to attracting institutional and mutual fund investors. This represents a very bullish forward looking guidance, as these high profile investors usual infuse large cash amounts with each trade. Here is a breakdown from Yahoo Finance of the major players which are heavily invested.

Number of Institutions Holding Shares: 36
% of Shares Held by Institutional & Mutual Fund Owners: 13%

Now if you’ve been aroun the investments niche for quite some time now, you know that whenever 36 institutions are holding a company, this represents a major bullish signal and a company with a lot of future potential. However, if you’re an expert like our Founder, and Lead Investment Analyst, these figures aren’t impressive unless you know who exactly these mutual funds and institutions are. Well, lets take a look:

When you are in the company of Vanguard, Barclays, Bank of America Corp., Spartan and Royce Micro, just to name a few, there is no better feeling than being a part of a stable and profitable investment.

Overall Sentiment

Expect prices to rise back to the $1.50 – $2.00 levels as investors become more aware of the deep pipeline being offered by GenVec. Surrounded by cash infusions through grants, mutual and institutional investors, multi-purpose products with billion dollar market potential, and an already flowing revenue stream – GenVec is one company you shouldn’t pass by. When analyzing the future guidance of GenVec, all you need to do is remind yourself of the story on Dendreon Corporation, and how the expect results on TFNerade’s Phase III during Q1 2010 will affect the price. Treatments for Pancreatic cancer (Fast Track FDA Designation), possible treatments in head and neck cancer, esophageal cancer, and rectal cancer. Add Vaccines for HIV, Malaria, and Foot and Mouth Disease to that list and one thing is clear – The potential for GenVec is truly astronomical.

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Disclosure: Position in GNVC