As a recently retired R&D specialist for both developmental biotech and Big Pharma, I have seen a lot of bright developmental companies over the last 20 years. I always found those with a new therapeutic approach as being the most attractive, many of which flew under-the-radar. In this article, I am looking at three such companies that are worthy of your due diligence.
An up-and-coming approach that targets Cancer
After trading flat for the first four months of 2012, NewLink Genetics Corp (NASDAQ:NLNK) has traded higher by 75% in the last two months. Now, the company has a market capitalization of $500 million – but it could be worth so much more.
NewLink has numerous late-stage clinical programs, all based on its HyperAcute immunotherapy platform. Basically, NewLink Genetics Corp (NASDAQ:NLNK) uses human cancer cells to target specific tumors via stimulating the immune system. This platform is being tested on four different types of cancers: Pancreas, Melanoma, Prostate, and non-small cell lung cancer,
HyperAcute Pancreas is being tested in a Phase 3 trial of 722 patients. In a previous Phase 2 study of 69 patients, the data showed overall one-year survival of 86%. This compares favorably to the 20% of patients who survive one-year with standard-of-care treatment. Pancreatic cancer is a condition that progresses rapidly and is almost certainly fatal. Yet, during this same Phase 2 study, 39% of patients survived three years and 62% saw no progression in the first year, which is unheard of with this disease.
If NewLink Genetics Corp (NASDAQ:NLNK) can maintain these results in its Phase 3 trial, or even stay remotely close, then HyperAcute Pancreas will be the preferred treatment for those with pancreatic cancer. The reason: There is nothing on the market that is as good or even close in both increasing survival and slowing the progression of the disease. The sales expectations for this one indication alone is $600-$850 million annually; an estimate that I find highly attainable.
So far, all data for both the company’s melanoma and prostate HyperAcute programs have been just as good as pancreas. This further validates the program as a whole, due to the same approach being used to target each cancer. If all three are successful, and lead to an eventual approval, the combined peak sales are estimated to be north of $2 billion. With a market cap of $500 million, this insinuates significant upside potential.
Changing the face of chemotherapy
Verastem Inc (NASDAQ:VSTM) is made up of a team of who’s who scientists, board members, and executives from prestigious universities and Big Pharma companies around. The company is developing a therapeutic approach to use next generation chemotherapeutics to kill cancer stem cells. If the company is successful, a new approach to chemotherapy will be created, one that also attacks cancer recurrence; a large unmet medical need in cancer.
An investment in Verastem Inc (NASDAQ:VSTM) might take a while to appreciate. The company’s most advanced study is VS-6063, which is being used to treat advanced solid tumors. Currently, it is being tested on both mesothelioma and ovarian cancer. According to the company, a regulatory filing could occur as early as early 2015 for this product.
