Innovation Pharmaceuticals Inc (IPIX)

[kob1140]

Yesterday I wrote to The Green Baron asking if they still feel the same way about CTIX. The original article was at

http://www.thegreenbaron.com/Cellceutix%20Analyst%20Discussion%20Newsletter%20Format.pdf

This is what they wrote back to me:


I spoke with my associate who follows Cellceutix extremely closely and is in contact with management on a regular basis. He is heavy in Cellceutix and believes that there is enormous potential because of the p53 connection with their lead compound, Kevetrin. His words to me (and he emphasizes that he is not an investment advisor or doctor and that all commentary is merely his opinion):

“There can always be comparisons drawn with a company like Pharmasset because they seem to have a very special drug for Hep C, which represents a huge area of unmet medical need and has the potential to generate billions annually in revenue. Kevetrin is similar in the sense that scientists have been trying for decades to re-activate the p53 pathway because of its crucial role in controlling cell cycles and the fact that it is known to be damaged or mutated in nearly all cancers. The laboratory research certainly appears to show that they are closer than anyone else to tapping-into the power of the p53 pathway. Clinical trials are, of course, the key. IF (and in biotechnology that is the big word), Cellceutix can show safety while identifying dosing levels in the Phase I clinical trial and Dana-Farber and Beth Israel Deaconess and by some chance show some efficacy as a bi-product (efficacy is never a primary endpoint in a Phase I trial), it would be presumable that major pharma is going to start really honing-in on this small biotech. There’s not much more that can be said other than what is public. The facts are:

· Arguably the most well-recognized cancer research center in the world is hosting the trials. No biotech the size of Cellceutix has ever hosted trials there. The smallest one I could find had a market cap 5 times that of CTIX when the trials began. Dana-Farber doesn’t make it policy to just take cash to host trials. It would seem that they see something in Kevetrin’s data and profile.

· Beth Israel Deaconess has taken it upon themselves to contact Cellceutix about combination studies with Pfizer drugs (for which Beth Israel will be paying for the research). It would seem that they see something particularly impressive as well.

· Cellceutix CSO Dr. Krishna Menon played a key role in early development of Alimta and Gemzar (still two of the biggest cancer drugs in use today) while at Eli Lilly. He has said that he believes Kevetrin can be bigger than those two drugs combined. The whole Cellceutix team is excited about Kevetrin and has been for several years without the excitement ever waning. In fact it’s higher than ever at this point.

· Kevetrin has showed tumor growth delay and significant reduction in every cancer cell line that it has been tested on in pre-clinical studies. The range of cell lines has been broad, including lung, breast, leukemia, colon, prostate, head & neck and squamous cell carcinoma. The effectiveness would seem to be because p53 controls cell cycles across the body; it’s not specific to a certain cancer. While most other chemotherapies are basically a poison (for lack of a better word) begin injected into the body to destroy specific tumors, Kevetrin re-activates p53, allowing the body to naturally destroy the cells. In a sense, the tumors self-destruct. It’s similar to immunotherapies that are being heralded as the next great thing in cancer therapy, except Kevetrin is actually another step up on the immunology ladder as a top-tier defense system.

· Kevetrin has been shown to be non-genotoxic. When Roche came out with Nutlins, it was trumpeted as one of the biggest breakthroughs ever in cancer research because it re-activated p53. Unfortunately for Roche, Nutlins proved to be genotoxic, meaning that they destroyed DNA as well as tumors (obviously a bad thing). They are still researching Nutlins to this day because they know how huge it can be if they could just figure it out.

· The Cellceutix Senior Management and Advisors have built their reputations in senior management positions at some of the biggest and best oncology organizations in the world (Dana-Farber, Sloan Kettering, Pfizer, etc.). Those individuals with centuries of experience combined in cancer research have thoroughly reviewed all the data collected so far and commented several times on how impressed they are with Kevetrin. The leaders have a lot of skin in the game with funding the company on their own and never drawing a paycheck. The clearly believe in the big picture and where Cellceutix can be in a couple years.

· Non-Disclosure Agreements have been signed with “major pharmaceutical companies.” This is rare for a pre-clinical company to be approached by big pharma and indicates that majors already have their eyes on Cellceutix and want to see data as it is received before it goes public. Big pharma is notoriously bad at developing early-stage drugs and looks for acquisitions. This is especially true in today’s biotech space as the patent cliff has many of the big pharmas with thin pipelines. Add it Kevetrin showing robust anti-cancer activity and it bodes especially well for Cellceutix.


In my opinion, the company is heavily undervalued at this price point. Obviously, I am eager for the clinical trials to get underway and look forward to the first bits of data to be received. Biotech stocks are very cyclic with the commencement of clinical trials typically a point where price per share increases, so I am hoping for the same to happen with Cellceutix.”