This is a very nice write-up from today's Bull Market Biotech Investor.
A $2 GENE THERAPY STOCK WITH A $950 MILLION MARKET CAP?
Looking for that special Biotechnology stock selling for under $2.50 per
share? Well, that is not quite the story here, but we thought we would
pique your interest by bringing to your attention the stock of Cell Genesys
(CEGE) and its underlying monetary value. The Biotech Investor previously
presented information on Cell Genesys (vol. 4, #2, March 9) and there have
been several recent emails inquiring about the progress of this gene therapy
company. What is garnering the attention of some followers of this company
are its holdings of Abgenix (ABGX). The share price of Abgenix has been on
an absolute tear this year. Consider that the company has already split its
shares 2 for 1 earlier this year and is going to execute another split of
those shares on July 10th.
Cell Genesys currently holds 4.85 million shares of Abgenix stock that today
is worth $634 million. Given that Cell Genesys possesses $250 million cash,
the total cash and investment holdings of the company are worth $884
million. Currently, Cell Genesys has 33.7 million shares outstanding making
the cash value per share roughly $26.25. With today's closing price of CEGE
stock at $28, the difference between the share price and the cash per share
holdings is roughly $2.
Oh yes, let's not forget to mention the clinical research that Cell Genesys
is performing with its GVAX technology. GVAX refers to cancer vaccines
comprised of tumor cells that have been modified to secrete
granulocyte-macrophage colony stimulating factor (GM-CSF). GM-CSF is a type
of protein with adjuvant-like activities that can boost antibody and
cellular immune responses to antigens (foreign or unique molecules). Thus,
an immune system that recognizes the presence of a tumor cell, or a specific
unique protein on the surface of the tumor cell, may produce antibodies or
specific killer-type cells to mount an attack against the tumor. The
protein GM-CSF helps to augment that immune response. In trying to develop
therapies to treat cancer, it is always advantageous to be able to initiate
a killer-T cell response against cancer cells because it is one means to
eliminate those cells.
Cell Genesys is making progress toward moving its research programs forward
into clinical trials. The company has obtained promising results from a few
pre-clinical studies involving animal models. Cell Genesys is performing
pre-clinical studies for the gene therapy of hemophilia, cardiovascular
disorders and cancer. On June 22nd, the company reported favorable results
using their adeno-associated viral gene transfer technologies to
successfully deliver nerve growth factor to a rat model for Parkinson's
disease. It appears that the clinical trials that are furthest along are
two phase II human trials for testing the efficacy of the GVAX cancer
vaccine toward prostate cancer. Thus, it may be 2001 before the results of
this study are known or a phase III clinical trial is initiated -- a long
time to wait.
Cell Genesys uses four different types of vaccines (vector models for gene
transfer) for the delivery of therapeutic genes. Such viral systems include
adeno-associated virus (AAV), adenovirus, lentivirus, and retrovirus. The
company possesses 230 issued or granted patents with over 300 pending
application. Cell Genesys reported 1Q00 revenue of $4.6 million and
operating expenses of $8 million for a net loss of $3.4 million, excluding
investment gains. The company has plenty of cash and investments to fund a
decade of research and the development of clinical studies. |
