Quickly Approaching Biopharma Catalyst Events Print E-mail
By Scott Matusow @scottmatusow   
Wednesday, 24 April 2013 07:39
Today, I list 4 biopharmas I feel offer strong upside potential in the short and midterm. With these catalysts quickly approaching, we can expect some nice shorter term appreciation under normal market conditions. I feel the 4 stocks I list here are also strong speculation investments. Agenus (AGEN) has a plenary update from its trial using its Prophage Series vaccines for newly diagnosed glioma patients due on May 1st, 2013. Afterwards, the company will be announcing the opening of their Phase III recurrent study in Glioma patients. The National Cancer Institute (NCI) will be funding the study.

According to the company website:

“The Prophage Series vaccines describe our portfolio of patient-specific therapeutic cancer vaccine candidates, which have been tested in more than 850 patients in multiple cancers in more than 15 Phase 1, 2, and 3 clinical trials. Included in the Prophage Series are the R-Series candidates in renal cell carcinoma (RCC), M-Series candidates in melanoma, G-Series candidates in glioma, and NP-Series candidate in pediatric neurological tumors.”

Glioma is a type of tumor that arises from glial cells and starts in the brain or spine. Gliomas make up 30% of all brain and central nervous system tumors and 80% of all malignant brain tumors.

The Phase III study is poised to be the largest ever funded by the NCI for brain tumors. If ultimately proved successful, Agenus's stock price could very well see 10 times the current stock price.

Other upcoming catalysts for the company include:

QS-21 Stimulon Adjuvant-data, which is designed to strengthen the body's immune response to a vaccine's antigen, thus making it more effective.

Agenus has already reported positive Phase III results on October 18, 2011 and November 9, 2012 for the QS-21 Stimulon Adjuvant in GlaxoSmithKline's (GSK) RTS,S for Malaria and has several other trials underway for additional indications. These catalysts include Phase III Mage A3 for Melanoma, and Phase III A3 for non-small cell lung cancer. Agenus is also partnered with GalaxoSmithKline for both of these indications. Furthermore, a Phase II HerpV trial for Genital Herpes is underway, with data due in 2013.

Speculating further into the future, Agenus has a Phase III trial for HZ/su for Shingles with data due in 2014 and 10 other undisclosed indications.

Notwithstanding the numerous near term catalysts, It's my opinion that Agenus is one of the better longer term speculation investments around in the small cap biopharma segment.

Insmed (INSM) creates inhaled therapies for a number of different lung diseases including chronic lung infections in which there are no approved therapies. What is interesting about the therapy is how it's delivered. Their patented eFlow Electric Nebulizer is a hand-held device that allows the patient to easily inhale from it, so that the antibiotic is delivered directly to the site of infection and into the lungs. The antibiotic agent is a liposomal form of Amikacin called Arikace. Arikace is an antibiotic commonly used by hospitals for severe infections.

Amikacin is an aminoglycoside antibiotic that is most often used to treat hospital acquired infections with multi-drug resistant Gram negative bacteria. Insmed is testing Arkiace in several trials for the treatment of Pseudomonas and Non-Tuberculosis Mycobacteria (NTM). The company is currently undergoing a Canadian and European Phase III (CLEAR 108) study for CYSTIC FIBROSIS patients Pseudomonas lung infections, initiated in the 2nd quarter of 2012.

In a Phase II extension study recommended by the DSMB for Arkiace, 560 mg were administered once daily for 28 day periods, for 6 cycles and was well tolerated. No adverse effects were observed with longer term dosing. Data showed statistically significant reduction from baseline in Pseudomonas Aeruginosa density, including mucoid strains. Inhalation of Arikace also showed statistically significant sustained improvement in lung function. Top-line data is expected to be released mid 2013, so investors should be very aware of the therapy's potential. This is an orphan status therapy that uses an already approved drug for Cystic Fibrosis patients, so the stock price could run significantly to data.

Aveo Pharma (AVEO)

A Food and Drug Administration (FDA) Advisory committee will convene on May 2nd to vote for or against recommending tivozanib for approval. Tivozanib is a low-molecular-weight inhibitor of the VEGF receptor designed for the treatment of metastatic renal cell carcinoma (RCC), which is more widely known as kidney cancer.

Many people believe the RCC market is too "crowded" for tivozanib to be commercially viable. This is clearly a wrong belief and here is why:

The current first line RCC drugs are all known to have heavy side effects, which cause many patients to cut down on dosage, or stop taking one drug altogether, only to be switched to yet another "toxic" RCC drug that causes the same issues.

Dose reductions of the drugs compared were 11.6% with tivozanib versus 42.8% with sorafenib (P<.001). Discontinuations occurred in 4.2% of the tivozanib arm versus 5.4% in comparison to the Nexavar arm. Overall, there were fewer drug-related adverse events with tivozanib at 67.6% in comparison to Nexavar at 83.3%.

The rate of dose interruptions due to adverse events was 18% for tivzanib compared to 35% for Nexavar (p<0.001). The rate of dose reductions was 14% for tivzanib compared to 44% for Nexavar (p<0.001). This is a strong sign of patient tolerability, which leads to better patient compliance.

I recently wrote a feature article on Aveo that goes more in depth into the company and its prospects. Seeking Alpha contributor Robert Schwartz has also made a very compelling case for tivozanib in his article, which many might find interesting.

Sarepta Therapeutics (SRPT)

On Monday April 15th, the FDA asked Sarepta to provide additional information on the drug, eteplirsen, to consider early approval. Eteplirsen is an antisense PMO-based therapeutic for the treatment of individuals with Duchenne Muscular Dystrophy (DMD).

As I have reiterated a few times now, I feel early approval is likely here, and sooner rather than later. The FDA just wants as much data as possible, so when the organization does grant the early approval, it will not be seen as a politically based decision. There has been a substantial advocacy push to get the drug to market as soon as possible. If the FDA simply approved it now, it might fall under criticism for caving into advocacy groups -- at least in my opinion.

While there is no set date for the FDA to grant accelerated/early approval for eteplirsen, I feel it can happen within the next 3 months or less, so Sarepta is a stock investors and traders should keep on close watch.

Disclosure: I am long AVEO, AGEN.

Disclaimer: This article is intended for informational and entertainment use only, and should not be construed as professional investment advice. They are my opinions only. Trading stocks is risky -- always be sure to know and understand your risk tolerance. You can incur substantial financial losses in any trade or investment. Always do your own due diligence before buying and selling any stock, and/or consult with a licensed financial adviser.

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