WINDSOR, ON / ACCESSWIRE / March 30, 2016 / The Wealthy Biotech Trader (or “WBT”), an investment newsletter focused on showing everyday investors new opportunities in rapidly growing, little-known biotech, pharmaceutical and medical device stocks releasing impressive news and making market moves, would like to highlight the massive potential in a number of biotechs pursuing orphan drugs.
Companies Included: Endonovo Therapeutics (OTCQB: ENDV); Delmar Pharmaceuticals (OTCQX: DMPI); Celator Pharmaceuticals (NASDAQ: CPXX); ProNAi Therapeutics (NASDAQ: DNAI)
The FDA’s Center for Drug Evaluation and Research approved 45 novel drugs last year whereby 47 percent of these were approved to treat rare or orphan diseases which affect 200,000 or fewer Americans per year. Currently, there are approximately 7,000 rare diseases that have already been identified with most having significant quality of life burdens as well as high mortality rates. Despite this fact, 95 percent of these diseases have no approved treatments, presenting a massive opportunity for drug makers in the space.
Endonovo Therapeutics (OTCQB: ENDV) is an innovative biotechnology company developing bioelectronics-based products and therapies for regenerative medicine. The company is in the process of obtaining an orphan drug designation for its off-the-shelf, allogeneic treatment for Graft-Versus-Host Disease (GvHD), which if successful could see the company’s $40 million valuation rise significantly.
Graft-Versus-Host Disease is a rare condition that occurs when donor bone marrow or stem cells attack the recipient and can cause a failure of the graft and is a significant cause of morbidity and mortality in transplants.
Endonovo’s treatment for GvHD uses bioelectronics-enhanced mesenchymal stem cells from the human umbilical cord. These stem cells are expanded and enhanced using their proprietary bioelectronics platform called Cytotronics to create next-generation, more biologically potent cell therapies.
The company’s approach to creating next-generation cell therapies differs from approaches currently being pursued by others, which include genetic modification and the use of small molecule drugs to enhance the therapeutic properties of stem cells. This means that ENDV’s approach may be translated to other types of stem cells, easier to scale up and ultimately manufacture.
At the current share price, we believe that Endonovo presents a potential opportunity for growth investors and any chance of buying before potential FDA approval could bode well for traders.
As it turns out, rare diseases are not so rare after all. An estimated 25 million people in the US alone collectively live with some sort of orphan disease. Therefore, these rare diseases present biotechs and investors alike “rare” opportunities to reap huge profits.
Some of the most notable deals involving orphan drugs include Horizon Pharmaceutical’s acquisition of Hyperion Therapeutics for $1.1 billion to gain a product to treat a rare inheritable urea disorder that can cause a build-up of ammonia in the body, and Alexion Pharmaceutical’s $8.4 billion acquisition of Synageva Biopharma which was developing a drug to treat a rare metabolic disorder.
While the examples above may seem to represent the higher end of the market potential, we believe that there are still a number of firms that have the capability to match or even surpass these results as highlighted below.
Multiplied Economics
For those up to the task of fulfilling the need for orphan drugs, the probability of massive gains is nearly certain. According to a recent research report by EvaluatePharma, global sales for orphan drugs are expected to grow 10.5 percent annually to around $176 billion in 2020. Apart from this impressive growth, the other aspect that makes orphan drug makers so appealing is the fact that the price range of these drugs ranges from $200,000 – $300,000 per year for a single patient with treatments usually lasting a lifetime. On top of the rich economics, once an orphan indication is approved the sponsor receives seven years of patent exclusivity under the Orphan Drug Act and the FDA cannot approve another drug in that designated orphan indication for the period.
A FEW OTHER NOTABLE COMPANIES IN THE SPACE INCLUDE
Delmar Pharmaceuticals (OTCQX: DMPI) is a clinical stage drug development company with a focus on developing and commercializing anti-cancer therapies in orphan cancer indications where patients have failed or are unlikely to respond to modern therapy. Recently, the company’s lead product candidate VAL-083 received FDA orphan drug designation for the treatment of medullablsatoma after previously getting the same designation for glioblastoma in the United States and Europe.
Medullablastoma is the most common form of malignant pediatric brain tumor accounting for 15-30 percent of all childhood intracranial neoplasms while glioblastoma multiforme (GBM) is the most common and aggressive for of brain cancer. VAL-083 is a “first-in-class” molecule chemotherapy and is currently in Phase 2 clinical trials for treatment of GBM. With a current valuation of about $35.2 million Delmar could see a significant rise in its valuation by the end of the first half of the year if Phase 2 data shows efficacy of VAL-083.
This is attributed to the fact that the GBM treatment market according to a new report published by Transparency Market Research is expected to grow from $340 million in 2013 to $910 million by 2022 at a CAGR of 11.4 percent. So far, Delmar’s shares have surged almost 14 percent this month on the backdrop of the FDA news and CEO Jeffery Bacha is confident that this momentum will continue going forward.
Celator Pharmaceuticals (NASDAQ: CPXX) is a clinical-stage biopharmaceutical company that is transforming the science of combination therapy and developing products to improve patient outcomes in cancer. Through the use of its proprietary technology platform CombiPlex, it enables the rational design and rapid evaluation of optimized combinations, incorporating traditional chemotherapies as well as molecularly targeted agents to deliver enhanced anti-cancer activity.
The company recently announced that its lead drug candidate VYEXOS Liposome for injection in patients with high-risk (secondary) acute myeloid leukemia (AML) Phase 3 clinical trials had met its primary endpoint demonstrating statistically significant improvement in overall survival rate. AML accounts for approximately 1.2 percent of cancer related deaths in the U.S with the market for treatments expected to grow at a CAGR of 28.4 percent from 2015 to 2020.
According to Professor of Medicine and Director of the Leukemia Program at the Weill Medical College of Cornell University and the New York-Presbyterian Hospital in New York Gail Roboz, the findings of VYEXOS clinical trials provide the first opportunity in decades to extend survival for patients with high risk AML compared to the current standard of care regimen of cytarabine and daunorubicin.
Over the past week, Celator’s shares have surged more than 300 percent further reaffirming our positive outlook in the orphan drugs space. Based on the results of the trials, the company expects to submit a new drug application later this year to the FDA as well as a marketing authorization application in the first quarter of 2017 leaving investors with a small window of getting in on the action before more gains are realized.
ProNAi Therapeutics (NASDAQ: DNAI) with a valuation of $205.6 million is a clinical-stage oncology company that develops and commercializes a class of therapeutics based on its DNA interference (DNAi) technology platform for patients with cancer and hematological diseases.
The company’s lead product candidate PNT2258 which is designed to treat cancers that overexpress BCL2, a validated oncogene known to be dysregulated in many types of cancer was granted orphan drug designation by the FDA earlier last week for the treatment of diffuse large B-cell lymphoma (DLBCL). The positive news has played a huge role in reversing the stock’s price downtrend during the past week subsequently posting a 10 percent gain by the end of the week.
In a research note issued on Friday, analysts at Wedbush reaffirmed their “outperform” rating on the stock with a price target of $36. This represents more than 400 percent potential upside to the current share price which, although might seem pretty optimistic, is without a doubt achievable. This is due to the fact that in the United States 60,000 patients are diagnosed with non-Hodgkin lymphoma annually, and DLBCL represents more than 30 percent of those cases.
DLBCL often occurs in people in their 70s and with the increasing life-span these cases will continue increasing leading to the need for new treatment approaches. Currently, the most widely used treatment is a mixture of rituximab and several chemotherapy drugs with 40 percent of the patients seeing the disease return within two years of treatment. Should ProNAi yield positive results in its subsequent clinical trials expected in the third quarter, it has the potential to displace rituximab as the lead treatment option.
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