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September 18, 2013

Nuvilex’s Cell Cloning News Is a Major Milestone Event

Stocks rise and retreat for both the right reasons and the wrong reasons. From time to time, these moves are associated with news released by the Company or third parties. What can be baffling for company executives is when a stock rises on what could be viewed as incrementally impactful news and yet treads water or declines in conjunction with the release of significant milestone events.   A perfect example of this last scenario occurred yesterday with Nuvilex, Inc. (OTCQB – NVLX - $01395 – Spec Buy). The Company released news that should have been received by investors as its most significant event to date, excluding the acquisition of rights to the ground-breaking live-cell encapsulation technology to treat cancer.  Instead, it was treated as a ho-hum event. Here’s why investors that missed the significance will be caught napping.

On the heels of last week’s cell storage contract with Fisher BioServices, Nuvilex announced that it has contracted with Inno Biologics for the generation of clones from the cells that are basis of the Company’s future Phase 3 cancer clinical trials.  As important as the Fisher BioServices contract is from the developmental and status affirmation perspectives, one could argue that the Inno Biologics deal is an even more significant event.  The clone production is the most obvious and tangible illustration that Nuvilex has taken a major step toward future Phase 3 cancer clinical trials, and here is why.

The generation of clones of these cells represents the initial step in the preparation of the large number of cancer drug-activating cells that ultimately will be required for encapsulation. These cells are the same ones used in previous clinical trials and will be used by the Company for cancer trials including its future planned clinical trials against advanced, inoperable pancreatic cancer.  Therefore, this event should be interpreted by investors as the greatest tangible evidence of Nuvilex’s direct development activity and its complete commitment to further its advanced clinical trial efforts. 

Initially, a large number of individual clones will be generated by Inno Biologics from the cells supplied to them.  Isolated clones will be tested to determine the best for Nuvilex’s use through recognizing clones with the highest CYP 2B1 enzyme activity.  The CYP 2B1 enzyme is the critical ifosfamide cancer-drug-activating enzyme in these cells that is the basis for the Nuvilex treatment to fight pancreatic cancer.

Once clones have been recognized and undergone initial assessment, the Company will continue to advance the clones through a series of validations necessary to prepare them for use in clinical trials. 

In Nuvilex’s treatment for advanced inoperable pancreatic cancer, live cells that express high levels of the enzyme CYP 2B1 will be encapsulated in cellulose-based, pin-head-sized capsules implanted near the pancreas and thus, the tumor itself.  Then, the well-known and widely used anticancer drug ifosfamide will be administered intravenously, at low doses, to the patients receiving these encapsulated cells.  Since ifosfamide is a prodrug, it must be activated to its cancer-killing form. 

The ifosfamide taken up by the cells in the capsule will be activated by the CYP 2B1 enzyme in those cells.  Placing the encapsulated cells near the tumor causes it to be exposed to high localized concentrations of activated ifosfamide compared to what is achievable in the absence of the encapsulated ifosfamide-activating cells. This results in increased antitumor efficacy of the anticancer agent used, which, in this case, is ifosfamide.

It is clear that the cell storage and cell cloning are just two of many milestone events for Nuvilex in the near term. Other, future catalytic events include mass production of clones and cells that carry identical properties will be stored by Fisher BioServices for Nuvilex’s use in future trials All in all, Nuvilex’s stock value should be afforded a significant boost with the initiation and completion of each phase, including the just-launched cell cloning activity, as demonstrative progress toward Phase 3 trials occurs. 

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.

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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.

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