Updated Executive Summary for Access Pharma (OTC: ACCP.OB) Print E-mail
Thursday, 04 February 2010 19:23

Access Pharma (OTC: ACCP.OB) is an emerging bio-pharmaceutical company which is focusing on the development of a late-stage, diversified oncology pipeline in addition to a treatment called MuGard that is cleared for marketing in the U.S., Europe, and other key global markets for a common side effect of some cancer treatments known as mucositis (painful sores in the mouth and GI mucosal lining).

In addition, the Company is developing earlier stage compounds in its pipeline and has an oral cobalamin nanopolymer drug delivery technology which has demonstrated positive results for the delivery of insulin by mouth in preclinical animal models.

Access expects to maintain a low cash burn rate of approximately $5 million during 2010, as compared to an operating budget of approximately $35 million - reflecting the significant benefit provided by partner funding such as the clinical development of ProLindac in the Asia-Pacific region. In addition, the current cash and expected milestone payments this year provides adequate funding for all development and commercialization plans through at least mid-2011, which does not take into account MuGard royalties from SpePharm in Europe and pending sales of the product in North America.

Last December, ACCP.OB provided an update on its European commercial launch of MuGard, an FDA approved treatment for oral mucositis, a debilitating side effect of radiation treatment and chemotherapy. MuGard is commercially launched by Access' partner, SpePharm, in six European countries, including the UK, Germany, Italy, Norway, Greece and Sweden. Access is conducting pre-marketing activities, including ramping of commercial production, with the goal of a commercial launch during March / April 2010 in U.S.

Over 15,000 bottles of MuGard have been used by over 2,000 patients since launch. SpePharm is currently gathering feedback from clinicians in the UK, Germany and Italy that are participating in a patient assessment project and expects that out of a total of approximately 1,500 patients who will be given MuGard in this project, a consistent number of patient forms will be collected by year end, and the information will be quality checked for potential presentation at a scientific or medical conference or meeting during 1H10, such as the Multinational Association of Supportive Care in Cancer (MASCC) that will be held June 24-26 in Vancouver.

Thiarabine is ACCP's next-generation nucleoside analogue (e.g. fludarabine, cladrabine) designed for the treatment of blood-based cancers such as lymphoma and leukemia. Access is currently working with leukemia and lymphoma specialists to initiate additional Phase 2 clinical trials in acute myeloid leukemia (AML), acute lymphocytic leukemia (ALL), and B-Cell lymphomas. These pilot studies are expected to begin during 2Q10 and will seek to determine the optimal dosage regimen and most susceptible malignancies for future trials to serve as the basis for partnership discussions for further development and commercialization.

In early January, Access announced successful results in a small, pilot study that validates the new, scalable manufacturing process for ProLindac that is a key component for partnership discussions and large-scale production of the drug for late-stage / pivotal studies and potential commercialization. ProLindac is a next-generation DACH platinum anti-cancer compound which includes a proprietary nano-polymer drug delivery vehicle that allows for over 10X the dose of platinum to be delivered in a targeted manner to cancer cells with a much better safety profile compared to standard platinum-based drugs which cause significant and cumulative neurotoxicity.

Access will also conduct a combination study evaluating ProLindac plus Taxol (paclitaxel) for second-line treatment of platinum pre-treated patients with advanced ovarian cancer. This is a multi-center study being conducted in Europe in up to 25 evaluable patients with primary efficacy endpoint goal of achieving at least a 63% response rate and expects to begin patient dosing by March-April 2010. The initial cohort of about 10 patients will begin the study as an open-label, dose-escalation study that is expected to provide initial results during 3Q09 and a possible partnership or larger pivotal Phase 3 trial could begin during 2H10.

Access has developed a nano-polymer drug delivery system for the oral administration of large molecules that are currently administered as injections (e.g. insulin, human growth hormone/hGH, erythropoietin/EPO, fertility drugs, parathyroid hormone/PTH, RNA-based therapeutics, monoclonal antibodies). This drug delivery technology involves coating a nano-particle with a vitamin B-12 analog (cobalamin) that binds to intrinsic factor in the gut and triggers binding to cellular receptors which absorb the entire package, resulting in exponential increases in absorption through the gut of large molecule drugs / hormones typically administered by injection.

 In June 2009, Access announced that two bio-pharmaceutical companies (one North American, one European) would conduct preclinical, proof-of-concept studies in animals (rat and dog models of diabetes) before proceeding to more formal negotiations for the Company's oral, long-acting (basal) insulin product candidate, seeking to validate the greater than 80% oral insulin bioavailability results achieved by Access in preclinical studies for its oral insulin formulation. Final results from the non-exclusive collaborators are possible during 1Q10 while Access may initiate proof-of-concept (Phase 1 equivalent) studies for oral insulin in humans in Eastern Europe or India during 2H10 (with expected duration of 3-5 months and cost of $250-300,000), and also plans to file an additional patent application reflecting improvements to the technology.

With the recently announced financing that included the sale of common stock / warrants at $3 per share, Access will have approximately $7 million in cash / equivalents and 25 million shares of common stock outstanding on a fully diluted basis (up to 30 million shares taking into account outstanding warrants, etc.) plus a $5.5 million note outstanding which is due at the end of 2011. The outstanding note is expected to be paid in part or full by possible upfront payments as part of co-promotion licensing deal(s) for MuGard in North America which could be combined with a reset of the current $27.50 conversion price.

Additional analyst coverage is also possible throughout 2010, including firms such as Rodman & Renshaw (NASDAQ: RODM), which served as the sole lead placement agent in the recently closed financing. Also, listing of Access shares is anticipated on the AMEX, which should provide greater liquidity and improved bid / ask spreads for trading of the stock. Finally, MuGard sales projections at 12-months post-launch include annualized revenue run rates of $30 million for Europe at 20-25% royalties (i.e. $2.5 million per month) and $50 million for North America (i.e. approximately $4 million per month.

Disclosure: Long ACCP.OB

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