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OncoSec Medical Incorporated Message Board

  • jim.beemer Aug 29, 2012 11:06 PM Flag

    Great analysis by Amy Baldwin

    Two Candidates with Outsized Potential: OncoSec Medical (ONCS.OB) & NeoStem Inc. (NBS)

    OncoSec Medical Incorporated

    OncoSec (ONCS.OB) is yet another San Diego based biotech with aspirations on the treatment of various skin cancers. Where it diverges from the other market entrants is its focus on a proprietary therapeutic delivery technology that centers on the notion that delivery methods haven't really kept up with advances in immunotherapic treatments. Think Medtronic (MED) or the medical device division of Johnson & Johnson (JNJ) as the best analogy as a company that specialize in the "razor blade", or "picks and shovel" approach to treatment. (Treatments might change, but a good delivery mechanism provides for steady earnings). By focusing on the device that delivers the chemotherapeutic agent, OncoSec is essentially delivering a next generation platform that makes treatment less intrusive and more effective--important when many of these cancers occur on the area most prone to skin cancer: the face. This is something that surgeons and their patients can easily rally behind. It is hard enough to have operable cancer on the most visible part of the human body, let alone the awkward healing process for intrusive surgery. A more effective treatment with tremendous cosmetic benefits are probably the future.

    OncoSec has three Phase II clinical trials underway with its OMS ElectroImmunotherapy product (recently renamed "ImmunoPulse"). Oncosec's device using electroporation technology (stimulates cells to engage better absorption rates of an anti-cancer therapy) has shown efficacy in patient treatment outcomes with respect to the disfigurement and functional impact of existing surgical procedures. The proprietary electroporation delivery system also better enables uptake by cells for powerful cancer fighting agents. Results have been promising with 90% of treated lesions demonstrating local control and 53% of patients with metastatic showing objective response. 16% of treated patients showed complete regression according to recent data.

    OncoSec 's stature as a small cap player (approximately $17M at present) belies its potential market expansion as the drug delivery component of novel immunotherapies have not evolved. OncoSec could be a hidden gem if it can capitalize on its promise as a legitimate device maker-- especially since the consensus among many analysts is that we are at "early innings" in immunotherapy treatments of cancer.

    NeoStem, Inc.

    NeoStem is a more established player than OncoSec, but it has faced challenges in its treatments in the development of proprietary cellular therapies in cardiovascular disease, immunology, and regenerative medicine. While it wields a market cap of $88M its stock price has languished in the sub-dollar range for months as the market takes a "wait and see" approach to its current product candidate, AMR-001, which is in Phase II trials to treat damaged heart muscles following acute myocardial infarction.

    NeoStem's appeal lies in the market's reduced expectations, providing a decent entry point at current valuations. What the market may be missing is that NeoStem has several avenues to growth: While it has its own promising cell therapy, it combines this with operational expertise as a leader in the manufacture of cell therapies. It touts Baxter as one of many clients that have signed on to receive treatments that have emanated from 65,000 square feet of manufacturing capacity. Another division, also, is in the business of collecting and storing adult stem cells as well as cord blood from infants. Some of the most successful businesses have this component to their business model: proprietary storage capabilities. While the excitement over stem cells waxes and wanes, it would be hard to dispute that, in some capacity, expertise in this domain will be valuable to future generations.

    Given that NeoStem had such high expectations, it might take a bit more convincing in the form of pure results to move the needle. OncoSec might seem to be the fresher choice given tremendous momentum in immunotherapy. Regardless, both firms are solid - but speculative-- candidates to add to a biotech or biopharmaceutical portfolio that has growth in mind.

    Disclosure: I am long ONCS.OB, NBS, JNJ. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Sentiment: Strong Buy

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