Two Explosive Biotech Game-Changers
In his January 3, 2013 interview with The Life Sciences Report, Josh Levine named "three biotech game-changers" while discussing his approach to investing in micro and small cap technology stocks.
"Biotech stocks account for almost half of the current portfolio. It is my favorite area. There are a number of reasons for that. Several of the companies in the portfolio qualify as what I call game changers. They are stocks that I'm in for the long haul, and I see tremendous potential for them. These companies have created technology platforms that can enable multiple products, drugs or applications. In that sense they have some built-in hedge to risk because they are not dependent on a particular compound that might fail a clinical trial. The three companies I will talk about today have all of the characteristics that are favorable to micro-cap investing as I approach it.”
On September 12th, Josh issued the following updates for two of the biotech game-changers he highlighted for The Life Sciences Report in January:
Inovio Pharmaceuticals (INO) took a giant step this week when it announced what we've long been anticipating -- an impressive and potentially lucrative partnership with a leading global pharmaceuticals company.
Before this week's news, Inovio's shares had been on a wild ride, surging as much as 500% since the start of 2013. The momentum stemmed from a series of strong pre-clinical and clinical results for its DNA vaccine platform, a growing appetite among institutional investors for exciting biotech opportunities, and expectations of a major license agreement.
Inovio delivered on this last point by partnering with Roche in a collaboration to commercialize Inovio's multi-antigen DNA immunotherapies to treat prostate cancer and hepatitis B.
The exclusive global licensing deal with Roche includes an upfront payment of $10 million to Inovio, along with development and commercial milestones of up to $412 million for exclusive access to Inovio's DNA-based vaccines INO-5150 for prostate cancer and INO-1800 for hepatitis B.
Immunotherapies tap the power of the immune system to fight cancer and could have the potential to transform some cancers into something akin to a chronic disease. These therapies represent a new wave that is generating excitement in the industry and on the Street.
Inovio's technology looks to stimulate the body's immune system to help it recognize and kill cancerous cells. It also wants to harness the immune system to treat hepatitis B.
In May, Roche announced positive results from clinical trials for its experimental drug to boost the immune system to target cancer. It's also notable that Roche is partnered with another portfolio component, Curis (CRIS), and has already commercialized its first cancer drug in collaboration.
In the Inovio deal, Roche licensed compounds that are currently in pre-clinical development and have shown they can induce the immune system's T cells in animal models.
Additionally, the license allows Roche to use Inovio's CELLECTRA electroporation technology for delivery of the vaccines. Moreover, Roche obtained an option to license additional vaccine opportunities in the field of oncology.
The most exciting aspect to the Roche deal is that it's focused on pre-clinical compounds and this leaves a vast pipeline of both pre-clinical and clinical assets open to licensing. Based on this agreement, future partners may be very willing to pay significant multiples to gain access to what is potentially a technology platform for a new generation of vaccines.
Neuralstem (CUR) is finally gaining the market recognition it deserves. The shares are trading at their highest level in two years – up nearly 150% since the start of 2013.
Now that the first patient was treated in Phase 2 of Neuralstem's ALS stem cell trial, the attention will only increase. The company has delivered positive results at every step along the way and further strong outcomes in this trial will add tremendous value to CUR's technology platform and intellectual property.
The Phase 2 dose escalation and safety trial, taking place at Emory and at the University of Michigan Health System, is designed to treat up to 15 patients in five different dosing cohorts.
The first 12 patients will receive injections in the cervical region of the spinal cord only, where the stem cells could help preserve breathing function. The final three patients will receive both cervical and lumbar injections.
The dose will also increase in both number of injections and cells per injection throughout the trial. In Phase I, the trial progressed to a maximum of 15 injections of 100,000 cells each. In Phase 2, the trial will advance up to a maximum of 40 injections and up to 400,000 cells per injection.
The main goal is to identify the maximum-safe dosage that patients can tolerate. It's expected that the injections will be completed by Q2 2014. Importantly, the trial is focused on cervical injections -- the region of the spine that controls the breathing function. This is where the therapy can have the strongest influence on patient quality of life and longevity.
Neuralstem is increasingly putting itself in a stronger position to partner with a major pharma on favorable terms. The fact that its stem cell therapy is in a Phase 2 makes a big difference.
To learn about Josh's three biotech game-changers, read the complete interview here.