December 4, 2013
Record Diabetes Cases Highlight Need for Nuvilex Treatment
According to the latest estimates released recently by the International Diabetes Federation (IDF), the number of people diagnosed with diabetes worldwide is soaring. Moreover, with deaths occurring at a rate of 5.1 million annually, one person is dying of the disease every six seconds. While there are a number of treatments to help cope with the disease, the new technology platform acquired by Nuvilex, Inc. (OTCQB – NVLX - $0.13 – Speculative Buy) may prove to be one of the breakthrough treatments in the space in the coming years.
The numbers are truly alarming. The number of people estimated to be living with the disease is a record 382 million compared with 371 million in 2012. The IDF forecasts that by 2035, the number of cases will leap by 55 percent to 592 million. Interestingly, one of the reasons why the number is slated to rise at such a huge rate is due to the fact that most of the people diagnosed with the disease have Type II diabetes. Type II diabetes has been linked to obesity and lack of exercise, and is very prevalent in Western societies. Interestingly, the epidemic is spreading as more people in the developing world are adopting Western, sedentary, urban lifestyles.
Clearly, Nuvilex is entering the diabetes treatment arena at a critical juncture.
Earlier this month, the company acquired the exclusive global rights for a cellulose-based live-cell encapsulation technology specifically designed for the development of treatments for diabetes. The studies for the Nuvilex technology involved transplanting cells that produce insulin into diabetic animals, which had much higher than normal levels of glucose in their bloodstream and had a difficult time controlling their glucose levels, just as humans with diabetes do. Animals that were induced with the encapsulated cells demonstrated normalized levels of glucose and remained stable for six months, which was the duration of the study. This was an indication that the encapsulated cells produced insulin in response to their higher than normal blood glucose levels. The cellulose-based capsules seem to have prevented the encapsulated cells from being attacked by the diabetic animals' immune systems and appear to have acted as an artificial or replacement pancreas, the insulin producer and regulator organ.
FDA approved treatments in this sector are lucrative and valuable. As Nuvilex initiates further development of this approach, it is likely to catch the attention of some of the industry’s leaders in the diabetes treatment market such as Novo Nordisk (NYSE – NVO), Sanofi (NYSE SNY), and Eli Lilly (NYSE – LLY) and others. For example, the recently announced $2.6 billion acquisition of Santarus (NASDAQ – SNTS) by Salix Pharmaceuticals (NASDAQ – SLXP), was at a huge multiple to revenue. Granted, the Santarus diabetes treatment accounts for about 50% of the company’s $400M annual revenue run-rate, and is the crown jewel in its chest. But, as the more than 8x projected revenue valuation in this deal has illustrated, success in this treatment category could be a home run for Nuvilex and its shareholders.
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Senior Analyst: Robert Goldman
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