By Jorge Aura
OncoSec Medical (OTCBB: ONCS) develops novel cancer therapeutic products. Its products combine proprietary electroporation delivery technology with a chemotherapeutic or novel DNA-based immunotherapeutics, known as OncoSec Medical System (OMS), which is based on both immunotherapy (ImmunoPulse) and chemotherapy (NeoPulse) agents. According to the company website, Immunopulse and Neopulse are defined as:
ImmunoPulse delivers instructions to the cell (DNA IL-12) to produce a protein that activates an immune response against cancer cells.
NeoPulse delivers bleomycin, an approved anti-cancer drug that specifically targets and destroys cancer cells.The most surprising thing is its action method on the two treatments. In the next image, which was provided by the company, you could see how OMS system works.
- Tissue: The generator creates a pulsed electric field that temporarily increases the porosity of cell membranes within the treatment field.
- Poration: The hand-held applicator supplies a series of short-duration electrical pulses of specific voltage through a series of needles.
- Uptake: Together, the action of the generator and applicator creates a rotating array of pulses that uniformly subject the targeted cell membranes to electroporation.
Source: Oncosec Medical
Source: Oncosec Medical
Fundamental Basic Review
Oncosec Medical has a market cap of $27.11 million. Its trailing P/E is incalculable, and its forward P/E is just incalculable as the majority of pharmaceutical companies of small-capitalization. It has a total cash position on its balance sheet of just $8.98 million, and its total debt is at $2.68MM. In Oncosec Medical's last quarter, we can see that its operating expenses reached $1.61 million. Based on the operating expenses and the company's cash deducting the current debt from them, we can think that the company would have enough cash for the next four financial quarters or second quarter of 2014.
I find at least four reasons to buy the stock currently:
1. Interim Data for Phase II Study of ImmunoPulse in Metastatic Melanoma Patients
On March 25, 2013 Oncosec Medical announced positive, durable response results in an update on interim data from its Phase II metastatic melanoma trial. This data was presented at the HemOnc Today Melanoma and Cutaneous Malignancies Conference. This is one of the most important conferences worldwide on studies of melanoma and Cutaneous Malignancies.
The data presented were impressive. ImmunoPulse demonstrated a partial or complete response. ImmunoPulse treated patients showed a 68% and 45% percent of treated lesions demonstrated a durable response at three and six months, respectively.
To help our readers get an idea of the importance of these results, Amgen (Nasdaq: AMGN) is developing a treatment for melanoma that is currently in phase III trials. The first results provided by the company showed 16% of trial patients on the engineered virus had a durable response compared with 2% of those on the control therapy GM-CSF.
We hope that Oncosec shows more data from this study at the next ASCO meeting in June, 2013.
2. Analysts' price target: $1.5
- On June 21, 2012 without being approved the European designation CE for Neopulse, Roth Capital initiated coverage on OncoSec Medical with a Buy. The price target market was $1.00 per share.
- On May 26, 2011 without being approved the European designation CE for Neopulse and without 3 important phases II treatment of melanoma, carcinoma and lymphoma, Vista Partners initiated coverage on OncoSec Medical with a twelve month target price of $2.90.
Mr. Silver, analyst of Vista Partners said:
"OncoSec's ElectroOncology clinical development pipeline is comprised of cancer treatments intended to address therapeutic needs in multi-billion dollar markets. The company's ElectroChemotherapy has shown in clinical trials to date that it selectively destroys cancer cells while leaving healthy tissue intact, dramatically improving patient quality of life. This provides OncoSec with a considerable potential competitive advantage compared to existing treatment options. OncoSec's ElectroImmunotherapy could prove to be a powerful new approach to treat local and metastatic tumors."3. Institutional ownership: 14%
- Sabby Capital LLC own 7.32MM shares or 6.24% of total shares.
- Downsview Capital Inc own 5.02MM shares or 4.29% of total shares.
- Ayer Capital Management LP own 4.41MM shares or 3.76% of total shares.
Source: CNN Money
In the OTCBB are few companies with many institutional investors. Oncosec Medical can boast a very high percentage and that will possibly be increased in the coming months with good results in clinical trials.
4. Ten Major Catalysts in 2013
- 2013 — April 15, 2013 Complete enrolment for Phase II melanoma program.
- July 15, 2013 — July 31, 2013 Present interim response data on Phase II melanoma program.
- July 15, 2013 — July 31, 2013 Present long-term PFS data from Phase I melanoma program.
- July 15, 2013 Present interim response data on Phase II Merkel cell carcinoma program.
- July 31, 2013 Complete enrolment for Phase II Merkel cell carcinoma program.
- August 31, 2013 End of Phase II Meeting with FDA for melanoma program.
- September 2013 Present interim data on cutaneous T-cell lymphoma program.
- October 15, 2013 Present final data for Phase II melanoma program.
- October 31, 2013 Present final data for Phase II Merkel cell carcinoma program.
- December 31, 2013 Launch Phase IIB melanoma program.
Source: OncoSec Medical
The next catalysts in OncoSec Medical surely will catapult the stock price.
OncoSec Medical is a tremendously undervalued company. It has a capitalization of $27MM and a cash flow of $9MM. Besides, it is carrying out several major studies. Immunopulse and Neopulse treatments can provide it with an income of $500MM annually minimum. This enterprise should have a minimum capitalization of $250MM or $2.5 per share.
*Pipeline overview data sourced from OncoSec Medical, all other data sourced from Nasdaq.com, CNN Money as well as the web of the previously mentioned company.
Disclosure: Jorge Aura owns shares of OncoSec Medical Jorge Aura wrote this article himself, and it expresses his own opinions. He is not receiving compensation for it. Jorge Aura has no business relationship with any company whose stock is mentioned in this article.