I think it would be challenging to find a more undervalued biotech company than SUNP. I've listened to two Informed Investors Forum presentations (one on tape and the other live) by CEO Stefan Borg and Investor Relations representative Paul Herron and spoke with Paul today (904-296-3320). The company has a rich pipeline, with new R&D being performed for them by Dr. Bergeron of the University of Florida. At the current price of 15/16 per share, down from a 52-week high of 6 ¼, its market cap is only $6.2 million. They have a vert low burn rate, so they are not like a lot of distressed biotech companies who might have to close their doors for lack of funds. Their current lead product, DENSPM, is in a fast-track Phase 2 trial, which Warner Lambert is conducting and funding. DENSPM is a polyamine analog, which has cytostatic (and ultimately apoptotic) effects on cancer cells, by preventing them from replicating. The Phase 2 trial is being conducted in six solid tumor cancers under a 3-stage protocol. In the first stage (which is fully enrolled), there are 15 patients for each of the 6 different solid cancer tumors. If they get enough responders in one or more of the 6 indications, they add another 15 patients (stage 2) in those indications, and then may narrow the process done further in a third stage with another 15 patients per indication. According to Paul Herron, WL is currently in the second stage for at least one or two indications, and the trials appear to be going well. They expect to hear the results for the complete Phase 2 trial by the end of the second quarter. The successful completion of the Phase 2 trial results in a $1M milestone payment to SUNP, as will the filing of an NDA. If the results of the Phase 2 trial are robust enough, WL could skip Phase 3 and go directly to the FDA for an NDA on the basis of the Phase 2 trial on its own.
The company's Phase 2 trial of DEHOP for refractory diarrhea in AIDS patients had a recent setback when the FDA asked for a stronger safety profile. DEHOP is both an anti-motility drug and also an anti-secretory drug (by way of contrast, Shaman's competing drug, Provir, is just an anti-secretory drug). In mice studies DEHOP's anti-motility effects have been measured as expanding by three times the duration of time it takes food to move through the GI tract. For AIDS patients, this anti-motility effect should improve ingestion of the oral medications (protease inhibitors, etc.) being administered as their primary therapy. According to Paul Herron, SUNP has been deliberating whether to do the additional DEHOP trial to satisfy the FDA's concerns (they want trials with lower doses of DEHOP) or to start over with a later generation drug, DESPM, which showed no adverse effects in animal studies. Paul says SUNP is ready, or nearly ready, to file an IND for DESPM. Paul observed that with Shaman's recent setback for its Provir drug, SUNP's setback for DEHOP no longer puts them behind Shaman in getting a refractory diarrhea drug to the market.
Paul said that SUNP is also ready or near ready to file INDs for two metal chelator drugs: HBED for sickle cell and/or Cooley's anemia, and PCA for ulcerative colitis. They are close, but not quite as close, to filing INDs for two new anti-cancer polyamine analogs (like DENSPM), which Paul referred to as DENOHO and DEHOHO.
The company would like to find a partner for bringing these new drugs into clinical trials, so I'm hoping that we will get lucky and read a press release announcing such a partnership in the not too distant future.
The company's website should be launched sometime next week at www.sunpharm.com. Paul warned me not to expect to find too much on the website the first week, but within a couple weeks after its launch they will be adding information about the technology behind their drugs.
The Informed Investor Forum presentations tout a very strong board of directors and scientific advisory counsel. Also, the strategic alliance with Dr. Bergeron and the University of Florida is very important asset, promising them a continuing flow of new products into their pipeline.
I agree with Paul, who described his company as a diamond in the rough. |
