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OncoSec Medical Inc (ONCS)’s Platform Creating Investor Buzz
By Equity Options Guru in News
Published: August 23, 2013 at 11:58 am

http://www.insidermonkey.com/blog/oncosec-medical-inc-oncss-platform-creating-investor-buzz-225901/?singlepage=1

Within the biotechnology industry, investors will come across many different processes that aim to treat a wide variety of diseases. In order to successfully invest in this fiercely competitive industry, investors must not only find a therapy that offers promise, but also find a company that has all the components necessary to excel going forward. One company that appears poised to take a giant leap forward is OncoSec Medical Inc (OTCMKTS:ONCS).
Company Profile
OncoSec Medical is an early stage biotechnology company focused on developing and commercializing treatments for advanced forms of skin cancer. The company is primarily focused on three deadly forms of skin cancer including Merkel cell lymphoma, cutaneous T-cell lymphoma, and melanoma. What really sets OncoSec Medical Inc (OTCMKTS:ONCS) apart from its industry peers is its proprietary technology that is based on electroporation.
The Science
Electroporation uses controlled, millisecond electrical pulses to create temporary pores in the cell membrane, which allow for increased cellular uptake of a synthetic DNA vaccine previously injected into the muscle or skin. The cellular machinery then uses the DNA's instructions to produce one or more proteins associated with the targeted disease. These foreign proteins mimic the presence of an actual pathogen and induce an immune response to provide future protection against the pathogen or eliminate cells infected with an infectious disease or cancer.
In simpler terms, the goal is to treat the cancerous cells while minimizing the damage to the healthy tissues. Pre-clinical and clinical data that have been produced so far demonstrates that the approach has a great deal of potential. Investors can look to the recently released interim results of OncoSec Medical Inc (OTCMKTS:ONCS)'s Phase II trial of ImmunoPulse in patients with metastatic melanoma for the proof.
Interim Phase II Results
The results from the trial demonstrated that ImmunoPulse was able to significantly alter tumor immunity after patients underwent treatment with DNA IL-12 and electroporation. The alteration was able to occur because of the unique approach of ImmunoPulse. Essentially, it submits a protein called DNA IL-12. This protein, in turn, is able to stimulate the immune system to seek and destroy cancerous cells.
The Phase II study enrolled 25 patients with Stage III or Stage IV cutaneous and in-transit metastatic melanoma. The primary endpoint is 24 weeks, at which point the response following treatment of cutaneous melanoma lesions will be observed. After 12 months, patients will be moved to the follow-up phase of the study and will be observed for a maximum of 5 years.
The interim results have demonstrated several promising data points. First, there was a significant drop in the amount of exhausted T-cells. OncoSec was able to successfully block PD-1, which has a tendency of being expressed in activated exhausted T-cells. A second important point was that there was an increase in NK cell frequency and activation. Third, it was shown that antigen-specific T-cell responses to melanoma were increased with DNA IL-12 while other antibody responses decreased over time.
Investors should be extremely encouraged by these interim results. The data points look encouraging and should give hope to those suffering from melanoma that a new treatment option might be available soon. OncoSec hopes to announce the final trial results in the next 5 to 8 months.
Market Potential for Melanoma
With melanoma being the most serious form of skin cancer, investors may be wondering what the market potential could be. Although melanoma only accounts for about 5% of all skin cancer cases, it does account for a large majority of skin cancer deaths. The American Cancer Society estimates that nearly 76,690 cases of melanoma are expected to be diagnosed in the U.S. alone during 2013. Sadly, it's also estimated that there will be nearly 10,000 melanoma-related deaths during the current year.
Melanoma rates continue to rise across the world, which only speaks to the importance of finding a successful and reliable treatment. Although melanoma can be successfully treated if caught early, a more advanced form usually requires several treatments with the odds of survival decreasing the longer it takes to seek treatment.
Given that OncoSec's market capitalization currently hovers around $30 million, a successful Phase II trial will likely send the shares soaring given the potential for this deadly disease.
OncoSec’s Pipeline
In addition to the melanoma clinical trial, OncoSec Medical Inc (OTCMKTS:ONCS) also has two additional ongoing trials:
OMS-I110: A Phase II trial attempting to treat Merkel cell carcinoma. The trial is using OMS ElectroImmunotherapy to deliver DNA IL-12 in patients with local and metastatic Merkel cell carcinoma. The trial is expected to enroll 15 patients and is being conducted in collaboration with the University of Washington.
OMSI120: A Phase II trial attempting to treat cutaneous T-cell lymphoma. The trial is using ImmunoPulse to deliver DNA IL-12 in patients with early and late stage cutaneous T-cell lymphoma. The trial is expected to enroll 27 patients and is being conducted in collaboration with the University of California San Francisco.
In addition to these two trials, OncoSec recently signed a Sponsored Research Agreement with Old Dominion University and the Frank Reidy Research Center for Bioelectrics. The agreement will allow the two organizations to work together to develop new technology related to the electroporation and delivery of different agents into solid tumors. The first research experiment under this SRA will evaluate the effects of ImmunoPulse in combination with Anti-CTLA4, Anti-PD1, and Anti-PDL-1 in a melanoma mouse model. This experiment is expected to begin shortly.
This pipeline of trials and agreements speaks to the depth of OncoSec's platform. It is critically important for developing biotechnology companies to build a broad portfolio of technology and techniques so that if one doesn't work out, there are others that can still succeed. Given the depth of the programs that OncoSec is developing, investors should certainly expect good things in the future.
Financial Health
It is extremely important to also consider the financial health of a biotech company before investing. Although these companies aren't expected to be generating a significant amount of revenue currently, they should be expected to have a strong cash position and be managing that cash efficiently. As of the last quarter, OncoSec had approximately $7.4 million in available cash. Another positive on the balance sheet is the lack of long-term debt. Instead of having to worry about paying back loans, the company can instead deploy all its available capital into funding trials and further developing its platform capabilities.
Even though the company isn't generating revenue at the moment, I did notice an encouraging trend on the income statement. Over the past 4 quarters, the company has lost roughly the same amount. This equates to a monthly cash burn of $500,000. Although losing money is never great, it's highly encouraging to see a small cap biotech company that knows how to manage its assets in such a systematic way.
Given the monthly cash burn of $500,000 and the lack of long-term debt, the $7.4 million in available cash should be sufficient to take the company through at least the middle of 2014. At that point, the company will have released its Phase II results for melanoma hopefully resulting in a much higher share price.
Conclusion
OncoSec Medical Inc (OTCMKTS:ONCS) seems to have a lot going for it, especially as an early stage development biotechnology company. In addition to improving fundamentals and enjoying a strong cash position, the company is well positioned with several ongoing trials. These trials, if successful, will have the potential to turn OncoSec into a company that generates several hundred million dollars of revenue annually.
Disclaimer: I do not hold a position in the company. Less