Valuing PharmaCyte Biotech’s New Treatment Option for Pancreatic Cancer
The current gold standard of care for patients with advanced, inoperable pancreatic cancer is the combination therapy of Abraxane® + gemcitabine, which was approved by the U.S. Food and Drug Administration (FDA) in late 2013. Another treatment, which is not used as widely, is FOLFIRINOX, a four-drug combination therapy. These treatments offer varying degrees of efficacy but what happens to the patients when they no longer respond to these therapies? With limited options currently available, PharmaCyte Biotech (OTCQB – PMCB - $0.06) is set to launch a new, mid-stage clinical trial in 2016 to specifically address what is clearly an unmet medical need and potentially increase the lifespan prospects for these late stage pancreatic cancer sufferers.
Positive results from this landmark trial would move PharmaCyte toward the front of the pack of cancer treatment providers, substantially enhance the value of the Company and attract the attention of major pharmaceutical companies. After all, a successful trial could be the trigger to change the way advanced inoperable pancreatic cancer is treated. It would finally give patients, who no longer respond to the premier combination therapy, a viable option. PharmaCyte’s pancreatic cancer treatment (Cell-in-a-Box® + low-dose ifosfamide chemotherapy) seeks to satisfy this critical unmet medical need by acting as a consolidation (and post- Abraxane® + gemcitabine or FOLFIRINOX) therapy.
Huge Addressable Market
A recent report issued by Research and Markets suggests that the size of the pancreatic cancer therapeutic markets in just the major developed countries will approach $3 billion in the next 5 years. However, the near term addressable market for PharmaCyte’s therapy in the U.S. alone is substantial. A typical current price tag for pancreatic cancer therapy for the roughly 43,000 patients diagnosed with the disease each year ranges anywhere from $50,000 - $75,000. More than 60% of this patient group, or roughly 25,000 patients, will no longer respond to the premier combination therapy (Abraxane® + gemcitabine or FOLFIRINOX) and require a new, or consolidation therapy. Therefore, should PharmaCyte ultimately receive FDA approval for its treatment, the Company’s initial target market size would range from $1.25 billion to $1.8 billion, depending upon pricing for the Company’s therapy. Clearly, there is tremendous underlying value in PharmaCyte and its novel therapy.
PharmaCyte has designed a Phase 2b clinical trial that will include a hard-stop at 6 months to evaluate the data. The primary endpoints of the trial will essentially mirror some of the primary endpoints of other treatments that have received FDA approval, such as Abraxane®. These include progression-free survival (PFS) and the side effects experienced from the combination treatment that occurs in the patients. 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. The occurrence of any side effects will be monitored throughout the trial.
The trial design also includes a series of measurable secondary endpoints. These include:
The Company’s consolidation therapy approach is poised to emerge as a win-win for the Company and patients alike. This positioning, along with an innovative trial design, enable PharmaCyte to launch and complete this clinical trial at a substantially reduced cost and shorter time period relative to typical studies since it will be conducted with fewer patients and in key sites in the U.S. and abroad. In addition, by measuring pain as one of the secondary endpoints, the Company eliminates the need to launch costly separate trials or studies to track the unbearable and untreatable pain that is associated with pancreatic cancer in 20-25% of patients. Finally, because the design of the trial allows for the release of interim data relatively quickly, it only enhances the value of the therapy to the Company and prospective patients.
Impact of Potential Approval
Positioning its innovative treatment as the next or last stage therapy for the difficult patient treatment group may be the fastest route to PharmaCyte’s FDA 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. Measurements will also be taken to determine if PharmaCyte’s treatment can convert an inoperable tumor to an operable one. If tumor shrinkage data proves encouraging, it could have a materially favorable impact on a trial’s outcome, let alone the quality of life and lifespan of pancreatic cancer patients, and the overall valuation of the Company among cancer treatment leaders.
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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