• TapImmune (TPIV) is proceeding on a total of four Phase II clinical trials in the development of a novel vaccine that aggressively attacks ovarian and breast cancers
  • In the earlier Phase I study of TPIV 200 at Mayo Clinic, 100% of patients demonstrated a T-Cell response lasting over 6 months and the drug was found to be safe and effective in treatment of both ovarian and breast cancers  
  • TPIV has collaborative partnerships with AstraZeneca (AZN), Memorial Sloan Kettering Cancer Center, and Mayo Clinic
  • TPIV received a $13.3 million grant from the U.S. Department of Defense which is fully funding a Phase II study of TPIV 200 in 280 patients with triple negative breast cancer being conducted at Mayo Clinic
  • TapImmune is well-funded and has no meaningful long term debt
  • TPIV has several positive forward drivers in coming weeks and months
  • With a Fast Track Designation and Orphan Drug Status under its wing, TapImmune is breaking down barriers at rapid speed and could very well have an up-and-coming commercial pipeline on its hands
  • TapImmune’s current market cap of just $36 million is a bargain given the company’s cash balance + $13.3 million grant from the U.S. government, + four Phase II studies in progress

tapimmune-logo

TapImmune, Inc. (web site) is a clinical-stage immune-oncology company specializing in the development of innovative technologies for the treatment of cancer and metastatic disease. The Company has made considerable clinical and financial progress over the last year, including the completion of positive Phase I clinical trials in breast and ovarian cancer at the Mayo Clinic, which showed that its TPV-100 and TPV-200 vaccines were safe and well tolerated, and demonstrated robust cellular immune responses in over 90% of evaluable patients. Since the results, TPIV has announced multiple Phase 2 clinical studies – and was also granted an Orphan Drug Designation and received fast track designation from the FDA for TPIV 200 in ovarian cancer.

 


Shares outstanding: 8.4 million
Closing Price 2/24/2017: $4.30
Market cap: $36 million
Total Cash (mrq) $9.6 million
Cash/Share (mrq) $1.14
Debt (mrq) 5k
Current Ratio (mrq) 4.40

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Four Phase II Immuno-Oncology Trials Underway with Top Tier Partners

Immuno-Oncology (or cancer immunotherapy) is a ground-breaking approach in the fight against aggressive cancer that uses the body’s own immune system to fight the disease. TapImmune has four clinical trials now in phase II for treatment of ovarian and triple-negative breast cancers.

Investors should note that TapImmune has world-class sponsors and collaborators in these trials, including AstraZeneca (AZN), Memorial Sloan Kettering Cancer Center, Mayo Clinic, and the U.S. Department of Defense. The caliber of these sponsors and partners speaks volumes about the potential for breakthrough research in the cancer immunotherapy space by TapImmune.

TapImmune Pipeline

 


  • Phase II Trial of TPIV 200 for Triple-Negative Breast Cancer with Fast Track designation from the FDA

About 15-20% of all breast cancers are found to be triple-negative (meaning the breast cancer cells tested negative for estrogen receptors, progesterone receptors, and HER2). This form of breast cancer does not respond to hormonal therapy (such as tamoxifen or aromatase inhibitors), or therapies that target HER2 receptors, such as Herceptin (chemical name: trastuzumab). Triple-negative breast cancer tends to be more aggressive with higher mortality rates than other breast cancers.

The open-label, 80 patient clinical trial by TapImmune is designed to evaluate dosing regimens, adjuvants, efficacy, and immune responses in women with triple-negative breast cancer. Key data from the trial is expected to be included in a future New Drug Application submission to the FDA for marketing clearance.

TapImmune announced a key clinical milestone earlier this month in passing a planned safety review that was performed when enrollment had reached 25 percent benchmark (20/80 patients).

In the prior Phase I study of TPIV 200 at Mayo Clinic, 100% of patients demonstrated a T-Cell response lasting over 6 months and the drug was found to be safe and effective in treatment of both ovarian and breast cancers.  

This study has Fast Track designation from the FDA which provides an expedited review to facilitate development of the drug.  This designation is granted in studies that treat serious or life-threatening conditions and fill an unmet medical need.


  • Phase II Mayo Clinic Trial of TPIV 200 in Triple-Negative Breast Cancer Fully Funded by U.S. Department of Defense

This is a separate Phase II study of TPIV 200 for the treatment of triple-negative breast cancer, conducted by the Mayo Clinic and sponsored by the U.S. Department of Defense (DOD). The 280 patient study is being led by Dr. Keith Knutson of the Mayo Clinic in Jacksonville, Florida. Dr. Knutson is the inventor of the technology and an advisor to TapImmune.

$13.3 million worth of non-dilutive capital for trial.

While TapImmune is supplying doses of TPIV 200 for the trial, the remaining costs associated with conducting this study will be funded by a $13.3 million grant made by the DOD. This grant is a direct result of the very positive findings of the Phase I trial of TPIV 200 and validates TamImmune’s technology.

This Phase II launch is expected to begin shortly, and the announcement should be a positive driver for TPIV shares.


  • Phase II Trial at Memorial Sloan Kettering of TPIV 200 in Platinum-Resistant Ovarian Cancer in Collaboration with AstraZeneca on FDA Fast Track

Approximately 22,000 women were diagnosed with ovarian cancer in 2016 and an estimated 14,180 will die from the disease according to the American Cancer Society. Because ovarian cancer tends to be detected at a later stage of the disease, the five-year survival rate for ovarian cancer is 45%. Current treatment options are surgery, radiation and chemotherapy.

There is currently no FDA approved cancer vaccine available for ovarian cancer.

This is a Phase II study of TPIV 200 in ovarian cancer patients who are not responsive to platinum, (a commonly used chemotherapy for ovarian cancer), sponsored by Memorial Sloan Kettering Cancer Center in collaboration with AstraZeneca. The open-label study is designed to evaluate a combination therapy which includes TapImmune’s TPIV 200 T-cell vaccine and AstraZeneca’s checkpoint inhibitor, durvalumab.

Because these patients are unresponsive to platinum-based therapy and have failed chemotherapy, there are unfortunately, no real options left at the present time. If the combination therapy proves effective, it would address a critical unmet need.

TapImmune received the FDA’s Fast Track designation to develop TPIV 200 as a maintenance therapy in platinum-resistant ovarian cancer.

On the Fast Track designation, Dr. Glynn Wilson, Chairman and CEO of TapImmune stated:

“We believe that the FDA’s decision to grant Fast Track designation to TPIV 200 for the treatment ovarian cancer significantly expedites our clinical development program. We believe TPIV 200 has the potential to improve outcomes for ovarian cancer patients for whom current treatment modalities offer a relative short time to recurrence and a poor overall prognosis.”


  • Phase II Trial in Platinum-Sensitive Ovarian Cancer 

TapImmune’s fourth Phase II trial utilizes TPIV 200 in ovarian cancer that is platinum-sensitive, and is being funded by the company. This study is an 80-patient double-blind placebo controlled study designed to examine the potential benefits of using the company’s lead product candidate TPIV 200 in combination with standard of care chemotherapy. The study has Fast Track designation from the FDA and TPIV 200 has orphan drug status for ovarian cancer.

In the January press release announcing the launch of this Phase II trial, Dr. John Bonfiglio, President and COO of TapImmune explained:

“The opening of this study represents the fulfillment of a major 2016 milestone. We now have three clinical studies utilizing TPIV 200 with approvals to enroll patients. A fourth study in triple-negative breast cancer sponsored by the Mayo clinic with a $13.3M grant from the Department of Defense is scheduled to begin shortly. We believe the depth of these clinical programs will give us an excellent understanding of how this exciting T-cell therapy can potentially be used in the treatment of both triple-negative breast and ovarian cancers.”


See video from last week on TPIV:

“Vaccine could prevent breast, ovarian, lung cancer”

 


 


TPIV 100, TPIV 110 Also in Pipeline

The Phase 1 trial of TPIV 100 in 22 patients demonstrated the drug was safe and well-tolerated. The trial also showed that 19 out of 20 patients showed robust T-cell responses to two antigens while 15 out of 20 patients responded to all four antigens. The immune responses in these patients were durable for months after their final treatment.

 

The Phase 1b/2a program for TPIV 110 is designed to examine this novel T-cell vaccine both as a stand-alone therapy as well as a combination therapy with other standard of care therapies and newer experimental therapies. TapImmune plans to initiate TPIV 110 trials in breast cancer in 2017. The strategy is to obtain positive Phase 2 data and then look for a partnership or collaboration to fund the rest of the commercialization for TPIV 110.

TapImmune TPIV 110

Existing treatments such as Herceptin and Parjeta target the Her2/neu receptor and can work well in controlling the disease. However, the patient’s tumor must have the Her2/neu receptor (~30%) and in addition have the receptor in high enough density to make the antibody effective (~18% of the 30%). This leaves a void where patients who have the receptor but are not eligible for antibody treatment are relegated to chemotherapy, radiation and surgery.

TapImmune’s investigational product TPIV 110 also targets Her2/neu by stimulating the body’s own immune system to attack cancer cells with the Her2/neu target.

TapImmune plans to file an IND (Investigational new Drug) application with the FDA this year for TPIV 110.

TapImmune TPIV 110 development plan

 


Positive Upcoming Drivers

TapImmune has multiple positive drivers going forward, including:

  • Participation in multiple oncology and biotech events in March and April
  • Launch of the Phase II trial of TPIV 200 at Mayo Clinic, fully funded by a U.S. Government grant of $13.3 million
  • Clinical data coming out of multiple Phase II trials of TPIV 200
  • IND announcement on TPIV 110 expected during Q1 this year
  • Initiation of the Phase 1b/2a studies using TPIV 110

Preclinical, A Next Generation T-Cell Vaccine: PolyStart

PolyStart is a unique antigen expression system that ‘elevates’ the expression, and consequently the processing and presentation of desired antigenic peptide(s) for the stimulation of T-killer and/or T-helper cells to recognize and kill target cells. This novel vaccine technology platform creates a four-fold or greater increase in presentation of any antigen, giving it unlimited application in oncology and infectious diseases. This allows TapImmune to not only leverage the technology for its own vaccine candidates, but also generates additional value for the platform via licensing to third parties.

In February of this year, TapImmune expanded its patent on the PolyStart Platform for use in next-generation T-cell vaccines. Glynn Wilson, Chairman and CEO of TapImmune stated that:

“This patent significantly enhances our IP position for our PolyStart platform, further positioning TapImmune as a leader in the development of next-generation vaccines for cancer. The allowed claims cover enhanced expression of class I and class II HER2 antigens, enabling us to create future vaccines that should elicit robust and long-lasting T-cell immune responses against HER2/neu+ cancers with enhanced potency. While we focus on advancing our multiple Phase 2 clinical programs in ovarian and breast cancer, we expect to continue developing PolyStart to be used synergistically with our peptide-based vaccines as well as potentially monetized through licensing or partnership with other vaccine developers in oncology and infectious disease applications.”

PolyStart creates a 4 (FOUR) fold or more increase in antigen presentation.  The increased cell surface presentation increases activated Helper and/or long-lived Killer T-cell populations that then effectively seek out and work to destroy a patient’s cancer cells.

PolyStart enhances immune responses in patients not only for cancer drugs but for infectious disease and other products. TapImmune believes PolyStart has unlimited application in oncology and infectious diseases not only in the Company’s own platforms, but that it can be applied to many others via licensing.

The data below is from an earlier study showing the increased presentation and subsequent KILLING of the targeted cell population.

 

 

tapimmune-polystart

Dr. Glynn Wilson, Chairman & CEO of TapImmune explains:

“We are very excited about this technology, as we believe it marks a next generation of T-cell vaccines. PolyStart has unlimited application in oncology and infectious diseases not only within TapImmune’s own platforms but it can be applied to many others via licensing. As we move forward in Phase 2 trials for TPIV 200, which targets folate receptor alpha, and TPIV 100/110 our Her2/neu product, we fully expect to develop PolyStart as both a stand-alone therapy and as a ‘boost strategy’ to be used synergistically with our peptide-based vaccines for breast and ovarian cancer.” 

Along with novel peptides and the PolyStart expression system, the TPIV vaccine platform can address multiple infectious diseases as well as pandemic and biodefense threats. TapImmune’s current Smallpox vaccine study at Mayo Clinic has already shown significant benefits over the current vaccine stockpile. It is naturally processed and peptide based, making it safer, longer lasting, cheaper and as effective (in animal studies) as the current product stockpile. The last DHHS contract for a smallpox vaccine stockpile was worth up to $2.8 billion.


Conclusion

TapImmune (TPIV) is at the forefront of the immuno-oncology space and has world-class collaborative partners in AstraZeneca (AZN), Memorial Sloan Kettering Cancer Center, and Mayo Clinic. The fact that the U.S. government has fully funded the Phase II trial of TPIV 200 for the treatment of triple-negative breast cancer validates the strong data obtained from the preceding Phase I trial. Additionally, the grant provides $13.3 million of non-dilutive funding for TapImmune’s research.

Given that TapImmune has a healthy cash balance of $9.6 million (mrq) and is receiving some $13.3 million in non-dilutive grants from the U.S. government, the market cap of $36 million seems extremely low- especially given the company has four different Phase II trials on progress for what could be a game-changing vaccine in the fight against cancer.

 


See also: TapImmune January 2017 Investor Presentation

Interview With TapImmune, Inc. (NASDAQ: TPIV) President And COO, Dr. John Bonfiglio (SmarterAnalyst- January, 2017)

TapImmune Developing Vaccines for Breast and Ovarian Cancer (Biosience Technology- December, 2016)

One Big Question: How close are we to a cancer vaccine? (NewAtlas- December, 2016)

Vaccine could prevent breast, ovarian, lung cancer (Fox News- February, 2017)


tapimmune -gary pic

 

 

Disclaimer/Disclosure/Terms of Use

 

 

 

Canadian marijuana stocks have been on fire recently, and one of the most highly anticipated stocks to begin trading in the space is Emblem Corp.

  • Pre-trading interest from investors in Emblem Corp. has been extremely high with shares oversubscribed
  • Emblem shares begin trading this week on the TSX Venture Exchange (TSX-V: EMC), with an OTC listing in the U.S. pending
  • U.S.-based investors can buy shares of Emblem on the TSX Venture Exchange with major online brokers. Buying shares prior to the initiation of trading on the U.S. OTC market in the coming weeks could prove to be extremely profitable, as a large increase in demand for a float of just 6 million shares will be felt when trading begins on the OTC market in the U.S.
  • The Emblem Pharmaceutical division is led by John H. Stewart, who launched 11 new products, including OxyContin while he was President and CEO of Purdue Pharma, one of the largest privately held pharmaceutical companies in the world

 


 

Emblem Corp. logoEmblem Corp. (TSX-V: EMC) (web site) is a licensed producer of Medical Marijuana in Canada, led by a team of former HealthCare & Pharma Executives who have built & run multi-billion dollar companies and have invested heavily into the company themselves.

 

 

Shares issued and outstanding: 65 million
Approximate float: 6 million
Estimated opening share price range: $1.15-$1.50

 


Booming Medical Marijuana Market

While many sources confirm the hyper-growth of Canada’s medical marijuana industry, the most telling is from the government’s own Health Canada site that reports over 220% growth in registered clients in the Medical Marijuana Program between September of last year to September of 2016.

Data in table below is from Health Canada Market Data: Marijuana for Medical Purposes

Quarter Ending September 30, 2015 Quarter Ending September 30, 2016
Dried Marijuana
Amount sold to clients (kilograms) 1,873 4,733
Amount produced (kilograms) 2,142 5,734
Amount in licensed producers’ inventories at end of quarter (kilograms) 7.312 13,246
Cannabis Oil
Amount sold to clients (kilograms) N/A 2,420
Amount produced (kilograms) 9 3,116
Amount in licensed producers’ inventories at end of quarter (kilograms) 7 3,330
Total number of clients registered at end of quarter 30,537 98,460

Health Canada expects clients enrolled in the Medical Marijuana program to grow at a CAGR of 30% over the next 8 years.


Deloitte Sees Potential $22 Billion Recreational Market

Going beyond medical marijuana, the Canadian government has stated it plans to legalize recreational marijuana by the spring of next year.

Just how significant is this?

In Recreational Marijuana Insights and Opportunities, Deloitte estimates the Canadian recreational marijuana market has an absolute base retail value of $5 billion/year with potential upside to over $22 billion/year when license fees, paraphernalia, tourism revenue, etc. are included.

emblem-cannabis-market-growth-deloitte

 

 


Emblem Corp: The Perfect Management Team and Business Model to Build Shareholder Value 

There are two factors that strongly differentiate Emblem from a multitude of other marijuana stocks available to investors; a management team that’s second to none in the space, and a very compelling business model.

Emblem raised approximately $38 million between the company’s founders, early investors, and investors in brokered and non-brokered private placements. The October private placement at $1.15/share sold out in days and was oversubscribed.

Management

A major reason why Emblem’s October capital raise sold out in a matter of days is summed up in one word: Management.

When you look at the senior management team Emblem has assembled, it’s easy to understand the attraction investors have. No other cannabis stock has a pharmaceutical division headed by someone who launched a drug as big as OxyContin, the most popular opioid of the 21st century. Emblem has that in John H. Stewart, who was President and CEO of Purdue Pharma in 1996 when OxyContin was launched.

 

See: Ex-big pharma executive behind OxyContin sells medical marijuana

 

emblem-cannabis-corp-founders

 

The founders above own a significant percent of the company and understand the importance of share structure. They also exchanged their original shares for Management Performance Escrow shares with a voluntary, 18 month escrow period. Founders, management, and employees have invested ~ $6 million in Emblem Cannabis Corp. to date.


Business Model

Emblem operates three distinct divisions which can create value for each other: Emblem Cannabis (the production division), Emblem Pharmaceutical, and GrowWise Health (marijuana education for patients and physicians).

emblem-cannabis-3-prong-model

I’ll discuss each of the three divisions and the competitive advantages Emblem has in each of them, below.


Production Division: Emblem Cannabis

emblem-cannabis-production

 

Emblem received a marijuana cultivation license from the Canadian government in August 2015 with initial sales beginning in July of this year.

The Company has invested $11 million to date to build a state of the art facility about 60 miles southwest of Toronto, (in Paris, Ontario), which consists of two buildings situated on 4.1 acres of land and includes 14,500 sq. ft. of total cultivation space.

Each grow room is outfitted with dedicated CO2, humidification, & custom HVAC units to provide ideal temperature, humidity, and climate control. With two high quality grow rooms yielding 100% medical grade product, Emblem is testing different methodologies for the Company’s phase 2 expansion to create the ideal balance of quality and quantity.

 

  • Phase 2 expansion is fully funded, and expected to be complete in February, 2017 for a running capacity of 2,100 KG
  • Phase 3 expansion is expected to be completed by Q3 2017 for an additional 9,500 KG of production capacity for a total 11,600KG potential running capacity from all phases
  • Phase 4 expansion (completion expected in 2018) is planned to meet additional demand from the recreational market. Phase 1-4 would have potential capacity of 21,100KG and generate $179.3 million in sales according to the company
  • Most significant for investors is that phases 3 and 4 bring production levels into a range that rivals OrganiGram Holdings (market cap $284 million), Aphria Inc. (market cap $553 million), Mettrum Health (market cap $345 million) and Canopy Growth (market cap $1.2 billion).

-click on graphic for high resolution enlargement

emblem-cannabis-production-capacity-1

 

 

Keep in mind Emblem has just 37 million shares outstanding, so even at $5/share, the market cap would still be far below its peer group.

 


Medical grade marijuana is preferred, and sells at premium prices. Emblem has a wide variety of strains and categories for sale now, with new product launches pending.

 

-click on graphic for high resolution enlargement

emblem-cannabis-strains


emblem-cannabis-oils-picEmblem has invested $1 million into oil production, and sees demand for cannabis oils, especially high CBD oil, rapidly increasing. This higher cost product, (with estimated 90% operating margin), increases the shelf life of medical cannabis and is attractive to consumers who prefer not to inhale smoke and are looking for an easily controlled dosage.

Emblem estimates potential revenue from a single growth room dedicated to high THC and CBD strains that are ideal for extraction to exceed $23 million @ $135/bottle.

 

For a tour of Emblem’s new facilities, see:  “An Inside Look At One Of Canada’s New Licensed Cannabis Producers

 


Emblem Pharmaceutical Division

emblem-pharma-division-logo

 

The second of 3 divisions at Emblem is the Pharmaceutical Division, headed by John H. Stewart.

Stewart, (who has invested about $1 million in Emblem), launched 11 new products, including Biphentin, MS Contin, Zytram and the $2B/year blockbuster, OxyContin.

Beginning in Q2 of next year, Emblem will launch cannabinoid-based medications in strict pharmaceutical dosages in liquid form, gel caps, oral sprays, and inhalers.

 

 

 

Pharmaceutical Division Rational & Opportunities

  • Cannabinoids Have Real Therapeutic Value with Cesamet (THC – Lilly), Marinol (THC – AbbVie) and Sativex (THC & CBD – GW Pharma) approved as prescription drugs by Health Canada
  • Pharma Companies actively developing NCE’s that target the Endocannabinoid System
  • Over 1,000 medical / scientific papers have been published pertaining to the use of cannabinoids
  • Evidence of efficacy in patients with chronic pain, neuropathic pain, muscle spasms, nausea, palliative care and PTSD
  • Canadian Pain Society recommends cannabinoids as third-line treatment for neuropathic pain

Pharmaceutical Division Advanced Dosage Forms

  • Overcome the significant limitations of smoking or vaporization of dried flower
  • Provide for dose-to-dose and lot-to-lot consistency, quality and effects
  • Change the dosage regimen from grams of dried flower per day to mg per dose / mg per day
  • Allow for dosage forms to be targeted to specific purposes- Creating sustained release, and rapid release for pain and sleep respectively
  • Opportunity for dosage form related intellectual property
  • Will greatly increase both patient and prescriber acceptance of cannabinoid therapy

 

While the majority of patients currently taking medical marijuana are seeking relief from pain, anxiety, and sleep disorders, there is exciting evidence that marijuana may prevent cancers from spreading (see Scientists Find Cannabis Compound Stops Metastasis In Aggressive Cancers).

And while scientific research is still needed to confirm some of the health benefits of medical marijuana, there is an abundance of anecdotal and early research results that cannabis has great therapeutic value in as many as 50 different conditions (see 50 Unexpected Benefits of Cannabis).

While many publicly-traded cannabis companies are little more than “growers of a commodity” plant, Emblem fully recognizes the potential for medical marijuana going forward, and has the expertise to capitalize on this market opportunity with an early mover advantage.

John H. Stewart explained:

“Cannabinoids and other components of marijuana have real therapeutic value. Emblem is identifying the marijuana strains with the greatest evidence of benefit in various conditions, cultivating those strains at medical grade and developing advanced dosage forms to provide patients with accurate, consistent, high quality and convenient to use cannabis formulations.”

and in a great interview that I strongly urge investors to read, The Next Big Cannabis IPO“, John Stewart notes that:

“Our high quality cultivation with our pharmaceutical development brings not only the right cannabinoid strain and content to the formulation, but also makes available the formulations best suited for particular therapeutic outcomes.”

Again, having a separate pharmaceutical division headed up by a former President and CEO from big pharma is a huge difference in Emblem vs. marijuana grow companies from an investment perspective.

Consider potential joint ventures and collaborations with global pharmaceutical giants, and you begin to see the potential Emblem offers investors.


Emblem Marijuana Education Division

 emblem-grow-wise-logo

The third division of Emblem Corp. is GrowWise Health, (web site) and is focused on marijuana education to provide a solution for both physicians and patients in the medical marijuana industry. It is a joint venture with White Cedar Pharmacy, one of the largest dispensing pharmacies on Ontario.

While dispensaries sell marijuana from unknown sources directly on site, cannabis support clinics like GrowWise offer support, education, and help on using medical marijuana and choosing a licensed producer.

GrowWise Education Centers operate in medical clinics and receives referrals when patients are prescribed marijuana. Here, nurses counsel patients on safety and strain selection, and assist patients in registering and placing orders with a licensed producer.

GrowWise has partnered with several preferred licenced providers, and is also expected to be another reliable, consistent source of patients for Emblem.

 

GrowWise operates two platforms:

  • Education centres within incumbent medical clinics
    Currently operating in 4 chronic pain clinics & one rehabilitation center, with three additional education centers to be added by end of this year.
  • Stand alone medical cannabis clinics
    First referral-based cannabis clinic opened in November, 2015, have received referrals from nearly 100 different doctors to date, and is opening two more clinics in 2016.

The GrowWise Health/Education Division will be a source of additional, independent revenue flow from new patient acquisition/referrals at other licensed producers, while also feeding into Emblem’s pharmaceutical and marijuana production divisions.

The GrowWise Health division is a strategically astute business model that allows Emblem to draw additional revenue from several preferred provider competitors while driving internal sales at the same time.


Positive Cash Flow Projected by Q4 2017

Due to the quality and strengths of Emblem’s products, management, and business model, Emblem is conservatively projecting to be cash flow positive by Q4 2017. 

 


Potential Answer to Skyrocketing Opioid Abuse

The revenue projections above do not include the potential revenue from collaboration or JV with government or big pharma in curbing opioid abuse. As we know, high levels of opioid abuse is a growing problem in the U.S. and Canada. There may be a light shining in the darkness of the present opioid abuse tunnel however. The American Journal of Public Health recently published a study that revealed opioid use was reduced in states with legalized medical marijuana (see Study: Opioid Use Decreases in States that Legalize Medical Marijuana). Additionally, Massachusetts has reported success in reducing opioid abuse by utilizing medical marijuana, (see Opioid Addiction Being Treated With Medical Marijuana in Massachusetts)

There is no cannabis stock with a management team as proficient in opioid analgesics as Emblem, and I think this is something both retail and institutional investors will come to realize in the near term.


Expect Surge of Interest & Volume When Shares Begin Trading on U.S. OTC Market

As mentioned earlier, U.S.-based investors can easily buy shares of Emblem Corp. via major online brokers. In most cases the ticker will be EMC.V or EMC:CA. Buying shares early, and prior to the initiation of trading on the U.S. OTC market in the coming weeks could prove to be extremely profitable. There will be an increase in demand for a float of just 6 million shares when trading begins in the U.S.

I’ll be a buyer of EMC.V shares tomorrow and look forward to updating subscribers on the company in the weeks and months ahead!


Best wishes for profitable investing,
Blue Line Protection - gary

 


See also: Emblem Corp. Investor Presentation December, 2016

 An Inside Look At One Of Canada’s New Licensed Cannabis Producers 

Sitewide Terms of Use/Disclosures/Disclaimer

 

tapimmune-nasdaqTapImmune Inc. (web site) (Ticker: TPIV), a clinical-stage immuno-oncology company specializing in the development of innovative peptide and gene-based immunotherapeutics and vaccines for the treatment of cancer and metastatic disease, announced this morning that the company has received approval for quotation on the Nasdaq Market.

Trading of TPIV on Nasdaq will begin Tuesday, November 8th. 

 

Glynn Wilson, Ph.D, Chairman and CEO, TapImmune stated:

“Our listing on The Nasdaq Capital Market is a major corporate milestone for our Company and a testament to the tremendous progress we have made over the past few years.  Trading on the Nasdaq market will expand our visibility and provide us access to a broader investor base, enhance stock liquidity and attract institutional investors. This is not only designed to enhance the value of our company but to provide us access to resources to advance our Phase II clinical programs including our Folate Receptor Alpha program (TPIV 200) for breast and ovarian cancer and our HER2/neu peptide antigen program (TPIV 110) for HER2neu breast cancer”.


TapImmune has four different phase II clinical trials underway, as well as collaborations and partnerships with AstraZeneca, Memorial Sloan Kettering Cancer Center, and Mayo Clinic.

 

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TapImmune also announced a Commercialization Pathway For Its HER2neu Vaccine earlier this week.


Shares outstanding: 8.3 million
Closing Price 11/2/16: $4.95
Market cap: $41.5 million


We initially covered TapImmune in this September 19th article, and shares rose to $7.15 on higher than average volumes for a gain of 29% in the week following our report. More recently, shares have pulled back with the market in general and biotech/pharma stocks in particular.


With the upcoming Nasdaq listing creating a much larger pool of retail and institutional investors, this could be the perfect time to re-enter TPIV or add to an existing position. 


TapImmune has multiple near term forward drivers coming up in addition to Nasdaq uplisting, including:

  • Phase II Mayo Clinic-U.S. DOD Trial of TPIV 200 in Triple Negative Breast Cancer

TapImmune anticipates that this Phase 2 study of TPIV 200 in the treatment of triple negative breast cancer, conducted by the Mayo Clinic and sponsored by the U.S. Department of Defense (DOD), will begin to enroll patients in the fourth quarter of this year. The anticipated 280 patient study will be led by Dr. Keith Knutson of the Mayo Clinic in Jacksonville, Florida. Dr. Knutson is the inventor of the technology and an advisor to TapImmune.

While TapImmune is supplying doses of TPIV 200 for the trial, the remaining costs associated with conducting this study will be funded by a $13.3 million grant made by the DOD to the Mayo Clinic.


  • Phase II TPIV 200 Trial in Platinum-Sensitive Ovarian Cancer (Fast Tracked by FDA)

TapImmune expects to have at least one clinical site open in a Phase II trial of TPIV 200 in 80 ovarian cancer patients who are responsive to platinum in the near future. TPIVD received the FDA’s Fast Track designation to develop TPIV 200 as a maintenance therapy in combination with platinum, in platinum responsive ovarian cancer. This multi-center, double-blind efficacy study is sponsored and conducted by TapImmune.Dr. Glynn Wilson, Chairman and CEO of TapImmune states:

“We believe that the FDA’s decision to grant Fast Track designation to TPIV 200 for the treatment ovarian cancer significantly expedites our clinical development program. We look forward to starting Phase II trials in the near future to address this highly aggressive cancer. We believe TPIV 200 has the potential to improve outcomes for ovarian cancer patients for whom current treatment modalities offer a relative short time to recurrence and a poor overall prognosis.”


  • Open IND (Investigational New Drug) with FDA for TPIV 110 in Q4 2016

TapImmune has reformulated a second cancer vaccine product, TPIV 110, following very strong safety and immune responses from a Phase 1 Mayo Clinic study.TPIV 110 targets Her2/neu, which makes it applicable to breast, ovarian and colorectal cancer.  The reformulated product adds a fifth antigen which should produce an even more robust immune response activating both CD4+ and CD8+ T-cells.

TapImmune has already requested a pre-Investigational New Drug (IND) meeting with the FDA and submitted questions to the FDA related to opening the IND.

 


  • Preclinical Pipeline Expands TapImmune’s Breast & Ovarian Cancer Killer Therapies

 

tapimmune-preclinical-pipeline

 

  • Also Preclinical, A Next Generation T-Cell Vaccine: PolyStart

In February of this year, TapImmune received notice of allowance on a patent for a Next Generation T-Cell Vaccine called “PolyStart.”

This unique vaccine platform antigen expression system creates a 4 (FOUR) fold or more increase in antigen presentation.  The increased cell surface presentation increases activated Helper and/or long-lived Killer T-cell populations that then effectively seek out and work to destroy a patient’s cancer cells.

The below data from a current study showing the increased presentation and subsequent KILLING of the targeted cell population.

 

tapimmune-polystart

Dr. Glynn Wilson, Chairman & CEO of TapImmune explains:

“We are very excited about this technology, as we believe it marks a next generation of T-cell vaccines. PolyStart has unlimited application in oncology and infectious diseases not only within TapImmune’s own platforms but it can be applied to many others via licensing. As we move forward into Phase 2 trials for TPIV 200, which targets folate receptor alpha, and TPIV 100/110 our Her2/neu product, we fully expect to develop PolyStart as both a stand-alone therapy and as a ‘boost strategy’ to be used synergistically with our peptide-based vaccines for breast and ovarian cancer.” 

I believe PolyStart is the icing on the cake of this soon-to-be-discovered, Nasdaq listed, biotech standout.


Conclusion

TapImmune (TPIV) is a biotech stock that should gain solid traction with the pending Nasdaq uplisting. The company has 4 different clinical trials in Phase II for unmet needs in breast and ovarian cancers. Collaborations and partnerships with AstraZeneca, Memorial Sloan Kettering Cancer Center, and Mayo Clinic demonstrate the potential these world class organizations see in TapImmune and in the TPIV 100 & TPIV 200 clinical trials going forward.

The company has multiple positive drivers to increase momentum and share prices following the uplisting as well.


See also: October 2016 Investor Presentation


tapimmune -gary pic

 

 

Disclaimer/Disclosure/Terms of Use

Oasmia Pharmaceutical logoOasmia Pharmaceutical (Nasdaq: OASM) has multiple key drivers in place to generate serious traction with retail and institutional investors in the near term.
The company recently raised $10 million in a U.S. IPO, has begun generating revenue, and has several late stage drugs in the pipeline. 

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Oasmia Pharmaceutical develops new generations of drugs in the field of human and veterinary oncology. The Company’s product development focuses on creating and manufacturing novel nanoparticle formulations and drug-delivery systems based on well-established cytostatics (cancer drugs which stop cell growth and division) which, in comparison with current alternatives, show improved properties, reduced side-effects, and expanded applications.

OASM shares began trading in an October, 2015 U.S. IPO at $4.06/share following a $9.5 million capital raise with Rodman & Renshaw and Joseph Gunnar & Co. lead managers.

Stock Symbol: OASM (NASDAQ)
Incorporation: Sweden
Closing Price: $2.98 (3/04/16)
52 Week Range: $2.88 – $4.49
Shares Outstanding (ADR): 34.9 Million
Market Cap: $104 Million
Float: 16.6 Million free trading shares


XR-17 Patented Technology the Key

OASM has breakthrough and patented (patent protection to 2028) technology that the company is now bringing to market.

This patented technology, called XR-17, is introduced in the video below.

OASM’s XR-17 technology:

•Improves solubility and facilitates administration of several large-market chemotherapy drugs
•Improves pharmacological profile and bioavailability of drugs
•Allows for dual encapsulation of water-soluble and water-insoluble APIs in one nanoparticle


 

Oasmia Pharmaceutical has three drug candidates that have large market potential in seven major markets (US, Germany, Italy, France, Spain, UK and Japan) as well as a number of emerging markets.

Oasmia Pharmaceutical - pipeline

Paclical is one of Oasmia’s biggest drug candidates with phase III trials already successfully completed.
In January, Oasmia Pharmaceutical announced that Paclical had been submitted for marketing authorization to the European Medicines Agency (EMA). Oasmia anticipates Overall Survival Data for this product, alternatively branded Apealea by the Company for use in Europe, during the second quarter of 2016 that it will add to the existing submission to EMA. The data resulting from this study will also be used as the basis for the Company’s US submission to FDA. Discussions of label extension are ongoing and as a part of that, a dose-finding study of weekly administration in metastatic breast cancer patients has been completed and the results are currently under evaluation.
Paclical has been fully approved in Russia and OASM is has begun generating revenue with the drug.

 OASM’s Paclical formulation contains a lower ratio of carrier vs Active Pharmaceutical Ingredient (API) which:

  • Enables higher doses
  • Shortens infusion times
  • No need for pre-medication (huge advantage over many chemo agents)
  • Reduces toxicity
  • Lowers production cost
Product Paclical Taxol Abraxane Cynviloq
Company Oasmia

NASDAQ:OASM)

Generic Celgene Corporation (NASDAQ:CELG) Sorrento Therapeutics (NASDAQ:SRNE)
Infusion solution Micellar solution Emulsion Colloidal suspension Micellar solution
Particle size 25 nm 10-22 nm 130 nm ~25 nm
Excipient XR-17 Cremophor EL Human albumin Poly-lactide and polyethylene glycol diblock copolymer
Dose 260 mg/m2 175 mg/m2 260 mg/m2 260 mg/m2
Ratio 1.3 : 1.0 88.0 : 1.0 9.0 : 1.0 5.0 : 1.0
Infusion time 1 hour 3-72 hours 1 hour 30 min
Hypersensitivity No Yes Yes No

The market for a vastly improved formulation of the common drugs Taxol and Abraxane is huge. Together, Taxol and Abraxane generate in excess of $1.7 Billion in annual sales. Keep in mind the market capitalization of OASM is a mere $104 million. Capturing even a small fraction of the Taxol/Abraxane market will drive the market cap of OASM much, much higher. 


 Market Potential not Priced in

OASM has had very positive news in recent weeks that I believe the market has not priced in, especially given the market potential of the late stage development pipeline the company has.

 

Q1 –2016 Filing for final sales approval for Apealea/Paclical to EMA
H1 –2016 Launch of Apealea/Paclical in Middle East & Africa with commercial partner
H1 –2016 Announcement of partner relationship for sales of Apealea/Paclical (China / Europe / US)
H1 –2016 Expecting OS data for Apealea/Paclical
H2 –2016 Submission for market approval of Apealea/Paclical to the FDA
H2 –2016 Expecting market approval of Apealea/Paclical in EU
H2 –2016 Expecting market approval of Doxophos® in Russia

And this is just the beginning. OASM’s patented XR-17 technology can be applied to other extremely successful, large market drugs to improve solubility, facilitate administration, and improve their pharmacological profile and bioavailability.

Oasmia Pharmaceutical - target drugs

This opens up enormous partnering opportunities for OASM, and could be why nearly 800,000 shares were snapped up by institutions in the most recent data. 


The OASM value proposition at current market capitalization of just $104 million is:

  • A very late stage development pipeline of patented drugs
  • Just beginning to generate revenue
  • Enormous market ($1.7 billion by less effective competitors) for just the first drug to launch, Paclical
  • Recent capital raise of $9.5 million = no need for near term dilution as multi-drug commercialization progresses
  • Multiple positive catalysts for the remainder of 2016
  • Increasing investor awareness (and likely analyst coverage) as positive catalysts play out

 

For further due diligence read: Oasmia Pharmaceuticals – Advancing Nanotechnology Based Chemotherapies.

 


 

Gary Anderson sig.

Please read disclaimer
Disclosure: Receipt of $20,000 from Star Media, LLC

While the stock market is getting off to a rocky start in 2016, 22nd Century Group (XXII) has all the ingredients in place to make a major move this year…a move which we believe will begin soon based on reasons discussed below.

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Share Structure

Shares outstanding: 70.6 million
Recent price: $1.40
Market cap: $ 98.8 million
Insider ownership: 40%
Float: 43 million

Institutional ownership: 5%


22nd Century Group - logoOverview

22nd Century Group (XXII) is a plant biotechnology company focused on tobacco harm reduction and smoking cessation products produced from modifying the nicotine content in tobacco plants through genetic engineering. 22nd Century Group owns or exclusively controls more than 200 issued patents and over 50 pending patent applications worldwide.


FDA Submission News

Yesterday, 22nd Century Group announced they filed a “Modified Risk Tobacco Product” application with the FDA for the world’s lowest nicotine cigarettes. So why is this a big deal? Because big tobacco has been given notice by the U.S. government that they can no longer use words like “light” or “ultra-light” in their advertising.

Specifically:

“A manufacturer who seeks to claim that a product poses fewer risks than other tobacco products may submit a modified risk tobacco product (MRTP) application to the FDA with scientific evidence to support that claim. To date, the FDA has not issued any orders permitting the introduction of modified risk tobacco products into interstate commerce.”

And the U.S. government is actively enforcing this regulation. Last year RJ Reynolds, among others, received warnings on this issue- see: “FDA warns 3 tobacco product makers over labeling.”

We believe XXII is the only cigarette company with the patented product capable of satisfying the FDA’s guidelines for a modified risk claim.

President and Chief Executive Officer of 22nd Century Group, Henry Sicignano stated:

“The scientific testing conducted in support of our submission to the FDA shows conclusively that BRAND A, as compared to conventional tobacco cigarettes, provides smokers with drastically reduced exposure to nicotine. We believe that the public health implications of a virtually nicotine-free tobacco cigarette are enormous and 22nd Century is excited about the prospect of introducing BRAND A into the U.S. market.”

It’s important for investors to know that the U.S. government has been buying XXII’s Spectrum Government Research Cigarettes (over 18 million of them in fact) over the last 2 years for their own studies.  Additionally, XXII’s application to the FDA includes a comprehensive overview of the many independent clinical trials that have found that smoking 22nd Century’s VLN cigarettes delivers the sensory and behavioral experience associated with conventional cigarettes while providing only minimal exposure to the most addictive component of tobacco.

According to research done by JP Morgan, 90% of smokers would also be willing to try a new brand if it were “safer” than their usual brand. In fact “light” cigarettes had 83.5% of the market prior to the Tobacco Control Act in 2009 that banned the use of that term. Roughly 45 million American’s smoke and retail sales of cigarettes in the U.S. were approximately $75 billion in 2014.

A product that appeals to 90% of a $75 billion/year market (from a $98 million market cap company) is just one reason why we believe XXII will have a breakout year in 2016, regardless of short term market turmoil. 


The Holy Grail of Smoking Cessation Products?

I try to avoid hyperbole when writing about stocks, but the potential to be the only company in the U.S. allowed to label their cigarettes as a “light”, “low nicotine” or “reduced nicotine exposure” product is huge…it would be worth hundreds of millions of dollars to big tobacco…and that’s not hyperbole. 

But here’s where it gets even better.

22nd Century may have in their wide, 200+ patent moat, what could become the holy grail of smoking cessation products.

Watch the video below on a study from the prestigious New England Journal of Medicine and know that:

  • the study included six styles of 22nd Century’s SPECTRUM research cigarettes (and only 22nd Century’s cigarettes)
  • the study was funded by the National Institute on Drug Abuse (NIDA) and the U.S. Food and Drug Administration (FDA)
  • the study concluded that reducing nicotine makes people less addicted to cigarettes and might make them more likely to quit
  • as compared with cigarettes of conventional nicotine content, 22nd Century’s proprietary Very Low Nicotine content cigarettes were “associated with reductions in smoking, nicotine exposure, and nicotine dependence, with minimal evidence of nicotine withdrawal, compensatory smoking, or serious adverse events
  • 22nd Century is the only company in the world capable of growing tobacco with such low nicotine content


More on this groundbreaking study using XXII’s cigarettes which resulted in both reduced cigarette consumption and an increased desire to quit by smokers of very low nicotine cigarettes is here. The same research team is currently conducting a Phase III clinical trial with 1,250 participants using XXII’s cigarettes to assess whether an immediate reduction or a gradual reduction in nicotine levels is most effective.

According to the U.S. CDC, approximately 50% of U.S. smokers attempt to quit smoking each year, but only 2% to 5% actually quit smoking in a given year. It takes smokers an average of 8 to 11 “quit attempts” before achieving long-term success. Approximately 95% of “self-quitters” (i.e., those who attempt to quit smoking without any treatment) relapse and resume smoking.

There are limited options of FDA-approved products to help smokers quit. These include Pfizer’s Chantix and Glaxo’s Zyban. While Chantix has been the best-selling smoking cessation aid in the U.S., the FDA slapped a “black box” warning on the drug for serious neuropsychiatric events, including suicidal ideation and increased risk of harmful cardiovascular events. As a result, Chantix sales dipped to $648 million by 2014, down significantly from the $846 million record set in 2008.  In March of 2015, the FDA decided to keep the black box warning on Chantix, plus they added a new warning about the controversial drug and its potential for negative interactions with alcohol.

Other options like hypnosis, acupuncture, new low-level laser therapy, and magnet therapy have not been shown to have positive effects in smoking cessation according to the American Cancer Society.  Moreover, e-cigarettes have ingredients in them that aren’t labeled and the amounts of nicotine and other substances a person gets from each cartridge are unclear and uncontrolled.  An analysis of 18 samples of cartridges from 2 leading e-cigarette brands found cancer-causing substances in half the samples. The FDA even found toxins such as diethylene glycol, (a poisonous compound in antifreeze) in some e-cigarettes!

Philip Morris, Reynolds America, British American Tobacco, Japan Tobacco, and Imperial Tobacco, will no doubt be watching for approval of the Modified Risk Tobacco Product application later this year.  The strong clinical data backing up claims of reduced smoking and improved odds of quitting if the modified risk application is approved would resonate with 90% of a $75 billion market, and big tobacco knows that.

For these reasons, XXII may indeed be holding the holy grail of smoking cessation products, and an eventual bidding war between big tobacco and big pharma (see below) is not out of the question.


The World’s First Prescription Cigarette

22nd Century Group also has a phase 3-ready clinical trial asset in the X-22 Smoking Cessation Aid, designed to be the world’s first prescription-brand cigarette. Big pharma would jump at the opportunity to offer a prescription cigarette that has been clinically shown to significantly increase the desire to quit smoking while having zero side effects of drugs like Chantix and Zyban. Recent SEC filings indicate that 22nd Century Group has “Identified and met with several potential strategic partners towards funding Phase 3 clinical trials for our X-22 prescription smoking-cessation aid in development.” As such, we believe the potential for a phase 3 trial funding deal to be struck with a noteworthy pharmaceutical player is ever-present and that a deal during 2016 is entirely possible, if not probable.


Revenue Ramping with Niche Products

22nd Century Group is positioned for significant growth in 2016. Commercialization of niche cigarettes (Red Sun in the U.S. and MAGIC in Europe) is tarting to take off. In the U.S., Red Sun is being distributed at premium tobacco outlets with more than 800 locations around the U.S. while MAGIC brand is building momentum in Europe. Financial results for the three previous quarters have exceeded expectations, and forecasts for 2016 have doubled over the past year according to Chardan Capital.

In the most recent quarterly results, sales for the first nine months of 2015 were $5.6 million vs. $0.5 million for the first nine months of 2014.  The bottom line improved by .05/share from a net loss of ($0.17) per share for the nine months ended September 30, 2014 vs. a net loss of ($0.12) per share for the nine months ended September 30, 2015. Management has guided for over $8 million in revenue for 2015.


The Bottom Line

There are only a handful of small cap stocks each year where everything is in alignment for a sustained move of 150% or more and we at MicrocapResearch.com believe 22nd Century Group (XXII) is one of them.


 

Gary Anderson sig.

 

 


Disclosure: Long XXII shares
Please see our disclaimer

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Announced Yesterday in After Hours: 

Actinium Submits Iomab-B IND Application to the U.S. FDA


 

  • Actinium Pharmaceuticals (ATNM) has spent much of 2015 laying the groundwork for a breakout year in 2016
  • With the recent weakness in biotech and pharmaceutical stocks in general, we believe this is the perfect time to initiate or add to a position in the company
  • IND designation and Phase 3 trial of a potential blockbuster drug for acute myeloid leukemia nearing
  • World class additions to management who previously led successful FDA approvals for major drug companies 

 

Actinium Pharmaceuticals logoActinium Pharmaceuticals Inc. (www.actiniumpharma.com) is a New York-based biopharmaceutical company developing innovative targeted payload immunotherapeutics for the treatment of advanced cancers.

Actinium’s targeted radiotherapy is based on its proprietary delivery platform for the therapeutic utilization of alpha-emitting actinium-225 and bismuth-213 and certain beta emitting radiopharmaceuticals in conjunction with monoclonal antibodies. The Company’s lead radiopharmaceutical Iomab-B will be used in preparing patients for bone marrow transplant. The Company is preparing a single, pivotal, multicenter Phase 3 clinical study of Iomab-B in refractory and relapsed Acute Myeloid Leukemia (AML) patients over the age of 55 with a primary endpoint of durable complete remission.  In both Phase I and Phase II trials, Iomab-B has led to effective cures in patients with no options left.  The Company’s second product candidate, Actimab-A, is continuing clinical development in a Phase I/II trial for newly diagnosed AML patients over the age of 60 in a single-arm multicenter trial. In addition to leukemia drugs, ATNM’s technology has been used to produce drug candidates for treatment of metastatic colorectal and prostate cancers, antiangiogenesis (prevention of blood supply to and growth of many solid cancers) and bone marrow ablation, part of a curative treatment for leukemias, lymphomas and multiple myeloma.


 

ATNM Share Structure

Shares issued and outstanding: 42.0 million
Market cap: $93 million as of close 11/17/15
Insider & 5% owners: 23%
Trading float: 36 million


 

Iomab-B Moving to Phase III Trial

ATNM is preparing to move lead candidate Iomab-B into a single, Pivotal Phase III clinical trial for bone marrow conditioning. There were prior manufacturing challenges that have now been solved, the Company also completed a pre-IND (Investigative New Drug) meeting with the FDA, and has (just now) submitted the IND application.   Based on feedback from the pre-IND meeting, the Company anticipates a straightforward path to IND designation, and to move Iomab-B into the Phase 3 trial.

In Phase II clinical studies, Iomab-B induced complete responses (CRs) and led to successful engraftment in 100% of treated patients with relapsed/refractory AML over the age of 50.


 

Large Potential Market Opportunity for Iomab-B

Acute myeloid leukemia (AML) is the most common form of acute leukemia in adults. The disease starts in the bone marrow and causes immature bone marrow cells to stop maturing. These immature cells, often called blast cells, just keep building up. Without treatment, AML can quickly become fatal as it spreads to the blood, liver, lymph nodes, spleen, brain, and spinal cord.

The average age of diagnosis for AML is 66. Approximately 70% of patients are over the age 55, and comprise the initial target population for Iomab-B. One third of these patients are not able to receive a bone marrow transplant (BMT) due to the toxicity of the chemotherapy regimen or because they do not achieve a sufficient level of blast reduction. Using a potential price of $85,000 per treatment as suggested by Actinium, which is in line with similar treatments on the market, the annual opportunity for Iomab-B exceeds $500 million in the US alone. Iomab-B has the potential to benefit a largely untreatable patient population and provide cost savings associated with shorter time to transplant. Notably, the majority of BMTs take place at a handful of leading medical institutions such as MD Anderson Cancer Center, Dana Farber Cancer Institute, and the Fred Hutchinson Cancer Research Center, meaning a small sales force could be employed for a potential commercial launch of Iomab-B. Investors should understand that there is no approved treatment for Iomab-B targeted patients, implying blockbuster drug potential.

Additionally, Iomab-B has demonstrated strong potential for other indications as well, including Myelodysplastic Syndrome, Acute Lymphoblastic Leukemia, Hodgkin’s Disease and Non-Hodgkin Lymphoma. These follow-on indications could greatly expand Iomab-B’s ultimate market opportunity.


 

Iomab-B Video Highlights: Clinical Results, Indications, Benefits, Commercial Potential


Phase II Trial with Actimab-A Expected to Launch in the First Half of 2016

Actimab-A is currently in Phase I/II multicenter, open-label, dose-escalation trials for the treatment of Acute Myeloid Leukemia (AML) in patients over the age of 60. These trials have attracted support from leading experts at prestigious, high-volume cancer treatment hospitals due to its safety and efficacy as well as potential potency, specificity and ease of use.  Trials are being conducted at world-class cancer institutions such as Memorial Sloan Kettering Cancer Center, MD Anderson Cancer Center, Johns Hopkins Medicine, Columbia University Medical Center, University of Pennsylvania Health System, Fred Hutchinson Cancer Research Center, and the Texas Oncology-Baylor Charles A. Sammons Cancer Center.

Trial participants receive low dose cytarabine and Actimab-A at a starting dose of 0.5 μCi/kg. Low dose chemotherapy is commonly used in this population due to tolerability issues with high-dose regimens. Unfortunately, this does not eliminate all cancerous cells, and residual blasts remain a problem. Actimab-A is intended to eliminate the residual blasts. To date there have been no responses at 0.5 μCi/kg, a 17% overall response rate (ORR) at 1.0 μCi/kg, and a 67% ORR at 1.5 μCi/kg. The trend of greater responses with higher Actimab-A doses is encouraging even given the small sample size. The typical response rate in this patient population treated with low-dose cytarabine alone is approximately 10-15%. Enrollment is open for the fourth cohort that will be an Actimab-A dose of 2.0 μCi/kg. Actinium has made progress getting new sites activated to speed enrollment, such as Columbia University where the principal investigator Dr. Joseph Jurcic is the Head of their Division of Hematological Malignancies. The Phase II portion is expected to begin in the first half of 2016 and is expected to enroll over 50 patients.

Targeted alpha radiation-delivering drugs like Actimab-A are that are extremely cancer-cell selective are both expensive and rare. Bayer bought the rights to commercialize the targeted alpha-radiation delivering drug Xofigo (formally called Ahparadin) for $2.9 billion, and we believe as Actimab-A and Iomab-B progress further through clinical trials, Actinium’s flexible strategic partnership platform could result in a significant joint or strategic partnership.

It’s important to note that Actimab-A  has been selected by the American Society of Hematology (ASH) for poster presentation at the 57th Annual Meeting in Orlando on December 7th.


New Radio-Labeled Antibody Candidate to Enter Pipeline

Actinium reported in August that it has labeled a new antibody with actinium-225, the same radioisotope used in Actimab-A.  Actinium-225 decays by giving off high-energy alpha particles which kill cancer cells.

Actinium noted that the actinium-225 antibody may have broad applications in hematology and oncology and has completed quality control testing.  Management stated that:

“Initial results confirm that we have a very robust technology that is well protected on all sides with appropriate intellectual property. We can now continue moving forward with further development and evaluation of this latest product candidate which expands our pipeline.”

Actinium is expected to disclose the antibody identity and target indication(s) by the end of this year.


World Class Additions to Management will Expedite Clinical Trials

As Actinium continued to lay the groundwork for a breakout year in 2016, the Company made recent key additions to management that have experience in successfully managing new drug applications with the FDA. These include:

  • Dr. Xin Du, Ph.D., as  Executive Director, Regulatory Affairs
    Dr. Du began his career at the FDA as Staff Fellow at the Center for Biologics Evaluation and Research and focused on the regulation of drug production, particularly Chemistry, Manufacturing and Control (CMC) and reviewed IND and BLA submissions. Following the FDA, he worked for Aventis (acquired by Sanofi), Wyeth (acquired by Pfizer), Novartis, Bristol-Myers Squibb and NPS Pharmaceuticals (acquired by Shire) in regulatory affairs and CMC positions with increasing responsibility. Most Recently, Dr. Du was Senior Director and Global Regulatory CMC Head at NPS Pharmaceuticals, until the Company’s acquisition by Shire, where he was instrumental in receiving approval for the Company’s first BLA submission and in the successful launch of the Company’s first product in Europe. Throughout his career, Dr. Du has been successful in preparing regulatory filings, managing interactions with regulatory agencies on a global basis and obtaining regulatory approvals for various drug products.
  • Felix Garzon MD, PH.D. as Head of Clinical Development

    Dr. Garzon was previously Senior Director, Oncology Product Creation Unit at Eisai, and Director, Oncology Global Clinical Research at Bristol-Myers Squibb. He has extensive clinical trial management and regulatory experience, and successfully led the late development and approval of several anticancer drugs, including Halaven®, Trisenox® and Xyotax®. Dr. Grazon stated:

    “Actinium is pursuing breakthroughs in the field in which I have more than a quarter of a century of professional experience. With two very promising products poised to enter Phase 3 and Phase 2 trials, I am thrilled to have an opportunity to maximize the development prospects for Iomab-B and Actimab-A. As we build and strengthen the clinical team to meet milestones, I look forward to adding value by generating high quality clinical data to help achieve timeline objectives.”

     

  • Dr. Sri Srivastava, Ph.D., PMP, Associate Director of Project Management

    Dr. Srivastava has nearly two decades of successful project management and clinical operations experience, including tenures at Parke-Davis (now Pfizer), Purdue Pharma, Organon Pharmaceutical, Aestus Therapeutics, Janssen R&D. Dr. Srivastava also spent a decade at ClinTech Research where he provided consulting services focused on clinical operations for emerging biopharmaceuticals including Aestus Therapeutics where he managed a randomized Phase 2 clinical trial.


Conclusion

Actinium exited the third quarter ending September 30, 2015 with $24.8 million in cash and equivalents. The Company has two product candidates moving through the pipeline that offer the potential to meaningfully improve treatment outcomes for patients with AML. Research ties and collaborations are in place with well-respected and leading cancer research institutions such as the Fred Hutchinson Cancer Research Center and Memorial Sloan Kettering Cancer Center. Actinium has added world class management with a history of successfully navigating the FDA approval process and has been invited to present clinical data at the American Society of Hematology annual conference in 3 weeks.

Actinium Pharmaceuticals spent much of 2015 laying the foundation for a breakout year in 2016. We believe the present market capitalization of $93 million dramatically undervalues the Company and its near future potential.

 


Pulmatrix sig.

 


See Dislaimer/Terms of Use

Disclosure: I own shares of ATNM  bought in the open market.
Our partner, Brite Ideas LLC, was paid $20,000 by an unrelated party, Stampede Ventures LLC, for investor awareness.

 

Actinium Pharmaceuticals logoIn news today that sent shares of Actinium Pharmaceuticals (ATNM) on an intraday roller coaster, it was announced that a group led by billionaire investor Dr. Phillip Frost (Forbes profile) was investing $5M in the company at $2.60/share. The deal is expected to close next week according to the press release.

 

Dr. Frost is well known in the cancer R&D space and there is no lack of media/press about him due to his (very) strong track record in biotech/pharma investments.

See also

  • Dr. Phillip Frost has an enviable track record in the building and selling of bio businesses – FierceBiotech
  • An Analysis of the Investment Success of Dr. Phillip Frost – Trefis Research
  • The Warren Buffett of biotech, Dr. Phillip Frost (Jim Cramer quote)

I could go on and on with other examples, but suffice it to say having Dr. Phillip Frost investing in Actinium Pharmaceuticals should be seen as a big positive for the company.


 

See also: Actinium Pharmaceuticals (ATNM): $100M Market Cap + Blockbuster Drug Potential + Well Funded + Near Term Catalysts = Strong Buy


 

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Disclosure: The publishers of MicrocapResearch.com are long shares of Actinium Pharmaceuticals

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It’s simple math.

Take a $100 million market cap pharma company entering Phase 3 clinical trials for a novel cancer drug with enormous market potential.
Add in that there’s no dilution in sight and several near term positive catalysts coming into play.
Top this off with increasing institutional investment…

and the result is a pharma stock on the verge of a breakout.

We believe Actinium Pharmaceuticals Inc. (ATNM) is a STRONG BUY based on reasons discussed below.


ac·tin·i·um
akˈtinēəm
noun
defin: the chemical element of atomic number 89, a radioactive metallic element of the actinide series. It is rare in nature, occurring as an impurity in uranium ores.


Actinium Pharmaceuticals  logo

Founded in 2000 and based in New York, Actinium Pharmaceuticals Inc. (www.actiniumpharma.com) is developing drugs that utilize innovative targeted payload immunotherapeutics for the treatment of advanced cancers. The company’s targeted radiotherapy products are based on its patented, proprietary delivery platform for the therapeutic utilization of alpha-emitting actinium-225 and bismuth-213 and certain beta emitting radiopharmaceuticals in conjunction with monoclonal antibodies. The Company’s lead radiopharmaceutical product candidate, Iomab-B, is designed to be used in preparing patients for hematopoietic stem cell transplant, commonly referred to as bone marrow transplant. In 2015, Actinium will be conducting a single, pivotal, multicenter Phase 3 clinical study of Iomab-B in refractory and relapsed AML patients over the age of 55 with a primary endpoint of durable complete remission. In both Phase I and Phase II trials, Iomab-B has led to effective cures in patients with no options left. The Company’s second product candidate, Actimab-A, is continuing clinical development in a Phase I/II trial for newly diagnosed AML patients over the age of 60 in a single-arm multicenter trial. In addition to leukemia drugs, ATNM’s technology has been used to produce drug candidates for treatment of metastatic colorectal and prostate cancers, antiangiogenesis (prevention of blood supply to and growth of many solid cancers) and bone marrow ablation, part of a curative treatment for leukemias, lymphomas and multiple myeloma.


ATNM Share Structure

Shares issued and outstanding: 35.7 million
Market cap: $103 million as of close 5/22
Insider & 5% owners: 23%
Trading float: 29 million


Strong Balance SheetActinium Pharmaceuticals - balance sheet

One of the first things investors in development stage pharma/biotech stocks should consider is the balance sheet in order to minimize risk of experiencing near term dilution. In the case of Actinium Pharmaceuticals, the balance sheet (SEC filing link) is exceptionally strong with nearly $20 million in cash and current assets and only $3.6 million in liabilities.  The current ratio is an extremely healthy 5.5.

Risk of near term dilution is minimal following a February 2015 capital raise of $20 million at $4.50/share, and in our discussion with management we were told the company is “well capitalized far into 2016.”

The ability to invest in Actinium Pharmaceuticals at a 30% discount to institutional investors a few months ago is especially appealing as the pharmaceutical industry overall is having a strong year with investors benefiting from an abundance of M&A activity. Moreover, we ATNM shares are one announcement or clinical update away from rebounding north of the $4.50 capital raise level.

 


 

Increasing Institutional Participation

Increasing institutional participation is always a good sign in a stock.

In the most recent quarter 8 institutions started new positions in Actinium and 26 institutions increased their positions. Institutions now hold just over 9% of shares in Actinium Pharmaceuticals, a 17% increase over the prior quarter.

Actinium Pharmaceuticals Institutional ownership

Current
Quarter
Previous
Quarter
Institutional Share Purchases 830.5K 335.9K
Institutional Shares Sold 256.1K 326.2K
Net Institutional Shares Purchased 574.4K 9.7K
Change in Ownership 17.46% 0.36%

 

Source: Nasdaq.com


In Good Company

In addition to increasing institutional buying, investors should know that Actinium’s largest shareholder is a subsidiary of Memorial Sloan Kettering Cancer Center, widely considered to be the nation’s #1 ranked cancer research facility. Moreover, Actinium’s second largest shareholder is a subsidiary of industry behemoth Merck and Co. (MRK).

Together, the Memorial Sloan Kettering and Merck subsidiaries own about 15% of Actinium Pharmaceuticals shares.


Drug Pipeline

Actinium Pharmaceuticals has multiple drugs in the pipeline which address extremely large patient populations as the graphic below shows.

Actinium Pharmaceuticals Pipeline Market Potential

 

Leading drug candidates are Actimab-A and Iomab-B, which I’ll discuss below.


Actimab-A

Actimab-A is currently in Phase 1/2 multicenter trials for the treatment of Acute Myeloid Leukemia (AML) in patients over the age of 60. Unfortunately, more than 18,800 new cases of AML were diagnosed last year and there were over 10,000 deaths from AML in 2014 according to the American Cancer Society estimates.

The clinical trials have attracted support from leading experts at prestigious, high-volume cancer treatment hospitals due to its safety and efficacy as well as potential potency, specificity and ease of use.  Trials are being conducted at world-class cancer institutions such as Memorial Sloan Kettering Cancer Center, MD Anderson Cancer Center, Johns Hopkins Medicine, Columbia University Medical Center, University of Pennsylvania Health System, Fred Hutchinson Cancer Research Center, and the Texas Oncology-Baylor Charles A. Sammons Cancer Center.

Iomab-B Entering Phase 3

Iomab-B is the only drug currently in development which can offer a cure for elderly AML patients and has been successfully used in over 250 patients with incurable blood cancers. Both Phase I and Phase II trials Iomab-B led to effective cures in patients with no options left.

The Phase 3 clinical trial will begin this year in which 75 patients will be treated with Iomab-B and bone marrow transplant while 75 control patients will be treated with current therapy. The primary endpoint is durable complete remission rates. Because the trial includes patients who had relapsed or had refractory refractory AML, a cross-over aspect to the trial will be in place where if a complete response cannot be achieved for the standard of care arm, the patient will be allowed to crossover to the Iomab-B study arm. This underscores the seriousness of the disease state in the patient population for which Iomab-B may be the only real hope that can be offered. Additionally, there is no generally recognized, successful standard of care for these patients. This was illustrated last year during this panel discussion on Iomab-B and its positive clinical results.

Actinium Pharmaceuticals crossover Ioamab-B

Actinium plans to develop Iomab-B through a regulatory approval via a pivotal registration trial in AML refractory/relapsing patients. This could provide a potentially curative treatment to patients who currently have little or no chance of achieving remission, (let alone a cure), and could also result in a faster pathway to commercialization.

Additionally. Iomab-B has demonstrated strong potential for other indications as well- including Myelodysplastic Syndrome, Acute Lymphoblastic Leukemia, Hodgkin’s Disease and Non-Hodgkin Lymphoma. These follow-on indications could greatly expand Iomab-B’s ultimate market opportunity.


Why Actimab-A and Iomab-B Could be Game-Changing Cancer Drugs

Actimab-A and Iomab-B are a new class of “Targeted Payload Cancer Therapeutics” that act as a guided missiles that effectively kill cancer cells without the side effects experienced from chemical toxins and external radiation therapies currently in use. 

In the video below, Dr. Philip Cohen discusses the technology utilized, as well as the benefits, initial trial results, and broad market implications for both Actimab-A and Iomab-B. The discussion is easy to follow and extremely informational. In 15 minutes you will completely understand the blockbuster drug potential that Actinium Pharmaceuticals has in the pipeline.


See also: Actinium Pharmaceuticals April, 2015 Investor Presentation for an in-depth look at Actimab-A and Iomab-B


2.9 Billion Reasons to be Bullish

Investors should understand that there is no approved treatment for Iomab-B targeted patients, implying blockbuster drug potential. Moreover, targeted alpha radiation-delivering drugs like Actimab-A are that are extremely cancer-cell selective are both expensive and rare.

Bayer bought the rights to commercialize the targeted alpha-radiation delivering drug Xofigo (formally called Ahparadin) for $2.9 billion (see Reuters) and we believe as Actimab-A and Iomab-B progress further through clinical trials, Actinium’s flexible strategic partnership platform could result in a significant joint or strategic partnership.


Near Term Catalysts

Near-term forward catalysts for Actinium Pharmaceuticals include the initiation of Phase 3 trials for Iomab-B and a clinical update on Actimab-A at ASCO 2015, the 51st Annual Meeting of American Society of Clinical Oncology, in Chicago on May 29 – June 2.

Dragan Cicic, MD, Chief Medical Officer of Actinium stated last week that:

“We believe the responses observed for Actimab-A, with minimal toxicity being reported, are impressive in this disease setting. These findings build upon those presented and published over the past year which demonstrated a clear survival benefit in secondary AML patients. We remain steadfast in our belief that Actimab-A could play an important role in the treatment regimen for newly diagnosed elderly AML patients who currently have limited treatment options.”

and

“The positive results on both safety and anti-leukemic effect demonstrated in the completed third cohort represents a significant achievement for the Actimab-A program, and support the advancement to a higher dose with the potential to further enhance the already strong results we have seen to date.”

Actinium Pharmaceuticals is also seeking Orphan Drug Designation (ODD) for Iomab-B this year. If granted, the ODD status would include the following very significant benefits:

  • a 50% tax credit on the cost of clinical trials undertaken in the USA
  • a seven year period of marketing exclusivity following the marketing approval
  • some written recommendations provided by the FDA concerning clinical and preclinical studies to be completed in order to register the new drug
  • a fast-track procedure for the FDA to evaluate registration files

Technically Speaking

For the last year ATNM shares had been in a declining channel which saw it drop from the mid teens to a triple bottom low near 2.30-2.40

Last week it spiked up off those lows on HEAVY volume, especially Thursday when it traded a record 2 million shares. This could be the initiation of a new up trend underway. Resistance is overhead near 3.35 & 3.65 if taken out with volume should lead to a run near 4.50  (short term target ) then possibly 6.50 (the intermediate target ) Longer term target is 8.20.

Actinium Pharmaceuticals daily stock chart

Technical analysis and chart by Harry Boxer at TheTechTrader.com.


 

Conclusion

Actinium Pharmaceuticals is coming off recent lows and we believe shares are on the verge of a strong move to the upside. This conclusion is based on:

  • Very positive results from earlier clinical trials of the company’s leading drug candidates, Actimab-A and Iomab-B
  • Phase 3 trials of Iomab-B starting
  • Large addressable patient populations and/or populations where there is currently no approved treatment underscore the blockbuster drug potential of the pipeline
  • Actinium Pharmaceuticals is well-funded, has a strong balance sheet, and risk of near term dilution is minimal to nil
  • Increasing institutional investment in the company
  • Memorial Sloan Kettering Cancer Center and Merck and Co. are largest shareholders
  • Currently trading at > 30% discount to February capital raise at $4.50/share

Presently there are (only) 2 analysts following Actinium Pharmaceuticals, both with a “buy” rating and an average price target of $16/share.  As Iomab-B enters Phase 3 trials and more data from clinical trials of Actimab-A become public, (as soon as next week), we believe additional analysts will begin following the company. Simply put, the market for Actinium’s drug pipeline is too big and the results from clinical trials have been too good to be overlooked much longer by analysts.

We see Actinium Pharmaceuticals as a STRONG BUY at current prices, and have a 12 month price target of $12/share. We believe this is a very realistic and conservative target, and we look forward to following Actinium’s developments closely in the coming months and sharing them with our subscribers.


MOKO - sig

 


Disclosure: The publishers of MicrocapResearch.com own shares of Actinium Pharmaceuticals (ATNM) bought in the open market and received compensation of $20,000 from an unrelated third party for our article and facilitation of investor awareness in the company.

See also: Site Disclaimer/Terms of Use


 

Zogenix-Inc.-logoZogenix Inc. (web site) is a pharmaceutical company which develops and commercializes medications for central nervous system disorders and pain. Zogenix has commercialized Zohydro, an extended-release hydrocodone for the treatment of moderate to severe chronic pain. The company is currently developing Relday, which is in Phase I clinical trials to treat schizophrenia and bipolar disorder in adults and teenagers 13 years of age and older. The company was founded in 2006, is headquartered in San Diego, and has approximately 110 employees.

Current Market Cap: ~ $210 million


Share Structure

Zogenix ownership summary

 

 

 

 

 

 

 

Shares short:

Zogenix shares held short

 

Source: Nasdaq.com


 

Why Zogenix Shares Were Beat Down in 2014

Zogenix shares were hit hard in 2014, closing the year down 73% from the high of $5.19 made in February. While shares were making this precipitous drop, revenue for the nine months ended September 30, 2014 was $25.6 million, an 11% increase from the $23.1 million in sales during the first 9 months of 2013. In Q3 the company also trimmed losses from .10/share to .09/share.

Despite these positives, shares were under pressure from dilution with approximately 40 million new shares hitting the market in 2014. More significantly, both the FDA and Zogenix received a torrent of negative publicity over the FDA’s approval of, and the company’s commercialization of Zohydro ER.

Zohydro ER is an extended-release form of hydrocodone used for around-the-clock treatment of severe pain. Like any narcotic, Zohydro can be addictive and has the potential for misuse by substance abusers.  Even before the drug was launched in March, a group called “Fed UP!” (a coalition to end the opioid epidemic) sent this letter to FDA commissioner Margaret Hamburg imploring her to re-write policies regarding FDA approval of all narcotics and that “the very last thing the country needs is another dangerous, high-dose opioid.”

With 2014 being an election year, some politicians couldn’t help themselves in what I believe was an attempt to win a few votes with the “Act to Ban Zohydro” in March. The lead on this bill was Sen. Joe Manchin (D-W.Va.). His daughter is the CEO of competing drug company Mylan Inc. which was also a major contributor to his campaign. This is a severe conflict of interest if ever there was one.

The media picked up on the Zohydro story with gusto, with multiple outlets parroting false claims such as:

  • Zohydro will kill people as soon as it is released (nobody has died)
  • Zohydro is 10 times stronger than Vicodin (it is the same strength)
  • It only takes 1 or 2 tablets to kill a patient (untrue)
  • Children who take 1 pill will die (unlikely, and how will a child have access?)
  • This is the worst decision by the FDA, a disaster and tragedy for this country (it was the right decision)
  • Zohydro is more powerful than anything on the market (it is actually the least powerful opioid in its class, when compared to oxycodone or morphine)

Zogenix tried to correct the misinformation spread by the media and politicians in Let’s Get the Facts Straight About Zohydro in May, as did the FDA in this update, but much of the damage to shares had already been done.  Never letting facts get in the way of improving their ratings, media outlets continued to perpetuate false claims about Zohydro and shares continued to slide to a low of $1.07 made two weeks ago.

Personally, I trust the judgment of noted pain management specialist Dr. Lawrence Robbins who wrote Zohydro Debate: Drug Hysteria or True Concernand FDA Commissioner Margaret Hamburg who discusses the safety and efficacy of Zohydro in this video over a politician with a clear conflict of interest and the media’s perpetuation of  falsehoods to boost ratings.

The “Act to Ban Zohydro” is one of over 10,600 bills and resolutions currently before Congress and of those, only about 5% will become law. The web site GovTrack.us  gives the Zohydro ban a 0% chance of being enacted.  GoveTrack.us is one of the world’s most visited government transparency websites and their embeddable widgets are deployed on more than 80 official websites of Members of Congress.

However, due to the unwarranted controversy and continued misinformation surrounding Zohydro ER, Zogenix shares were sold and shorted throughout 2014.  Shares are just now coming off their lows while at the same time 25 million shares are held short.

At MicrocapResearch.com, we like this setup when combined with near-term events in January that we believe will lead to an appreciable recovery.

 


Why Zogenix Shares Will Recover- PDUFA January 30th 

Zogenix submitted a supplemental New Drug Application (sNDA) to the FDA for a new formulation of Zohydro, “Zohydro AD” (Abuse Deterrent). Zohydro AD is more difficult to abuse by injection or nasal insufflation and the FDA’s decision is expected on January 30th. Having already refused to cave in to pressure from a politician who received large campaign contributions from a competitor (and whose daughter is the CEO of that same competitor), the odds of the FDA approving the same drug in a safer formulation that’s harder to abuse appear excellent.

Zogenix - ReldayIn addition to the likely approval of Zohydro AD on January 30th by the FDA, Zogenix will be initiating the next phase of studies for Relday, a once/month subcutaneous injection for persons suffering from schizophrenia in Q1 of this year.

Phase I trials of Relday were positive and if approved, Relday will be the first subcutaneous antipsychotic product that allows for once-monthly dosing. Non-compliance by patients taking antipsychotics is common and well documented. A once-monthly subcutaneous dose would have obvious advantages for both clinicians and their patients. This is truly a potential blockbuster drug in the Zogenix pipeline- note that sales of the antipsychotic drug Abilify alone were some $5.4 billion in 2011-2012.

Also in development is Brabafen for the treatment a catastrophic form of epilepsy (Dravet Syndrome) for which there is currently no cure. Treatment options are “extremely limited” according to this Dravet Syndrome Foundation Scientific Advisory Board publication. Brabafen had dramatic results in a Belgian study where 70% of patients taking the drug were seizure-free for at least 1 year. Phase 3 clinical trials are expected to begin in Q2.


Technically Speaking…

Shares are now approaching a resistance level around $1.50 that they failed to break for months as shown on the weekly chart below.

Zogenix weekly chart - resistance levels

We believe shares will break above resistance due to forward events and recent activity in the stock. On December 30th, shares crossed the 100 day moving average on heavy volume, prompting us to make this tweet to notify subscribers we entered the stock at $1.30.  Zogenix is one of many high-potential, “best microcaps” we’ve identified, and the volume in crossing the 100 dma is convincing, as was the New Year’s Eve follow-thru on lower, but still respectable volume.

Zogenix 100 dma breakout

 

Finally, the odds of a golden crossover look good in Q1…and possibly in the next 2-3 weeks.
The 200 dma will continue a rapid decent for the next month while the 50 dma should begin to slope up given last week’s rise off the bottom. Something to watch for!

Zogenix golden cross


 

The Bottom Line

  • Shares of Zogenix have been oversold and over-shorted, due in large part to media misinformation re: Zohydro ER that fueled investor fear
  • With year-end tax loss selling over, the January 30th PDUFA date for Zohydro AD, the Q1 pharmacokinetics study of Relday, and sizable short interest in the stock, we believe shares of Zogenix are on the verge of an appreciable move to the upside in January
  • Risk of near term share dilution appears mitigated by the company’s $50 million cash balance reported at the end of Q3 combined with the December 31st filing of a credit facility of up to $20 million

Traders may wish to hold off for a break above $1.50-$1.55 resistance- which we believe will take place soon.

We recommend the use of stop-loss orders to preserve capital in all trades.

Supplemental: Zogenix December 2014 Investor Presentation


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Disclosure: The publishers of MicrocapResearch.com are long ZGNX.  We have not been paid by any company or third party for this article.

See Disclaimer.

Rockwell Medical

 


MicrocapResearch.com emailed and tweeted a trading alert on Sorrento Therapeutics (NasdaqCM: SRNE) at market open on 12/24 at $8.60. We believe Sorrento Therapeutics has serious potential to make strong gains in 2015 for reasons discussed in this article. 


 Company Overview

Sorrento Therapeutics logoFounded in 2006, Sorrento Therapeutics (web site) is based in San Diego, California and focuses on the discovery, development, and commercialization of proprietary pharmaceuticals internationally for the treatment of several forms of cancer and auto-immune diseases as well as intractable pain in end-stage disease. Sorrento’s lead product, Cynviloq, is currently approved and marketed in various countries, including South Korea, for metastatic breast cancer (MBC), non-small cell lung cancer (NSCLC), and ovarian cancer under the trade name Genexol-PM. Cynviloq has also completed Phase I or III trials for MBC, and Phase I or II trials in NSCLC, Ovarian, Bladder, and Pancreatic cancers.  Resiniferatoxin, a non-opiate, ultra potent drug for intractable pain in end-stage disease is also under development. Sorrento Therapeutics is also developing antibody drug conjugates and recombinant intravenous immunoglobulin (rIVIG) for the treatment of certain auto-immune diseases, as well as immunodeficiencies.

Sorrento also notes in their Q3 filing:
“Through September 30, 2014, we have identified and further developed a number of potential drug product candidates across various therapeutic areas, and intend to select several lead product candidates to further advance into preclinical development activities in 2014 and 2015.”



 

Share Structure

Shares Outstanding: 36.1 million as of the 12/22/2014 Schedule 13D, which includes the shares from a $40 million investment by Dr. Patrick Soon-Shiong for a 20% stake in the company.

Market Cap: ~ $345 million

Public Float: 18-20 million, depending on source

(click to enlarge)

Sorrento Therapeutics ownership summary

 Sources: SEC filings, Nasdaq.com, and Fidelity Investments


New Joint Venture and Key Investor Bring Strong Upside Potential in 2015

In the last 10 days,  Sorrento Therapeutics made three major announcements regarding their direction in 2015:

  1. The 12/15/2014 announcement of “The Immunotherapy Antibody” joint venture with privately held NantWorks Inc. and its founder, physician scientist, and biotechnology entrepreneur Dr. Patrick Soon-Shiong. Dr. Soon-Shiong has provided 20 million in “initial” funding and now owns 20% of Sorrento Therapeutics at a purchase price of $5.80/share. The JV will accelerate development of multiple immuno-oncology monoclonal antibodies (mAbs) for the treatment of cancer
  2. The 12/19/2014 announcement of collaboration with privately held Conkwest Inc. (web site) to develop “Next Generation Cancer Immunotherapy”
  3. The 12/24/2014 announcement  of a $48 million investment by Dr. Soon-Shiong in Conkwest Inc.
    Sorrento Therapeutics is also purchasing $2 million in class A common stock in Conkwest Inc. as part of the transaction

Who is Dr. Patrick Soon-Shiong?

For starters, he:Dr. Soon-Shiong Sorrento Therapeutics

  • Founded Abraxis BioScience and developed Abraxane, a blockbuster drug approved for use in liver, lung, pancreatic, and breast cancers. Dr. Soon-Shiong sold Abraxis BioScience to Celgene for $2.9 billion in 2010
  • Founded American Pharmaceutical Partners which he sold to Fresenius SE for $5.6 billion in 2008
  • Has a net worth estimated at $13 billion (Forbes), is the wealthiest American in the healthcare industry, and the wealthiest man in Los Angeles
  • Is a pioneer in genomics and immunotherapy drug research, drugs that stimulate our immune systems to work harder or smarter to attack cancer cells

Dr. Soon-Shiong in November of this year, San Diego News


Dr. Soon-Shiong “Disrupting Cancer”.  60 Minutes, December 7, 2014 


The market for new immunotherapy treatments for cancer was estimated at $35 billion annually by Citigroup last year. Obviously, the “Immunotherapy Antibody Joint Venture” announced between Sorrento Therapeutics and Dr. Soon-Shiong’s NantWorks Inc. and the Sorrento-Nantomics-Conkwest collaboration is aimed squarely at this segment.

Dr. Soon-Shiong stated:

“Immunotherapy is one of the most powerful next-generation platforms added to our war against cancer. Integration of Nantomics advanced proteomics platform with the power of Sorrento’s fully human antibody libraries and Conkwest’s natural killer cell-lines is expected to enable an approach to attack tumors and their micro-metastases in a manner never before addressed.”


 

Strong Balance Sheet

Sorrento Therapeutics reported current assets of $45.8 million vs. current liabilities of $8.7 million as of the September 30th Q3 filing.

  • Q3 cash balance of $44.3 million has been increased with the additional$40 million in funding by Dr. Soon-Shiong just announced
  • Dr. Soon-Shiong’s investment in Sorrento Therapeutics has been called “initial joint funding” and an “initial joint venture”- strongly suggesting there’s more to come
  • The potential for a massively dilutive financing at poor terms for current shareholders seems remote given Dr. Soon-Shiong’s personal wealth and investment in the company

Analyst Mean Price Target of $17/share Likely to Increase 

Sorrento Therapeutics is rapidly growing from a microcap into a small cap company. There are currently 4 analysts following Sorrento, all with buy recommendations.

Price Target Summary
Mean Target: 17.00
Median Target: 14.50
High Target: 30.00
Low Target: 9.00
No. of Brokers: 4

Source: Yahoo Finance
Zacks Small Cap Research increased their price target on Sorrento Therapeutics to $18/share on December 15.  The price targets in the table above were made prior to the materially significant news of the last 10 days and I expect them to be revised upward as well.

Zacks (see release) points out the following positives from the Sorrento/Natworks JV:

Sorrento Therapeutics positives -Zacks


Expect a Jump in Institutional Participation

Sorrento Therapeutics had a healthy 39% institutional ownership as of 9/30/14 (see table above) and I expect that level is increasing now. With a relatively small float of 18-20 million shares, this could easily keep momentum to the upside…but due to the smallish float investors should expect and be prepared for volatility. There doesn’t appear to be a meaningful short position in the stock at present.


Technicals

The 1 month chart for Sorrento Therapeutics is a thing of beauty. Following the high volume breakout earlier this month, there were a few days of lower volume sideways trading. Then, during the holiday-shortened 12/24 trading day, shares gained another 11.5% on heavier volume. It’s noteworthy that the initial move in Sorrento shares was made during the biggest weekly decline in two years for the broader market.

Momentum and money flow show an uptick on 12/24 and could be signaling the start of another leg up.

Stock chart for Sorrento Therapeutics 12-26-2014

There is some resistance at around $11 on the 12 month chart.

resistance level Sorrento Therapeutics chart 2


The Bottom Line

I believe Sorrento Therapeutics is a strong buy here and a gain of 50% from current prices over the next 6 months is a reasonable, if not conservative expectation. Short term/active traders may want to see a breakout above $11 resistance before jumping in. 


 

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Disclosure: I am long SRNE. I have not been paid by any company or third party for this article.

Disclaimer: Opinions expressed are my own and should not be considered investment advice nor an invitation to buy or sell shares of any company mentioned on this site. Investors should perform their own due diligence and consult with a Registered Investment Advisor prior to making any investment decision. See sidebar for full disclaimer.

Rockwell Medical