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Prima soars on Dendreon announcement

Nick Evans
Thursday, 16 April 2009

PRIMA BioMed has been one of the most heavily traded stocks on the Australian Securities Exchange this week, with the share price doubling on positive news from the US about a technology similar to that which the firm is developing.

The recent share price spike earned Prima a speeding ticket from the ASX overnight, and all the small Australian company could point to in response was a Tuesday announcement by US biotech Dendreon about its prostate cancer vaccine, Provenge.

The fortunes of Prima have long been linked to those of Dendreon.

Like Dendreon, Prima is developing a cancer treatment that encourages the body’s own immune system to attack cancer cells – in Prima’s case, ovarian cancer in women is being targeted, whereas Provenge, Dendreon’s lead therapy, is aimed at prostate cancer in men.

In May 2007, Prima’s shares slumped when Dendreon was issued an “approval letter” from the US FDA, which refused to approve Provenge for use in the US, running against the recommendations of its own Cellular, Tissue and Gene Therapies Advisory Committee.

The FDA told Dendreon to finish a larger study demonstrating the benefits of Provenge in prostate cancer patients, and both Dendreon and Prima suffered accordingly.

At the time Prima was trading at around 4c, but shed most of that after the Dendreon decision and – with the exception of a trader driven spike in August of that year – the company’s share price had never really recovered.

Until this week, that is, when Dendreon announced the preliminary results of the larger FDA ordered study and said it was back on track for marketing approval for Provenge towards the end of this year.

While the Dendreon announcement was thin on detail – the company said only that Provenge’s ability to prolong lives for patients is “consistent” with previous trials – the news was seized on by Australian traders in Prima.

A frenzy of activity made the micro-cap the 17th most-traded company on the ASX yesterday, with just over 16 million shares traded.

On Tuesday, in the lead-up to the Dendreon announcement, 12 million Prima shares were traded.

Prima shares closed at 1.6c before the Easter break, were at 2.8c at the end of trading on Wednesday, and have been as high as 4c in early trading this morning.

Background Notes

Prima BioMed is based in Melbourne and focused on technologies in the fields of immunology and cancer immunotherapy, in particular on development of a dendritic cell-based immunotherapy.

CVac is an experimental therapy consisting of a patient's own dendritic cells primed with a tumour antigen (Mucin-1) and an adjuvant, mannan fusion protein (M-FP).

M-FP refers to the form in which the target protein of the CVac immunotherapy is presented to the immune system. The mannan used is a chain of mannose molecules that is oxidised and linked to the cancer protein (Mucin-1).

Mannan stimulates the immune system and it is the mannan that results in rapid uptake of Mucin-1 into the dendritic cells of the immune system via the mannose receptor on the cell surface.

Once the M-FP is inside the dendritic cell, enzymes digest the Mucin-1 and fragments of Mucin-1 are presented on the dendritic cell surface. This presentation results in the stimulation of certain cells of the immune system to target Mucin-1 on the surface of cancer cells.