Rodman Conference Recaps: EXACT Sciences, Delcath, Unilife Print E-mail
Sunday, 13 September 2009 15:02

On 8/31/09, Delcath Systems (NASDAQ:DCTH) announced the FDA granted orphan drug status to doxorubicin, an approved chemotherapy agent, for the treatment of primary liver cancer.

The Company said it tested doxorubicin with its unique drug delivery technology, Percutaneous Hepatic Perfusion (PHP), which results in significantly higher doses (e.g. 10X the FDA approved standard dosing with 100X exposure of drug to the tumor site) of anti-cancer drugs such as doxorubicin to the liver without exposing the patient's entire body. Delcath plans to carry out the necessary clinical work for a regulatory submission of PHP with doxorubicin.

This ABC News Video describes the PHP system and provides a case study for a patient with liver cancer

On 8/25/09, DCTH reported that it has exceeded 90% enrollment for its pivotal Phase 3 Metastatic Melanoma Trial which will enroll a total of 92 patients. This study is testing the PHP System for the regional delivery of melphalan to the liver to treat patients with metastatic melanoma (a deadly type of skin cancer) who have tumors in the liver, which cannot be removed by surgery (unresectable). On 9/11/09, DCTH reported that the Data and Safety Monitoring Board (DSMB) reviewed clinical data on 77 patients enrolled in its pivotal Phase 3 clinical trial and unanimously recommended that the trial continue to enroll patients with the goal of reaching the 92 patients required to complete the study. DCTH expects enrollment to be completed by mid-October and is still on track for a FDA filing by mid-2010.

Despite the recent run-up in shares of DCTH, the fully diluted market cap is about $130 million and leaves plenty of room for upside with catalysts looming in the near to intermediate term based on news flow from the ongoing pivotal Phase 3 trial of melphalan delivered by PHP. PHP represents a platform technology that can be expanded to the treatment of other cancers (with established, FDA-approved chemotherapy drugs) and other infectious diseases such as hepatitis. The Company also represents a risk-mitigated play since it is seeking to improve the effectiveness of existing chemo drugs by its targeted drug delivery system which greatly increases exposure to the tumor site while sparing healthy tissue outside of the liver.

The Company’s goal is to complete Phase 3 trial enrollment by end of 2009, obtain European marketing approval by mid-2010, and obtain U.S. FDA approval by mid-2011 while seeking development and marketing partnerships to expand and fund the development and commercialization of the PHP system. Delcath has a cash burn rate of just under $1 million per month with $8.9 million in cash at the end of 2Q09 and about 32.5 million shares on a fully diluted basis. Importantly, the ongoing Phase 3 clinical trial protocol received Fast Track designation from the FDA and is being conducted under a Special Protocol Assessment (SPA).

A key development for EXACT Sciences (NASDAQ:EXAS) is the replacement of a large collection bucket associated with the Company’s stool DNA screening test for colorectal cancer (CRC) with a much smaller (less than two ounces) system that will greatly enhance the commercial prospects and logistics associated with the development of the next-generation V3 test. The much smaller size of the collection system for the V3 test will make it much easier for doctors to store in their offices and simplify the shipping process for lab processing.

This adds to positive news announced during the 2Q09 conference that the Company’s pending Phase 3 FDA study is likely to be much smaller in scale (e.g. 3,000 subjects) and less costly versus the previous guidance of 8,000-10,000 subjects enrolled at 30-40 clinical sites that would have taken 12-18 months to complete. The objective of this study is to obtain broad claims and FDA marketing clearance for a non-invasive stool DNA based CRC screening test, including the detection of pre-cancers. The stock research section of includes my 2Q09 update report for EXAS, including an earnings model in the U.S. market, targeting a major unmet medical need for an estimated 90 million people over the age of 50.

Unilife Medical Solutions (UNIFF.PK) (UNI.AX) is in the process of obtaining a primary U.S. listing on the NASDAQ as part of its relocation to Central Pennsylvania where the Company began manufacturing the FDA-cleared Unitract 1mL Insulin Syringe in August 2009. Unilife boasts an impressive, experienced management team that delivers on its objectives – as evidenced by the Company’s Industrialization Program for the Unilife Ready-to-Fill Syringe that is one year ahead of schedule, targeting completion by the end of 2010.

Click here for my previous article coverage of Unilife at, beginning in late March when the stock was trading around the 25 cent range with little to no volume for the U.S. Pink Sheet listing (UNIFF.PK) which is quickly approaching $1/share as the Company nears a NASDAQ listing. In addition, the research section of includes a report by Griffin Securities with a US$3 price target and the Company’s most recent corporate presentation. Highlights from the report include the following:

1.) Unilife has a disruptive drug delivery technology with a sound strategy to enter the U.S. and European needle and syringe markets

2.) Unilife has a big pharma partner in Sanofi-Aventis (NYSE:SNY), which is investing $38 million into the Company through an industrialization agreement in addition to a strong relationship with the Commonwealth of Pennsylvania

3.) Starting next year, additional supply agreements in other therapeutic areas (outside of the SNY agreement) are anticipated

Disclosure: Long EXAS. See my full disclaimer at at the bottom of any page.


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