Prima BioMed Ltd is an Australian biotechnology company with a portfolio of products focussed in the therapeutic area of cancer. The current portfolio is the result of its affiliation with the Burnet Institute in Melbourne, a leading medical research institute with a focus in developing therapeutics for infectious diseases, cancer immunotherapies and autoimmune diseases. Thursday, October 22, 2009
Prima BioMed CVac™ ovarian cancer vaccine trial and share price, bear close watching by Andrew McCrea
Psst, want to know one of the best performing stocks on the ASX in 2009? A tip, this is not a mining stock.
Prima BioMed (ASX: PRR), an Australian healthcare company, rocketed from $0.005 to $0.265 in October - a mere gain of 5,200% - for investors who stayed the course.
Currently, the share price is $0.185.
Prima BioMed's lead product is CVac™. It is a vaccine therapy to treat ovarian cancer administered post-surgery and post-chemotherapy to delay relapse and control metastases.
What has generated excitement is that in August, the company received approval from the US Food and Drug Administration (FDA) for its Investigational New Drug (IND) application for CVac™ to proceed with a Phase IIb clinical trial in the US.
The trial, which will be conducted in of Seattle and managed out of the US, will be closely watched as will news of results filtering through.
Pfizer’s former Director of Global Medical, Ginny Raymond will oversee the pivotal clinical trial. The company said the trials will begin in the near future.
Following that trial, Prima BioMed intends to commence commercial treatment of ovarian cancer patients, beginning in Australia and New Zealand.
The prize for Prima BioMed is significant. Recent estimates put the global market for ovarian cancer treatments at US$2 billion, and expected to rise to over US$3 billion by 2010.
Importantly, for patients, and for Prima BioMed, there is a large un-met medical and market need for new treatments for ovarian cancer which has a very high morbidity rate, and there are currently no maintenance-based therapy products commercially available.
Funding for these types of trials are not cheap. Here, Prima BioMed is ahead of the curve. In July, the company received funding from New York-based investment fund SpringTree Special Opportunities Fund, LP.
Springtree know a thing or two about successful investing in the "small-cap" space. Its successful investment in NASDAQ-listed company Dendreon Corporation (NASDAQ: DNDN), applied similar technology, to Prima BioMed, to develop a vaccine treatment for prostate cancer.
Springtree likes to hedge its bets, providing a A$25.5 million convertible loan facility to Prima BioMed, doled out in 35 installments of $700,000 each, with upfront payments already made. An additional 15 million/5 year options are to be issued to Springtree.
The convertible note accrues no interest, as long as Prima BioMed does not default under the loan terms.
The funding has removed much of the financial risk, that is attached to emerging biotechnology or healthcare companies.
A NASDAQ listing down the track might also ignite greater global interest in Prima BioMed.
Prima BioMed's subsidiary company, Cancer Vac Pty Ltd, has secured a Japanese patent for peptides that mimic the MUC1 antigen. This is the key cancer antigen under development in its ovarian cancer immunotherapy program.
The wraps are high from Springtree on the prospects for Prima BioMed's CVac™, based on its due diligence. As well as the success it had with its Dendreon investment, which applied similar technology (to Prima BioMed) to developing a vaccine treatment for prostate cancer.
The last year has seen a heady rise in market valuation for Prima BioMed. However, the Prima BioMed clinical trials, and market need for a successful therapy, bear keeping a close watch over Prima BioMed.
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PRR Price at posting:
18.0¢ Sentiment: Hold Disclosure: Held
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