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I guess even a great promo can't lift a bogus story. I know, I know, day's not over yet, anything can happen. But I've seen more momentum in an old folk's home people.
MCMIKE, Do you really think anybody is going to take that "business plan" seriously? LOL, what a joke. This company is touting some 80 subject CANINE study as proof that p65 has potential as a universal cancer marker? Man oh man, the people running this "promo" better have a rolodex filled with peabrains if this stock is going to go anywhere.
Lol guys, we'll see how your little "promo play" pans out. And if it works out well, I'll hop aboard the next one.
Lol Iman. I guess since you don't have any substantive rebuttals to my points, it makes sense for you to put up my posting history on IHUB to point out that I am a BOCX freak. Well, you're correct...I am a BOCX freak :) Why? Because they actually do have a universal cancer marker, which is a big big deal. Those of you who are seriously looking at this company (not just as a "promo play"), you owe to yourselves to check out the competition. That's what brought me here...checking out the competition. Nothing wrong with that is there now?
TBILLS what's your point? Try to find stuff by the same doc which relates to p65, not any and all papers he's written. Go to pubmed. It's all old stuff, there isn't much of it, and the data itself is very unimpressive. Look for yourself.
Here's a question for you...go the XPNG's website, and look under the "Studies" section. The company has 1 retarded canine study up there, and nothing else. Even though the U of T data on p65 is unimpressive from what I've seen, it's pretty SHOCKING that XPNG wouldn't include any of it on their website.
It's all starting to make sense to me now... Why did U of T, a top 3 cancer center, license this technology to a little shell company called XPNG, who probably didn't pay a dime for it considering they have no money?? The answer is obvious: no real players in the industry wanted to touch this stuff in the 10+ years since it's been around.
Quest/Roche/Abbott/Ortho/Fujirebio/etc would have been ALL OVER this stuff if it had the slightest bit of promise as a universal cancer marker. BOCX's technology didn't slip by the industry leaders even though the company is a bona fide pink sheets POS. I doubt U of T's technology would have slipped by if it had any promise whatsoever.
I will eat my words if somebody can provide a link to some impressive data. And 60% specificity by no means counts as impressive, especially with such a tiny sample size. Here are some of BOCX's test results over the past year or so, to give you an idea of what the competition is publishing:
----------------
Prostate Cancer: 99% sensitivity, 95% specificity
Stomach Cancer: 90% sensitivity, 95% specificity
Breast Cancer: 93% sensitivity, 95% specificity
Colon Cancer: 75% sensitivity, 95% specificity
Lung Cancer: 90% sensitivity, 95% specificity
----------------
You've got to admit that is pretty mindblowing. What's more is that Abbott Labs did a blind sample verification process with BOCX before signing a licensing agreement. What that means is that Abbott submitted blind encoded samples and BOCX returned the samples labeled as positive or negative.
In other words, Abbott did not take BOCX's word for it that their technology works. They tested it themselves, THEN signed a deal.
Let's stick to facts and keep the "he's a basher" talk to a minimum. I'm not a "basher," I just have an investment in a competing company (BOCX) so was compelled to look critically at this company. Originally I was excited by the thought of U of T being involved, but when you peel back the onion there is nothing here.
Take care,
BOCXMAN
Well, as long as we agree that the company is a joke, and that this is only a "promo play" . My post was meant to address those on this board who seem to be taking this company seriously beyond the "promo" aspect. Those people could get burned very badly, as they start buying more shares for the long-term when this momo run disintegrates.
If the idea of a universal cancer marker and it's potential as a blockbuster product appeals to you, invest in BOCX...that is THE universal cancer marker play now that GERN's telomerase marker fell through (because it couldn't be mass produced). Abbott just licensed the technology, which is no small feat, yet the company is still trading for $1.25 on the pinks.
JustDolt, if you're daytrading it that's another thing as long as you keep your stops tight. But I'm hearing serious discussion about the company, and it seems to me that there are more than a few chinks in this armor.
Some thoughts and questions...
This company's p65 is the exact same concept as BOCX's product -- a universal cancer marker that has potential in both diagnostics and as a cancer vaccine/mAb therapy. The difference is that BOCX just licensed their technology to Abbott Labs, the second largest diagnostics company in the world behind Roche. What is shocking to me about XPNG is why would University of Texas license their technology to some tiny OTC-BB company rather than a big name like Abbott/Roche. There might be a decent explanation for this, but I can't think of one -- does anybody have thoughts? These things are awarded to the higher bidder, so I'm wondering how it slipped by the bigs in diagnostics (abbott, roche, ortho-clinical, etc), all of whom have a relationship with U of T.
In case you guys didn't realize it, University of Texas's Anderson Cancer Center is a regular in the top 3 of the U.S News & World Report top cancer centers. Them, Sloan Kettering, and John's Hopkins play musical chairs for the #1 spot, but in 2004 Anderson was actually #1. That is a MAJOR selling point for the stock, of course.
All in all, looks like an interesting play and I may take a position, but these are the questions I'm asking before I pull the trigger:
1) As I mentioned before, why did U of T license the tech to XPNG over a leading diagnostics company? This is a very big question in my mind right now...just doesn't make sense.
2) Another biggy...WHERE'S THE DATA!?!?! On their website, under the "Studies" section, I only see reference to one tiny canine study which is very very far from compelling. We're talking about 80 dogs with cancer where 1 out of 3 were misdiagnosed (70% specificity). Uhhh...is that it? BioCurex (BOCX) has been publishing 90% specifity (1 out of 10 misdiagnosed) with comparable sensitivity (90%+), but more importantly they have published data on a sample size of hundreds of HUMAN subjects across 5 or so different types of cancers. BioCurex's studies are far from conclusive in my opinion, and the share price reflects it (only $40 mil market cap), but one 80 dog study is quite frankly a joke, so I hope I'm missing something.
I thought to myself...it's strange XPNG didn't include it on the site, but surely Dr. Walaszek at University of Texas has published more data, since according to the P.R he was "on the team" that found the correlations between p65 and cancer. So I hit pubmed and searched. I could only find a few, 10 year old studies that were TINY and showed lackluster performance for detection of cancer. 61% for leukemia, 68% for some other type of cancer, etc. Look for yourself -- the data sucks, unless I'm missing something. That could be why the big names haven't gotten involved in the last 10 years since this research was performed.
3) Assuming they really are confident that their technology has potential as a universal cancer marker, why in the heck is this company choosing the veterinary market first?? That's flat out nuts to me. They should be thinking about which human cancer indications they should seek approval for first, and what their regulatory strategy will be in pursuing each indication. Over at BioCurex for instance, we have been wondering whether our first official trial will be a head-to-head against PSA test for prostate cancer or a combination trial or a three-armed trial which covers all bases. And will the first indication even be prostate cancer (the largest market) or will it be with the CEA tests (colon), Pap Smear tests (cervical), etc...all of which are mega markets and all of which BOCX has published phenomonal HUMAN data on.
Those are the questions that XPNG should be dealing with, as opposed to worrying about cats and dogs...don't you think? That is, of course, if they have a tiger by the tail like they seem to be suggesting.
4) Who is behind this company? There are basically no assetts whatsoever, and nobody noteworthy is involved with the exception of this Walaszek guy who was publishing 10 years ago. Even he was only named to the SAB and may or not be an active member of management and/or a significant shareholder. It's all very mysterious...does anybody really understand what's going on here? I'd love to hear the straight story on this.
Take care,
BOCXMAN
Foamulator...
Re raging bull, I wish you would contact them about your issue because it would be great to have you on board.
1) I don't know where you're getting that from
2) I agree it is strange...it seems like they are referring to otc.
3) Good point
4) Yup
5) What it probably means is that they will sell some more common. They haven't done any preferred so I doubt they'll go that route. If they can manage to raise $4 mil via a stock sale we can instantly list on the AMEX. The other route is to get to $3. It makes me nervous too and I hate offerings, but this co needs to stop the b.s of raising 100k here and 50k there and actually do a proper financing.
My theory is that they have a PIPE deal in the making and the overhead supply which was paralyzed the stock is just the financiers shorting into the deal.
6) Tell me about it. These guys have dropped the ball with that.
Redwards, novustrader, Merovingian, Foamulator: Can you guys PLEASE get a free membership at RagingBull and start posting on that bocx board too?? You have no excuse as it takes only 5 minutes to sign up. The board is pretty dead, and much of the activity comes from the bashers. I'm expecting a lot of buyers this year, and it'd be best if the newcomers came to one place for discussion/collective due diligence. Believe me, it is VERY important in stocks like these for investors to have a vibrant message board. Also, BOCX is very sh**ty in the communications department, so we as shareholders have to pick up the slack by maintaining a good message board.
People who PM'ed me...So sorry but I realized I shouldn't share the info.
Merovingian and Foamulator, if you provide your email addresses I would like to share something private with you. As for DC-Steve, he is a long-time BOCX basher on Raging Bull that pissed his pants after they signed the Abbott deal...He had been calling BOCX a scam for years, saying that they would never garner industry interest, so you can imagine why.
Take care.
Merovingian, I believe they just re-aired the old interview they did with Moro (not really that old, though...it was like nov '04).
Foamulator, I appreciate the compliments and share your passion for BioCurex. Here are my thoughts on your questions:
1) The pinks are very important, and I'm 100% confident we'll get off them soon. You have to remember we're dealing with an extremely cash strapped company that is, for lack of a better word, pretty unprofessional. If Moro had a proper IB relationship and was better capatilized, we would have had the licensing deal years ago along with peer-reviewed publishing, larger trials, top brass management, amex/naz listing, etc, etc. But, unfortunately we aren't properly capitalized (a measly $50k at hand as of the recent 10-k). So we'll get everything done, but with delays. Sucks :(
2) I have no clue what you're referring about using RECAF for "immunization"? Would you mind posting the question on the ragingbull board as there are a few docs over there.
3) Re anti-cancer agents, it is still very much in the plan. If you notice on the 10-k they filed a few weeks ago, their pro forma R&D budget for FY05 really emphasizes the tumor imaging and therapeutic applications for RECAF. Also, the recent interview with Wittenberg discusses it, and if you call the company and talk to the lab personnel you'll see that they are very very excited about that aspect of the technology. Personally...I'm not very excited about the therapeutic application because it will take 5 years plus to monetize. The tumor imaging market, however, is also a huge market that is similar to diagnostics in the sense that the regulatory bar is very low (trials can take a few months rather than years). That appeals to me more than the traditional, three phase trial process that drugs have to deal with.
4) Re ROCHE...I agree with you totally and I think they will be our next partner. My guess is that Roche Diagnostics and Ortho-Clinical (JnJ's diagnostics unit) will be our next two partners. The company wasn't bulls**ting us before, when they said a deal is coming with a large pharma, so I doubt they are bulls**ting us now. The recently filed 10-k is very clear that they "expect" to license the technology to other "major" pharma company's in the "near-term." They couldn't be more clear, and I think Roche is a sure bet.
ECP, we can get an AMEX listing pursuant to standard 4 once we reach $3, so I don't recommend selling at that level.
Road map for the year:
- Publishing in a peer-reviewed journal. Dr. Taketa will be publishing his data in the big industry journal soon ("Tumor Biology" or something). BOCX also needs to start publishing -- this is a PRIORITY and they are not on the ball in this regard. If we don't create a buzz among the medical community, our product is meaningless. Also, the medical community has many affluent and active investors and can contribute to the share price. Last but not least, the reporters/editors for CNN Health, PBS, and the other "pop medical" press outlets get their ideas from the industry journals.
- More news on Abbott. This is another biggy. I'd like to hear the company project some timelines, and lay out a concrete plan of attack to monetize their new partnership. The first thing we'll probably hear about is progress on the process of integrating RECAF onto ABT's proprietary ARCHITECT system. After this or even concurrently, we will probably hear about regulatory strategy. THIS IS THE BIG ONE. Nobody likes a pre-clinical biotech, and what's attractive here is that the regulatory path for a diagnostic is a cinche. Lots of questions to be answered in this regard, and believe me these questions will be answered soon. Will they choose to start with the prostate cancer indication, which is by far the largest market right now? If so, will they do a head-to-head against PSA or a combination trial or both?? OR, will they choose to start with lung cancer or breast cancer instead of prostate, since those are mega-markets that have no serum assay available for screening??? My prediction is that we start with a dual arm trial, RECAF plus PSA against PSA alone. Such a trial could be completed by Abbott in months, and compiling/submitting the data will take barely any time at all. There is a chance of course, that ABT will perform simultaneous trials for multiple indications. The cheap and simple regulatory process for a diagnostic makes the risk/reward attractive for simultaneous trials.
No question they are under a strict NDA, and we will never learn the details of the deal (standard industry practice), but you can be sure that the company can and will be providing updates.
- More healthcare conferences and investor conferences to get the word out and bring new strategic partnerships and investors aboard. I know for sure that the company will be on the conference circuit this year.
- Legitimate exchange listing. And I'm not talking about OTC-BB, although that is a step in the right direction. We are very close to meeting the AMEX "Standard 4" requirements. The requirements are a $3 share price, a $20 mil float, a $75 mil market cap, and 400 public shareholders with 1 mil shares publically held. As you can see, once BOCX reaches $3 we will be eligible for AMEX listing as our market cap will exceed $75 mil at that point and we meet all the other requirements currently. Yes, this requires a doubling of the current share price but this thing can make a move like that in one day. I don't think we'll be spending much time on the OTC-BB.
- More partnerships...we KNOW this will happen it's just a matter of when. The company used very strong language in the last 10-K, and clearly they can be believed when they say they are close to a deal.
- Progress and perhaps a partnership for the tumor imaging application of RECAF. This is a HUGE market and easy to get approval/penetrate kind of like diagnostics. The company was very direct in saying they will start focusing more energy in that direction (per recently filed 10-K). We need to get the market thinking about how important and VERSATILE this technology is. A licensing deal for therapeutic agent will also help in this regard, although it will take half a decade or more to monetize that so I'm more excited about imaging.
- A proper earnings call with a webcast. Of course there are no earnings to discuss but that's the same with 90% of biotechs. Upper management needs to stop being mysterious and start talking to shareholders. Aurelius says they are working on this and we can expect something soon.
Look guys, the cervical cancer P.R is better than nothing, but we have bigger fish to fry right now. MUCH bigger fish. The market yawned at the news, and so did I. If you're thinking the market yawned at the ABT news, you're wrong...our share price tripled based on that deal which is pretty good. All of us underestimated the overhead left over from trading our entire float over $2 last year. $2 is a formidable supply point and we simply couldn't surpass it...THIS TIME. Believe me we will eat that level for breakfast in the near future.
Dew...First of all, it is very rare for ABT or any other large pharma to disclose the details of a licensing agreement (especially with a smaller company). Do your own "dew diligence" (sic) and you'll realize that pretty quickly. The fact that you are reading into their lack of disclosure of the deal terms indicates that you are new to biotechs.
Also, your comment about "once a scam always a scam" is totally unfounded. This company has never been a scam, and the fact that ABT just signed a deal with them confirms that. Do you think ABT did not do hardcore due diligence on this company before getting in bed with them? More importantly, are you aware that ABT went through a process of blind sample verification with BOCX before signing the deal??! This means that they didn't take BOCX's word for it...they submitted their own blind, encoded tissue and serum samples and it is apparent now that they were impressed with the results when BOCX returned those samples.
If you're going to use "DewDiligence" as your alias, how about actually rolling up your sleeves and doing some DD so you don't make a fool out of yourself.
10-K just filed, here are my comments:
In no particular order...
1) BioCurex expects licensees to be responsible for regulatory approval, and expects the serum assay to be classified as a Class II device (which has a very low regulatory hurdle).
2) As of March 15, 2005, BOCX has 32.2 mil shares outstanding. This is an increase of 2.8 mil shares OS from there last filing on November 12, 2004. We expected an increase, considering the company covers op ex via common stock sales, like just about every development stage biotechs out there. In my opinion, this increase in shares OS was expected and acceptable.
3) "BioCurex expects to enter into other licensing agreements in the comings months.." FANASTIC!!!!!!!!!
4) Rudy, if you could help me understand that part about RIA's, ASR's, "home-brew" tests, 501k's, and PMA's, I'd appreciate it very much.
5) Net loss for the year was cut from $2.6 mil to $1.4 mil, on lower operating expenses.
6) Capital requirements projections for 2005 are quite interesting. It seems the company is going to starting focusing on therapeutics as far as R&D goes, and they are planning to increase marketing and investor communications (ahem Aurelius).
7) BOCX is projecting total capital requirements at $1.8 mil for 2005. Where are they going to get this cash considering they have only $90k at hand? Will the upfront payment from Abbott cover that? Personally, I hope that the company wasn't stupid enough to accept a large upfront payment because you have to lower your royalties to get a bigger upfront. I'd take 5% - 10% dilution for quick cash via PIPE over a bigger upfront from ABT in a second! That is, of course, if I believed in the technology.
Who knows, but I get the feeling from the filing they will be doing another stock sale. If I were them, I probably would be considering a stock sale right now just because the OS is still tiny and the share price is at relative highs. This always f**ks with the price a bit, but for those of us going for long-term capital gains it's just another accumulation point.
8) I believe Z was asking about the latest insider ownership information. As of March 15, 2005, Moro/Wittenberg/Gold owned 5.9 mil shares, which amounts to 17% of common. This is an increase of 500k shares over the prior year. Contrary to what Steve predicted the insiders were not dumping into the rally which started in February!! Try again Stevie boy.
9) Regarding the possibility of takeover, the company is somewhat tightly held considering the big 3 own 10 mil shares of common when you include their options which are very deep in the money ($0.07 strike). Anything can happen though.
Merovingian...Like I said, it was sent to investors of a hedge fund with a micro-cap component. I'm guessing it was written by the research department at the hedge fund, or the fund licensed the research from a third party. Since it is dated February 28th, which was preceded by a couple high volume up days, I'm thinking the fund took a position and then issued the report to clients. Don't get too excited, though, just because a hedge fund took a position. This stock's future rests on a sweet licensing deal with big pharma and a hedge fund buying in doesn't relate to that at all.
NO, MEROVINGIAN...My friend sent me the report. He is an investor at a hedge fund that has a micro-cap component, and they forwarded him the report.
BOCX RESEARCH REPORT...
BIOCUREX:
Quest for the Universal Cancer Test
Quote: Pink Sheets: $0.97
Rating: BUY: Extreme High Risk/Reward
By: 02/28/05
Investment Thesis
BioCurex has developed a single blood test that the company claims can detect the presence of all types of cancer from a blood sample. The data that the company and corroborating institutions have published to substantiate their claims is nothing short of spectacular, and the scientists at BioCurex are considered to be the fathers of the cancer diagnostics field (see The Scientists section).
As the company is currently in late stage negotiations with leaders in the cancer diagnostics field, I believe it is only a matter of time before a deal is struck and BioCurex can proceed with the commercialization of a potential blockbuster – the first universal and highly accurate cancer test.
Short-Term &
Long-Term Catalysts
NEAR TERM CATALYSTS:
Partnership with big pharma and relisting of stock on the OTCBB.
LONG TERM CATALYST:
Regulatory approval and commercialization of a potentially blockbuster product.
This stock has both near-term and long-term potential for appreciation. The near-term catalysts are the completion of one or more licensing deals with big pharma and the imminent relisting of the stock on the OTC-BB. The long-term catalysts are the regulatory and commercial success of their primary product, the Serum-RECAF test. I believe that the near-term catalysts are slam dunks, while the long-term catalysts are very possible but less certain.
Price Targets
My near-term price target, based on successful completion of a single deal with big pharma, is $2 - $6, or a market cap of $60 - $120 mil based on 30 million shares outstanding. I derived this price target by discounting back the lower end of my long-term price target by 50% for time and regulatory/competitor risk and creating $2 bands around that number ($4). The shares outstanding figure of 30 million factors in some future dilution as the actual number of shares outstanding is slightly lower.
This near-term price target could be revised upwards based on multiple deals being struck with big pharma, or with a single deal being struck along very favorable terms to BioCurex. A large upfront payment, favorable milestone and royalty schedule, and other terms of the deal are all big factors in the near-term price potential of the stock.
The near-term price target could be significantly increased if the market discounts the peak potential sales figure by less than 50%, which is the potentially conservative number I’m using (see valuation method for long-term price target below). A lower time and risk discount than 50% is possible if the market is convinced by the data and/or the credibility of our partner that FDA approval and commercial success have a better chance of succeeding (my model assumes 50% chance of failure).
My long-term price target, based on successful FDA approval and commercialization of the RECAF technology, is approximately $8 - $80 , or a market cap of $250 mil - $2.5 bil. This range is being derived by assuming a 5 - 50% market share of a $2 bil market, with 50% of sales going to a strategic partner (subject to change). A price/sales ratio of 5 is being used, which is in line with the industry
This long-term price target could be revised upwards based on 1) clinical applications for RECAF that are beyond the realm of diagnostics, such as therapeutics; and 2) market acceptance of RECAF technology as a general cancer screening tool for routine blood tests, rather than “just” as a tool to increase the accuracy of current cancer-specific tests.
A Significant &
Unmet Clinical Need
There is currently no universal cancer marker, and the common cancer-specific tests such as PSA, Pap Smear, CEA, Mammogram, etc are inaccurate and in some cases costly. Despite how inaccurate the current cancer tests are, the market for them is huge – in excess of $2 billion in 2004.
The PSA test, for example, has sensitivity to specificity ratio of only 82% / 40% yet earned in excess of $400 million in 2004. An 82% / 40% accuracy means that patients are misdiagnosed a whopping 60% of the time. The other major cancer tests have an average accuracy ratio of 68% / 67%, which means that healthy patients are misdiagnosed 33% of the time – also a very high number.
By contrast, BioCurex’s RECAF technology detects all forms of cancer that have been tested so far, and has achieved an average accuracy ratio of 90% / 95%. This means that less than 5% of healthy patients are misdiagnosed -- a striking contrast to the 20 – 60% rate of misdiagnosis seen with current cancer tests.
The Science
BioCurex has discovered and patented a cancer marker, dubbed RECAF, that is present on all types of malignant cell tissue but not on healthy cell tissue or benign tumor tissue. Most importantly, the marker can be found in high concentrations in the blood stream of cancer patients. The data furnished to date points to a remarkably high level of accuracy for RECAF compared to currently available cancer-specific tests (see chart), with the added benefit of universal applicability to the many different forms of cancer.
Even with the limited sample size of around 350 patients, the “p value” or degree of statistical significance of the data presented is less than 0.00001%, which indicates a high probability that these results can be replicated in a larger sample size A larger sample size will, of course, be needed for FDA approval.
Below is a table that summarizes the data presented to the National Cancer Institute Workshop and ISOBM International Congress in 2004. It was at these events that BioCurex was approached by several large companies for strategic collaboration. Based on this data, it is easy to see why. The full data-set from the event is available at:
http://www.biocurex.com/curexhtml/powerpoint/
Cancer
Type Current
Test Current Test
Sensitivity /
Specificity RECAF
Sensitivity/
Specificity
Prostate PSA 82% /
40% 99% /
95%
Stomach CA-19-9 56% /
75% 90% /
95%
Breast TPA,
Ca 15-3, CEA 62% /
80% 93% /
95%
Colon CEA 70% /
70% 75% /
95%
Lung NO TEST
AVAILABLE N/A 90% /
95%
TOTALS = 68% /
67% 90% /
95%
As you can see from the table, the data is extraordinarily compelling. Currently available tests like PSA, etc, have sensitivities in the 50 – 80% range, but not with specificities anywhere near the 95% achieved with RECAF. The average specificity of the current cancer tests is only 67%, which again, results in 33% of healthy patients being misdiagnosed as compared to 5% with RECAF.
These results, while preliminary, have been replicated at several prominent hospitals in Japan and Canada. The lead investigators in those facilities have independently published corroborating data.
If the data being furnished by BioCurex and collaborating institutions holds water, the possibilities for this product are endless.
The Scientists
The scientists involved in the discovery of RETAF and the current research efforts at BioCurex are a who’s who of the cancer diagnostics field. The chairman of the company’s SAB, Dr. Phil Gold, is the inventor of the PSA test for prostate cancer, and is the recipient of innumerable awards and honors for his research efforts. Perform your own research, and you will see that Dr. Phil Gold is the Mickey Mantle of cancer diagnostics – a titan in the field. Another SAB member is the inventor of the AFP test which was the first cancer marker that was ever discovered.
The FDA
The FDA approval process for a diagnostic test is far more rapid and straightforward than for a drug. The company is simply required to perform their diagnostic test on a very large sample size. There is no three-phase process and the endpoints are standardized (specificity and sensitivity). Diagnostic tests can move through the approval process in as little as a few months.
According to management, there are comprehensive tissue and serum samples databases available that the RECAF technology could be “backtested” on. The company claims that the FDA has approved many blood serum diagnostics based on backtesting of a historical sample database. By utilizing this approach, the trial and preparation of data could be completed very rapidly.
Applications of RECAF Technology
DIAGNOSTIC – Mass Cancer Screening
The company has a bold vision that their technology can be be used at the most basic level of care – the physician “check-up” – for the purpose of routine cancer screening of the public. Essentially, the physician would ask the patient “Do you want a cancer test?” just as he asks “Do you want a Hep-C test?” today when a patient is about to have a routine blood test. It is believed by many that mass cancer screening would prevent late diagnosis of certain cancers, which is a very costly problem in terms of both human life and healthcare budgets.
DIAGNOSTIC – Combination Use
There are numerous clinical and diagnostic applications for BioCurex’s patented RECAF technology. The most immediate application is in combination use with the currently available cancer-specific tests. The limitations of the current cancer tests are well known by doctors, patients, and the insurance industry. As a result, there is obvious pressure on industry leaders like Abbot, Roche, and Johnson & Johnson to improve existing testing methods with new or complimentary technology like BioCurex’s RECAF.
DIAGNOSTIC – Standalone Use for Lung Cancer
Although lung cancer is the second most common type of cancer, there is currently no available blood test for this form of cancer. Doctors currently rely on X-Rays, biopsies, and other methods which result in late diagnoses. Many doctors believe that the absence of a known lung cancer marker is largely to blame for lung cancer’s high fatality rate. Simply put, they usually don’t find out about lung cancer until it’s too late. The total absence of an effective diagnostic system for lung cancer makes it an attractive market for standalone use RECAF.
BioCurex’s RECAF test for lung cancer has been tested in a sample size of over 130 patients, and has shown astonishing sensitivity of 90% and specificity of 95%.
DIAGNOSTIC – Check for Recurrence of Cancer
RECAF technology can be used to diagnose the recurrence of cancer after a patient has had chemotherapy, radiation, or surgical removal of growths.
THERAPEUTIC APPLICATIONS
The company believes that their technology has far-reaching potential as a therapeutic, not “just” a diagnostic. It is conceivable that an antibody could be engineered to attach to the RECAF marker, and if so it would constitute a universal cancer vaccine. According to the company, there is interest from big pharma to license the technology as the foundation for a therapeutic agent, but my price targets and valuation do not take into account this aspect of RECAF. This is because, while compelling from a theoretical point of view, there is no proof of concept to date that RECAF can be adapted as a therapeutic.
Competitors
There is only one competitor in the race for a universal cancer marker, but the competing technology has recently been showed to be severely flawed. Geron Corporation, a pioneer in stem cell research, is conducting extensive research into the telomerase protein, which the company believes has significant potential as a universal cancer marker. In recent years, however, a number of independent institutions including the Mayo Clinic have presented strong evidence that the telomerase protein has high sensitivity but low specificity, which is similar to the characteristics of the current cancer tests. Sensitivity of telomerase has been achieved in the 90% range, which is similar to the results achieved with BioCurex’s RECAF technology, but sensitivity has only been shown to be in the 40 – 60% range. BioCurex’s RECAF technology has consistently achieved sensitivity in the 90% range and specificity in the 95% range.
Financial Position
Like most companies on the pink sheets and OTCBB, the company is currently being funded via common and convertible stock sales to the public. The company’s burn rate is relatively low at around $700,000 per year, with the bulk of expenses being related to their lab space at Pacific Biosciences Research Center. The company faces no major liabilities burden, although there is no guarantee that BioCurex will be able to continue raising cash for operations from the public markets. By continuing to raise cash from the public markets, the company is steadily diluting the ownership of the company. With only around 30 million shares outstanding, however, I don’t view dilution as a major concern at this point. Be aware that dilution via a stock or convertible sale often causes temporary price weakness.
IP Position
The company has a strong patent portfolio, with primary U.S patents not expiring until 2017. The company has also recently procured patents in China, Russia, Australia, Japan, and most of Europe.
Major Risks
PRODUCT RISK: The company is unable to replicate their results on the larger sample size required by the FDA. As stated previously, the company has amassed a net sample size of a few hundred patients, which is only a fraction of the sample size needed to convince the FDA of approval. The “p value,” or degree of statistical significance, that RECAF technology has achieved in current sample sizes is compelling evidence that the results can be replicated in a larger sample size. Given the high level and statistical significance of the accuracy achieved thus far, RECAF has a lot of “elbow room” to underperform in larger samples before it loses it’s competitive edge against current cancer diagnostics. Illustrating this “elbow room,” the range of difference between the accuracy of RECAF to current cancer tests is 10% - 50%, with an average “p value” for RECAF of well below 0.01. From a purely statistical perspective, it’s easy to make the case that RECAF’s heretofore astonishing results will be reproducible in a larger sample size.
BUSINESS RISK: The company is unable to secure a strategic partnership to provide the financial support and regulatory expertise needed for commercialization of RECAF. I believe that they will in fact be able to secure a partnership, but there is no guarantee. If the company is unable to form a partnership with big pharma, however, the company is at risk of being unable to fund current operations, let alone shoulder the financial burden of regulatory approval and commercial success. Funding aside, I don’t believe the company has the regulatory expertise or sales capability to bring their product to market alone. So, any way you slice it, the fate of this company is tied to it’s ability to procure a partnership deal with big pharma.
VOLATILITY RISK: Like all pink sheet stocks, the shares of BOCX will remain extremely volatile for some time. Double and triple digit percentage moves on an intra-day basis are likely. The stock has recently rallied from ~$0.50 to ~$1.00, and could be back to $0.50 in an instant even without negative news. The volatility is primarily a result of how small the float is. Also, the fact that the company is being valued on intellectual property and “fluff,” rather than earnings and assets, will keep the stock volatile for some time.
LIQUIDITY RISK: The pink sheets and OTC-BB are extremely illiquid trading venues. Bid/ask spreads are very wide, and getting in and out of the stock is more difficult than with conventional stocks (not to mention commission is usually higher).
MANIPULATON RISK: The pink sheets and OTC-BB are known for manipulative activity, including naked shorting and “pump and dump” schemes, which could negatively effect shares of BOCX. Although the SEC has recently increased scrutiny of these stocks and created safeguards against naked short selling, the pink sheets is unquestionably the “wild west” of trading venues.
DILUTION RISK: If the company is unable to secure a partnership, they will be forced to dilute the company significantly to raise enough capital to commercialize their technology.