Big Pharma Could Take Notice of Nuvilex Inc.

On May 16, 2013, Goldman Small Cap Research published an Article on Nuvilex, Inc. (OTCQB – NVLX).  For your convenience, a copy of the article can be found below.
Please see previous NVLX reports for relevant disclosures and disclaimer.

Big Pharma Could Take Notice of Nuvilex Inc.

As broad development of its proprietary live-cell encapsulation platform delivery system progresses, it is possible that “Big Pharma” takes notice of Nuvilex Inc. (OTCQB – NVLX). Frankly, this is a natural progression of biotechnology companies that are in the same stage as Nuvilex (OTCQB – NVLX). Moreover, when “Big Pharma” takes notice of revolutionary technology, a particular pattern emerges.

This pattern is usually executed in a combination of steps, starting with a lengthy due diligence process. Of course there are no guarantees that anything material arises from such due diligence but it is not uncommon that the process results in some form of partnership or collaboration. The steps include all or some of the following components: collaboration, an agreement to assist in funding future research and development, a royalty arrangement should development lead to regulatory approval, and a direct investment in the targeted company itself.
Interestingly, from the timing perspective, it is not uncommon for these relationships to be formalized ahead of a Phase III clinical trial launch. In fact, considering the great expense of a lengthy and large Phase III clinical study, the core of these relationships usually involves an upfront development investment of $25 - $100 million by larger pharmaceutical firms to the smaller biotech.  Marketing rights and support are often granted to the larger firm in exchange for royalties on sales of around 20-25% or even higher. Of course, this stage does not get executed until an approval is garnered and sales are slated to commence.

The Nuvilex (OTCQB – NVLX) platform delivery system could emerge as an agnostic and broadly used system by many pharmaceutical firms.  For example, in the cancer area, the Company’s treatment for advanced pancreatic cancer that is based on the cell encapsulation platform has shown a high degree of efficacy in its targeted approach, low toxicity, and activation of pro-drugs – all are very desirable qualities in a cancer treatment. Therefore, it is possible that a number of sizable pharmaceutical firms with great reach could eventually have an interest in a partnership with the Company.  A likely candidate would be a firm with exposure and experience in the oncology arena that may be seeking to improve upon its own existing oncological therapeutics or would be anxious to add a more efficacious pancreatic cancer treatment to its offerings.

Nonetheless, many firms enter Phase III trials without a partner and Nuvilex (OTCQB – NVLX) could be counted among those companies. Still, big pharma partnerships provide credibility as well as capital and it is interesting to watch these types of developments unfold.

A third party paid GSCR for this article.