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Post by JHam on Aug 6, 2014 6:40:58 GMT
A very thorough article on ONCS was just published today. It is long, but a good read and is probably the best breakdown of ONCS to date. The author is a shareholder and is extremely knowledgable about the company and the rest of the sector. We see eye to eye on a lot of his points in the article, helping to confirm my thesis for starting a position (and why I am not panicking right now): seekingalpha.com/article/2384855-oncosec-medical-multiplying-immune-response?uprof=45 |
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Post by JHam on Aug 6, 2014 6:52:23 GMT
I am going to highlight here what I think are some important parts of this article, for those who don't have the time to read through the whole thing (though I strongly recommend it):
"OncoSec seems to have found the ability to greatly enhance the response rate of these new standard of care drugs. With ImmunoPulse, a new and novel treatment, they may have found the key to converting Anti-PD-1 non-responders into responders. Unique, groundbreaking and yet even with all this potential few people have heard of them. While slowly achieving their milestones, their quiet approach has seen the stock price fall to its year low of $0.42 from $0.88 just 2 months ago. After presenting positive Phase 2 Melanoma interim data at ASCO this past June, the stock price saw a quick boost followed by the announcement of a 10 percent dilution leading to uncertainty, and retail investor sell off. The price decline though drastic is not alarming as turbulent price activity is common in an OTC "penny" stock. Between the dilution and an expected several month wait for additional news to be released, the price will likely continue to drop till the next news event is announced. There has been no material reasons for this price decline made public and the CEO sent out a tweet on July 17th saying the same and assuring investors that they will meet all 2014 milestones. Though this may not be the best time to buy, OncoSec may be an excellent stock to add to your watch list, especially as we enter the last quarter of this year when a Phase 2B trial is expected to begin."
Here are those milestones, also printed in the article:
"According to the company there are five planned milestones for 2014 (an update to be announced shortly):
Phase 1 Melanoma study for long term survival data
Phase 2 Merkel Cell Interim Phase 2 data
Phase 2B Melanoma combination study strategy / start
Initiation of new Phase 1 and 2 clinical study in non skin cancer indication (Breast or Head/Neck cancers are probable)
Final Melanoma Phase 2 data and expanded Phase 2 interim
Early Next year they are hoping to get 2 new IDO pathway drugs into a Phase 1 trial."
In my opinion, that is a lot of news to happen in the next 4 months. Given that the CEO promised less than a month ago that they would all be met, that means we can expect a flood of positive events announced in the near term.
The author mentions that this may not be the best time to buy the stock. It may not be the best time if the decline is going to continue. However, as long as I feel comfortable with my overall thesis, I'd rather be buying when it is getting beaten down instead of having to chase it on the way up.
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Post by JHam on Aug 6, 2014 7:03:04 GMT
On partnering ImmunoPulse as a combined therapy with a company developing an anti-PD-1 drug:
"OncoSec's approach to the field of immunotherapy has them in a place where a partnership with a large pharmaceutical company is more than just a possibility; it is part of their overall strategy. Immunotherapy has found a spotlight in Oncology with Bristol-Meyer (NYSE:BMY), Astra-Zeneca(NYSE:AZN), Merck(NYSE:MRK), and Roche (all producers of Anti-PD-1 or Anti-PDL-1) vying for the top position, and the competition is fierce. Each of these companies is looking for an opportunity to make their drug more marketable and effective, and none of them can afford to let a key ingredient for success get away. That is where OncoSec holds a unique opportunity."
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"The next major step for this company is likely a partnership in preparation for running Phase 2B trials, expected to begin this year. The three most likely partners: Merck, Bristol-Meyers, and AstraZeneca. Each of these companies have an Anti-PD-1 or Anti PDL-1 drug that would benefit from OncoSec's unique work with IL-12 and electroporation. The ability to convert the non-responders of Anti PD-1 treatments into responders is an advantage that no major pharmaceutical company can ignore. This makes a partnership a potential win-win for OncoSec and any one, or all, of these well-known pharmaceutical giants.
Other options available to the company, if a partnership does not happen, would include purchasing an approved Anti-PD-1 drug (most likely BMY's Nivolumab) on the market and running the trial themselves or using an independent lab with access to both drugs to supervise a trial. Though these latter two options are not beyond OncoSec's ability, a partnership would be ideal, and is what many investors are expecting."
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"Bristol-Meyers, as an example, has clearly demonstrated that big pharmaceutical companies are trying to increase their efficacy in Anti PD-1 drugs. BMY is currently looking at trials of IL-21 combined with Nivolumab or Ipilimumab. It may be important to note ZymoGenetics, acquired by BMY in 2010, did a Phase 2 study with IL-21, showing worse side effects and less efficacy than Oncosec's interim data on IL-12."
So the bottom line, and what I have thought from the beginning, is that a) Big pharma's developing anti-PD-1 therapies are looking to find a way to convert non-responders into responders. In a comparison chart of IL-21 and IL-12 (what ONCS uses), IL-12 was clearly safer, less toxic, better tolerated, and more efficacious than IL-21. njecting IL-12 by itself is far too toxic for patients to tolerate. However, administering it locally via electroporation (ImmunoPulse) safety and tolerability become a non-issue. Therefore, if big pharma wants to go with IL-12, they'll have to go through ONCS, since ONCS owns the patent that allows IL-12 to be delivered safely.
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Post by JHam on Aug 6, 2014 7:25:13 GMT
Lastly on the science, here is how the results in mouse studies between BMY's IL-21 combined study and ONCS' iL-12 mouse study compare to one another (please see the chart in the article):
Bristol-Meyers is currently looking at trials of IL-21 combined with Nivolumab or Ipilimumab. Mouse trial results showed:
With IL-21 alone treatment led to 30% median tumor growth inhibition TGI
With PD-1 alone 60% TGI and 1/10 complete response.
Combining the 2, 7 out of 10 (70%)CR and 99.9% median TGI
CTLA-4 alone 34% CR
CTLA-4/IL21 resulted in 6 out of 8 mice with CR and 86% TGI
OncoSec's interim results (final results have never been made publicly available) from their mouse study:
"Dr. Richard Heller, professor at Old Dominion University, summarized the initial results of this study at the Cancer Vaccines and Gene Therapy Meeting in Philadelphia, Pennsylvania. The study was conducted using a single tumor model where a total of forty mice (eight treatment groups) were treated with either ImmunoPulse alone, or in combination with anti-CTLA4, anti-PD1 or both at varying concentrations. Safety and anti-tumor activity were assessed. Results indicate that all treatment groups showed 100% regression of treated lesions in all mice, and that no mice died as a result of toxicity from treatment. The results from this initial study demonstrate that ImmunoPulse in combination with anti-CTLA4 or anti-PD1 is safe, effective and does not have any contraindicated outcomes. Based on these positive results the company intends to continue testing combination approaches in more aggressive melanoma models that will support further evaluation of this approach in humans"
In short, BMY showed so-so results while ONCS showed 100% regression in all mice. This is why I am so excited about this upcoming Phase IIb combined trial. The potential for ONCS to report 100% tumor regression in all trial patients, as they did in mice, is worth the risk for me at this point.
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Post by JHam on Aug 6, 2014 7:27:18 GMT
On their cash position which pretty much confirms what I wrote the other day (except I didn't add in the months of cash burn since the raise was done):
"The recent share offering added $14m to this total, and if we subtract 3 months of operating expenses (at an estimated burn rate of $1m a month) we can project that they have around $35m in cash, or about $0.15 per share. As long as the burn rate stays consistent they should be able to operate for 30-35 months. If the holders of the remaining warrants chose to redeem their warrants an additional $13m would be added to the cash reserves."
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Post by JHam on Aug 6, 2014 7:45:17 GMT
One final bit about in the article on Dr. Pierce coming to ONCS. This is what I have been saying this whole time and something I think gets overlooked:
"Dr. Robert Pierce, OncoSec's Chief Medical Officer, believes Immunopulse to be the key to converting Anti-PD-1 non-responders into responders. This is why, after successfully leading the development of Merck's Anti-PD-1 drug, pembrolizumab (MK-3475), he left Merck moving to OncoSec."
Why would he leave his big position at Merck to come to a broke biotech unless he thought what OncoSec had was the missing piece to anti-PD-1 puzzle?
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Post by JHam on Aug 6, 2014 7:50:59 GMT
I know I am pasting only highlights so it looks like a typical pumper article. It is definitely pro-ONCS, but the author also did also address the risks in several spots. Here is one snippet:
"As with any biotech stock there are risk factors which need to be considered, including the general failure rate of biotech companies in various Phases of development.
Without reported revenues they can be difficult to valuate, and it is always possible that another company will develop a better more marketable therapy before they bring a product to market. There is also the ever-present risk of key figures leaving the company, due to lack of funding, progress or other circumstances. Though I do not believe OncoSec could survive the loss of their key figures, for now these scientists have shown no indication that they intend to leave, to the contrary they have shown great enthusiasm for the progress they are making. This association with leading researchers in the field of Immunology is one of OncoSec's strongest selling points."
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Post by JHam on Aug 6, 2014 9:44:53 GMT
"With a market cap just barely over $100m, OncoSec has a large number of shares for a small company, 244m outstanding shares and another 15m shares authorized under a 2011 incentive plan. In addition, 29m shares are reserved for the issuance of outstanding warrants. Dilution has dragged the share price down from recent highs. The most recent S-3 filed early this year was for up to $75m of common stock, which at today's price would be another 120 million shares (a recent offering mentioned in the annual share holder letter closed on June 6th). OncoSec through their Articles of Incorporation are authorized to issue 3.2 billion shares of common stock. Like all Biotechnology companies which lack a source of revenue, additional dilution is always a risk factor which needs to be considered."
That's a lot of authorized shares. While there is surely more dilution to come down the road, I don't see this turning out to be an ACTC share guzzler.
Imagine that somewhere down the road we'll what's leftover from that $75M shelf used. My hope is that other value creating events will occur before this happens.
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