FDA’s Record Approvals Bode Well for PharmaCyte’s Cancer Treatments
Biotech stocks have been on fire since the start of 2015 and there is no sign of the money flows abating anytime soon. For the first quarter of 2015, biotech ETF bellwether iShares NASDAQ Biotechnology (NASDAQ – IBB) was up 13% while the SPDR S&P Biotech ETF (NYSE – XBI) rose around 20%. It should be noted that the SPDR ETF is comprised of small to midsized biotech stocks. Since we are in the midst of a biotech acquisition and investment boom that seems to occur on an almost daily basis, it is no surprise that the performance of the smaller biotech stocks is greater than their larger, acquisitive brethren. Still, biotechs are not under such broad accumulation due to M&A alone. In fact the real driver should result in a rising tide lifting all biotech boats, including shares of biotech pioneer PharmaCyte Biotech (OTCQB – PMCB - $0.1375 – Spec Buy).
The primary driver behind the rise in biotechs may be the Federal Drug Administration (FDA) itself. Last year, it approved 41 new drugs which, according to the organization’s website, were the most in nearly 20 years. That figure is up from 27 in 2013---a 51% increase year-over-year. Could it be that the FDA has become more accommodating in its goal of more swiftly approving drugs for treatment of diseases, especially those that are rare and serious diseases? It certainly seems that quality of life, especially in the treatment of life-threatening diseases has emerged as a key determining factor, which sets up very nicely for PharmaCyte Biotech.
Of the 41 approved drugs, eight were to treat cancer and four to treat type-2 diabetes. However, 17 (41%) of the drugs were approved to treat rare diseases that affect 200,000 or fewer Americans. In fact, that figure is the highest yearly total of such drugs ever — even surpassing the previous high of 13 from 2012. That is a great sign for companies such as PharmaCyte Biotech which is right in this sweet spot. The Company’s flagship technology, Cell-in-a-Box®, has recently been granted this Orphan Drug Status by the FDA for the treatment of advanced, inoperable pancreatic cancer when used in combination with the chemotherapy drug ifosfamide at one-third the dose normally given.
Moreover, to expedite the development and review of these drugs the FDA used a number of regulatory programs, including Fast Track, Breakthrough Therapy, Priority Review, and Accelerated Approval. Half of the approved drugs were fast track or breakthrough and nearly two-thirds were designated for Priority Review, meaning that the FDA saw potential for providing a significant advance in medical care, and set their review target to within six instead of the standard 10 months.
Clearly this enhanced approach by the FDA has had a great impact on biotech stocks and bodes well for companies like PharmaCyte Biotech, should they be entered into any of the accelerated review tracks above. In any event, the FDA’s current accommodative stance should continue to serve as a biotech stock driver going forward.
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Senior Analyst: Robert Goldman
Rob Goldman founded Goldman Small Cap Research in 2009 and 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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