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Big Picture on the CDNX Small Cap
MS Treatment Gives EPS Pep In First Week of Trading
By Catharina Mendonca
Friday, March 30
Investors in EPS Capital Corp. [V.ECC] have been riding a sharp wave upward in the week since the company's debut. Climbing 33% since it's opening price of $6.01, shares in the Edmonton-based company closed up at $7.85 on Thursday.
EPS began trading on the CDNX on March 21 after a proposed merger with privately held Rycor Technology Investments Corp. The new company is producing and marketing a treatment for chronic progressive multiple sclerosis (CPMS) developed at the University of Alberta.
Clifford Giese, chairman of EPS says that once the merger is completed the new name will be changed to Bio MS Medical Corporation reflecting the company's new direction. Giese was the founder of Mr. Lube Centre car service centre chain and the major shareholder of NQL Drilling Tools Inc, [T.NQL.A] an oilfield equipment company. Clifford Giese's wife, an MS sufferer, has been on the treatment since 1996. "She's still in complete remission to this day and doing very well," says Ryan Geise, head of corporate communications for EPS, and Clifford Geise's son. The peptide's first recipient in 1992 is also still in complete remission
The treatment involves the intravenous injection of a naturally occurring, synthetically manufactured, protein based peptide named MBP8298 that has been found to elicit a positive immune response in patients with Multiple Sclerosis (MS). The peptide was co-developed by Dr. Kenneth Warren and Dr. Ingrid Catz at the University of Alberta nearly 10 years ago. The University of Alberta will continue to conduct research into the technology. The technology's inventors at the school's Faculty of Medicine and Dentistry will provide scientific advisory assistance.
In Phase I testing, 41 patients were injected with the MBP8298 peptide with 61% going into remission. EPS expects Phase II trials to be completed late in May and results will be released in the fall. The peptides are licensed from AutoImmune Inc. [AIMM].
Approximately 2.5-million people in the world have MS: half with the relapsing-remitting form of the disease, and half with CPMS, the chronic-progressive form that is more severe. A patient with CPMS typically worsens without remission of disease.
A number of drugs on the market treat the symptoms of MS but only one drug is approved specifically for the CPMS. Immunex's [IMNX] Novantrone is a chemo-based drug originally developed for the treatment of prostate cancer. As is the case with most chemotherapies, there are serious side effects with Novantrone including ones that are heart-related.
"Novantrone does have all the nasty side effects," says Ryan Giese. "And patients can only be on it for from eight to 12 doses or a maximum of two years,"
Patients injected with the MBP8298 on the other hand aren't limited to any sort of lifetime maximum dosage says Giese. He adds that the peptide's first recipient in 1992 is also still in complete remission.
But there is competition. Biogen [BGEN] is a mammoth in the biotech industry with a market cap over US$9 billion, compared to EPS's C$20 million in the bank. Biogen has Avonex, an approved drug for the relapsing-remitting form of MS. The company is in Phase II trials testing Avonex on patients with secondary CPMS. Biogen has plenty of experience in getting its products to market quickly. Its shares closed Thursday at US$63.12.
If MBP8298 receives approval to go into Phase III trials, and all runs smoothly in the final phase of testing, Clifford Giese says long-term shareholders can expect to see revenues, at the earliest, in less than two years.
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