It’s every stockholder’s dream to be ahead of the curve in discovering a small company that will become the next big stock. Most of upstarts that could possibly meet the criteria are in need of quality exposure for their fundamental strengths, the type of exposure that can be delivered by major conferences. For biotechs with cancer drug candidates, there is none bigger than the annual American Society of Clinical Oncology (ASCO) meeting, this year being held from May 29-June 2 in Chicago. The meeting brings excitement to the oncology and investment communities alike, as interested parties cull information looking for potential breakthroughs to treat the deadly disease and strengthen portfolios.
Big pharma, the likes of Merck (NYSE: MRK), AstraZeneca (NYSE: AZN), Pfizer (NYSE: PFE) and Bristol-Myers Squibb (NYSE: BMY), generally garner most of the headlines and will rightfully have a dominant presence at ASCO, but the world’s biggest cancer research conference has implications for companies of all sizes. Small and even micro-cap companies can be sharp movers out of ASCO as they share information that is worthy of taking note of 1) for its own merit and 2) for how stock prices could fluctuate based upon data at ASCO from other organizations in the same field. So, while many look only to large cap companies, here are two ASCO plays to radar with market capitalizations under $400 million (stats from Yahoo! Finance as of market close on Wednesday, May 27, 2015).
Oncothyreon Inc. - $3.36 per share, $343.73 million market capitalization
Oncothyreon (NASDAQ: ONTY) has two drug candidates in development, ONT-10, a therapeutic vaccine targeting MUC1, a glycoprotein overexpressed in most solid epithelial tumor cancers and common non-solid tumors, and ONT-380, an orally active, reversible and small molecule selective inhibitor of human epidermal growth factor receptor 2 (HER2). HER2 is also overexpressed in many types of cancers, including breast, ovarian and stomach.
ONT-380 is differentiated from other small molecule HER2 inhibitors for HER2+ breast cancer in that others in this category inhibit both HER2 and HER1, also known as EGFR (epidermal growth factor receptor). ONT-380 inhibits HER2 without significant inhibition of EGFR, meaning ONT-380 could increase efficacy and reduce the side effect burden associated with dual inhibitors, namely grade 3 adverse events of diarrhea and rash. Approved drugs in the dual inhibitors class include GlaxoSmithKline’s (NYSE: GSK) Tykerb and Boehringer Ingelheim Pharmaceuticals’ Gilotrif. ONT-380 has also gained recognition in comparison to the HER2-blocking drug candidate neratinib being developed by Puma Biotechnology (NASDAQ: PBYI). Last summer, shares of Puma skyrocketed on news of positive top line results from a Phase 3 trial of neratinib after adjuvant treatment with Roche’s (OTC: RHHBY) Herceptin (trastuzumab) in breast cancer patients, showing a 33% improvement in disease-free survival versus the placebo. More data on Puma’s Phase 3 trial is expected at ASCO as well (Abstract #508).
In December, Oncothyreon replaced a co-development contract with Array bioPharma (NASDAQ: ARRY) with an exclusive license agreement to develop and commercialize ONT-380. ONT-380 is in three early-stage clinical trials as a combination therapy for the treatment of metastatic breast cancer, two Phase 1b trials sponsored by Oncothyreon and a Phase 1 trial being conducted by Harvard’s Dana-Farber Cancer Institute.
Shares of ONTY have been galloping ahead this month, more than doubling from a low of $1.41 on May 13 to a high of $3.56 on Tuesday. As Seeking Alpha news editor Douglas House notes, the driver in the recent run for ONTY share value seems to be “ASCO abstract-stoked investors” bidding up Oncothyreon on news of early-stage trial results of ONT-380.
Oncothyreon will be presenting two abstracts at ASCO (#602, #612). 602 summarizes the Phase 1b dose-escalation trial evaluating ONT-380 in combination with Genentech’s Xeloda and/or Herceptin in HER2+ metastatic breast cancer patients that have already been heavily treated, including with Herceptin and Genentech’s Kadcyla and Perjeta. The abstract has results from eight patients, showing an acceptable safety profile for the treatment. The best results listed include four patients of which have shown a partial response and two with disease stabilization.
Abstract 612 covers Oncothyreon’s other Phase 1b dose-escalation trial, in which ONT-380 is being used in combination with Kadcyla in patients with metastatic HER2+ breast cancer previously treated with Herceptin and a taxane. This trial also includes an expansion arm in patients where cancer has spread to the central nervous system. Among the eight evaluable patients, three have shown a partial response and four patients have shown disease stabilization, according to the abstract.
Cellceutix Corp. - $2.76 per share, $324.1 million market capitalization.
Cellceutix Corp. (OTC: CTIX, uplist pending with Nasdaq) has made a name for itself through a deep portfolio of compounds targeting various diseases and conditions, including bacterial infections (Phase 2b trial of QIDP-designated Brilacidin completed Q3 2014), dermatology (Phase 1 complete, Phase 2 to commence in June of Prurisol for psoriasis) and oncology. In the cancer space, enrollment has just begun in a Phase 2 trial of Brilacidin-OM, an oral rinse for the prevention and treatment of oral mucositis in patients undergoing chemoradiation for treatment of head and neck cancer. With no FDA-approved therapies and about 450,000 patients with OM each year, the market potential is substantial for a treatment that is prophylactic and more effective than the palliative coatings currently available.
Cellceutix is seeking to achieve a major breakthrough with its flagship cancer drug Kevetrin. Interest has surrounded Kevetrin because it acts upon the key tumor suppressor p53, a protein so important to cellular and genetic stability that it has been coined the “Guardian of the Genome” or “Guardian Angel Gene.” Due to the fact that in nearly every type of cancer the p53 pathway is damaged in some way, scientists have been trying for years to reactivate p53, but have done so only with limited success due to toxicity issues.
Extensive pre-clinical studies have shown Kevetrin to act upon multiple tumor types, including lung, breast, colon, prostate, squamous cell carcinoma and in a leukemia tumor model. Importantly, the studies showed Kevetrin to be non-genotoxic, an integral component to the major breakthrough Cellceutix seeks. An ongoing Phase 1 trial at Harvard’s Dana-Farber Cancer Institute and partner Beth Israel Deaconess Medical Center is evaluating Kevetrin as a monotherapy for treating advanced solid tumors. This trial has set the stage for a Phase 2 trial sponsored by the University of Bologna to test Kevetrin in combination with cytarabine as a new drug candidate for acute myelogenous leukemia that is expected to start in 2015. According to Cellceutix, signs of efficacy have also been shown, as measured by increased levels of p21, a key biomarker of p53 activity, and the reported near disappearance of a spleen lesion in a Stage 4 ovarian cancer patient after minimal exposure to Kevetrin. As with the lab studies, Kevetrin has demonstrated a solid safety profile to date in humans.
With the target enrollment of 40 patients being met, Cellceutix recently requested the hospital’s Institutional Review Board to amend the protocol to allow additional patients to be treated at high doses of Kevetrin. The IRB agreed, which should be interpreted as a positive development, as it would only seem reasonable that the IRB would not have allowed more patients to be treated if they didn’t see something compelling in the data. Investors seem to see it the same way as shares of Cellceutix, which have traded between $1.60 - $4.93 in the past year, turned back up towards $3 following the IRB approval.
Cellceutix will be presenting a trial-in-progress poster at ASCO on this trial. Dr. Geoffrey Shapiro, Director, Early Drug Development Center at Dana-Farber Cancer Institute and the Principal Investigator in Cellceutix’s Kevetrin trial, will be the poster presenter. Cellceutix said recently that it has more than enough data to approach the FDA to discuss initiating a Phase 2 trial of Kevetrin for a specific tumor type with a shorter interval between infusions. Because of Kevetrin’s pharmacokinetic profile to clear the body quickly and safely at high doses, the company seems confident that switching dosing to more than once a week will deliver an even more robust effect. Trial-in-progress posters limit the information that can be disclosed, but investors will likely be looking to glean more information about the future of Kevetrin as the Phase 1 trial looks headed to be successfully completed in the near term while Cellceutix plans for multiple Phase 2 trials of Kevetrin.
A Great Time for Oncology Drug Development
These two companies are some of the smaller firms that have some quite promising early studies that will be presenting at ASCO that can possibly generate attention at the cancer research extravaganza. The biotech sector remains of great interest and the oncology R&D business may be one of the hottest areas today. The regulatory environment has been a work in progress the past few years, continually shifting to become friendlier to innovation in a bid to bring new products to market more quickly to address areas of unmet need. Overall, this is an exciting time for cancer research as next generation drugs acting upon different mechanisms to destroy tumors work their way through pipelines, offering new opportunities for investors and hope for the millions of patients in need.