Saturday, April 25, 2015

Reader's question: What do you think about Actinium Pharmaceuticals ATNM?

I got the following question from Anonymous.  Thank you for the question and spent a few hours researching Actinium Pharmaceuticals ATNM and below are a summary of my thoughts on the company and their planned phase 3 trial in AML.

I think there are much better Biotech investments with similar or even lower market values.  Note that ATNM's current market cap is $104 million.  Here are my concerns:

-  They have no big pharma partnerships.  Always a red flag as we have no quality, third party due diligence done on the technology and/or leadership team.  Also, a small cap biotech would jump on the chance for a partnership so if their lead compound truly has blockbuster potential, as leadership boasts, why haven't they secured a partnership going into phase 3 trials?

-  They recently raised capital but have less than $30 million in cash and plan to launch a Phase 3 study of their lead compound.  Quality phase 3 studies cost in excess of $100 million so they will need to raise more capital (i.e. shareholder dilution).  

-  The phase 2 trial was not randomized (compared to the control arm being used for the phase 3 trial) and only had 27 patients.  THIS IS A HUGE RED FLAG!  They are assuming the results from a 27 patient study and comparing them to prior trials done in the planned control arm for the phase 3 trial. I see these types of assumptions used going into phase 3 trials all of the time and they almost always fail.  Beware!

-  There's a crossover component in the phase 3 trial.  Remember Aveo's failed phase 3 study?  They had a crossover for ethical reasons as well and that didn't work out for them.  Crossovers can muddle results and I don't like them.  

-  I'm also surprised they don't have a relationship with the Leukemia and Lymphoma Society which provides various degrees of funding for research and trials in their lead indication.  both CPXX and ONTX are in Phase 3 trials and have funding grants from this leading non-profit organization.  Why don't they?

If I were to invest in a company focused on AML/MDS, I'd look at CPXX and ONTX.  Cheaper companies, more cash on hand, better partnerships, and further along.  

Thank you again for the question and best of luck!  

Thursday, April 23, 2015

Biotech Investing: Upcoming Clinical Results Trade Catalysts That You Might Not Know About

There are a number of trade catalysts coming up in the next two months that you probably haven't heard about because they are with biotech names with little or no coverage due to their small market capitalizations.  And they have small market caps for a reason....because they are extremely high risk.  But with any high risk investment, there's high reward for the brave at heart.  Here's the list!

Celator (CPXX) - First readout of their Phase 3 lead candidate CPX-351 in secondary Acute Myeloid Leukemia.  This company has no big pharma partnership which usually turns me away but I like it for a few reasons.  1.  The Phase 2 results was a randomized trial which showed statistically significant results.  The Phase 3 trial replicates this smaller trial so I think it has a chance of repeating in the larger population.  2.  The trial goes against the standard of care (7+3).  If approved, it should be the go-to treatment for secondary AML so the market potential is significant.  3.  They are receiving funding for the trial from the Leukemia and Lymphoma Society which gives them credibility as a high profile non-profit isn't going to financially support a trial and/or company without doing significant due diligence.  With a market cap of only $69 million, I like the risk vs. reward opportunity with this one.

Oncothyreon (ONTY) - Phase 1 results from lead compounds will be presented at ASCO in May.  Not too exciting because it's way early but worth watching as any efficient data could move the stock.

GlobeImmune (GBMI) - Phase 2 results in Hepatitis B are expected in the quarter.  The program is partnered with Gilead (the $150 Billion giant) which is a good sign.  They also have other programs including an oncology program partnered with Celgene with a number of trials in Phase 2 and 1 currently enrolling.  All of this for a market cap of only $48 million which seems like a bargain of bargains for the risk vs. reward opportunity.

Onconova (ONTX) - Phase 2 results in MDS should be coming out this quarter. The company also plans to start a Phase 3 trial in MDS later this year but requires funding which definitely worries me a bit.  The company had a prior Phase 3 trial in MDS that failed but a subset of patients showed significant improvement in overall survival and the new trial is directed to this subset but with enough patients to meet regulatory requirements for approval so I think there's a good chance of success down the road for the company.  The company does have a partnership with Baxter for international rights to the compound so that's a vote of confidence.   A market cap of $51 million so another bargain basement deal!

Bind (BIND) - I really love this stock.  Market cap of $146 million, partnerships with Pfizer, AstraZeneca, Roche, and Merck (did they miss anybody), and Phase 2 results in lung and prostate cancer due this quarter.  Also, they expect one of their partners to move a compound into clinical trials around mid-year as a bonus.  Just screams deal, deal, deal!!!

Aeterna Zentaris (AEZS) - Phase 3 preliminary results of their lead compound in endomentrial cancer should be out this quarter.  I'm a bit worried that they will have to perform a reverse split to maintain listing on the Nasdaq (stock currently trades at $.57 which is under the $1 minimum) before the results come out so I'd probably hold off but the risk vs. reward is significant with a market cap of $52 million.  Then again the other stocks in this column seem to be much better deals with less risk.

Immunomedics (IMMU) - Phase 3 lupus results should be out this quarter from their partner UCB.  Lupus is extremely difficult to treat and current treatment options are inadequate thus why this is a very high risk, very high reward stock.  The market cap is close to $400 million so not exactly a bargain but they do have other programs in Phase 3 trials including pancreatic cancer (another tough disease to treat with very high risk, very high reward potential).

Exelixis (EXEL) - Phase 3 results in kidney cancer are due this quarter.  Their compound is going head-to-head with the current standard treatment so if the trial is a success the commercial potential is significant.  The drug has been in two other phase 3 trials in prostate and thyroid cancers and both have demonstrated statical significance in Progression Free Survival which is the primary endpoint in the kidney trial.  I feel like it has a good shot of meeting it's primary goal and they stock will move significant higher....if positive.

I hold all of the stocks mentioned above (some a whole lot more than others) but make sure you do your own research.  Good luck biotech investing and hope everyone has a great weekend!

Monday, April 13, 2015

Biotech Investing: Aeterna Zentaris (AEZS) Update

Aeterna Zentaris (AEZS) issued a press release today that they had a meeting with the FDA on March 6th regarding the path forward on one of their two lead programs, Macrilen.  Macrilen is being studied to be a test for individuals for a condition known as AGHD (adult growth hormone deficiency).  The company performed a phase 3 study a few years back and received a complete response letter from the FDA on November 6th stating that a new trial would have to be run due to the poor design of the prior trial.

Now it looks like AEZS will go for it again and hopefully this time they won't F*** up the design.  There is new leadership in place since the last trial was run so I do have confidence that they won't waste investor money this time.  They stated that the trial will take approximately 18 months and cost between $5-$6 million (which seems pretty low).  They have a meeting with the European Medicines Agency in early May to ensure the FDA approved trial design will also meet their requirements.  I wouldn't expect the trail to start until the end of the year so we are looking at a data readout sometime in 2017 and assuming positive results the product wouldn't be on the marketing until 2019 (best case).

AEZS has a very important interim analysis of their other lead program, zoptarelin doxorubicin, in endometrial cancer in the first half of this year.  Look to this event as the near term catalyst for a major stock swing (good or bad).

I currently hold 27,000 shares of AEZS in hopes for positive interim results in the endometrial cancer study.  The stock is extremely risky but I believe positive results would push the market cap back above $100 million and the stock over $1 per share.  I wrote off the AGHD program of the CRL so this news was a bonus though any data is so far out it's not relevant for current investors considering the stock.

Also, note that the companies stock could be delisted if it doesn't regain compliance by the middle of June which means there's a high risk of a reverse split.  I'm banking on positive interim data comes in before this deadline.  Again, a very high risk, high reward (or loss) investment.

Do your own research and best of luck!