Drug development is a business that can be a minefield; littered with pieces of failed companies that couldn't manage expenses and compounds that failed to meet expectations. The beauty of biotechnology, though, is a level playing field in which companies can grow robust valuations based upon target indications and assets, even at early stages of development. With initiatives around the world to expedite the regulatory pathway and major pharmaceutical companies hungry for acquisitions, there probably isn't a better time to be looking at some well-positioned up-and-comers in the space.
Galectin Therapeutics (GALT) has seen a surge in share prices in 2013, from around $2 per share in January to recently hitting $13.12. Galectin is special in that it has positioned itself at the forefront of a short-list of companies targeting the "silent epidemic" of liver fibrosis, a deadly disease with no FDA-approved treatments. The accumulation of fat in the liver is the genesis of severe conditions, including Nonalcoholic Fatty Liver Disease (NAFLD), which affects about 30 percent of the U.S. population, Nonalcoholic Steatohepatitis (NASH) and cirrhosis of the liver. With no drugs on the market for these conditions, it's apparent why Galectin has been garnering attention of the investment community.
The ramp-up in share price began as the company approached clinical trials for its lead fibrosis drug candidate, GR-MD-02, after research in animal models showed the drug to have a powerful therapeutic effect on liver fibrosis. GR-MD-02's mechanism of action involves inhibiting galectin-3, an important protein in the development of NASH and fibrosis. Importantly, not only does GR-MD-02 appear to be able to halt the progression of fibrosis, but actually reverse the damage of scarring, a game changing result if clinical trials can support early research.
An Investigational New Drug application for a Phase 1 trial in patients with NASH with hepatic fibrosis was filed with the FDA in January, approved in March and dosing began in July. From IND filing to first dose, shares doubled in value and have since continued an ascent. In August, Galectin said that the FDA granted GR-MD-02 a Fast Track designation for NASH with hepatic fibrosis, giving the company an expeditious path towards commercialization and the stock price an additional boost to seven-year highs.
At the end of the second quarter, Galectin had $5.1 million in cash and cash equivalents, with another $8.4 million added to the kitty in recent months from warrant exercises and a private placement. Even with the share appreciation, Galectin is only just finding its stride. The company still only commands a market capitalization of $167.9 million, leaving plenty of additional headroom for growth.
A company heading towards filing its IND with the FDA that likely will be hitting the radar of investors is Sunshine Biopharma (SBFM). The company is developing Topoisomerase 2 inhibitor Adva-27a, a novel derivative of the non-alkaloid toxin lignin podophyllotoxin, which has been shown in preclinical research to be a potent tumor suppressor in a several cancer lines (breast, lung, uterine and pancreatic), notably tumors that are resistant to today's approved drugs. It does so by being unaffected by P-Glycoprotein, the enzyme responsible for making cancer cells resistant to chemotherapy drugs. Lab research has shown the small molecule drug to have a strong pharmacokinetic profile and no toxicity at high concentrations.
Nothing describes the potential for Adva-27a like the commonly used drug Etoposide, also a derivative of Podophyllotoxin, that is approved for use in a bevy of cancers including, but not limited to, leukemia, lymphoma, testicular, lung, brain, prostate, bladder, colon, ovarian and liver. The critical difference is that Adva-27a is a novel chemical entity with more desirable biological properties while demonstrating the ability to destroy drug-resistant tumors, positioning it potentially as a front-line, or final-line, defense.
While Adva-27a certainly appears to have the potential to spiderweb into a great many cancer types, Sunshine Biopharma is initially targeting drug-resistant breast cancer, and for good reason. Etoposide is not effective against this aggressive form of cancer that kills about 458,000 people worldwide annually with a new diagnoses rate of 1.38 million each year.
Two well-known enzyme biomarkers, Top-2 (Topoisomerase 2) and HER-2 (Human Epidermal Growth Factor Receptor 2), are associated with aggressive forms of breast cancer. Swiss drug maker Roche Holding AG (RHHBY), the biggest manufacturer of cancer drugs in the world, generates about $6 billion annual from sales of Herceptin(R) for HER-2 positive breast cancer patients. While certainly a formidable sales total, it's amassed through only treating the 20-percent of breast cancer patients that are HER-2 positive, leaving and incredible void and large opportunity for a potent drug targeting Top-2 positive patients.
Sunshine Biopharma falls under the umbrella a parent company Advanomics Corporation. Advanomics received two research grants in Augusts totaling $1.45 million for the development of Adva-27a. Additionally, Advanomics recently bought privately-held Garmen Laboratories, a profitable Good Manufacturing Practices lab with 45 employees working in a 50,000-square-foot headquarters in Montreal, Canada (Sunshine Biopharma is also based in Montreal). The acquisition cuts through the red tape, shaves expenses and eliminates waiting in queue at other laboratories for the manufacturing of Adva-27a for clinical trials. Advanomics generating revenue, receiving grants and essentially doing all the heavy lifting regarding manufacturing certainly bodes very well for Sunshine Biopharma going forward.
Sunshine Biopharma has not issued guidance on when they will be filing the IND to proceed to the clinic, but it has been disclosed that the trials will be hosted by McGill University's Jewish General Hospital in Montreal. Extrapolating from press releases, it seems probable that the lab research is nearing completion and the regulatory filing would be coming in the first quarter of 2014, which could portend some significant movement in share value if the general pattern of a biotech cycle is followed. With a market capitalization of only $11.3 million, Sunshine Biopharma also has substantial upside potential.
About Sunshine Biopharma Inc.
Sunshine Biopharma is a development stage pharmaceutical company focused on the research, development and commercialization of drugs for the treatment of various forms of cancer. Sunshine Biopharma's parent company, Advanomics Corporation, recently announced that it has filed a new patent application covering various composition matters and manufacturing processes of Adva-27a.
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