Rexahn Pharmaceuticals Looks To Find A New Partner Once Again For Cancer Compound

Today Rexahn Pharmaceuticals (RNN) announced that it will be attending the BioPharm America 2014 Partnering Conference. This is significant because the previous partnership with Teva Pharmaceuticals (TEVA) came from exactly the same conference. This conference allows small-cap biotechnology companies to sit down with a lot of various pharmaceutical companies looking for innovative drug companies to partner with. Rexahn was able to partner out a drug compound known as RX-3117 with Teva at this conference.

There is no guarantee that Rexahn will be able to establish a partnership at this conference, and even if the company does find a pharmaceutical company to partner with it could take months to establish a deal. Therefore we don’t recommend that investors buy shares of Rexahn only because of a potential partnership but because they believe in the future value of the RX-3117 drug itself. First to understand what RX-3117 is and why a pharmaceutical company would want to form a partnership with this compound we have to understand its value. RX-3117 is a nucleoside analog compound that inhibits both DNA and RNA synthesis.This inhibition of Synthesis the blocking of DNA and RNA molecules from combining to form a protein thus creating new cancerous cells.

The key point for RX-3117 is not only that it would block both DNA and RNA from synthesizing but the drug compound only targets cancerous cells and leaves healthy cells alone. A lot of biotechnology companies are looking towards new treatments for cancer that avoid the toxicity of current therapies like chemotherapeutic drug compounds. Even though the partnership between Rexahn and Teva didn’t work out it does not mean that Rexahn should stop exploring options to partner this drug compound with anotehr big pharmaceutical company. A lot will need to be done to prove the power of the RX-3117 compound but Rexahn establishing a partnership will be helpful for moving the company forward.

So despite the breakup Rexahn should be able to establish a new partnership with another biotechnology company. The partnership may not come instantly, and it will be a long road but it is in the company’s best interest to partner out the compound. Especially a company that is in early clinical stage testing and has no other means to generate revenue. If proven successful in clinical trials RX-3117 could be applied to many types of solid tumors and could generate billion of dollars in revenue. RX-3117 is in great shape because the compound is currently in the middle of recruitment of the 4th dose group at (150mg) as the MTD — meaning maximum tolerated dose patients can sustain without a lot of toxicity — has yet to be established. This bodes well because the higher the MTD can go the greater the efficacy of the compound during the readout in the future. Rexahn expects the phase 1b trial for RX-3117 enrollment to be completed by Q4 2014 or Q1 2015. The wait is not too bad as the company is expected to also report on other compounds in the clinic. Rexahn is expected to report the phase 2a trial for Archexin by Q4 2014, and final results for Supinoxin phase 1 in Q4 2014. We believe that Rexahn is a nice long term hold, and the entry share price point is attractive at $0.74 per share as well.


Rxi Pharmaceuticals Presents Preliminary Phase 2 Data In Hypertrophic Scars, Share Price Unfairly Punished

Today the CEO of Rxi Pharmaceuticals (RXII) presented preliminary phase 2a data for hypertrophic scars at the Rodman and Renshaw Conference. We think that today’s sell off was overblown way out of proportion, because if we look at the preliminary evidence there was nothing wrong with the results. Rxi’s 31% drop to $2.44 per share  acted as if the trial totally bombed, but in actuality it didn’t. We will explain in great detail why the share price dropped and why we believe this is a good buying opportunity for anyone that wants to be a long term investor in Rxi Pharmaceuticals.

For instance here is the link to the Rodman and Renshaw Conference webcast. One quick note is that each cohort was evaluated by an analysis known as VAS. In VAS the individuals score from a (0) — fine line scar to a (10) worst scar seen possible.  What this means is that 11 individuals assessed Cohort 1  in early treatment with RXI-109 and placebo. Now in the cohort 1 trial both the median score for RXI-109 and placebo was a (2). So early treatment in cohort 1 created no difference between RXI-109 and placebo. In cohort 2 though utilizing delayed treatment RXI-109 achieved a VAS score of (2) and placebo achieved a VAS score of (2.5).  Now before we go any further we believe that a lot of investors didn’t quite understand that these results were only 1 month after the surgery period. So even after only 1 month after surgery RXI-109 in cohort 2 fared better than placebo.

If we take a look at slide 19 in the “Webcast” link above you will notice that RXI-109 shows a finer thin line compared to the placebo which is more raised in appearance. We think investors unfairly punished the share price, because if the one month results came out better than imagine another 2 months post surgery. The results for RXI-109 at 3 months post surgery should look far superior, and the company has stated in the presentation that those are coming within the next few months. Also to many people don’t understand clinical trials and we believe today’s sell off was a notice of share price tanking and immediately reacting to the share price. This is because this trial was a phase 2a trial that means two things happen in a phase 2a trial.

First the trial tested two different cohorts which compared early treatment with RXI-109 and then delayed treatment. Now Rxi knows from this phase 2a trial that delayed treatment produces better results for the compound. Secondly the trial was looking for efficacy using the current dosage post one month. I think the company will need to see the the 3 month pictures (which will come within the next few months) this way they can better determine the proper dosage for the phase 2b trial. We think a lot of people misunderstand the difference between a phase 2a trial and a phase 2b trial. If the company had max dose then the would have just ran a phase 2 trial and be done with it. But they didn’t because they needed to see the initial efficacy using the current dosage. With the knowledge after observing the 3 month pictures in hypertrophic scars, the company can then better design a phase 2b trial with a possibly higher dosing regimen.

Maybe the company could have waited to release the 3 month data instead of releasing the early 1 month data. Despite that cohort 2 still performed better than placebo in hypertrophic scars which is not an easy thing to do considering there are no FDA approved drugs for scarring. The 3 month data pictures in hypertrophic scars will come within the next few months and that will be the true measure of where the company can go from there. One quick note is that RXI-109 was shown to still work 3 months after a single injection which means the 3 month photos should be better. In the placebo side the scars will grow back with a vengeance so the difference will be clearly visible.We believe the share price was unfairly punished today despite RXI-109 performing better than placebo. With the current share price at $2.44 per share and a market cap of only $34 million  along with the preliminary presented phase 2a data we think Rxi Pharmaceuticals is severely undervalued.


Rxi Pharmaceuticals Is Ready To Show The True Power of Its Technology Platform

Rxi Pharmaceuticals (RXII) will be presenting next Wednesday September 10th at the Rodman And Renshaw conference. Under normal circumstances conferences are no big deal as they just lay out what most investors already know, but this time it is different for Rxi. This is because Rxi has stated in its press release today that it will show data on new novel targets in the dermatology field, and that it will release data from its phase 2a interim trial using RXI-109 against hypertrophic scars.

Why do we bring this to the attention of investors now before this big event. For starters there is the potential to make huge gains when the phase 2a results are released. There is no way for sure to know how good the results are, but after evidence we have described in a previous article we are inclined to believe the data to be de-risked and positive. For instance the RXII share price has risen by 40% over the last 5 days in anticipation of these phase 2a interim results. Even with this recent 5 day rise of 40% that still only puts the company at a market cap of $60 million.

Therefore we believe that even with this recent rise the company is still way undervalued to its trading peers in similar phase 2 trials like Arrowhead Research Corp (ARWR) which trades at a market cap of $800 million and Tekmira Pharmaceuticals (TKMR) who has a market cap of 440 million. That means right now at 60 million market cap Rxi is trading at around 13 times too 7 times  respectively less than its peers in similar stage phase 2 trials. Even accounting for most other biotechnology stocks which trade at a fair value of around $500 million  in the phase 2 stage of trials Rxi should be trading at around $18.45 per share.

The fact that Rxi trades so low compared to its RNAi technology peers and momentum towards phase 2a results could be what propelled the share price higher this past week. Why are investors excited about the phase 2a results? Well quite frankly if the phase 2a results come out extremely positive it will validate Rxi’s technology platform known as the “sdrxRNA” platform. In essence without going into the pharmaceutical aspect of it it is a platform of combining both the properties of RNAi and RNA into one drug molecule that can be delivered directly into tissue, eyes, skin etc. of choice without using a delivery vehicle. RNAi stands for RNA interference and is the ability to shut off genes at the source before they ever produce a protein of the disease to begin with. RNA stands for Ribo Nucleic Acid and is the building block of DNA, and companies working with RNA compounds change the way the mRNA — messenger RNA responds in the disease that is being targeted.

The importance of these results are at an extreme because one it will validate that RNAi science can be used to treat disease as to date there are no RNAi therapies approved by the FDA. Secondly it will validate Rxi’s sd-rxRNA platform. With this validation the company can then use its technology to expand to other billion of dollar markets like macular degeneration, liver fibrosis, and other unmet medical needs. The company has also stated that it will discuss data of new novel compounds that it will use its sd-rxRNA technology for which will also target the dermatology field. No one can say for sure what the new novel compound targets will be but if we base it off of market potential it could possibly be the corneal scarring of the eye which the company found on accident in its eye monkey study. It could also hypothetically be Lupus or Psoriasis, and we are estimating this to be the case since these disease also affect the skin and the sd-rxRNA platform is good at distributing the drug compound directly into the skin.

With positive results in RXI-109 against hypertrophic scars the estimate valuation of potential sales could be around $1.5 billion dollars as a low end estimate as a drug without insurance could be worth. For instance Allergan (AGN) Botox drug sells for billions of dollars and patients still utilize the drug compound despite not using insurance to pay for it. The validation of the sd-rxRNA platform would establish Rxi as a product development company and should see potential partnerships rise up thereafter in the following months. We believe that Rxi Pharmaceuticals is still extremely undervalued at only $60 million market cap and think that Rxi still has room to run higher before the potential phase 2a data in hypertrophic scars. We look forward to next Wednesday where we will potentially discuss the new novel compounds in detail, and go a little in depth on the phase 2a results in hypertrophic scars.


Roche Wastes No Time, Acquires Intermune for $8.3 Billion Dollars

Just a few days ago on Sunday August 24, 2014 Roche (RHHBY) had agreed to buy an biotechnology company known as Intermune (ITMN) for $74 per share, which comes with an $8.3 billion dollar share price. The price was a good deal for shareholders because it was a 38% premium to the last closing price on August 22, 2014. Intermune is a company that if focused on treating a rare lung disease where patients have limited treatment options. We feel that this recent acquisition may spur other biotech merger deals in that big pharmaceutical companies will be looking for the next best drug that could potentially make billions of dollars on the market.

The drug that Intermune has created is known as perfenidone which is already marketed in Canada under the name Esbriet. Esbriet treats a rare lung disease known as idiopathic pulmonary fibrosis which is a disease characterized by damaged lung pocket that form severe scars. These scars hinder the lungs by making them harder, because typically these lung sacs are thin. With these thickened lung sacs the lungs have a hard time expanding properly and exchanging oxygen at a normal rate. The drug compound from Intermune is an oral drug compound that is made up of a molecule known as TGF-beta which plays a major role in many fibrotic diseases.

Some are skeptical about the deal because the current drug Esbriet brings in $1 billion dollars so why would Roche pay $8.3 billion dollars? We can hypothesize that it is probably for the many other rare fibrotic disorders that are targeted in Intermunes remaining pipeline. Therefore we believe Roche is looking out into the future on how much they could potentially make many years from now. With this deal though many other biotechnology stocks that are potential takeover targets have also seen a huge influx of investors interest in the last few days.

Other potential take over stocks seeing a huge rise in volume would be Arrowhead Research Corp. (ARWR) and Achillion Pharamcueitcals (ACHN). That is because they both have what big pharmaceutical companies are looking for to fill their pipeline with a hepatitis B and hepatitis C drug candidate respectively. Both of these companies target large markets, and so many analysts on Wall Street along with many enthusiastic investors believe that these will be next on the list as a buyout candidate by big pharma. I have written about a possible buyout by a big pharma for Achillion Pharmaceuticals seen here “Achillion Pharmaceuticals Is Primed For An Eventual Buyout“. A more detailed analysis on Arrowhead Research Corp can be seen in this article here ” Arrowhead Starts It’s Engine For Phase 2a Trial For Chronic Hepatitis B Infection “.

We think that there are many biotechnology companies that have the potential to unlock a lot of value. We believe that Roche took this opportunity because other than Hepatitis C and Hepatitis B drug candidates, the next best thing is drugs that target fibrotic disorders. This is because there are many patients suffering from some type of fibrotic disease and it gives these companies the potential to make billions of dollars off of therapies for this disease area. Ultimately liver fibrosis is another huge market that could potentially be unlocked over time, and one company we have mentioned on many occasions before that has a strategic interest to target liver fibrosis is Rxi pharmaceuticals (RXII) which makes perfect sense since the company’s lead drug candidate targets anti scarring of hypertrophic scars and keloids. Rxi is set to report phase 2a results in the coming weeks so good results there will automatically validate its target compound RXI-109 and its sd-rxRNA self delivering platform for Liver fibrosis as well. Be on the lookout for the next possible biotech merger deal because we are pretty sure this acquisition by Roche recently won’t be the last one.


Achillion Pharmaceuticals Is Primed For An Eventual Buyout

Shares of Achillion Pharmaceuticals (ACHN) had gained about 10% for reporting positive results in a mid-stage trial of its hepatitis C drug ACH-3102 in combination with Gilead Sciences (GILD) drug Sovaldi — also known as sofosbuvir. The trial enrolled 12 patients to test the combination of ACH-3102 together with Sovaldi to determine the efficacy of this combination of drug compounds. The results were outstanding because the combination of  ACH-3102 together with Sovaldi was able to achieve a 100% cure rate of the hepatitis C virus. All 12 patients had undetectable HCV — Hepatitis C virus RNA levels for 4 weeks after completing the cycle of therapy. Hepatitis C virus RNA levels are the measure of how much of the virus is still left circulating in the blood of the patient.

There are two key components for why this combination study was important for Achillion Pharmaceuticals. For starters standard of care treatment for hepatitis C patients is adding a toxic chemical known as Ribavirin for clearing the virus from the body. Even then the cure rate for Ribavirin alone in hepatitis C isn’t all that great, and leads to many unbearable side effects for the patients. The second thing to note is that this proves that ACH-3102 is able to be combined with a nucleotide NS5B Polymerase inhibitor– which is what Sovaldi is.  ACH-3102 is an NS5A  inhibitor, and is a different compound from Sovaldi. The good news now though is that Achillion is also working on a similar drug compound for the hepatitis C virus known as ACH-3422 which is also a nucleotide NS5B Polymerase inhibitor.

This is good news for Achillion because now moving forward it can combine both ACH-3102 together with ACH-3422 into one drug compound. This could then potentially prove in later trials a 100% cure rate in the hepatitis C virus and be able to compete in the market against Sovaldi. We don’t know yet because all is dependent on how well the two chemical drug compounds from Achillion go together, plus also it depends on how long the drug combination takes to cure the virus — how many weeks of treatment. While that remains to be seen this initial positive result of combining ACH-3102 together with Gilead’s Drug Sovaldi shows the potential for a combination of combining an NS5A inhibitor together wtih an NS5B inhibitor.

The hepatitis C market is huge, and Achillion may have a chance to be a part of this huge market if its ACH-3422 drug  proves to clear the hepatitis C virus by 100%. Sovaldi is selling well matter in fact the drug compound made$3.48 billion dollars in second quarter sales in 2014. Eventually Achillion may have an opportunity to capitalize on this market in the mean time shares of the company have surged as much as 184% year to date. We think that the continuation of successful results with the company’s hepatitis C pipeline will bring in other big pharmaceutical players to attempt a buyout of the company. Many big pharmaceutical companies are looking to fill their pipelines with a hepatitis C drug compound. Buying Achillion Pharmaceuticals may be that way for these big pharmaceutical companies to get their foot in the door on this growing hepatitis c space. Therefore we believe that Achillion Pharmaceuticals will eventually be bought out for billions of dollars.


Opko Health Posts Positive Phase 3 Results for Its Rayaldee Drug

On August 11, 2014 OPKO Health (OPK) had released its results for a phase 3 trial utilizing a drug known as Rayaldee to treat patients with chronic kidney disease that are insufficient in Vitamin D (Vitamin D insufficiency). Vitamin D insufficiency means that the person’s body is not able to easily convert the Vitamin D mineral to the body which results in a loss of vital nutrients. Vitamin D in the body is essential for renal health, immune system health, and cardiovascular health. Vitamin D insufficiency is even worse in patients with chronic kidney disease, because the disease makes it a lot more difficult for the patients to be able to convert Vitamin D into their bodies properly.

Opko Health posted positive phase 3 results for its Rayaldee drug compound by improving Vitamin D levels in patients with secondary hyperparathyroidism — SHPT —  which stems from stage 3 and stage 4 chronic kidney disease. The results can be summed up by the Vice President of Research and Development Joel Z Milnick of Opko’s renal health division:

Top-line data from this study demonstrate that Rayaldee effectively controls secondary hyperparathyroidism in patients with stage 3 or 4 chronic kidney disease by correcting vitamin D insufficiency”

The phase 3 results were able to help patients achieve the ability to properly elevate the patients’ vitamin D levels to appropriate measures. The phase 3 trial had enrolled 219 patients which were all lacking Vitamin D . Some patients were given Ryaldee and other patients were given a placebo compound. By the end of the trial 97% of the patients had corrected their Vitamin D insufficiency by taking Rayaldee, which shows the market potential for the drug when it makes it to market. The Rayaldee compound was able to achieve great safety measures and also achieve the primary endpoint of the study. The primary endpoint of the study was something known as “responder analysis”. This means that at least 30% of the patients needed to exhibit a decrease of the plasma parathyroid hormone — effect of chronic kidney disease. Two positives came from the primary endpoint of the study. For starters the response rate of the primary endpoint achieved clinical efficacy of p < 0.001 . This p value is a measure of clinical success, and anything under p < .01 means that the trial achieved its primary endpoint.

The success of this treatment is great because current treatment options have their own problems. Vitamin D offered over the counter are ineffective in helping these chronic kidney disease patients with their hyperparathyroidism at all. Vitamin D Hormones actually do more harm than good because they offer Vitamin D at extremely abundant levels. That means they bring the Vitamin D level to a higher level than is needed in the body — basically way too much Vitamin D .  Investors though will still be happy to know that there are further catalysts coming for Opko’s Rayaldee drug before the end of 2014. First the company expects to announce additional data from a similar phase 3 trial using Rayaldee for the same indication of Vitamin D insufficiency in Chronic Kidney disease. These additional phase 3 results are due out sometime in September 2014. Another catalyst is that Opko expects t file an NDA for Rayldee to the FDA before the end of 2014 — this means that the company is seeking approval for Rayaldee.

We believe that Opko Health is a great long term play because it has a nice pipeline of drug compounds that can create future value for shareholders. We also like the fact that the CEO is a man known as Dr. Phillip Frost who is famous for acquiring biotechnology stocks that come in value in the future. Dr. Phillip Frost knows true value when he sees it, and we feel Opko will do well in the long term. Dr. Phillip Frost had even invested in a biotechnology company known as Rxi Pharmaceuticals (RXII) when it was trading back on the OTC. Rxi Pharmaceuticals now trades on the NASDAQ and is expected to release phase 2 results of a trial in a few weeks, using RXI-109  to target hypertrophic scars — raised scars that are difficult to treat and grow back instantly. Dr. Frost had made a private placement deal buying $16.4 million dollars worth of shares during the deal with Rxi’s CEO Dr. Geert Cauwenbergh back in 2013. We believe that Opko will continue to rise as investors realize the true value of the company.



Two Biotech Stocks To Consider For Ebola Virus

Lately everyday when people wake up they hear news about a new Ebola case in various parts of the world, and that the spread of the virus is continuing everywhere around the globe. Ebola is a virus that starts off with flu-like symptoms so patients brush it off believing that it just might be the flu virus. On top of the flu-like symptoms patients then start to experience other symptoms associated with the Ebola virus like severe vomiting, diarrhea, and abdominal pain. As of August 1, 2014 there have been 1,605 suspected cases of the Ebola virus in the countries of Guinea, Sierra Leone, Nigeria, and Liberia. Of those 1,605 cases there has been about 887 confirmed deaths from the Ebola Virus.

The Ebola Virus itself has a 90% death rate when a patient is infected with the Ebola Virus. There are some experimental vaccines that may prove to combat against the Ebola virus, and these vaccines are being tested on patients that have come back to the U.S. with this Ebola Virus. One misconception about the Ebola Virus is that it is spread airborne through contact with other people, and that’s false. If that were the case then  the spread of this virus would be huge because it would be harder to contain. This Ebola virus is spread through the means of  blood, saliva, sweat, and other bodily fluids which eliminates the possibility of an airborne infection. Even still this virus should not be passed off as an  irrelevant bug because once a person is infected with it then it causes a huge death rate at 90% as mentioned above.

With this Ebola Virus outbreak news there is one biotech company that has already risen a lot on these cases, and that biotech is known as Tekmira Pharmaceuticals (TKMR). Another biotech that may potentially rise in share price based off of these new Ebola cases is Sarepta Therapeutics (SRPT). Both of these biotechnology companies are utilizing some type of oligonulceotide technology. Oligonucleotides are short single stranded nucleic acid molecules that can be placed together with other types of technology to create new molecules to combat against these types of diseases, even the Ebola Virus.

Tekmira Pharmaceuticals makes use of oligonucleotides using a new type of science known as RNAi or RNA interference. What RNA interference was created for was the ability to down regulate the amount of genes a disease produces. The idea is that by knocking down the genes of the disease in question it would either slow down the progression of the disease or cure the disease completely. Tekmira’s Ebola Virus program is known as TKM-Ebola and has only begun to dose patients in a phase 1 clinical trial with the Ebola Virus. The downside is that the FDA placed a clinical hold on the TKM-Ebola trial for reasons about safety concerns. We believe that these safety concerns are about the safety of Tekmira’s RNAi technology, but it should be easily addressed in the coming months. The FDA should work quickly because Tekmira’s Ebola drug showed 100% protection of the Ebola Virus in non-human primates (monkeys). Despite the clinical hold  on on the Ebola clinical trial Tekmira’s share price has risen substantially over the last month gaining about 20% in share price. One thing that investors should note is that this Ebola Virus news may drive the share price in the short term but should be cautious on a sell off when the Ebola hype dies down. Regardless investors should be in the name based off of Tekmira’s RNAi technology for other indications, because the rise in share price of the Ebola Virus program is just a bonus.

Sarepta Therapeutics makes use of a different science which has been around a long time known as RNA oligonucleotides. RNA works differently then RNAi mentioned above, because RNA is the building blocks for DNA. The goal of RNA is to change the DNA  structure of the proteins in question. This means that RNA builds off of the ability to  be able to direct the cells machinery to increase or decrease production of a protein for a particular disease. Sarepta has also been working on an Ebola drug AVI-7537 and has seen the ability to show survival rates of the Ebola virus by 60% to 80% in animal testing. This compares with 0% survival rate in animals in the Ebola virus where the animals receive no treatments. Sarepta’s CEO says the company stands ready to help give their drug out to patients if needed but the FDA would have to approve a certain measure to allow this to happen. Also the funding came from a government entity so Sarepta would have to get permission from them as well if they want to get their Ebola drug out to these patients that need a treatment. The difference though between Tekmira’s Ebola drug and Sarepta Therapeutics is that Sarepta has yet to receive a clinical hold on its Ebola trial.

In conclusion both biotech stocks are great to consider for both traders and long term investors. Long term investors should be focused on the technology of both companies where one utilizes RNAi and the other utilizes RNA. Traders though can capitalize on this great short term opportunity to make money off of the recent and upcoming Ebola news. Future news from Ebola outbreaks may move the share prices of both companies slightly n the coming months. Despite short term movements in share price long-term investors should stay focused on the longer term picture about the science of each company. We think that there is a great opportunity to be invested in both of these stocks for both short term and long term prospects. Both of these biotech stocks have the ability to completely change the way we treat many of today’s deadly diseases.


Galectin Therapeutics Gets Punished For Phase 1 Trial, But Wall Street Is Missing The Point

Shares of Galectin Therapeutics (GALT) were punished on Tuesday July 29th after reporting the phase 1 results of its NASH trial with patients in the 2nd cohort. The stock tanked as much as 60%  on the news, but the sell off could have been given a bigger push down by many bearish articles from various writers on Wall Street. For starters the company was targeting a fatty liver disease known as NASH (nonalcoholic steatohepatitis) , which is becoming a huge epidemic. This indication is now being pursued by many small cap biotechnology stocks since of the huge target market, because there are about 9 and 15 million people in the U.S. alone that have NASH.

The results of the study were phase 1 and the only primary endpoint being tested was “safety” of the drug compound GR-MD-02. That was the only thing being tested because the cohort 1 study was performed with 2 mg/kg and the cohort study 2 phase 1 that just reported results used 4 mg/kg. So I’m not understanding these bearish articles claiming that the GR-MD-02 drug performed no better than the placebo drug. Of course it didn’t this study wasn’t focused on efficacy it was focused upon evaluating a higher safer dosage level.

Going forward investors should not write this study off completely because there are three reasons why the study can still be advanced and become successful. First of all investors are wondering why did the pre-clinical trial in animals obtain good efficacy in NASH and not cohort 1 and cohort 2? With that I can answer because in the pre-clinical trial for NASH Galectin used 8 mg/kg but this phase 1 study reported Tuesday used 4 mg/kg and the previous cohort used 2 mg/kg. So we can’t infer from these bearish articles that the phase 1 trial of GR-MD-02 is a flop. That’s because the phase 2 trial which is going to run the dosage from the pre-clinical trials 8 mg/kg will determine whether the drug has efficacy or not. We are baffled why investors punished the stock so much today for a phase 1 trial whose primary endpoint was establishing safety.

Secondly all biotechnology stocks in testing have to declare an Independent Data Safety Monitoring Board (DSMB) because the company would be bias so they look to this board to confirm if an additional cohort should be initiated. Since there were no safety problems of significance the DSMB has concluded Galectin should continue to its cohort 3 trial using 8 mg/kg. Nobody is a psychic and we don’t know if doubling the dose will increase efficacy of NASH over placebo by a huge margin but the company won’t know until the trial is ran. So for these bearish articles to claim it as a failure already when the maximum dose hasn’t been tested yet doesn’t make any sense.

Finally the company will be enrolling 20 patients in the 3rd and final cohort, and this time they will wait till phase 2 to run the liver biopsy of each patient in the study. Also this will allow the company to adjust the blood biomarker analysis to four different times in the study to account for varying blood levels. Whether investors want to dip in now to attempt to either trade Galectin short-term or an attempt to go long is their option, but we feel that Galectin was way oversold for a phase 1 trial. Typically as many biotech analysts know phase 1 trials are known for testing safety primarily, efficacy can be seen sometimes in phase 1 but it is not an end all priority. That is because phase 2 trials are meant to test the efficacy of the compound, and in this case GR-MD-02 will be tested in a phase 2 trial. Now if Galectin fails efficacy in the phase 2 trial with the highest dose possible at 8 mg/kg then we can declare it a failure. As of now these bearish articles are just speculating, and have no hindsight on whether the drug compound is efficacious or not.

Investors can now pick up Galectin at a huge discount trading at around $5.70 per share and if your risk tolerance in biotech is there it may not be a bad idea to dip your toes into the stock. NASH is a terrible disease and it has only added to many damaged livers in the U.S. and abroad. Despite today’s declining share price we don’t think the company should be passed off in NASH as a failure until the cohort 3 is completed and we can then see if efficacy has improved or not. Only then can we declare it is a failure if it doesn’t achieve efficacy with the highest dose of 8 mg/kg. Investors won’t have to wait long because patient enrollment has begun already for cohort 3 and results are expected as early as November 2014. All biotechnology stocks are not perfect the first time around, sometimes doses need to be increased to achieve better efficacy. In this case it may be plausible that doubling dosage of GR-MD-02 from 4 mg/kg to 8 mg/kg may yield better efficacy. We will just have to wait till cohort 3 is completed to find out!


Inovio Pharmaceuticals Posts Positive Phase 2 Cervical Dysplasia Data, Platform Now Validated

If you have been following me since September 9, 2013 when I first posted an article about the partnership with Inovio Pharmaceuticals (INO) and Roche (RHHBY) seen here ” Inovio Inks Deal With Roche, The Sky Is The Limit ” then you will be very happy today. As with all biotechnology stocks there are many risks where trials fail, but in this case the results are very good with a platform that deals with immunotherapy. Immunotherapy is long become the favored form of treatment for cancers because chemotherapy is toxic. This also follow along with other drugs that have severe side effects that make the patient’s quality of life less appealing. Immunotherapy, especially Inovio’s CELLECTRA electroporation device along with synthetic DNA vaccine codes is a lot safer for patients as it utilizes the patient’s own immune system (T -cells) to attack and kill these pre-cancerous and cancerous cells.

Inovio had gone up to a high of $14.20 per share in the morning , and the volume seems to be high after posting positive phase 2 results in patients with Cervical Dysplasia. So how do the results stack up in terms of validation? Patients had CIN 2/3 associated with HPV 16 and 18, and patients were either given VGX-3100 or a placebo drug counterpart. The results were good because VGX-3100 was able to achieve the ability to take CIN 2/3 down to CIN or actual clearance of the HPV in the study. The amount of patients that had their CIN 2/3 brought to CIN 1 or less was 53 out of 100 patients which brings the percentage to 49.5% this compares to placebo only coming in with a percentage of 30.6% or 11 of 36 patients.

Many bearish articles will come out to make false claims. They will find many items to spin to cause panic, but the bottomline is that they won’t mention one thing in their articles. They will not mention that Inovio had met its p-value of statistical significance compared to placebo. You will never see these bearish articles post that Inovio met its primary endpoint, in which case it did. Not only did Inovio meets its primary endpoint but it also achieved its secondary endpoint of virological response within the patients’ bodies compared to placebo. Around 40.2% or 43 out of 107 patients saw virological disappearance compared to placebo that only saw 5 out of 35 patients  or 14% with virological disappearance. There is no disputing the facts and that is that VGX-3100 met both its primary endpoint and secondary endpoint and will now move on to a phase 3 clinical trial.

We can also look to evidence above where Roche made a deal with Inovio. Keep in mind that the deal that was made was by Roche just observing only pre-clinical results of Inovio’s Syncon DNA vaccine and electroporation technology. For Roche to put so much faith in a small-cap biotechnology stock just by observing only pre-clinical results is amazing in itself. So we have validation that already occurred by a big pharma company — Roche — investing, and now we have validation of Inovio’s platform in its phase 2 results. Investors are missing the big picture here, because these results don’t just validate VGX-3100 but the entire pipeline has now been de-risked greatly. The CEO is currently expected to present the data today, and could allow the share price to rise slightly higher. The bottom line is that long term investors should be happy, because there is plenty of more good news to come regardless of short term trading. We think that Inovio is a strong buy and can create significant upside for investors over the next few years!


Sarepta Tumbles On New Drug Data But Presents A Big Buying Opportunity

Shares of Sarepta Therapeutics (SRPT) tumbled as much as 28% after it had updated its phase 2b data from its Eteplirsen study through 144 weeks. The stock stumbled down but not for the right reasons, and so we reiterate that Sarepta is still a strong buy for those long-term investors that have patience. Sarepta’s drug known as Eteplirsen is being developed for boys with a disease known as DMD -Duchenne Muscular Dystrophy. DMD is a disease characterized by muscle weakness and inability to walk due to reduced dystrophin levels. The disease occurs when a male child is born with an x-chromosome, but it is random in nature. Meaning not all boys born with the x-chromosome will have DMD, but it still is a huge possibility.

The breakdown of the results are important in understanding what the results mean for boys suffering from DMD. In order for Sarepta to test these patients walking ability they used a test known as the 6MWT or 6 minute walk test. This test is used to measure the amount of muscle strength the patient has to walk for a certain amount of distance before they are unable to do so anymore. The patients that took the 30 mg/kg and 50 mg/kg eteplirsen cohorts saw an average decline of only 33.2 meters from the normal baseline walking ability. The most important portion of the results is that patients taking the Eteplirsen drug saw an overall benefit of 75.1 meters or p less than or equal to .0004 which was way above the placebo group.

So with these good results on hand what has caused the stock to decline so much? Well for starters the CEO for Sarepta Chris Garabedian has stated that with this data the company can file an NDA to the FDA by the end of this year. The problem though comes from other media sources, and analysts that are now stating that Sarepta may have to delay their NDA. By this they mean that Sarepta may be forced to run a phase 3 trial to confirm that the data results can be taken as fact. All this doubt probably stems from another drug company known as Prosensa Holdings N.V. (RNA) which had failed a phase 3 trial on patients with DMD. All this doubt can be understood but what investors need to realize is that these two companies have different methods for delivering RNA oligonucleotides. The only similarity is that they both use RNA technology, but each company has a different method of action formulating their RNA technology.

Going forward though we think that the eventual approval for Eteplirsen will be possible. While we can’t predict what the FDA will want – meaning Sarepta may have to run an additional phase 3 trial as more proof of concept for DMD patients — the FDA is looking for a treatment to help these boys that suffer form DMD with no available treatment options. Sarepta’s Eteplirsen drug is safe, and has the ability to significantly increase the amount of walking distance compared to a placebo that hardly does anything to help these patients with DMD. We should note though that investors might see some short term volatility, but for the long term we tend to be more optimistic that the FDA will want to finally approve a treatment for DMD patients. Especially all the parents of the boys that are pushing hard on the FDA to finally approve a treatment for these boys to improve their quality of life. Sarepta currently trades at $21.36 per share which is close to its 52-week low of $12.12 per share so investors have an opportunity to buy for the long term. With that said we believe that this Sarepta tumble has created a big buying opportunity for investors to capitalize on in the near future.