Faster Approval Ahead for PharmaCyte

Recent and pending events infer that the road to approval and marketing of Pharmacyte's flagship pancreatic cancer treatment has been dramatically shortened, potentially leading to a banner year 2016 for PharmaCyte shareholders.

Investment and Company Research
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MICROCAP HOT TOPICS
 

Rob Goldman
rob@goldmanresearch.com

November 30, 2015

Reduced Clinical Trial Length and Faster Route to Approval Ahead for PharmaCyte

Working its way through the research and development process on the path to FDA approval is a marathon and not a sprint for biotechnology companies of all sizes. However, recent and pending events lead us to believe that the PharmaCyte Biotech (OTCQB – PMCB - $0.0875 – Spec Buy) road to approval and marketing of its flagship pancreatic cancer treatment (Cell-in-a-Box® + low-dose ifosfamide chemotherapy), have been dramatically shortened, leading to a banner year for PharmCyte’s stock.

Orphan Drug Designation

Earlier this month, PharmaCyte announced that upon the recommendation of the European Medicines Agency (EMA), the European Commission has granted the Orphan Drug designation to PharmaCyte’s subsidiary, PharmaCyte Biotech Europe Limited, for PharmaCyte’s pancreatic cancer treatment. Receiving Orphan Drug designation for PharmaCyte’s pancreatic cancer treatment carries with it 10 years of marketing exclusivity in countries in the European Union. In addition, according to the EMA website, the organization provides special assistance in the development orphan drugs, such as PharmaCyte’s treatment for patients suffering from inoperable, localized, advanced pancreatic cancer.

This award follows a similar designation awarded by the FDA in 2014.

While granting Orphan Drug designation is no guarantee of approval for the providers, it appears that the odds are increased for these assignees’ offerings versus non-Orphan Drug designation treatments.  In fact, the FDA Office of Orphan Products Development (OOPD) program has successfully enabled the development and marketing of more than 400 drugs and biologic products for rare diseases since 1983.  Clearly, having both FDA and EMA designations in its pocket have meaningful value and bode well for the future.

Clever Approach Improves Approval Success Odds and Timing

Health care’s R&D history is replete with what I call the “Captain Ahab syndrome.” Too often clinicians get caught up in the great efficacy of their treatment under development that they are singularly focused on bringing down or displacing the great white whale that serves as the gold standard for their treatment category. Instead, they never receive marketing approval because their trial design was flawed or are mired in lengthy trials until time and money passes them by.

Investors do not have to worry about that issue with PharmaCyte. As evidenced via a glimpse of the pending (1H16) pancreatic cancer clinical trial design in a press release last month, the Company’s treatment is being positioned as an expansion of the current gold standard of care or as a consolidation therapy, rather than a front-line therapy.  Positioning the therapy as the next or last stage therapy for the difficult patient treatment group may be the fastest route to approval, as there is no truly effective therapy for patients at this stage that can materially extend survival rates and improve their quality of life. Moreover, as a consolidation therapy PharmaCyte plays to the strengths of the Cell-in-a-Box® + low-dose ifosfamide chemotherapy, given the very strong one-year survival rates and no side effects in its first clinical trial.  However, it should be noted that with the primary endpoint of progression-free survival (PFS), the length of the trial will also likely be shorter than one with a treatment seeking to serve as a front-line therapy. PFS is the time that elapses from the first day of treatment until the disease gets worse and will be measured and determined at 6 and 12 months. By the way, once approved, PharmaCyte could always engage studies to use the therapy as a front-line alternative, if management elected to do so. But, since the current market is at least in the hundreds of millions of dollars annually, such a move is not a necessity.

Looking Ahead

The Company exits 2015 in great shape. It has Orphan Drug Designation for its flagship treatment offering under development from the two most important health care regulatory authorities, a roadmap for Phase II clinical trial design and protocols, and appointment of the Clinical Research Organizations (CROs) to manage the trial in the U.S. and Europe.  While it is too early to determine which sites in the U.S. will be used for the Phase II trial, slated to commence in the first half of 2016, it is logical to assume that one of the leading cancer centers in America could be front and center.

Manuel Hidalgo, MD, PhD, an internationally respected oncologist and a member of PharmaCyte ’s Scientific Advisory Board, has been named Clinical Director of the Leon V. & Marilyn L. Rosenberg Clinical Cancer Center, part of the Cancer Center at the Beth Israel Deaconess Medical Center (BIDMC) in Boston. Dr. Hidalgo has also been appointed Chief of the hospital’s Division of Hematology-Oncology. In his role at the prestigious medical center, Dr. Hidalgo will oversee all of BIDMC’s clinical cancer programs, which could include the PharmaCyte trial, and would be an extremely high profile event for the Company.

Meanwhile, investors can expect a busy year of milestones for PharmaCyte in 2016 just for the pancreatic cancer trial alone.  These include the approval of its GMP facility in Asia for both manufacture and processing —from which the Company will source live cells for its trial, and a pre-IND (Investigational New Drug) meeting with the FDA, ahead of the official IND filing. Once given the go-ahead by the FDA, the trial launch should commence during the second quarter with preliminary results released sometime in 2017.

With major events on the near term horizon, it is not likely that this sub-$100 million mid-stage biotech will stay under the radar for long. 

For more information, refer to our previous sponsored PMCB Reports, Updates and Hot Topic Articles by visiting http://www.GoldmanResearch.com/

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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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