|Biotech penny stock's shares fly after report sheds light on "game changing innovation"|
|By Staff and Wire Reports|
|Thursday, 01 March 2012 08:20|
Goldman wrote: "Existing treatments for most serious and chronic diseases have demonstrated limited efficacy. By using Nuvilex’s live-cell encapsulation technology and targeted delivery system in conjunction with these treatments, we believe efficacy along with quality of life improves dramatically, as the live cell encapsulation approach serves as a dramatic therapy booster.
According to the report, the patented cell encapsulation technology enables the targeted placement and delivery of any cell type into the body after enclosing the cells inside tiny, non-toxic, bio-inert beads that protect the encapsulated cells from attack by the body's defense mechanisms. This platform does not encapsulate drugs, but live cells. SG Austria’s proprietary offering, the ability to encapsulated live cells of any kind, is called Cell-in-a-Box®.
At the same time, the beads provide a microenvironment that enables encapsulated cells to survive for long periods of time, which is a major advantage over typical encapsulation technology and critical for future storage and mass deployment. By using Cell-in-a-Box®, it is possible to create small cell-based factories that can be made to convert inactive drugs into the active ones In the case of the drug-converting “factories,” cells inside the capsules are deployed directly at the tumor site to create a continuous high concentration of active cancer fighting molecules (active drug) and in effect provide a dramatically elevated dose of active drugs right where they’re needed, the tumor.
As to the value of this technology to Nuvilex and its shareholders, Goldman states, “We believe that the cancer treatment segment of Nuvilex’s business is worth $0.20 alone, versus the $0.037 close yesterday.” Goldman derives this figure from a comparable valuation analysis where he compares the valuation of certain companies using drug-based pancreatic cancer treatments in clinical trials, in an effort to demonstrate that NVLX’s shares are dramatically undervalued based on its progress in this treatment category. These companies include Merrimack Pharmaceutical which uses encapsulation technology and Threshold Pharmaceutical (NASDAQ - THLD), which has a treatment in Phase II trials.
Interestingly, a technology head-to-head competitor, Living Cell Technology (OTCQB: LVCLY) also uses live-cell encapsulation technology, but to treat diabetes. The Company has completed Phase I trials. To date, Nuvilex has engaged in early stage testing in diabetes as well.
However, Goldman remarked to us that, “LVCLY has only completed Phase I testing for diabetes and trades at a market cap of $28M. Conversely, NVLX, which has completed Phase IIa for pancreatic cancer, trades at a market cap of only $14M. This disconnect alone strongly illustrates the incredible buying opportunity in NVLX’s shares.”
According to the report, investors have mistaken silence in recent months from Nuvilex management for issues regarding its soon-to-be acquired partner SG Austria, when research collaboration is bearing significant fruit. The two are collaborating on key R&D projects, strengthening and broadening the reach of combined firms, which will substantially raise Nuvilex’s valuation. The projects include treatment of a multitude of cancers, enhanced stem cell implementation, chronic conditions such as diabetes, and the treatment of life-threatening viral infections.
Overall, Goldman predicts that with a platform approach that is treatment agnostic in most cases, leading pharmaceutical firms in each treatment segment could seek partnerships with Nuvilex worth $50 – 100M in order to gain access to the Nuvilex technology for use in its best-selling drugs as a method of maintaining their respective market shares.
Goldman Small Cap Research is adamant that Nuvilex’s current share price represents but a fraction of its true value. With recently increased interest and a higher valuation afforded the pancreatic cancer treatment arena, Nuvilex may be worth $0.20 just on the oncology therapies alone and $0.31 for all of the treatments under development. The six-month target price for the stock is $0.50 and Goldman projects that as milestone events occur $1.00 per share is within reach over the next 12-18 months.
Goldman produces research via two formats: Goldman Select Research and Goldman Opportunity Research. The Select product represents the Firm’s internally generated stock ideas while the Opportunity product represents sponsored research reports. This coverage tends to be dominated by early-stage health care, technology and energy sectors. Six month or three month subscriptions can be commissioned by publicly traded company management, investor relations or consulting firms, investment banks, or related parties. Full disclosures and report details are available at goldmanresearch.com