3 Small-Cap Biotech Stocks That Are Challenging the Status Quo

WHITEFISH, MT / ACCESSWIRE / June 29, 2015 / Small-cap biotech stocks have been
top performers so far this year, with the PowerShares S&P SmallCap
Healthcare ETF (NASDAQ: PSCH) returning 25%, which is 5x better than the SPDR
S&P 500 ETF’s (NYSE: SPY) 5% return. Investors may want to consider adding
exposure to this asset class given its outperformance and lower correlation
with the overall U.S. equity market.

In this article, we’ll take a look
at three micro-cap and small-cap companies that are taking a different approach
to the status quo within multi-billion dollar industries.

eBalance Technology

Diabetes, a disorder of blood sugar
metabolism, is a prevalent and serious disease of major public health importance. Currently
there are approximately 387 million people in the world living with
diabetes with an expected increase to nearly 600 million by 2035. Diabetes has major adverse effects on people’s
health, but also presents a large economic burden. Global healthcare expenditures on diabetes
currently exceeds $420B. Experts agree
that a significant portion of the morbidity, mortality and cost of diabetes
could be avoided with improved control of blood sugars.

Cell MedX Corp. (OTC: CMXC) has
discovered a potentially valuable new, proprietary technology for the treatment
of diabetes – one that encompasses electrical micro-currents delivered in
distinctive patterns of waveform, amplitude, frequency, and duration leading to
alterations in metabolic pathways which may result in improved blood sugar
control. The treatment is believed to be of exceptionally low risk, and can be
self administered at home. It is a
uniquely new category of treatment.

In a pilot clinical discovery phase
trial in two diabetic subjects, the company
found that its e-Balance technology increased sensitivity to insulin and
up-regulated glycolytic processes, with subjects demonstrating enhanced glucose
utilization.

Further explorations of these
pathways will continue, along with endpoints like HbA1C, in an expanded
clinical trial that is currently recruiting subjects in Newport Beach, CA.

Investors in Cell MedX can look
forward to multiple potential catalysts in the near future including a series
of clinical trials, expanded basic research, intellectual property pursuits,
exploration of new form factors with innovative industrial designs, and growth
and expansion of the enterprise as their technology is productized and readied
for introduction into a global market.

BACcel Platform

Drug resistant organisms and
hospital-acquired infections have become an enormous global problem, especially
given the lack of new antibiotics capable of fighting these serious infections.
According to the CDC, one in five hospital patients has at lest one
healthcare-associated infection. Accelerated Diagnostics Inc. (NASDAQ: AXDX)
aims to rapidly identify these pathogens for treatment.

While traditional testing to
determine a pathogen’s susceptibility to a certain antibiotic may take upwards
of 50 hours, which is often too late to help patients, the company’s BACcel
platform is capable of performing the analysis in just three steps taking less
than five hours to complete. These tests have 98% sensitivity (identification
of target) and 97% specificity (identification of non-target).

The company plans on launching its
Accelerate ID/AST System in the U.S. in early 2016, after having initiated its
BSI trial and secured a CE Mark in mid-2015. Over the long-term, the company
could capture a significant piece of the $7.5 billion (estimated 2019) market
with peak gross margins of over 70% – an attractive proposition for investors
in the biotechnology space.

Cell-in-a-Box(R) Technology

Pancreatic cancer is one of the deadliest forms
of cancer, with less than half of patients surviving more than a year. In
addition to the diseases rapid progression, many patients experience unbearable
and, unfortunately, untreatable pain from malignant fluid (known as ascites) in
the abdominal cavity. PharmaCyte Biotech
Inc. (OTC: PMCB) is attempting to combat both the cancer and its side effects.

Rather than injecting patients with
high doses of toxic chemotherapy drugs, the company’s approach is to place its
Cell-in-a-Box(R) ifosamide-activating capsules in close proximity to the tumor
and then intravenously inject low doses of ifosamide – a cancer-killing drug – to attack the tumor. Unlike other approaches, there’s no immune response or
damage to tissue near where the capsules are placed.

The company has demonstrated the
effectiveness of the low dosage (as opposed to regular dosages that harms the
body) in two early clinical trials and is preparing to conduct a more advanced
Phase 2b clinical trial in the near future. Early evidence also suggests that the treatment may be effective in
delaying the accumulation of ascites fluid in mice bearing an aggressive form
of ovarian cancer.

Key Takeaway Points

Small-cap biotech stocks have been
top performers so far this year and they don’t seem to be ready to stop anytime
soon. Investors looking for exposure to the industry may want to consider
small-cap opportunities in the space, such as the three companies discussed in
this article, which are targeting multi-billion dollar industries with platform
technologies.

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SOURCE: Emerging Growth LLC

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