Inovio Pharmaceuticals (INO) is another of quite a few developmental companies in the healthcare sector that has experienced a boost in both volume and price since the summer months and could be worth keeping an eye on as an advancing pipeline and a novel technology moves into the latter stages of Phase II development. Inovio has pushed forward - through the development of its SynCon vaccine design process - a full pipeline of synthetic vaccines that are designed to universally treat multiple and emerging strains of a virus - instead of just focusing on treating a single strain, as is the standard of today's vaccine development. In addition to developing this technology to treat just various virus strains, however, Inovio has also applied the SynCon technology to treating multiple cancers, too.
In total Inovio has nine programs in development with three of those in the Phase II stages. Also noteworthy is that - according to documents contained on the Inovio website - six of those nine programs are funded by third parties, alleviating a portion of the monetary burdens of product development from Inovio, but also providing a sign of validation for the SynCon technology by those willing to fund its development.
With the three leading vaccine candidates moving into the latter stages of Phase II for the treatment of cervical dysplasia, leukemia and hepatitis C - and with the influenza and HIV pipeline moving through or having completed Phase I, investors have started to take notice of this company's potential to eventually jump head-first into the multi-billion dollar vaccine industry. With SynCon's distinct advantage over current vaccines that treat just one virus strand, there's sound reason to believe that Inovio would be positioned to steal rapid market share, should any of its candidates advance to market.
Developing and selling flu vaccines is a huge business and companies developing such vaccines are always thrust to the speculative forefront when a rapidly-spreading virus strikes a large population. Use the H1N1 'Swine Flu' scare of a few years ago as a prime example. Evey company and its cousin that had its hand on vaccine-creating technology spiked in price in anticipation of possibly landing government funding for the endeavor of creating the 'cure'. Cel-Sci Corp (CVM), for example, which is more widely known for its Phase III head and neck cancer vaccine, Multikine, spiked to as high as two bucks on the potential that it could transform its LEAPS technology into the H1N1 vaccine that the world was looking for at the time.
In the case of Inovio, which also spiked to over two bucks at one point in 2009, the company has put its SynCon platform to use in a Phase I trial and - according to a press release issued earlier this month - interim analysis of the trial showed that its universal H1N1 influenza vaccine demonstrated proved effective against some of the most prevalent strains of H1N1 influenza from the past 100 years. Inovio has also reported positive results in a similar H5N1 trial - among others - which offers multiple early validations of the technology in the clinical environment. Although still early in development, a universal flu vaccine hits home to the average citizen - and investor - which could be a good reason why INO receives a nice price and volume spike anytime its universal flu vaccine reaches a definitive milestone.
Multiple trial catalysts are set to unfold over the next couple of quarters, namely interim analysis of ongoing trials, which - if positive - would provide investors another layer of validation and possibly provide enough spark to send shares back towards the dollar mark.
Another angle with which Inovio is attacking the vaccine market is the accuracy and effectiveness of its electroporation vaccine-delivery method. Electroporation, as described on Inovio's website, uses controlled, millisecond electrical pulses to create temporary pores in the cell membrane and allow dramatic cellular uptake of a synthetic DNA vaccine previously injected into muscle or skin. This technology allows Inovio to more accurately and effectively direct its vaccine technology into the intended cells and has thus far in development "demonstrated best-in-class immune responses from DNA vaccines delivered using electroporation," also according to the above-linked website.
The combination of the SynCon pipline and the electroporation delivery technology could have the company positioned for success. Investors should bear in mind, however, that the pipeline is still only in Phase II and the company will likely continue to need funding at points along the way, although management has stated in recent reports that there is enough cash on hand to last well into 2013. Should any of this technology make it to market, however, the millions already pumped into development by all relevant parties could be quickly returned, given the sheer size of the vaccine market.
Electroporation may not be new to those who follow the more speculative side of the developmental healthcare sector or to those who follow VFC's Stock House. As previously discussed, OncoSec Medical Incorporated (ONCS) is another early-to-mid stage company demonstrating potential in the cancer treating sector after developing the OncoSec Medical System (OMS) based on electroporation technology licensed from Inovio. Through OMS, OncoSec is more accurately and efficiently able to deliver therapeutic agents directly into cancerous cells without disturbing the surrounding tissue and has spawned two application paths for development from this technology - ImmunoPulse and NeoPulse.
ImmunoPulse, similar to the application used by Inovio, uses the electroporation process to spark a patient's immune system to target cancerous cells itself and, according to information published on the OncoSec website, "Initial evidence suggests that this gene therapy has the potential to not only treat cancer cells in the target area, but to also trigger immune responses affecting remote cancer cells outside the direct treatment area including distant lesions." NeoPulse, on the other hand, uses the OMS technology to destroy cancer cells using less harmful doses of bleomycin, a highly effective but also highly toxic anti-cancer drug.
Both platforms have demonstrated early trial success, but results released earlier this year from a Phase III trial testing OMS in the treatment of head and neck cancer, however, demonstrated only equal efficacy with surgery - although quality-of-life for the patients was notably better when compared with patients receiving surgery. It's likely that many investors - who were looking for superior efficacy compared to surgery - were underwhelmed with those results and bailed out on their investment. Before the results release, ONCS shares were trading for roughly triple the current prices and have only modestly recovered, thus far.
Looking to boost its proprietary technolgy, OncoSec announced that it had "secured an exclusive license for specific patented technology from the University of South Florida Research Foundation relating to the delivery of gene-based therapeutics via intratumoral and intramuscular electroporation." The patent, as described in the press release, relates to the ongoing ImmunoPulse Phase II trials for metastatic melanoma, Merkel cell carcinoma and cutaneous T-cell lymphoma and extends patent protection for the ImmunoPulse technology to the year 2024.
An additional clinical site for the ongoing MM trial was also announced this week.
With a highly speculative market cap of under twenty million, OncoSec - like Inovio - may offer investors a solid risk/reward play based on the potential of each company's respective applications of electroporation. Each company has numerous opportunities to bring a product to market - as noted by the nine programs in development by INO and the six ongoing or planned clinical trials for OncoSec - and each is targeting very large markets, notably Inovio and the tens of billion dollar vaccine market. Both are also trading notably off their respective 52-week highs, indicating that the right trial update news could spark another move higher, especially in the case of OncoSec where investors are looking for new enthusiasm following the early-2012 trial disappointment.
As always, each investor should conduct his or her own DD and devise entry and exit strategies accordingly while bearing in mind the inherent risky nature of the developmental healthcare sector.
Disclosure: No positions.
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