Robert Morris is helming a biotech-focused stock newsletter that’s called Biotech Supertrader (modesty has no place in the world of newsletter promotions, of course), and I’ve never covered this letter before so I thought I ought to have a look at the latest teaser we’ve been asked about.
Morris, incidentally, has been featured in our pages before — but that was back when he was editor of China Stock Insider at the same publisher. That letter, like almost all China-focused investment newsletters, seems to have disappeared quietly into that good night … which probably tells you that it’s time to invest in China again, since the newsletter publishers are ignoring the Middle Kingdom and rushing out their pitches about biotech and tech stocks. At the time, Morris was teasing NQ Mobile (NQ), which has turned out to be pretty good if you bought it down there in the $6-8 neighborhood (though it’s been a wild ride).
So now what’s he pitching for his Biotech Supertrader?
Well, the destruction of “Man’s deadliest disease”, of course. Here’s how the teaser gets our attention:
“This Tiny, Unknown Biotech is About to Unleash Its ‘Holy Grail’ Drug on Man’s Deadliest Disease
“Their ‘Guided Missile Approach’ Could Save Thousands of Lives Each Year
“It’s about to become the most talked about advancement in cancer treatment in our lifetimes and you can lock in a life-transforming fortune if you act quickly….
“I’m urging my subscribers to load up on this stock NOW….
“I’ve just uncovered a tiny, unknown biotechnology company with a new cancer drug in phase 3 clinical trials which is showing remarkable success at treating several types of cancer.
“Their scientists have found an innovative approach to cancer care which involves a breakthrough in treatment. It goes deep inside the inner workings of our cells.
“Plus, this medicine looks to be many times more effective and with fewer side effects than the chemo, radiation, and drug therapies currently available.”
If there’s one thing that investors know can make them rich and make them feel good about themselves and the world, it’s a cure for cancer — we’ve seen that effective cancer treatments can and do (occasionally) turn little biotech stocks into gigantic successes, so the dream lives on that you’re going to catch one of these lottery tickets and own the next Genentech. Will we be so lucky? Well, let’s see which one he’s pitching:
“When this drug wins FDA approval – which I believe it will – this small company’s $4.16 stock price will go straight to the moon.
“And the market for this drug is absolutely huge!
“You see, this small biotech is targeting its new drug, let’s call it ‘drug S’, at cancers of the blood and bone marrow. And it is already in very promising phase 3 trials for these two types of cancer.
“But here’s where it gets really interesting. It looks like the drug this company is developing will also work on other types of cancer!
“There are positive signs it works on Non-Small Cell Lung Cancer (NSCLC) too. There are 1.1 million people with this type of malignancy. Just in the United States alone there are over 300,000 patients with this disease according to The American Cancer Society. Each desperate for a cure.
“Plus it looks like ‘drug S’ may turn out to be an effective treatment for ovarian Cancer. There are more than 204,000 new cases of ovarian cancer diagnosed worldwide each year with 22,280 of these in the United States according to the National Cancer Institute estimates.”
So … who is it? Thinkolator sez this is Cyclacel Pharmaceuticals (CYCC)
Cyclacel is indeed a little biotech around $4 (it closed at $4.35 yesterday), with a market capitalization of only about $80 million — so be careful, we’re a big enough group here that if just a small percentage of Stock Gumshoe readers got enthused about this stock it could drive the shares up, less than a million dollars worth of shares trade each day (Biotech Supertrader says they limited their readership to 750 people — I don’t know if that’s still their cap or if they’ve hit it, but we’ll have more folks than that reading this free article).
And like many biotech stocks, it’s got some impressive scientists and it’s been losing money for a long time as they’ve been searching for a viable drug (their current lead drug also was a big focus of theirs back when it was in Phase 1 trials five or more years ago, so that’s a good reminder of the time these things take, it’s just starting Phase 3 trials now). It looks like they must have gone public in 2004, when they were about eight years old, and a quick scan of ten years of their financials over at Morningstar indicates that they’ve never generated more than a token amount of revenue (meaning, they’ve probably had some research collaboration payments or partnership funding, but never got a product to market), and have accumulated more than $250 million in losses to date. And had two reverse splits to keep the price from sinking far into penny territory.
So that’s not unusual, but it means that — as with all developmental-stage biotechs — it’s not about the financials or the fundamentals, it’s about what’s going to happen in their clinical trials and whether things are going well enough that they can continue to finance the trials … which get much more expensive as you progress through Phase 2 and Phase 3.
All I know about them so far is that they say they’ve got enough cash to get through enrollment in their key Phase 3 study for “drug S” (which is sapacitabine) as of September when they last updated their investor presentation, but I know nothing about the science or the competing cancer drugs that are out there or how fabulous this particular one might be, so I asked our favorite medical writer, Doc Gumshoe (who, yes, is not a doctor) to check them out quickly and chime in. Here’s what he could share after looking into them for a few minutes (he’s just looking at the medical stuff, not so much the “investor presentations”):
- Cyclacel’s Prospects
Cyclacel has three drugs in development at this time, and is involved in eight clinical trials with these drugs, not including two clinical trials that have been terminated. Their top contender is sapacitabine which targets the division of cancer cells. If you can prevent cancer cells from dividing and reproducing, you have the cancer whipped, so targeting cancer cell division (or mitosis, which is the technical term) is a highly promising avenue for treating cancer. However, we need to take note of the fact that sapacitabine is one of a large number of drugs that propose to fight cancer by this method.
At present, all eight of Cyclacel’s clinical trials involve sapacitabine. Of these, at least one has been completed – a Phase 1 study of the safety and pharmacology of the drug. Four others are current, with no information about results. These are likely Phase 1 or small Phase 2 studies, to assess safety, determine what a correct dose might be, and evaluate whether the drug does what it’s supposed to do in human subjects with the target diseases, which in this case include acute myeloid leukemia (AML), cutaneous T-cell lymphoma, and some advanced solid tumors. Prior to the clinical trials, sapacitabine has demonstrated impressive results in delaying the spread of metastatic liver cancers in mice.
From what I can gather from public sources (i.e., the NIH Clinical Trials Registry), there is one Phase 3 trial, which started recruiting patients in February of 2013 and is expected to be completed in late 2015. The trial is in elderly patients with AML, and compares alternating cycles of sapacitabine and decitabine with decitabine alone. Decitabine (Dacogen) is FDA-approved for treating AML and also targets cancer cells’ replication by attacking their DNA.
It is possible that the Phase 3 trial by itself could lead to FDA approval for sapacitabine, depending on the strength of the results. However, that trial would not get the drug approved for use as monotherapy, since it is not being investigated as monotherapy. My guess is that Cyclacel is planning more trials of sapacitabine as monotherapy, perhaps in younger patients. And my further guess is that FDA approval is still quite a long way off.
Sapacitabine is also in a Phase 3 trial with cyclophosphamide and rituximab for the treatment of relapsed chronic lymphocytic leukemia. Cyclophosphamide (marketed under several trade names) is a well-established chemotherapy agent used in a number of cancers, and has led to remission in many cases; however, it is associated with truly harrowing adverse effects. Rituximab (Rituxan, Genentech) is used not only in cancers but in some autoimmune diseases. And sapacitabine is also being studied in patients with previously-treated non-small-cell lung cancers.
Although the piece from Biotech Supertrader said that the drug – identified as “drug S” –is also a promising treatment for ovarian cancer, I find no clue that it is being studied in such patients. [ed note: that’s because that “promise” is in the lab still, not in people — they had a press release about this in the Fall, “75% of Ovarian Cancer Patient Samples Highly Sensitive to Sapacitabine”, not studied in patients but on patient samples]
Cyclacel has two other drugs in development: selicilib and a drug designated as CYC116. One selicilib study has been terminated, and in a second Phase 1 study, selicilib is used with sapacitabine in patients with advanced solid tumors. Remember, however, that Phase 1 studies are many rungs of the ladder below what’s needed to gain FDA approval.
CYC116 is an aurora kinase inhibitor, meaning that it blocks the action of an intracellular enzyme that facilitates cancer cell mitosis. This is a promising avenue of cancer treatment, however, the traffic on this avenue is fairly heavy, and includes several other classes of drugs including tyrosine kinase inhibitors, and taxol based agents such as paclitaxel (Taxol, Bristol Myers Squibb); docetaxel (Taxotere, Sanofi-Aventis), Abraxane (a newer formulation of paclitaxel from Celgene) and others.
CYC116 supposedly also inhibits vascular endothelial growth factor (VEGF), which induces the growth of blood vessels that nourish cancer cells. Inhibiting VEGF is a well-established means of combating cancer, and CYC116 could hardly be characterized as a radically new departure in cancer treatment.
The one trial involving this agent has been terminated. That, of course, does not mean that development of CYC116 stops dead in its tracks – there are many reasons why a trial can be terminated, and ours is not to speculate without more information.
Beyond those three drugs, it’s hard to guess what Cyclacel may have up its corporate sleeve. It is certainly true that a successful cancer drug – even if only moderately successful– can be transformational for the biotech that develops the drug. But the drugs that Cyclacel has under development do not appear to this skeptical observer to be radically new departures in cancer treatment.
It’s important to remember, when trying to estimate the likelihood of a single drug demonstrating sufficient efficacy and safety to gain FDA approval and market share, that the competitive field is vast. As I mentioned earlier, Cyclacel has a total of 8 clinical trials in process at this time.
For the sake of perspective, it’s worth knowing that at present there are 41,445 cancer trials being conducted. So those are the odds.
So there you have it — it’s almost impossible to find a development-stage biotech whose financials look great or that makes your heart go pit-a-pat over their valuation, especially in a biotech bull market like we’ve seen over the past year or so, and Cyclacel doesn’t jump out as spectacular on that front either, not unless you’re a big believer in the promise of their specific drug. They’re a small stock and they don’t get much attention, other than from the analysts who probably helped them sell shares in secondary offerings in recent years, and there aren’t any major “skin in the game” insiders as far as I can tell (the CEO owns $1 million worth of shares, but he gets paid more than that every year), and there’s only one really focused owner on the institutional side that seems to have any kind of biotech focus (Eastern Capital owns about 7% of the shares, roughly $5 million worth … don’t know much about them).
So I don’t see a lot to make them stand out other than Robert Morris’ apparent enthusiasm for the shares (which certainly goes over the top, he calls his special report “The End of Cancer Worries Forever“), and I don’t know enough about the science to be a believer (though, to be fair, I almost never speculate on developmental biotechs because they’re so hit-driven and I’m not smart enough to be a hit-picker in the sector). It is at least encouraging that they are enrolling patients for Phase 3, and that they probably won’t have to raise more money before they have some indication of how the trial is going, but sometime in the next year or two they’re probably going to have to either get good results from this trial that let them raise cash at a good price, or have promising enough results that some big pharma company wants to jump in and help fund development of “drug S” (or just buy up the whole company, as happens with some regularity when a little biotech gets promising results).
Oh, and they are presenting at an investor conference next week, so maybe they’ll have something interesting to share then. As you can tell, this one doesn’t jump into my cup of tea … but these kinds of stocks almost never do. Sound interesting to you? Interested in the science or the lottery-ticket possibilities of $80-million developmental biotechs? Have any experience with Robert Morris or know whether or not we should consider him a biotech savant? Let us know with a comment below.
To all Benitec longs:
The below is an open letter I sent this morning to the CEO, chief science officer and founder of Benitec (3 people). It regards the recent Lisowski and Kay assertion that AAV8 is an ineffective way of transducing human hepatocytes. I feel that Lisowski and Kay are wrong, and that the fact that their argument is “out there” (and it is “out there” in BOTH senses of that phrase) is an impediment to share price appreciation. My hope is that they will wake up in a few hours time, Sunday morning there, and peruse this over coffee and that it will help them quell dissent.
Letter text:
“As I am sure you are aware, a recent paper first-authored by Lisowski and senior-authored by Mark Kay of Stanford has created concern in the minds of many in the investing and medical communities regarding Benitec’s TT-034 clinical trial.
The authors posit that, in a mouse/human liver chimera mouse model, AAV8 showed only limited transduction efficacy against human hepatocytes. It goes on to conclude, quite spuriously I feel, that serious aspersion can be cast on clinical plans to utilize AAV8 as a vector for infecting and transducing human livers for the expression of shRNA.
As a Benitec investor and as a hepatologist, I have strenuous objections to this paper, and am surprised it sailed through peer review as ostensibly easily as it did. I suspect that all of you, in deliberations with others and in presentations, are likely to encounter questions about this paper and whether its seeming conclusions diminish your resolve as regards Benitec’s clinical program. I would politely assert that your answer should be “no” and would like to say why.
Mice with chimeric human/mouse livers are made, of course, by the killing off of mouse hepatocytes and replacing them with infused human hepatocytes. What results, however, can hardly be regarded as a histologically normal liver. Normal liver has a very specific architecture in which portal tracts (hepatic arteriole, portal venule, and cholangiole) are surrounded by central venules. And each central venule is surrounded by portal tracts, rather like a carpet or necktie pattern.
Between portal tract and central vein are cords of hepatocytes. The area around the portal tract is the highly oxygenated Rappoport zone A. The area around the central venules is Rappoport zone C. The betwixt area is Rappoport zone B. Hepatitis C histopathology is humans is famously anisotropic, with most of the harm and inflammation happening peri-portally, in zone A. The blood perfusional path from zone A to zone C is via the hepatic sinusoids. In ways not yet understood, but that the TT-034 trial may do much to elucidate, HCV’s infectivity seems to vary in liver as a consequence of proximity to other types of liver cells that may serve as replicative waystations for virus, including cholangiocytes, endothelial cells, Kupffer cells, and intrahepatic lymphocytes. This, I suspect, is why we see more HCV “action” near the portal triads than in any other liver zone.
In mice with chimeric livers, there is histologic chaos as regards the newly-deposited human hepatocytes. Rappaport zone architecture, sinusoidal architecture, the formation of gap junctions between hepatocytes, and likely the migration of macrophages and lymphocytes….all of these things are distorted and non-native. This leads me to assert that Lisowski and Kay’s conclusion that, based on this system, AAV8 is a poor transducer of human hepatocytes, is nothing if not disingenuous. Our understanding of how AAV8 gets into hepatocytes is incomplete, of course, but to argue based on a system where perfusion, juxtaposition to endothelium, and access to non-hepatocyte liver cells is perturbed that AAV8 is ineffective is just not sound science. Theirs is but one observation, an incomplete one, and one based on a highly imperfect model system. Its broader interpretability as to AAV8 efficacy in human patients is utterly indeterminate. In their system, AAV8 may be having at mouse hepatocytes more readily than human ones because the native mouse hepatocytes remain in a setting of normal perfusion and adjacency to endothelial and sinusoidal lining cells. The same absolutely cannot be said of the human hepatocytes in this system.
Anyway, I hope this helps. I am pulling for you and will help in any way that you will allow me to.
Very truly yours,”
Holy Lord…I wish I could write a letter like that ! I can hardly pronounce 75% of the words.
Or was it a job application????
Dr I would not presume to disagree with you but at times things are not what is seen at 1st glance. The motives of men are difficult to ascertain,& is it not a possibility that company officers might not want a large run-up at this time & hope to create a pause in enthusiasm? Just a thought, there are often many turns in the best road.
Frank: what you are suggesting is certainly possible. Beni has historically been very low-profile, sleepy. And the shares appreciation in Sydney got them the unwanted attention of the ASX this week, something they never thought they would face. But the fact is, the CEO has been on a Benitec road show this year, touting the company to investors actively (SF and NY at major conferences). He did the reverse split specifically to get Americans to pay attention to the shares. Benitec is now itself doing a clinical trial, and doing it before the FDA, not in Australia. This is serious, big league stuff. In the duration of this thread it has literally morphed from pre-clinical to clinical. So, childhood, naptime, is over for Benitec. They face real world concerns, and will have to confront critics. It cannot seek to elicit attention, and then ignore the attention it elicits. The share action this past week has created de novo many Benitec millionaires. Those people will want Benitec to protect its newfound equity, their newfound assets.
Dr thank you for reply . You speak from greater knowledge than mine,I have caution from being burnt many times. I cannot at all disagree with your conclusion.
I truly believe that this thread and its buying triangle is mostly responsible for the Beni jump. That said, now that we are all in, I v much expect the price to fall back, so Im waiting to buy @ $1.20 (guess I should sell and re buy, but I just cant bring myself to the risk). Thinking on Don Barrett #693 replies, perhaps if we all agreed to get out at the same time, the price would fall dramatically, then we could all buy back in for pennies.
(Reposting: got to learn to post comments where they belong or they get ‘lost’):
Thats amazingly similiar to a letter I was going to send them as well… 😉
For those that are counting, add my 40K BNIKF to the list of grateful admirers of Dr.KSS.
When you add all these up, plus those that have not shared (and no reason they should feel compelled to do so) plus those that we all notified and shared this “buy recommendation” with, I think I now know what has helped to drive the price upwards as quickly as it did. WE ARE the the reason. We were all competing with each other for this thinly traded stock (at least the BNIKF version). With that in mind, we need ours friends herein with large holdings, (AKA Steve, Randy, Subramania, etc) to promise not to liquidate their holdings as they can singularly sink the price. I’m kidding of course as I know we are all in for the long term.
I do have one question Doctor: considering the recent price action and other things that you may know or have a gut feeling for, is the current price still an attractive price for additional accumulation of stock. I ask with the full understanding that this is one mans opinion.
Make that two mens question.
KennyG; I would say the answer resides in market caps. As of yesterday’s close(I put these in a table, but am not sure it will be depicted as such by the software here):
Alnylam $5,8 billion
Arrowhead $891 million
Benitec $140.9 million
Bio-Path Holdings $379.3 million
Dicerna $656.8 million
Marina Bio $ 20.8 million
RXII $ 62.3 million
Tekmira $364.8 million
These are all exogenous RNAi plays except Benitec (ddRNAi) and Marina (ddRNAi encoded by bacterial DNA). Valuation of all must be taken in the context that we may be mildly in a biotech bubble, so vast and deep is the speculation. I feel RXII is appropriately valued because of its paucity of clinical ideas….RNAi notions, but no clue what disease to go after. Alnylam is heinously overvalued now.
I regard Arrowhead and Tekmira as Benitec’s most approximate peers in terms of technology and clinical stage of development. So, Benitec is still undervalued. I am waiting for a pullback to load up on shares again.
I have left out of this analysis companies that are making locked oligonucleotides (like miraversen and etiplersen) to go after microRNA. I feel those are a different beastie.
As usual, thank you sir for your input
Hi Dr KSS and everyone on the forum
Nice to read such an informative forum in the US …only discovered you a week ago.
The forum that is … have followed BLT since 2009 … was the first biotech company I became interested in and the one with the most potential out of all the others I now hold.
Someone mentioned the volumes trading in Aust (where I am) for last week … I have shown below the trading for Feb so you can see the surge in volume (a lovely last couple of days!!). The re rating has incredible strength :>
FWIW I will be topping up this week, I generally like to wait for pullbacks to do so but in this case I feel if I wait the price could be much higher than now before it pulls back
And lastly Dr KSS would you mind if I repost your summary of the market caps onto the australian forum I use (crediting you of course!)?
cheers
21/02/2014 1.470 1.755 1.400 1.590 2,593,817
20/02/2014 1.085 1.260 1.070 1.260 1,294,063
19/02/2014 0.950 0.990 0.950 0.990 405,446
18/02/2014 0.920 0.960 0.920 0.950 219,669
17/02/2014 0.915 0.925 0.900 0.920 257,531
14/02/2014 0.950 0.960 0.900 0.900 210,368
13/02/2014 0.930 0.950 0.865 0.950 233,731
12/02/2014 0.995 0.995 0.930 0.930 615,230
11/02/2014 0.875 0.930 0.870 0.930 691,326
10/02/2014 0.850 0.860 0.840 0.850 262,875
07/02/2014 0.845 0.850 0.830 0.830 136,378
06/02/2014 0.850 0.850 0.815 0.825 150,797
05/02/2014 0.835 0.860 0.805 0.840 210,315
04/02/2014 0.820 0.835 0.760 0.780 457,834
03/02/2014 0.830 0.845 0.810 0.840 471,201
31/01/2014 0.805 0.835 0.800 0.820 329,108
I am not sure what to say about the recent action in BNIKF and BLT shares. Prior to last week, I felt that action in BNIKF (which may have been a Gumshoe Gang effect) was driving BLT. But then, at the beginning of last week, my Australian colleague predicted all the BLT action for the week on the basis of technical considerations, by studying its chart there. I view last week’s BNIKF movement as in response to BLT movement, a flip of what was happening. It seems that there is always a pushme vs pullme effect in these shares, with one continent leading the other. Two weeks ago, I blogged about Benitec on a new-to-me Australian forum, and I am being told that led to some buying there. But I do not want people to buy just because I say so. I am introducing people to the stock, and after that it stands on its own merits, scientific validity. I say the company is just finally getting its (long overdue) due.
I do not want Benitec to succeed by dint, by the casting of aspersions on exogenous RNAi plays, but that is how I think this race must be called. I am deeply concerned that after a period of time on RNAi shots, that Alnylam patients are going to start getting mysterious fevers and rashes and aches. You just cannot putz around with Toll-like receptors and expect there to be no consequences. This to me is the great hamartia of these exogenous RNAi companies: things may work like gangbusters for a year in clinical trials, get approved, and then the long term horror sets in and people have to stop their treatments. Nucleic acid RNA, DNA) is just not meant to be extracellular ad free-range in living organisms. It is meant to be shrouded, covered, encapsulated.
To all Benitec longs, i would have bought 150k shares but was hesitant 🙂
I agree with Dr. KSS that at 140m MC it is still way undervalued. I believe it will be in 250m MC in the coming months. Regarding a pullback it may or may not since the stock is only now getting some attention and if we have some good articles i see it only going up. For a trader timing is important but not for an investor. Don’t expect a unreasonable price for you to go long on Benitec. I believe the time is now for Benitec.
BTW Dr. KSS your email was just mind blowing. I hope Benitec board hires you for PR in US! 🙂
Dr. KSS, when you get a chance can you look at Heron Therapeutics (HRTX) and give your opinion? It used to be A.P. Pharma (APPA) but did a total restructuring and $60M financing with new mgt. They will submit a revised NDA for their lead drug Sustol in 2Q…
After a 2nd CRL in March 2013 the BOD of APPA cleaned house and brought in the management team that was responsible for founding Ardea in 2006 and selling it to Astra Zeneca in April 2012 for $1.3B. Barry Quart, co-founder and former CEO of Ardea is now CEO of Heron. On Nov 25, 2013 APPA completed a 1:20 r/s and financing resulting in a $60M cash infusion from the Baker Bros, Perceptive, Broadfin and BVF. The Baker Bros own 9.99%.
A.P. Pharma had $82M cash after the financing. On Jan 23 A.P. changed it’s name to Heron Therapeutics, uplisted to Nasdaq and started trading under the symbol HRTX.
Lead drug Sustol (formerly APF530) recieved 2 CRL’s under former mgt but nothing related to efficacy or safety. The FDA requested data re-analysis and had some supply chain issues and also requested a human factors study. The new management is very confident that all issues have been resolved. Sustol is a long lasting (5-7 days) subQ polymerized version of granisetron (5-HT3 antagonist) for the prevention of chemotherapy-induced nausea and vomiting (CINV). There are no drugs approved for delayed CINV in the HEC population.
Leerink research notes posted on twitter suggest Sustol could become the new SOC for CINV…
https://twitter.com/TomSilver39/status/431593934637117440/photo/1
The best selling drug for CINV currently is Aloxi with 2.8M units sold annually. The overall TAM is 7M chemo doses/yr. Re-submission is planned for mid-2014.
Another program is a long lasting (5 day) polymerized version of Ropivacaine for post-surgical pain using their Biochronomer tech.
Leerink Swann investor presentation..
http://leerink.metameetings.com/confbook/healthcare14/webcast_of.php?p=411
company presentation…
https://docs.google.com/viewer?url=http://www.appharma.com/resources/HRTX-Presentation-Feb2014.pdf
Sustol poster…
https://docs.google.com/viewer?url=http://www.herontx.com/resources/APF530-MASCC-ISOO-poster-June-2012.pdf
Dr. KSS i have invested heavily on RXII as well. I see that you are not keen in what they are trying to do. I cannot scientifically prove what they are doing is right but from a investment prospective they are going after an unmet need and have shown good efficacy. Greet has mentioned few times on conf calls that they don’t want to concentrate on many areas at the same time.
The way i see it is that their core focus will be on the following:
1) Lower abdominal scar revision
2) Keloid scar excision
3) Scar revision following cosmetic breast surgery
And Ophthalmology plans are for early next year.
Here is the latest company presentation.
http://investors.rxipharma.com/Cache/1500056464.PDF?Y=&O=PDF&D=&FID=1500056464&T=&IID=4418218
As always appreciate your thoughts!
Subramania: I looked at that investor presentation for RXII. Thanks for posting. Their lead agent has things in common with siRNA and with locked oligonucleotides, and is basically an antisense RNA (different from si RNA) that resists nuclease degradation. The science behind this specific thing is good. But I still am concerned that fundamentally the company is going after an aesthetic, cosmetologic indication, not a disease. This is a company spawned as it were from the loins of Mello and this is the best they can do? I feel the presentation grossly overstates the number of revisionary operations for scars, and also ignores that in most cases, third party payers do not cover this, as it is elective and cosmetic.
When I hear “inhibition of connective tissue growth” what pops to my mind is one disease, a disease stalking every country on earth and slaughtering people by the millions. It is liver disease! HBV and HCV and schistosomiasis kill not because of LOSS of liver tissue. That is not the problem. The problem is that these cause liver to scar. Scar tissue shrinks, retracts, with time. Because of this, portal flow through the liver gets resisted, and that is how liver disease kills. Resistance to flow causes shunting around the liver. The shunting leads to varices, engorged gut vessels that rupture and cause exsanguination. Shunting leads to diversion around the liver of blood, which is the root cause of portosystemic encephalopathy, which leads to coma. Miguel de Unamuno wrote: “it is not the night the kills, but the frost.” In cirrhosis, it is not loss of liver cells that kills, but resistance to flow across the liver. RXII has within its grasp a cure for cirrhosis! And where is this on their docket??? Languishing in pre-clinical development. Liver scar, not liver cell death, is why people are transplanted. Break up that scar and you save the world trillions in health care costs.
I am deeply concerned about RXII’s plan to use its connective tissue growth factor for revision of abdominal incisions. I predict it will lead to hernias. But for the rest of the scar market, its agent may work well, but lead to an out-of-pocket operation being even more unaffordable.
If they would get away from derm indications and pursue liver in earnest, or a real disease that kills in earnest, then I would say they are a screaming buy. Its market cap is nearly nano , isn’t it? Maybe you and I and some of us interested in this could begin blogging and contacting the company directly to get them to shift plans? I am game for doing this in fact. I am passionate about liver disease and these guys are giving that second shrift. Maybe they need some “persuasion.” Good science, totally misguided clinical development plans.
Dr; Decades ago I was taught large/lethal radiation overdose has a side effect of dissolving old scar tissue such that old incisions would re-open. Could that lead to a treatment using radiation,RXII, & stem cells in combo? Just passing thought.
One other concern I have about RXII is possible guilt by association with Galena. I do not trust GALE.
Also, its NASDAQ listing. Does anyone here know what criteria an OCT/BB stock must fulfill to get put up on NASDAQ? There is more to it than just share price. What changed about the company to earn it a place on NASDAQ?
The Nasdaq has three sets of listing requirements. Each company must meet at least one of the three requirement sets, as well as the main rules for all companies.
Listing Requirements for All Companies
Each company must have a minimum of 1,250,000 publicly-traded shares upon listing, excluding those held by officers, directors or any beneficial owners of more then 10% of the company. In addition, the regular bid price at time of listing must be $4, and there must be at least three market makers for the stock. However, a company may qualify under a closing price alternative of $3 or $2 if the company meets varying reequirements. Each listing firm is also required to follow Nasdaq corporate governance rules 4350, 4351 and 4360. Companies must also have at least 450 round lot (100 shares) shareholders, 2,200 total shareholders, or 550 total shareholders with 1.1 million average trading volume over the past 12 months.
In addition to these requirements, companies must meet all of the criteria under at least one of the following standards.
Listing Standard No. 1
The company must have aggregate pre-tax earnings in the prior three years of at least $11 million, in the prior two years at least $2.2 million, and no one year in the prior three years can have a net loss.
Listing Standard No. 2
The company must have a minimum aggregate cash flow of at least $27.5 million for the past three fiscal years, with no negative cash flow in any of those three years. In addition, its average market capitalization over the prior 12 months must be at least $550 million, and revenues in the previous fiscal year must be $110 million, minimum.
Listing Standard No. 3
Companies can be removed from the cash flow requirement of Standard No. 2 if the average market capitalization over the past 12 months is at least $850 million, and revenues over the prior fiscal year are at least $90 million.
A company has three ways to get listed on the Nasdaq, depending on the underlying fundamentals of the company. If a company does not meet certain criteria, such as the operating income minimum, it has to make it up with larger minimum amounts in another area like revenue. This helps to improve the quality of companies listed on the exchange.
It doesn’t end there. After a company gets listed on the market, it must maintain certain standards to continue trading. Failure to meet the specifications set out by the stock exchange will result in its delisting. Falling below the minimum required share price, or market capitalization, is one of the major factors triggering a delisting. Again, the exact details of delisting depend on the exchang
Is the enemy us?
Benitec was first mentioned by Dr KSS on this board on Jan 9th and prior to that had traded only once in the previous 30 days, a trade of 1200 shares. Over the last week it traded almost two million shares in the USA with a four day week, and it was mentioned two million more shares in Australia in one day, although I have not checked that. That is an awesome Gumshoe ripple effect if true.
Further Gumshoe type sleuthing reveals words like hamartia, and previous classical Greek references. Are we lead by a classical Greek scholar and physician? Should we be wary of Greeks bearing gifts? What else cause this feeding frenzy? The start of the trial?
Interesting times ahead, best of luck to all of us
lonesome; “hubris & harmartia travel oft together” ” if one knows how to do what is right & does not, it is a sin [hamartia] for him” “to stray from uprightness is a sin [hamartia]. One does not need to be “classical” to appreciate nuances of our human language.
Operating on intra abdominal adhesions or scar tissue has kept me up many a night performing adhesio and enterolysis for bowel obstructions. Controlling post operative intra abdominal scarring or adhesions would be another noble cause.
Let me get this straight Lonesome Doc: I bust my backside and wreak havoc with my personal life and read into the wee hours about science and stocks for people (all with absolutely zero compensation despite the fact that this thread is bringing in gadzooks of ad revenue for the publisher). I tell people about my holding in BNIKF, which for the record I have held since last summer and been blogging about long before this thread. And then you surface like something the cat dragged in, cast aspersions on me, defecate a little golden prose into the mix to seem cute. To you I say beware geeks bearing rifts. You can stick it in your ear or anywhere else it fits! Life is too short and my goodwill too precious to deal with the likes of you.
I know we have more than a Greek scholar and a hepatologist (still dusting off my pathology texts and reading my new cell biology). KSS your knowledge and passion goes beyond the realms of medicine, and your impact will affect many lives beyond your immediate practice. As you posted before mene mene tekel upharsin. This will not be your case.
Geeks bearing rifts is too excellent a turn of a phrase not to praise.
Let me start with a thousand apologies or more if needed. My point was not to cast asparagus on you or any other vegetables but to question the incredible increase in market activity and suggest I feel it is well beyond the ripple of the Gumshoe group. Four million shares, I think exceeds our influence.
I have been amazed by your in depth analysis and selfless dedication to this board and all of us. You have incredible analytic abilities which go well beyond mine and most of the physicians I know. I have read with great interest your thoughtful and thorough analysis of many stocks and medical problems. I had deducted that you were also a classically trained Greek Scholar as well. We are all richer for your hard work. I have thanked you for that above and continue to do so.
I have attended several of the TED and Pop Tech conferences and only at that level have I encountered minds of your ability. I have been amazed by your ability many times.
Please know the last thing I intended was to in any way belittle or defame you. I got my self into this mess which is probably why I am a lonesome doc
lonesome doc; I have to admit I took your comment the same way that the good doctor has taken it. At the time I assumed I was merely not interpreting your comments correctly. But apparently it was correct. And what the hell do you mean in your followup explanation by “My point was not to cast asparagus on you or any other vegetables”? Are you on drugs this morning?
Dr. KSS – – please understand that lonesome doc does not speak for others on this thread.
Dr. KSS RXII did a reverse split 15 to 1 last year when the stock was trading at 15 cents last year, which means that a stock price of $4.50 post split. The stock has hardly moved and in fact it went down to $2.80 at one point. The Galena controversy has not spilled over to RXII since this stock has always been under the radar and has hardly gone up. On the outstanding shares front, even though it says 13m shares, if we count all the Preferred A Stocks which can be converted to ordinary anytime if the owner wants to, then we are looking at close to 37m shares outstanding on a fully diluted basis. Yes i do like their unique technology and can be used in various forms which the company is not focusing on. I believe that there is room for stock appreciation if their P2 anti scar trial is positive. That being said i will be looking at moving some money out of RXII to Benitec & CTIX in the coming weeks. Thank You!
Don – On POSC, the market cap of 11m just doesn’t reflect the partnerships, deals, licenses it has acquired over the last 3 years while the rubidium market is still limping back to get on track. Positron is not a quintessential biotech stock. It is in an industry that that is very hard to relate to(at least for me) for the general trading community. As you can see it is virtually unknown and hardly trades any significant volume. Per their last PR, they will be making the Sr-82 API(that they source from iThemba) commercially available this Feb/March. The cardiac PET market is constrained by the supply of Sr-82. For someone who has been following this market, the demand for cardiac PET is pent up and with the additional Sr-82 supply from Positron, the market will expand. Also in support of cardiac PET market, a heavyweight (Jubilant Life sciences) will enter the market in Canada, USA, India and Europe. They are expecting Rubyfill (another PET generator) to get approval in the sep 2014 to march 2015 timeframe. That event should catapult PET market growth by multifold and will eliminate the single supplier scenario. I have 70% of my investment in Positron. And anybody entering in Positron now has very minimal downside. I’m in at a cost basis much much much higher to the PPS today. I will invest now and look back towards the end of the year. Also note that in preparation to get their cyclo financing done and creating more visibility to investors, they plan to reverse split shortly. That will elevate the stock from a sub-penny land to penny land but my guess is once the reverse split happens the stock prices should go up as they have laid a super strong foundation and revenue growth is imminent.
Hi Dr KSS and everyone on the forum
Nice to read such an informative forum in the US …only discovered you a week ago.
The forum that is … have followed BLT since 2009 … was the first biotech company I became interested in and the one with the most potential out of all the others I now hold.
Someone mentioned the volumes trading in Aust (where I am) for last week … I have shown below the trading for Feb so you can see the surge in volume (a lovely last couple of days!!). The re rating has incredible strength :>
FWIW I will be topping up this week, I generally like to wait for pullbacks to do so but in this case I feel if I wait the price could be much higher than now before it pulls back
And lastly Dr KSS would you mind if I repost your summary of the market caps onto the australian forum I use (crediting you of course!)?
cheers
21/02/2014 1.470 1.755 1.400 1.590 2,593,817
20/02/2014 1.085 1.260 1.070 1.260 1,294,063
19/02/2014 0.950 0.990 0.950 0.990 405,446
18/02/2014 0.920 0.960 0.920 0.950 219,669
17/02/2014 0.915 0.925 0.900 0.920 257,531
14/02/2014 0.950 0.960 0.900 0.900 210,368
13/02/2014 0.930 0.950 0.865 0.950 233,731
12/02/2014 0.995 0.995 0.930 0.930 615,230
11/02/2014 0.875 0.930 0.870 0.930 691,326
10/02/2014 0.850 0.860 0.840 0.850 262,875
07/02/2014 0.845 0.850 0.830 0.830 136,378
06/02/2014 0.850 0.850 0.815 0.825 150,797
05/02/2014 0.835 0.860 0.805 0.840 210,315
04/02/2014 0.820 0.835 0.760 0.780 457,834
03/02/2014 0.830 0.845 0.810 0.840 471,201
31/01/2014 0.805 0.835 0.800 0.820 329,108
sorry I am in the habit of referring to BLT though in the US you refer to BNIKF
Many thanks, Siva. Very helpful information. I guess I will sit back and patiently wait.
Given the potential, the outcome could be awesome.
Appreciate the update.
Don
dr. kss, great work on benitec !!!
dr. kss or anybody else:
***any ideas on cnce?
-new ipo
-massive insider buying or only support for stock price ?
http://www.openinsider.com/CNCE
– pipeline looks interesting, partnering with big names (jazz…)
***any ideas on ctic
– pipeline with some in phase III
– partnering with bax
– one product approved in eu
– milestone payment from teva
thx,
oxx
Re: the good Dr.’s letter to Benitec (post #701)
I loved reading it, but of course a great deal of the language was outside of my realm. It reminded me of a semi-famous video clip of a ‘scientific’ description of the Encabulator, a supposedly unscripted bit made while sound and lighting were being checked before a real presentation. I don’t in any way suggest that the good Dr. was using words randomly (like in the video), I just offer it because 2 minutes of humor is good for the soul…
http://biggeekdad.com/2010/11/turbo-encabulator/
LOL Jim!
Jim T. Kept me in stitches.
with all the stock that we’ve purchased we’re well on our of getting our own turbo encabulator … on time share of course proportionally to the amount of stock that we each have … unfortunately i’ll be at the lower end of the of the time share slice
🙂
Not a dry pair of pants in the house . Hugely funny. Whats the ticker. I just gotta have some of that stock.
Hello everyone. New to the site and bought some BNIKF last week in the 80’s. Just saying thanks to the good Dr.K and Kaushik for introducing me to this stock. I will be stalking around here for now on :).