"Research by Sunshine Biopharma has shown its flagship drug candidate, Adva-27a, to be effective at killing multi-drug resistance cancer cells in breast cancer, small cell lung cancer, uterine sarcoma and pancreatic cancer."
Overview
Sunshine Biopharma is committed to developing novel therapies for the treatment of various forms of aggressive cancer types. The Company's initial drug candidate, Adva-27a, is a small molecule that has proven effective against different types of multidrug resistant cancer cell lines including breast cancer (MCF-7/MDR), small-cell lung cancer (H69AR), uterine carcinoma (MES-SA/Dx5) and pancreatic cancer (Panc-1).
According to the American Cancer Society approximately 1.5 million new cases of cancer are diagnosed each year in the U.S. Today, there are over 11 million Americans living with cancer. Virtually all cancers are either aggressive at the onset or become aggressive over time.
Profile
For the most bang for an investor’s buck, there probably isn’t a more lucrative industry than biotechnology. 2012 was actually a slow year with $57 billion in merger and acquisition deals, compared to $92 billion in 2011, $75 billion in 2010 and $142 billion in 2009. 2009 featured Pfizer (NYSE:PFE) agreeing to pay $68 billion for Wyeth Pharmaceuticals and Merck (NYSE:MRK) dishing-out $41 billion for Schering-Plough. Be that as it may, big and small buy-outs come at a steady pace and the smallest company can mushroom to a billion-dollar valuation with the results from a clinical trial; planting them firmly on the radar of big pharma with deep pockets.
The fact is that only one in about every 1,000 compounds in development makes it to commercialization, so it is far easier for larger pharmaceutical firms to let a junior start to develop a drug to demonstrate the potential and then swoop in and partner or buy the whole company. The fact also is that low interest rates that are conducive to deal-making and thinning pipelines have big pharma actively on the lookout for attractive drug candidates.
Regardless of macroeconomic conditions, the Nasdaq Biotechnology Index (NBI) has outpaced the three major indexes of the Dow Jones Industrial Index, the S&P 500 Index and the Nasdaq Index for five straight years, including essentially doubling return to investors in the first half of 2013 compared to those benchmarks.
There are always the monster mergers that grab the attention of the whole investment community, such as those aforementioned or Valeant Pharmaceuticals saying in May that it will spend $8.7 to acquire eye care product maker Bausch & Lomb from Warburg Pincus. However, the trend seems to be shifting a bit towards smaller – and perhaps smarter – deals to build pipelines and complement existing compounds or technologies.
Take GlaxoSmithKline (NYSE: GSK), for example. The London-based company has made two moves in the last week to bolster its pipeline. On May 31, Glaxo paid $325 million to buy privately held Okairos AG to gain control of its vaccine platform technology. On June 3, Glaxo entered an agreement with MorphoSys AG, with Glaxo assuming responsibility for the development and commercialization of MOR103, MorphoSys’ HuCAL-derived antibody against GM-CSF that recently concluded a Phase I/II trial to treat moderate rheumatoid arthritis. Glaxo made an upfront payment of $17.2 million with milestone payments up to $323.5 million in addition to tiered, double-digit royalties on future sales. That’s for a drug still in early stages of development targeting a smaller indication compared to high profile, life-threatening diseases, mind you.
The list goes on and on in the biotech world. AstraZeneca (NYSE:AZN) has been particularly aggressive recently as it tries to revive its pipeline, including agreeing last month to spend up to $443 million to acquire Omthera Pharmaceuticals (NASDAQ:OMTH) for its fish oil-based medicine in development. That move was on the heels of AstraZeneca buying early stage biotech company AlphaCore Pharma for an undisclosed amount in April.
These are merely a few examples that underscore the thirst of the overall industry to develop new blockbuster drugs and the resurgence of merger and acquisition activity to do so. It also sets the tone for the potential of smaller biotechnology firms that can accumulate promising data for treatments of areas of great unmet medical need. Simply, big pharma is not afraid to spend the money to get control of those compounds.
For investors looking for a promising upstart, Sunshine Biopharma (OTCBB:SBFM) is readying for clinical trials with Adva-27a, the company’s flagship oncology drug candidate that has delivered strong laboratory data to date as a potential therapy for some on the largest, most deadly, forms of cancer.
Adva-27a is a GEM-difluourinated C-glycoside derivative of Podophyllotoxin that Sunshine is developing for various forms of drug-resistance cancers, most impressively topoisomerase 2-positive breast cancer patients. Competition in the oncology community is a short list, primarily etoposide, which is also a derivative of Podophyllotoxin. However, etoposide is ineffective against multi-drug resistant cancer lines, giving Adva-27a, as a completely new chemical entity, a distinct advantage and substantial area for market penetration. As such, it also likely makes it very attractive for partnering or acquisition opportunities to big pharma should clinical trials support the laboratory research.
Importantly, research of Adva-27a has been shown in HMEC cell lines, the standard measure of cytotoxic activity, to be non-toxic in high concentrations. Sunshine tested the drug candidate at more than three times the actual concentrations that will be used in human trials in evaluating any possible toxic activity. This is a critical piece of information as toxic activity damaging surround cells is what stops the majority of new drugs in development, especially those drugs which laboratory studies show a robust profile in treating a variety of tumors.
Research by Sunshine has shown Adva-27a to be effective at killing multi-drug resistance cancer cells in breast cancer, small cell lung cancer, uterine sarcoma and pancreatic cancer. “Multi-drug resistance” is a hot topic as researchers struggle to find new therapies. In short, every person that dies of cancer develops multi-drug resistance. In layman’s terms, it simply means that the cancer cells have mutated to render all treatments ineffective, eventually leading to death.
To emphasize how many times this happens, understand that the Centers for Disease Control and Prevention said in February that 7.6 million people worldwide die of cancer each year and more than 12.7 million cases are diagnosed annually. Clearly, there is an area of great unmet medical need for new compounds that are focused on ever-mutating cancer lines that are resilient against today’s approved therapies.
Animal studies also show Adva-27a to have an excellent pharmacokinetic profile, meaning that the drug responds favorably with regards to absorption and distribution before completely being removed from the body. Again, this is a key component to potential efficacy of a drug.
Any of the given indications that Adva-27a has shown a potential to treat could deliver a windfall for Sunshine and its shareholders. In what could prove to be a clairvoyant move of market capture, the company has chosen to first target multi-drug resistant breast cancer as the initial indication for clinical trials. The trial will be hosted at McGill University’s renowned Jewish General Hospital in Montreal, Canada employing U.S. Food and Drug Administration standards.
Roche dominates the breast cancer treatment industry with sales of Herceptin that totaled $6 billion in 2012. Roche has also recently garnered FDA approval for Kadcyla, or TDM-1, combining Herceptin with emtansine to earn the nickname “Super Herceptin” as a stronger form of the therapy that has investors excited about the potential sales. The key factor in the case of breast cancer is that Herceptin treats HER-2 (Human Epidermal Growth Factor Receptor 2) positive patients that only account for about 20 percent of the breast cancer population annually. Breast cancer patients that are topoisomerase 2-positive, represent a larger population, but there are no FDA-approved drugs for this group of patients, leaving them little options in treatment. As aforementioned, Adva-27a is directed at topoisomerase 2-positive patients, lending to the premise that the potential sales for the drug could be far greater than Roche’s product.
Even more succinctly in the mid-term, a drug that collects promising data in human trials could be a strong target for Roche or any company with an oncology franchise looking to compete in the industry.
The breast cancer indication is the first clinical target for Sunshine Biopharma, but it is only a portion of where Adva-27a could go. It should be expected that additional research on the other indications will be conducted once the clinical trials at Jewish Hospital are underway sometime late in the fourth quarter or early in the first quarter of 2014. The one indication alone has the potential that would make most other biotechs envious, but spanning several deadly diseases sets Sunshine apart from all peers at this point in small molecule development.