OncoSec Medical (ONCS) - with a market cap of right around twenty million and a share price of just over twenty cents - is still chugging along as a potentially attractive risk/reward play for investors looking to take a chance on a new method of cancer treatment based on a novel technology. OncoSec, as previously noted, has developed the proprietary OncoSec Medical System (OMS), which uses a process known as electroporation to more accurately and efficiently deliver therapeutic agents directly into cancerous cells without disturbing the surrounding tissue. Such a technology, should it prove successful through development, could help ease the cost burdens associated with cancer treatment today as existing treatments could become more effective and side effects could be minimized.
From the OMS, OncoSec has spawned two application paths for which the company has concentrated development - ImmunoPulse and NeoPulse. ImmunoPulse 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.
Even though the share price has not recovered from the March drop, however, there is evidence that many eyeballs are still watching this stock.
Early last week the company 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.
While the extended exclusivity of the exclusive license adds inherent value to the company and its pipeline technology, the volume spike that associated the announcement could have been evidence that investors are watching - and waiting to pounce when the right news hits. When investors take a 'wait and see' approach to a speculative stock such as ONCS, spontaneous reactions to any news release - such as that seen last week - could be an indication that the stock is being heavily watched. In such cases, stocks can move quick as investors move in when the news they are looking for hits - such as positive interim or actual trial results.
On the other hand, the volume boost could also have been related to a company presentation at a high-profile investor conference last week, in which case the boost could be a validation of investor interest in the company. Either way, overall volume has been up this month and the share price has also inched modestly higher.
With numerous trials underway testing a novel technology and with a company market cap of right around twenty million, ONCS is just the type of speculative play worth keeping an eye on. At this point investor sentiment remains skeptical following the mentioned Phase III results from earlier this year, but a turnaround could come quick at any hint that the technology is proving more effective in the still-ongoing trials. It's also worth noting that although the efficacy in the head and neck cancer trial may have only been equal to that of surgery, there is something to be said for equal efficacy, but improved quality-of-life and lower associated costs. Less-intrusive and less-costly is the name of today's healthcare game, and OMS plays right into that trend.
Is that alone enough to draw in new investors? Maybe not, but the ONCS 52-week highs that were just about five times the current price are a sign that investors who once again become enthusiastic about this company's technology could move the share price quickly.
A story still developing and worth keeping an eye on.
Disclosure: No position.
Disclosure: Long AMRN, IMSC, SGYP.
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