Rick, AVXT’s market cap is down to just $19.9M. At this level, I think it deserves another look. I listened to the replay of the conference call this last weekend. I was very impressed by the acting CEO, David Tousley, and the stock price seems to be building strength after its temporary dip into the below-$1 level.
The take-home messages were (a) the FDA hold on the clinical trials of MVAX and OVAX should be temporary, (b) the company has developed an improved version of the vaccine, which they think will be even more effective, (c) over then next 12-18 months there will be good news flow about exciting developments in their pipeline, which has much more to offer than just the autologous cell vaccines, and (d) they've learned the lesson about needing to form strong marketing partnerships for local distribution and are in the process of doing so in Germany and the Netherlands.
Here are my more detailed notes from the conference call:
The company wants to resolve certain strategic issues before startinq a search for new CEO. Meanwhile, like I said, David Tousley appears to be doing a great job at the helm.
The FDA has provided a clearly defined statement of its concerns about the vacine clinical trials (halted by the FDA) and Avax’s manufacturing plant. All of FDA's concerns relate to sterility and not to any evidence of actual adverse events. Avax management does not believe that sterility was actually compromised in the manufacturing process. But they will now implement quality assurance controls to satisfy FDA's requirements.
They need to develop processes in the hospital collection points to ensure sterility there and at the point of receipt at the production plant. Because the autologous cell vaccine technology is a new type of therapeutic, it wasn't clear how/if the FDA would apply the sterility standard to it -- so Avax management got caught a bit by surprise.
Avax expects to submit its response to the FDA (all of whose steriltiy concerns management intends to address to FDA's satisfaction ) by early August.
When clinical trials are resumed, Avax hopes to use an enhanced vaccine. It does not believe that this enhancement will constitute a new product (which would require starting new non-pivotal trials), so they expect to restart the pivotal Phase III trial with this enhanced version of the vaccine.
They are planning 3 new initiatives for the autologous cell vaccine. 1. Consolidate freezing process to a single step instead of eight steps. 2. A new process for sterilizing tumors. 3. A new technique to minimize tumor cell loss, allowing use of smaller tumor masses (their vaccines require a certain minimize size of tumor, so reducing that minimum size increases the potential market for the drug).
They are hoping to reduce required size of tumor mass by 1/4, so that MVAX would work for stage 2B melanoma. Melanoma is particularly challenging for collecting large enough tumor mass.
They expect to begin a Phase I trial for their new anti-estogen therapy (an anti-cancer therapy) within 12 mos. Unlike Tamoxifen, the anti-estrogen compound does not cause uterine hyperplasia.
They also expect to commence Pahse I trials of their Topoisomerase Inhibitor drugs (also anti-cancer) in 18-24 mos.
By year-end they also hope to start a Phase I trial of their drug for treating Graft vs. Host Disease in bone marrow treatment for leukemia patients.
Within 12 months they hope to begin marketing and receiving revenue in Europe for thier orphan disease drug to treat the so-called BubbleBoy Disease (also known as severe combined immune deficiency or "SCID"). A subsidiary in France is handling development of this product. They hope to be able to release news on their SCID compound in the next few weeks.
The company has $15.4 M cash as of 6-30-01: enough cash for another 16-24 mos.
They are planning enhanced communications program for investors.
The company is still on-track to begin manufacturing MVAX in The Netherlands and Germany within the next 12 months, but they need a marketing partner there, and hope to obtain one by year-end.
Sales in Austalia have been very slow. The biggest hurdle has been getting approved for government reimbursement in Austrialia. Also, the bad publicity from the FDA order has hurt sales in Australia. Head-to-head comparison data would help. They are submitting an application package for govt reimbursement in August and expect govt review time to take 9 mos.
Marc |
