I went through the ANX slide presentation from the other day and wanted to make a few observations.I apologize if i am rehashing prior DD.I am also a biased long holder of the stock.I do have experience or knowledge of following companies who blazed the trail of creating improved equivalent ethical pharmaceutical products and those companies quickly became billion dollar companies and were bought out.There are many cases were companies have done this with lower profit margin drugs and this path has been very profitable and much less riskier.The fact that Adventrx is doing this with Oncology products is brilliant.Oncology products offer much higher profit margins and lower managed care hurdles.But Adventrx has a proven model to follow and i will elaborate below.First of all why can Adventrx do this ? Because they have developed a unique proprietary emulsion technology to reformulate approved drugs and lower side effects. In simple terms by improving how a dose is delivered once its in the body you can change the way the body reacts to that drug.A simple analogy would be giving someone 3 shots of whisky immediately vs mixing 3 shots of whisky with a bottle of 7 up and drinking it slowly.You have changed the way its delivered to the body thus less burning in the mouth etc. Adventrx is an early stage oncology company that doesn't carry the same risk as other early stage similar companies.They have a lower-risk regulatory path. Approvals are based on a single pharmacokinetec study.The only endpoint is bioequivalence.This gives shorter time lines , lower clinical study costs and lower risk of failure.The one negative with this scenario is that you will not be marketing major new breakthrough like avastin with no competition so the stock upside may be less than if you stumbled across Genetech at this point in their development.But the upside with Adventrx is still huge.The good news with Adventrx is that they already have a product on the launching pad. ANX 530 Vinorelbine (Navelbine ) Emulsion.The problem with the current form of Navelbine is that the injection site reaction is 30%.Oncology products are notorious for side effects.In most oncology treatment protocols side effects or toxicity are one of the top reasons patients are not able to complete drug treatment and get the full potential life saving benefit from the treatment.Slide 9 in the presentation shows ANX-530 had considerably less ear vein histopathological toxicity in preclinical trials.Slide 12 shows an 89 % reduction in injection site reactions.This is highly statistically significant.This should bode well with the FDA review committee.They are also in development of ANX-514 Docetaxel (Taxotere) emulsion detergent free formulation.Again an easier softer delivery system designed to reduce hypersensitivity reactions associated with detergents.The pharmacokinetic study was finished , bioequivalence not observed.Higher levels during administration were observed but smoothed out during the time curve.My personal opinion is that if you can deliver more of the drug with less side effects you have potential for better efficacy.That's an oncologists first thought " how far can i push this drug " .It wasn't a major factor in this bioequivalent study and no clinical studies will follow to prove this point.If left out here with an approved drug it will be a positive in my oipinion. FDA meeting is planned..They already partnered for South Korea. ANX-514 could also have the benefit of reducing the need of high dose steroids.High dose steroids are a necessary evil in many current oncology treatments.High dose steroids risk/reward benefit is a delicate balance and reducing or eliminating them would be a huge advantage for ANX-514.Another benefit may be less interruption in treatment therapy schedule and again if you cant take the drug your overall survival and relapse free survival rates suffer.Potentially less nursing time spent managing adverse events.Do you know how much a speciality oncologist nurse makes ?Do you know how much time they spend managing adverse events ? Too much .Another advantage will be use of standard tubing sets,more money, time and headaches saved.The Docetaxel story gets even better.The current composition patent expires in 2010 but the last taxotere formulation patent goes until 2013.The molecule becomes free in May 2010.Then Adventrx gets a brand name product to share for 3 1/2 years.That's a 3 bil existing market potential.They could also potentialy get a patent until 2027.ANX-530 has a 200 mil unpromoted existing market.Demand is still growing without any current promotion.ANX-530 patent claim will go to 2025.Now is Adventrx going down some dark uncharted alley ? No !The path has already been cleared by a couple of current product reformulations. Abraxane a detergent free formulation , approval based on improvement in response not overall survival studies, reduced hypersensitivity reactions lower rates of neutropenia and faster infusion rates.Prior to generic entrants in 2001 Taxol sold 1.8 bil , Abraxane sold 335 mil in 2008 nearly 40% of the taxane market share in this metastatic breast cancer pie. Aloxi was the fourth drug in its class for chemotherapy induced nausea and vomiting.Aloxi gained the market share lead in 2 years.Finally most small bio techs are desperate for cash.As of 9-30-09 Adventrx had 3.2 million in cash.October 2009 Adventrx raised 6 mi.Adventrx has only 185 mil shares outstanding with a very small market cap of just over 50 mil.No debt and over 12 months of cash on hand.Adventrx costs are not your typical high dollar expensive clinical studies.The clinical study costs for them are much lower.They are taking high profit drugs and improving the delivery.I believe this is a very solid company with an excellent chance of price share appreciation in the next 2 years.
AI
