August 27, 2013
Nuvilex Has Cleared the Common Biotech Hurdles
Biotech is one of the top industries in terms of number of companies in the small and micro cap market space and there are literally hundreds that are listed on some exchange. Frankly, the amount of capital these firms require necessitates ‘going public’, and even after going public it is not uncommon that companies undergo multiple iterations. The mortality rate for these firms is very high as fewer than 20% survive to the Phase III clinical trials stage.
Nuvilex, Inc. (OTCQB – NVLX - $0.143 – Spec Buy) has already passed the four common ‘areas of failure’ listed below and once a NDA (New Drug Application) is awarded by the FDA the Company will be in position to market and generate revenue from its live-cell encapsulation platform to treat pancreatic cancer.
- Trial and Too Much Error
As mentioned above, fewer, than 20% of biotech firms make it to Phase III of the FDA approval process. Nuvilex now owns exclusive rights to a live-cell encapsulation platform technology for all cancers and has not only successfully completed Phase II trials for advanced, inoperable pancreatic cancer, but comprehensive animal trials for mammary (breast) cancer, and is on the verge of acquiring similar rights to the technology to fight diabetes. Additionally, CEO, Dr. Bob Ryan has been an instrumental consultant for several biotech firms throughout the FDA approval process.
The common thread in failure among small cap biotech firms is either scientists trying to run a business or business people trying to scientifically innovate. A balanced approach and having an executive team who are leaders in a chosen health science combined with seasoned management is paramount. The three main executives at Nuvilex have nearly 80 years of combined experience in biotech and management. Chairman of the Board, Patricia Gruden, was a Founder of the Company and has held a multitude of jobs from developer to CFO to CEO. Dr. Gerald Crabtree, COO, is a published expert with over 80 articles in peer-reviewed scientific journals and was a research fellow of the National Cancer Institute of Canada. Additionally, he has held roles at both large and small biotech firms from Director of Project Planning and Management for Oncology/Immunology at Bristol-Meyers Squibb (NYSE – BMY) to interim CEO of PhytoCeutica, Inc. to name a few. At BMY, Dr. Crabtree was part of the team that developed Taxol, a drug with $11B in annual sales.
Finally, CEO Dr. Bob Ryan brings a wealth of expertise in biochemistry, cell and molecular biology, human genetics, novel therapies, and cancer research to the table from a scientific perspective. He also brings nearly 12 years of experience as CEO of RFR Consulting. In this role he has provided grant writing, business management, scientific guidance, FDA regulatory advice, advising investors, and investment acquisition opportunities for several biotech firms.
- Research Focus
Many early stage biotech firms lack a true research focus or experience in engaging in the full R&D process leading up to a drug approval, since so few actually do make it that far. The extremes can be firms trying to be the ‘jack of all trades’ with a variety of platforms and applications or the opposite of delving into expensive research and development that will far exceed any payback in the form of meaningful revenue. The live-cell encapsulation platform from Nuvilex is a specific focused technology that is targeted at a large and growing market. As mentioned in previous updates, the instances of pancreatic cancer caused from diabetes are only going to increase as the diabetic epidemic continues throughout the globe. According to the International Diabetes Federation (IDF), more than 370 million people have diabetes worldwide, with Type II accounting for 90-95% of all cases. Additionally, the IDF estimates that by 2030 about 550 million people could have the disease. The link between diabetes and pancreatic cancer has been demonstrated in several studies. One study found that people diagnosed with diabetes after age 50 are eight times more likely to develop pancreatic cancer compared with the general population.
- Intellectual Property
IP is the great differentiator in the small cap biotech space. Without it, these companies and stocks are almost doomed from the start. Additionally, these proprietary platforms must demonstrate significantly greater results versus the competition. Pancreatic cancer is one of the deadliest forms of cancer, often going undetected, then terminal once discovered. Gemzar® from Eli Lilly (NYSE – LLY) is the only FDA-approved drug as a single agent for pancreatic cancer and has provided Eli Lilly with about $10 billion in revenue annually. Gemzar®, or gemcitabine, is a member of a group of chemotherapy drugs known as anti-metabolites. The drug prevents cells from making DNA and RNA, which stops cell growth and causes the cells to die. In comparison, the live-cell encapsulation technology used in Nuvilex’s pancreatic cancer treatment works to protect and maintain living drug-activating cells in close proximity to the cancer and serves to optimize the cancer-killing effect of the well-known cancer drug ifosfamide when both are used in combination. In addition to its efficacy against the primary tumor, the live-cell encapsulation/ifosfamide combination treatment may also have significant effects against pancreatic tumor cells that have migrated to the liver where they can form new tumors. The data from clinical trials for Nuvilex’s pancreatic cancer treatment technology demonstrated an average survival of 44 weeks versus 28 weeks for Gemzar® and 36% 1-year survival rate versus 18% as well. Basically, the live-cell encapsulation technology from Nuvilex, in combination with ifosfamide, has demonstrated to be nearly twice as effective as Gemzar® in clinical trials. Finally, these beneficial effects of Nuvilex’s pancreatic cancer treatment were accompanied by no treatment-associated side effects; this is not the case with Gemzar® as its use can be accompanied by very severe side effects.
With big check marks alongside these hurdles, Nuvilex has the potential to become one of biotech’s major players, given its roadmap in the treatment of cancer and diabetes. As a result, the Company’s stock is poised to enjoy a high valuation at a premium to other biotechs.
For more information, refer to our previous NVLX Reports, Updates and Hot Topics by visiting www.GoldmanResearch.com
Senior Analyst: Robert Goldman
Rob Goldman has over 20 years of investment and company research experience as a senior research analyst and as a portfolio and mutual fund manager. During his tenure as a sell side analyst, Rob was a senior member of Piper Jaffray's Technology and Communications teams. Prior to joining Piper, Rob led Josephthal & Co.'s Washington-based Emerging Growth Research Group. In addition to his sell-side experience Rob served as Chief Investment Officer of a boutique investment management firm and Blue and White Investment Management, where he managed Small Cap Growth portfolios and The Blue and White Fund.
I, Robert Goldman, hereby certify that the view expressed in this research report accurately reflect my personal views about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the recommendations or views expressed in this research report.
This Opportunity Research Hot Topics article was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research and Goldman Opportunity Research. The Select product reflects the Firm’s internally generated stock ideas while the Opportunity product reflects sponsored research reports. It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. While stocks in the Opportunity format may have a higher risk profile, they typically offer greater upside as well. Since April 2012, Goldman Small Cap Research has been compensated $500 per article by a third party. This article is the opinion of Goldman Small Cap Research and was written based upon publicly available information. The Company has not endorsed or compensated Goldman Small Cap Research for this article. All information contained in these articles was derived from GSCR due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations.
Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.
The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research report, update, article, or note is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.
This publication does not take into account the investment objectives, financial situation, or particular needs of any particular person. This report does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA, the U.S. Securities and Exchange Commission or with any state securities regulatory authority.
ALL INFORMATION IN THIS REPORT IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.
For more information, visit our Disclaimer: www.goldmanresearch.com