One way to offset the current market uncertainty is to look for news driven stocks that appear to be paving the way for future growth. This is especially true in the biotechnology sector where one positive news announcement can help pave the way for years of innovation. Two companies that have released recent positive announcements include Medivation (NASDAQ:MDVN) and VolitionRx (VNRX.OB). Investors should keep their eyes on both of these promising companies.
Medivation is a biopharmaceutical company focused on the rapid development of novel therapies to treat serious diseases for which there are limited treatment options. The company’s flagship product is XTANDI, which is FDA approved for the treatment of patients with metastatic castration-related prostate cancer (or, mCRPC) who have previously been treated with chemotherapy. In the AFFIRM Phase 3 trial, men treated with XTANDI lived for a median of 18.4 months compared to just 13.6 for men taking the placebo.
While that was great news, the hope all along was that Medivation could develop a first-line treatment for the disease. This would relate to men whose prostate cancer has spread but remain relatively symptom free. On Tuesday morning, that hope turned into a very real possibility when the company announced results from its Phase 3 PREVAIL trial of enzalutamide in men with metastatic prostate cancer. The trial was evaluating enzalutamide in men who have failed androgen deprivation therapy and have few or no symptoms. The results demonstrated a statistically significant reduction both in the risk of death and a delay in cancer progression. Several important data points were:
- Enzalutamide reduced the risk of death by 29 percent as compared to the placebo.
- Men taking enzalutamide experienced a 17-month delay in having to initiate chemotherapy compared to men taking the placebo.
- Of the patients, 78 percent taking enzalutamide experienced a PSA decline of 50 percent or more, compared to just 4 percent in the placebo group.
The full data report will be released on January 30. Needless to say, shares have soared since the announcement. Medivation’s share price is up approximately 10 percent since Tuesday as investors continue to bet an extremely positive future for the company. JPMorgan (NYSE:JPM) also upgraded its price target on Medivation to $101.
Last year, the company generated $181.7 million in total revenue. Through the first three quarters of 2013, Medivation generated $148.2 million which puts it ahead of 2012′s pace. Given this new data, investors should be excited about the possibility of the FDA approving enzalutamide. It would dramatically increase the revenue that the company brings in and make the company a strong acquisition candidate.
A second company that investors should be keeping their eyes on is VolitionRx. VolitionRx is a life sciences company focused on developing blood-based diagnostic tests for different types of cancer. The company’s goal is to make its non-invasive cancer blood tests easy and simple to use, similar to the tests that are currently available for diabetics. The company’s research and development efforts are currently centered in Belgium as the company is focused on marketing its products in Europe at the start due to an easier path to regulatory approval there. Beginning this year, VolitionRx plans to expand its marketing and commercialization efforts to the U.S. and then the rest of the world.
The company’s tests are based on the science of Nucleosomics, which is the practice of identifying and measuring nucleosomes in the bloodstream. In order to understand what VolitionRx is trying to do, investors should have an understanding of the science. The DNA in every cell is wrapped around protein complexes. It looks like a piece of jewelry (a string with beads), and each structure that looks like a bead is actually a nuclesome. When a cell dies, individual nucleosomes are released into the bloodstream so that the body can recycle them.
However, when a person has cancer, cells are continually dying, which releases more nuclesomes into the blood than can be recycled. Thus, VolitionRx is developing screening and diagnostic tests that are capable of measuring if a person’s blood contains a heightened level of nucleosomes, as well as identifying the different types of nucleosomes produced by cancerous cells.
VolitionRx is developing two types of tests, each of which will be used to identify a different type of cancer.
- Population Tests — These are given to an entire group of patients. Common examples would include colonoscopies for colorectal cancer and Pap smear tests for cervical cancer.
- Patient Specific Tests — These are given to an individual patent who is showing cancer-like symptoms, has a family history of cancer, or are part of a high risk group.
The company has developed a range of about twenty individual assays, each of which is able to identify and quantify a particular nucleosome structure. The company also plans to continue developing additional assays. An optimal panel of assays (typically 4-5) will be selected. That panel of assays will be best suited to identify the particular type of cancer present and are all covered by their broad IP protection. Each panel of tests requires a very small amount of blood, can be turned around in a day, and is very cost effective.
In order to further determine the accuracy of the company’s NuQ assays, the company announced on January 22, 2014 that it was initiating blood sample analysis for its largest clinical study in collaboration with Hvidovre Hospital of Denmark. The initial samples were collected from 4,800 patients between 2010 and 2012. These samples will be entered into a blind retrospective study and the results are expected in the near future.
In addition to the above trial, the company is also participating in an 11,000 patient colorectal cancer screening population trial. This is also being done in collaboration with Hvidovre Hospital, with collection of the samples expected to begin in April. Data from these trials will be used to apply for a CE mark for a colorectal cancer test, and will also be submitted to the FDA.
The colorectal cancer market is in need of much better diagnostics. The current available options include colonoscopies (invasive and expensive) and FIT/FOBT faecal-based tests (unpleasant and don’t screen for pre-cancerous polyps). If VolitionRx can successfully get some of its products to market, the company should see a dramatic climb in its share price. Also, investors should begin to see a run-up in the company’s share price as VolitionRx gets closer to revenue production.