OXiGENE (NASDAQ: OXGN)

I might be the only person who owns this stock on the board but I will go ahead and provide an update anyway. The data release on November 9 was mixed. They met endpoints with significant progression free survival increases but they may have a long road ahead for a pivotal study because they are trying to prove that a combination of drugs (including Avastin which is not yet approved for ovarian cancer) is at least equal in efficacy to chemo treatment. Here is what was covered in the earnings call last night;

seekingalpha.com/article/2676085-oxigene-oxgn-ceo-dr-dave-chaplin-on-q3-2014-results-earnings-call-transcript?part=single

Here is a cautious analysis of the data from Adam Feuerstein;

www.thestreet.com/story/12949868/1/oxigene-faces-challenges-for-ovarian-cancer-drug-even-with-encouraging-data.html

I doubled my holdings yesterday because I thought it was oversold and I expect a runup in anticipation of Avastin potentially being approved on November 20 (which seems extremely likely). The stock has rebounded this morning and I expect it to continue to rise over the next week. I will likely look to lock in profits before the 20th.

I don't know what to think about this stock. It definitely seems oversold after getting surprise early news that Avastin was approved. It is trading at new 52 week lows today but I don't see firm catalysts on the horizon to cause significant gains. I will continue to hold for now. 

I had a few hours on a long train to actually do some deeper reading into this one. Here is my rundown.

Highlights:

- $33M in cash at end of Q3
- $36M current market cap
- 20M shares outstanding
- 7.5M warrants
- Closing price today (11/18) $1.78
- Recently completed a Phase 2 combined therapy trial with Roche with their lead candidate Zybrestat (Fosbretabulin)
- Large pipeline

Summary:

Zybrestat is a vascular disrupting agent (VDA) drug that targets and destroys blood vessels in a tumor starving it of oxygen and essentially killing it off. The Phase 2 trial combined their lead candidate drug Zybrestat with Roche's cancer drug Avastin in the treatment of ovarian cancer. The data on 107 patients (released in March 2014) showed that when Avastin is combined with Zybrestat there is a 32% increase in reduced re-growth of tumor or death, which was the primary endpoint and proved statistically significant.

The PPS shot up 134% to $5.65 on the news. However, OXGN used that news to do not one, but two capital raises within 3 months of each other grossing $28M. That added about 12M or so shares to the float which is a lot considering that now there are still only 20M o/s. The cash is expected to last them through 2016.

The downside is that there are no real short/mid term catalysts that I can see. Maybe some data results from some of their other trials. It has been beaten down pretty bad over the past 6 months and is trading right at the year low. The fact that it is basically trading at cash level makes it interesting for me. I think the risk at these levels is pretty low. A lot depends on where they go from here with Phase 3, but if Zybrestat improves the performance of Avastin, it only makes sense that Roche will look to continue working with OXGN in the future. Potentially another combined Phase 3, followed up with an NDA. Annual global sales of Avastin is around $7B, so if Roche decides it's worth it to them, it could obviously be pretty huge for OXGN, especially at the current $36M market cap.


Q3 10Q:
www.sec.gov/Archives/edgar/data/908259/000119312514410532/d799265d10q.htm

Latest corporate presentation (Oct. 2014):
investor.oxigene.com/events.cfm

Adam Feuerstein article:
www.thestreet.mobi/story/12525896/1/oxigene-surprises-with-positive-ovarian-cancer-study-success.html

For anyone interested in buying stocks with a market cap less than their cash on hand, OXGN just entered that zone. The price is all over the place today for no obvious reason but anything under $1.60 is pretty much a market cap lower than cash on hand. I have held a small amount of shares and am tempted to buy more but want to see where the price goes later this week.

Lots of rumors swirling around about a Roche/OXGN buyout happening next week.  Apparently it was reported at stockwits, so I take it with a very large grain of salt.  They make random buyout rumors every day and they almost never come to fruition.  Anyway, I almost opened a position today, but decided to go with ATHX instead.  Still have my eyes on this one though and am anxious to see how things play out.

Don't look now, but OXGN is up big pre-market.

That is the main reason I have been hesitant about pulling the trigger with this one. While I like their cash position, there are no real catalysts to move it up in the near future, except a Roche buyout. At least from what I gather. 

Yelk,
I don't see what bad news could be on the horizon for this stock so I think the 52 week low ($1.48) should hold and I am just hoping for a surprise to move this one up later this year.

I was waiting for it to pop closer to 1.5 and now it is almost 1.7 should have got it when I said Oh well! Now I'm faced with entry decision.