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Actually, a number of existing drugs have been shown to be effective on multiple cancers (paclitaxel and avastin are two examples). These drugs have all been approved for one condition, and have later been extended to other conditions after additional studies demonstrating effectiveness on the other conditions were performed. It's unlikely that Kevetrin will be treated any differently. However, even if Kevetrin is just used for lung cancer, it could still generate revenues of several billion dollars/year, just in the US. Other indications would be icing on the cake.
A1
Which cancer should CTIX focus on first?
The FDA traditionally only approves cancer drugs for the treatment of specific cancers. I believe they'll stay with this approach with Kevetrin, so which type of cancer should CTIX focus on first? After a quick look at Kevetrin's results in pre-clinical studies, and another quick look at cancer statistics in the US, the answer is clear - lung cancer.
Although lung cancer comprises ~ 17% of the total new cases of cancer in the US, it is responsible for ~ 40% of the deaths, more than 3X the number of deaths for the next most deadliest cancer (colon cancer).
Kevetrin's pre-clinical studies also showed excellent results in two models of human lung cancers.
So, I think it's safe to say that lung cancer will be one of the primary areas of focus with Kevetrin.
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Number of new cancers and cancer deaths
I have a feeling we'll be needing to put a lot more people on ignore in the new year.
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The best reason to become a premium IHUB member.
= unlimited ignores.
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Karin;
My most recent posts were in relation to Prurisol, not Kevetrin, but your point is well taken - there's certainly room for debate about every assumption that was made in my estimate of NPV (by my count, I made over a dozen assumptions in my estimates for the NPV of Prurisol and Kevetrin).
As shareholders, I think the tendency is to be overly optimistic about the prospects of the companies we've invested in, which is why I deliberately tried to shade my assumptions in the NPV calculations to the conservative side.
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Pepsiman;
Actually, the 16.5% chance may be optimistic. See link.
Clinical Trial Failure Rates
Noretreat;
I appreciate your reply. Actually, the NPV calculation assumed a ~ 16.5% chance of FDA approval from today (33% chance of success of the phase II trial - if that's successful, 50% chance of FDA approval). The estimated value/share if the phase II trial is successful would be ~ $9.00
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Prurisol Present Value Estimate ($3.00/share)
Now that I've learned to present spreadsheet information in a (more or less) legible fashion on IHUB, I went back and re-visited my calculation for the net present value (NPV) of Prurisol. The number comes out to $3.05/share. This number is lower than the value of $5/share I estimated previously, largely due to a new assumption that the chance of FDA approval after a successful phase II trial is 50%. In my past estimate, I assumed the probability of (eventual) FDA approval after a successful phase II trial was 100%, which is clearly too optimistic.
Comments and suggestions that would make the estimate more accurate would be welcome.
When added to the previously estimated NPV/share of $6.50 for Kevetrin, this yields a NPV of ~ $9.50/share for CTIX shares.
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Assumptions: 10% discount rate, Prurisol purchased in Q4 2013, Acquiror would pay 50% of A/T NPV
for Prurisol, after a successful proof of concept (POC) phase II trial in Europe.
A/T NPV calculated assuming 80% gross margin (GM), and 15% S G & A, 35% tax rate.
FDA approval would occur 3 years after successful phase II POC trial, 150 million shares O/S.
125 million global psoriasis sufferers, 25% of whom (~ 30 million) have moderate to severe
psoriasis. Fifteen percent of these (~ 4.5 million) have access to first-world (ie, expensive)
healthcare. Prurisol market share in these 4.5 million patients is 5%.
Number of Patients with moderate to severe Psoriasis who have access to first-world healthcare 4,500,000
Market share in patients to whom Prurisol is available 5%
Number of patients treated with Prurisol 225,000
Annual price of treatment $10,000
Annual psoriasis revenue for Prurisol $2,250,000,000
Pre-Tax Profit assuming 80% gross margin, and 15% S G & A $1,462,500,000
35% Tax . $511,875,000
Prurisol Annual After Tax Profit . $950,625,000
A/T Profit Goodwill Depr. Tax
By Year… Benefit By Year
2013 $0.0000000000 $35,000,000 Assumes a $1.5 billion purchase price, 35% tax rate,
2014 $0.0000000000 $35,000,000 goodwill amortized over 15 years.
2015 $0.0000000000 $35,000,000
2016 $95,062,500.000 $35,000,000 Assumes FDA approval three years after successful POC trial
2017 $380,250,000.00 $35,000,000
2018 $570,375,000.00 $35,000,000
2019 $760,500,000.00 $35,000,000
2020 $950,625,000.00 $35,000,000 Assumes a five year ramp to full revenue
2021 $950,625,000.00 $35,000,000
2022 $950,625,000.00 $35,000,000
2023 $950,625,000.00 $35,000,000
2024 $950,625,000.00 $35,000,000
2025 $950,625,000.00 $35,000,000
2026 $950,625,000.00 $35,000,000
2027 $950,625,000.00 $35,000,000 Depreciation period expires
2028 $950,625,000.00
2029 $950,625,000.00 $266,212,783 NPV of Prurisol goodwill depreciation tax benefit
2030 $950,625,000.00
2031 $950,625,000.00
2032 $950,625,000.00 Prurisol patent expires
After Tax NPV assuming 100% chance of FDA approval if POC trial is succesful $4,478,418,739
After Tax NPV assuming 50% chance of FDA approval if POC trial is succesful $2,239,209,369
Amount an acquiror would pay assuming 50% chance of FDA approval if POC trial is successful $1,385,817,467
Risked NPV of Prurisol assuming a 33% chance of success of POC trial $457,319,764
Risked Present Value/Share of Prurisol $3.05
Yes, 150 million is about right, assuming all warrants and options were exercised, and Aspire purchased 5 million shares at an average price of $2/share.
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Ovidius;
The 180 million OS came from the assumptions that Kevetrin would not be sold until after phase II trials were complete, and that CTIX would issue 30 million shares in a secondary offering to pay for the phase II trials. These may very well be conservative assumptions, but it's nice to know that, even with conservative assumptions, the calculation predicts a present value/share considerably higher than the share price.
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Karin;
I would be truly (and pleasantly) shocked if Kevetrin received FDA approval within a year.
IMO, the real benefit of the present value analyses that I've been doing are the results that show that it's not necessary to make anything other than 'business as usual' assumptions to arrive at a present value for Kevetrin (and Prurisol) that is several times the current share price.
Actually, assuming good clinical results, there will be multiple opportunities to take profits prior to final FDA approval, eg, after successful phase I trials, after successful phase II trials, after a buyout, after a run-up like the recent one due to improved investor sentiment/awareness, etc.
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Pricing for some current cancer medications:
Provenge (prostate cancer vaccine): $93k
Xtandi (prostate cancer): $7500/month
Zytiga (prostate cancer): $5500/month
From a recent NY Times article:
Companies often seem to charge what the market will bear for cancer drugs — as much as $35,000 a month and $100,000 a year in various cases.
Recent NY Times article
I don't know whether 20% is high or low either ( I suspect it may be on the low side). As for the cost of treatment, many new cancer med's run $10k/month, or more than $100k/year. Big pharma charges what the market will bear, and in the case of cancer patients, that number is pretty high.
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Cost of Cancer Care
From what I've read, eight years is the average amount of time required for new cancer meds to progress from start of phase I trials to FDA approval (assuming they don't fail somewhere along the way). It can be done faster, of course.
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More calculations for Kevetrin present value ($6.50/share)
In the past, I calculated a present value/share of ~$8.00 for Kevetrin, using buyouts of two companies with promising cancer drugs in mid-stage trials as benchmarks. In this post, I calculate the present value/share of Kevetrin to be $6.50, starting from the after-tax Net Present Value (NPV) of Kevetrin to the purchaser (presumed to be a big pharmaceutical), using a series of fairly conservative assumptions, as shown below.
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Assumptions: 10% discount rate, 20% of new cancer patients will be treated with Kevetrin, 1 million new cancer
patients/yr in US , 2 million cancer patients/yr in ROW
cost per Kev course of treatment in US is $50,000, cost per Kev course of treatment in ROW is $25,000.
Gross margin = 80%, S G & A = 15%, tax rate = 35%, Kevetrin will be purchased in Q4 2015 after phase II trials.
CTIX share count at time of Kev purchase = 180 million. Kev buyer will pay 50% of A/T NPV for Kev. Kev purchase
price will be depreciated by buyer straight-line over 15 years. Overall prob of Kev success
(phase I -> FDA appr.) = 10%. Time from start of phase I to FDA approval = 8 years.
New cancer patients/yr in US with good health insurance 1.00E+06
Kevetrin price inside US $50,000
New cancer patients/yr outside US with good health insurance 2.00E+06
Kevetrin price outside US $25,000
Fraction of new cancer patients with good health insurance treated with Kevetrin 0.2
Worldwide Kevetrin Revenue $20,000,000,000.00
Pre-tax profit @ 80% GM, and 15% S G & A $13,000,000,000.00
35% tax $4,550,000,000.00
After-Tax Profit $8,450,000,000.00
Kev A/T Purch. Depr. Comments
Profit … Tax Benefit
2016 0.000000000 $175,000,000
2017 0.000000000 $175,000,000
2018 0.000000000 $175,000,000
2019 0.000000000 $175,000,000
2020 845,000,000 $175,000,000 FDA approval 8 years after start of phase I trials
2021 3,380,000,000 $175,000,000
2022 5,070,000,000 $175,000,000
2023 6,760,000,000 $175,000,000
2024 8,450,000,000 $175,000,000 Five year ramp to full revenue
2025 8,450,000,000 $175,000,000
2026 8,450,000,000 $175,000,000
2027 8,450,000,000 $175,000,000
2028 8,450,000,000 $175,000,000
2029 8,450,000,000 $175,000,000
2030 8,450,000,000 $175,000,000 End of depreciation period
2031 8,450,000,000 $-
2032 4,225,000,000 $- Kevetrin patent expires (mid-year)
A/T NPV (100% COS) 30,054,007,331 1,331,063,914 A/T NPV of Deprec. Tax Benefit
Buyout price/share, assuming a 100% Chance of Success (COS) $104.62
Buyout price/share, assuming a 40% COS after successful phase II trials, and 20% dilution $35.61
Present value/share, using a 25% COS* in ph I and ph II trials, 10% discount rate $6.49
*~ 80% COS in phase I and ~ 30% COS in phase II
Focus on value, not short-term fluctuation.
Every investor should have an estimate of the value of the shares they have purchased, or are considering purchasing (or selling). This estimate provides an analytical, as opposed to emotional, basis for action, or for inaction, especially when a share price moves as dramatically as CTIX's has in the past few days.
In post 16719, I estimated a current value of about $18/share for CTIX shares (~$10/share for Prurisol, and ~ $8/share for Kevetrin). I now think the estimate of $10/share for Prurisol was too high. The $10/share estimate was based on the implicit assumption that CTIX would develop CTIX itself. It is far more likely that CTIX will sell or license Prurisol, assuming good results in the upcoming phase II trial. A reasonable estimate of a purchase price would be perhaps 50% of the current value per share of Prurisol, or $5/share. This would put my current estimate of the value of each CTIX share at $13.
If the upcoming proof of concept trial in Europe is successful, the value per share of Prurisol would be in the $10-$20 range, for a total value/share estimate of $18-$28, assuming no change on the Kevetrin front. If it's not successful, Prurisol's value/share would drop to close to zero, yielding a total value/share estimate of $8.
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Another article mentioning P53
Basically a re-hash of the NYT article.
Mentions Merck, Roche, Sanofi, and Cellceutix in the same sentence.
Another P53 article
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Value of Prurisol per CTIX share today ~ $10
I've tended to focus more on Kevetrin, and ignore Prurisol when doing valuation estimates, because of the large number of existing treatments for psoriasis. After doing a bit of searching and some calculations, I now realize that ignoring the value of Prurisol was a mistake.
According to the national psoriasis foundation, approximately 125 million people worldwide suffer from psoriasis, and about 25% of these, or ~ 30 million people, suffer from moderate to severe psoriasis. These 30 million people would be candidates for the newer, more expensive (and more effective) psoriasis medications, such as enbrel, humira, and remicade. However, only a relatively small percentage (perhaps 15%, or 4.5 million) of these 30 million people would have the financial means and/or insurance to pay for the cost of these medications.
So, I did a calculation assuming that 4.5 million people worldwide would use more advanced psoriasis medications, that Prurisol would have a 5% market share of these 4.5 million patients, and the annual cost of prurisol to patients or their insurance companies is $10,000 (the annual cost of enbrel, humira, and remicade is ~ $10,000 - $25,000).
This yielded an annual revenue of $2.25 billion. I further assumed a 75% gross margin, and that Prurisol sales would start in 2017, ramp up to the annual rate of $2.25 billion over a 5 year period, and drop to zero upon the expiration of the Prurisol patent. An NPV10 calculation using the above assumptions yielded a net present value for Prurisol of $5.9 billion dollars.
Using a 25% chance of success for Prurisol yields a risked NPV of $5.9 billion * 0.25 = $1.47 billion dollars, or about $10 per fully diluted CTIX share.
Adding this valuation to the current (conservatively) risked valuation for Kevetrin of $7.81 per fully diluted CTIX share that I calculated in an earlier post, and I arrive at a risked valuation of $17.81 per CTIX share, as of today.
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Number of Psoriasis Sufferers
List of Psoriasis Medications
A (conservative) valuation of CTIX shares today.
In posts 13956 and 16485, I calculated the potential value of Kevetrin, using buyouts of two other companies with cancer drugs showing good results in mid-stage trials as benchmarks.
One calculation showed a potential value of $200/share, and one showed a potential value of $300/share. These numbers are pretty mind-boggling, but are based on a series of assumptions. By backing out the assumptions, it's possible to arrive at an estimate of the value of CTIX shares today.
Start with the averaged share price from the two calculations: $250/share.
Assumption 1: Kevetrin is found to be safe and effective in a broad range of cancers in phase I and phase II trials - probability 25% (I'm trying to be conservative here).
Assumption 2: Kevetrin's value can be linearly extrapolated from the above-mentioned buyouts. This is likely optimistic, for two reasons:
1) Very few companies can afford to pay tens of billions of $, so the pool of purchasers would be small.
2) At least some of the value assigned to YM Biosciences' and Micromet's drugs was due to the potential for increasing the number of indications for these drugs in the future. Kevetrin's potential application is already so broad, it's unlikely to increase much.
Taking the above arguments into account, the value of Kevetrin per potential patient might be only 25% of the amounts paid in the above-mentioned companies' buyouts. (I'm trying to be conservative here.)
Taking the time value of money, and other potential risks into account might reduce Kevetrin's value by another 50% (I'm trying...)
So, a conservative valuation of Kevetrin's value per CTIX share today is as follows:
$250*0.25*0.25*0.5 = $7.81
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When all the options and warrants are added in, the fully diluted share count is close to 150 million.
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Cancer drug M & A comparison.
On 12/12, I posted about Gilead's purchase of Y M Bio for $ 510 million. Using that purchase price as a metric, I concluded that CTIX's purchase price could be as much as $30 billion, which works out to ~ $200/fully diluted share.
I've been looking for other buyouts to establish a potential purchase price for CTIX and/or Kevetrin. This is not as easy as it might seem, as most buyout or licensing agreements these days are comprised of an upfront payment, and multiple milestone payments, which makes calculating the overall value of the deals somewhat difficult.
I did come across another straight buyout deal, from earlier in 2012. Amgen purchased Micromet for $1.16 billion in cash. Micromet has a drug that has shown good results in treating leukemia in phase II trials.
Approximately 250,000 people in the US have leukemia.
As before, if we assume Kevetrin is effective on 10 million cancer patients in whom P53 has been turned off, the valuation calculation is
Potential value of Kevetrin = $1.16 billion * (10 million/250,000)= $46.4 billion (or about $300/fully diluted share).
These numbers are hard to grasp, but that's what the calculation shows.
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Number of people with leukemia
Amgen Micromet Purchase
NY Times article mentions 3 large drug companies investigating drugs that affect P53. They are Roche, Sanofi, and Merck.
Other large drug companies are
Pfizer, Eli Lilly, GSK, Novartis, Bristol Meyers, Bayer, Abbot, and Johnson and Johnson.
I wonder how many of these other companies will feel added pressure to start investigations in this area, and how many will be talking to CTIX, if they aren't already.
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NY Times P53 Article
Gilead buys YM-bio for $510 million
YM-bio has a drug that had good results in a phase I/II trial treating a rare cancer called myelofibrosis. There are ~ 30,000 people in the US with this condition, and another ~ 140,000 with related conditions.
If Kevetrin works, it has the potential to treat ~ 10 million people.
So what could Kevetrin be worth?
A quick calculation: $510 million * (10 million)/170,000) = $30 billion.
Works for me
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Gilead buyout
YMI Bio website
Estimate of prevalence of myelofibrosis and related conditions
Before now, shareholders have been retail and insiders.
The Aspire deal is the first significant instance of institutional purchases of CTIX shares. Institutional interest is what will drive the SP to multiples of its current value, assuming good clinical results.
The purchase agreement with Aspire will legitimize CTIX in the minds of many institutional investors. CTIX is now on the radar screens of many more funds.
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That's not bad at all.
I certainly hope that Aspire is not privy to material information before other investors are. That would be a violation of SEC rules, specifically regulation FD.
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Aspire Capital's web site.
Aspire Capital
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Re - Definitely a dip (not!)
Situps - Don't know how others will react to this news. IMO, this financing deal is a positive. Anyone who looked at CTIX's financials should have known that some form of financing was almost guaranteed, so this should already be baked into the share price. It's possible that short-sighted investors will take the SP down on the news, but I think it's just as likely that the SP will rise, as this financing has removed substantial uncertainty.
Also, as others have mentioned, the terms of the deal look very favorable. Kudos to Leo for this deal.
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Actually, the Prurisol patent will be published in June 2013.
According to the USPTO's web site:
Publication occurs after expiration of an eighteen-month period following the earliest effective filing date.
The patent application for Prurisol was filed in January 2012, so it should be published in June 2013.
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DFG; Where is the info on the initial Kevetrin dose?
Thanks,
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Once again, from CTIX's latest 10K (dated 10/12/2012):
Expected expenses over the next 12 months (from 10K)
1 Research and Development- $1,500,000 in preclinical development costs, including costs to manufacture Prurisol.
2 Clinical trials – $3,000,000. We have budgeted $1,500,000 for our Phase 1 Kevetrin trials and $1,500,000 for the Prurisol pilot study and phase 2/3 trials.
3 Corporate overhead of $1,250,000: Budgeted office salaries, legal, accounting and other costs expected to be incurred.
4 Capital costs of $100,000: Estimated cost for equipment and laboratory improvements.
This adds up to $5,850,000. Since CTIX has less than $100,000 in the bank, it's a legitimate question as to how they will raise this money. I'm confident they'll be able to raise the money, the only question is how much (if any) dilution will be required.
I really don't understand why people get so emotional when this issue is raised.
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How will CTIX fund its operations?
According to CTIX's 2012 10K, they expect to spend ~ $6 million over the next 12 months or so, as detailed below. Since they don't have the money, I'm guessing they'll do a small ($10-20 million) capital raise in the next couple of months. Other options are continuing to sell small amounts of shares or debentures in private sales, or outlicensing Prurisol or Kevetrin. However, a secondary offering appears most likely to me.
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Expected expenses over the next 12 months (from 10K)
1 Research and Development- $1,500,000 in preclinical development costs, including costs to manufacture Prurisol.
2 Clinical trials – $3,000,000. We have budgeted $1,500,000 for our Phase 1 Kevetrin trials and $1,500,000 for the Prurisol pilot study and phase 2/3 trials.
3 Corporate overhead of $1,250,000: Budgeted office salaries, legal, accounting and other costs expected to be incurred.
4 Capital costs of $100,000: Estimated cost for equipment and laboratory improvements.
Perhaps you're being a little optimistic about Prurisol. There are already many treatments on the market for psoriasis.
Also, although it's certainly possible that Prurisol will work on other autoimmune diseases, at this point that's just speculation, as Prurisol has not even been shown to work on psoriasis in humans.
Obviously we all hope both Prurisol and Kevetrin will be blockbusters, but, for the sake of our own financial well-being, we need to be careful not to substitute hope for thoughtful analysis of risks and rewards.
Current treatments for psoriasis
From Wikipedia:
There are a number of different treatment options for psoriasis. Typically topical agents are used for mild disease, phototherapy for moderate disease, and systemic agents for severe disease.[38]
[edit] Topical agents
Bath solutions (epsom salt) and moisturizers, mineral oil, and petroleum jelly may help soothe affected skin and reduce the dryness which accompanies the build-up of skin on psoriatic plaques. Medicated creams and ointments applied directly to psoriatic plaques can help reduce inflammation, remove built-up scale, reduce skin turn over, and clear affected skin of plaques. Ointment and creams containing coal tar, dithranol (anthralin), corticosteroids like desoximetasone (Topicort), fluocinonide, vitamin D3 analogues (for example, calcipotriol), and retinoids are routinely used. The use of the Finger tip unit may be helpful in guiding how much topical treatment to use.[39] The mechanism of action of each is probably different, but they all help to normalise skin cell production and reduce inflammation. Activated vitamin D and its analogues can inhibit skin cell proliferation.
[edit] Phototherapy
Phototherapy in the form of sunlight has long been used effectively for treatment.[38] Wavelengths of 311–313 nm are most effective and special lamps have been developed for this application.[38] The exposure time should be controlled to avoid over exposure and burning of the skin. The UVB lamps should have a timer that will turn off the lamp when the time ends. The amount of light used is determined by a person's skin type.[38] Increased rates of cancer from treatment appear to be small.[38]
Psoralen and ultraviolet A phototherapy (PUVA) combines the oral or topical administration of psoralen with exposure to ultraviolet A (UVA) light. The mechanism of action of PUVA is unknown, but probably involves activation of psoralen by UVA light, which inhibits the abnormally rapid production of the cells in psoriatic skin. There are multiple mechanisms of action associated with PUVA, including effects on the skin immune system.
PUVA is associated with nausea, headache, fatigue, burning, and itching. Long-term treatment is associated with squamous cell carcinoma (but not with melanoma).[citation needed]
[edit] Systemic agents
Pictures of a patient with psoriasis (and psoriatic arthritis) at baseline and 8 weeks after initiation of infliximab therapy.
Psoriasis that is resistant to topical treatment and phototherapy is treated by medications taken internally by pill or injection (systemic). Patients undergoing systemic treatment are required to have regular blood and liver function tests because of the toxicity of the medication. Pregnancy must be avoided for the majority of these treatments. Most people experience a recurrence of psoriasis after systemic treatment is discontinued.
The three main traditional systemic treatments are methotrexate, cyclosporine and retinoids. Methotrexate and cyclosporine are immunosuppressant drugs; retinoids are synthetic forms of vitamin A. Patients taking methotrexate are prone to ulcerations. Methotrexate exposure may contribute to post-surgical events.[40]
Biologics are manufactured proteins that interrupt the immune process involved in psoriasis. Unlike generalised immunosuppressant therapies such as methotrexate, biologics focus on specific aspects of the immune function leading to psoriasis. These drugs (interleukin antagonists) are relatively new, and their long-term impact on immune function is unknown, but they have proven effective in treating psoriasis and psoriatic arthritis. Biologics are usually given by self-injection or in a doctor's office. In the United Kingdom in 2005, the British Association of Dermatologists (BAD) published guidelines for use of biological interventions in psoriasis.[41] A UK national register called the BAD Biological Register (BADBIR) has been set up to collect valuable information on side effects and benefits and will be used to inform doctors on how best to use biological agents and similar drugs.
Two drugs that target T cells are efalizumab and alefacept. Efalizumab is a monoclonal antibody which blocks the molecules that dendritic cells use to communicate with T cells. It also blocks the adhesion molecules on the endothelial cells that line blood vessels, which attract T cells. However, it suppressed the immune system's ability to control normally harmless viruses, which led to fatal brain infections. Efalizumab was voluntarily withdrawn from the US market in April, 2009 by the manufacturer. Alefacept also blocks the molecules that dendritic cells use to communicate with T cells and even causes natural killer cells to kill T cells as a way of controlling inflammation.[35]
Several monoclonal antibodies (MAbs) target cytokines, the molecules that cells use to send inflammatory signals to each other. TNF-a is one of the main executor inflammatory cytokines. Four MAbs (infliximab, adalimumab, golimumab and certolizumab pegol) and one recombinant TNF-a decoy receptor, etanercept, have been developed against TNF-a to inhibit TNF-a signaling. Additional monoclonal antibodies have been developed against pro-inflammatory cytokines IL-12/IL-23 and Interleukin-17 [42] and inhibit the inflammatory pathway at a different point than the anti-TNF-a antibodies.[35] IL-12 and IL-23 share a common domain, p40, which is the target of the recently FDA-approved ustekinumab. Ustekinumab (IL-12/IL-23 blocker) was shown to have higher efficacy than high-dose etanercept over a 12-week period in patients with psoriasis.[43]
In 2008, the FDA approved three new treatment options[44] available to psoriasis patients: 1) Taclonex Scalp, a new topical ointment for treating scalp psoriasis; 2) the Xtrac Velocity excimer laser system, which emits a high-intensity beam of ultraviolet light, can treat moderate to severe psoriasis; and 3) the biologic drug adalimumab (brand name Humira) was also approved to treat moderate to severe psoriasis. Adalimumab had already been approved to treat psoriatic arthritis. The most recent biologic drug that has been approved to treat moderate to severe psoriasis, as of 2010, is ustekinumab (brand name Stelara).
Medications with the least potential for adverse reactions are preferentially employed. If the treatment goal is not achieved, then therapies with greater potential toxicity may be used. Medications with significant toxicity are reserved for severe unresponsive psoriasis. This is called the psoriasis treatment ladder.[45] As a first step, medicated ointments or creams, called topical treatments, are applied to the skin. If topical treatment fails to achieve the desired goal, then the next step would be to expose the skin to ultraviolet (UV) radiation. This type of treatment is called phototherapy. The third step involves the use of medications which are taken internally by pill or injection. This approach is called systemic treatment.
A 2010 meta-analysis compares the change in Psoriasis Area and Severity Index (PASI) improvement from baseline in 22 trials. The combination therapy for moderate to severe psoriasis using psoralen with ultraviolet A (PUVA) plus acitretin shows a 97.3% PASI improvement from baseline. Therapy limitations need to be taken into consideration in the treatment of moderate to severe psoriasis, such as the increased risk of skin cancer with phototherapy and birth defects with acitretin.[46]
If both Kevetrin and Prurisol fail in their respective trials, CTIX could very well undergo significant dilution and a reverse split.
My (and I think, most people's) investment thesis for CTIX is not that it's not risky, but that the potential reward justifies the risk.
If Prurisol is successful, CTIX could be a five (or more) bagger.
If Kevetrin is successful, CTIX could be a fifty (or more) bagger.
If CLSN's or PCYC's drug candidates are successful, they might be 2-3 baggers (although, with PCYC's current EV of ~ $3.3 billion, expecting even a 100% gain from here might be optimistic).
So, as investors, we need to balance the admittedly lower risks of companies like PCYC and CLSN with the smaller potential rewards they offer vis-a-vis CTIX.
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CTIX patents.
I've been spending time perusing CTIX's two published patent applications, both of which are for Kevetrin.
Not sure why they have two applications - they look quite similar.
One thing is for sure - they've spent a great deal of time and effort putting the applications together, and trying to cover every possible angle - looks like they think they have something worth protecting.
CTIX patent applications - insert Cellceutix in term 1 and Assignee Name in field 1
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So what's your estimate of WFEMF's NPV?
A1
Let's not get carried away. The NPV10 of $200 million/year for 80 years is ~ $2 billion, even assuming no taxes and 100% profit. Using more reasonable assumptions, such as 40% profit, and a 30% tax rate, the NPV is $560 million - still a good sight higher than WFEMF's EV, but nowhere near $20 billion.
A1
How much of your portfolio should you invest in CTIX?
One way to answer this would be to use the Kelley ratio.
Kelley Ratio Calculator
If you input the estimated chance of success, the estimated payoff if you're successful, and the estimated loss if you're unsuccessful, the Kelley ratio calculator will provide a recommendation on how much you should invest in a particular stock. In practice, I find the recommendation from the Kelley ratio is overly aggressive; I find dividing it by two gives me a more reasonable value.
A1
What is prurisol?
Cellceutix only states that it's a small molecule, with a molecular weight of less than 500. I did a little digging on current treatments for psoriasis, and found that methotrexate is one of the most common treatments for psoriasis and other autoimmune disorders. It turns out that the molecular weight of methotrexate is 454. Interestingly enough, methotrexate was developed by an Indian scientist.
Methotrexate
According the Cellceutix's web site:
The FDA informed the Company that a 505(b)(2) application would be an acceptable approach for Prurisol
A 505 (b) (2) application is only appropriate for a modified version of an existing, approved drug, so I'm speculating that prurisol is a modified version of methotrexate.
A1