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How to Protect your Wealth by Investing in AI Tech Stocks

Biotech Growth Stocks Investing

Companies / BioTech Dec 13, 2013 - 10:47 AM GMT

By: TLSReport


Get ready for a bonanza of biotech names. Managing Director and Equity Research Analyst Reni "Ren" Benjamin is a new arrival at H.C. Wainwright & Co., and he's busy doing diligence on a lot of stocks. Along with three Buy-rated biotechs he's already initiated coverage on, Benjamin brought The Life Sciences Report a bonus package of names that could fatten investors' portfolios. Backed by Benjamin's extensive industry knowledge, this long shopping list includes companies poised to make drug development history.

The Life Sciences Report: Do you currently have a major theme, Ren, or do you just go anywhere to find growth?

Reni Benjamin: The overarching theme for our franchise is novel therapies, or platforms driven by strong scientific and clinical data. Under that umbrella we have subthemes that we concentrate on. We don't just go looking anywhere for growth. We try to be at the forefront of the biotechnology and medical worlds.

TLSR: Go ahead and touch on some of the subthemes you focus on.

RB: The subthemes include immunotherapy and the cancer stem cell space. We also look at targeted therapies, which are very broad in scope, so we try to focus on specific targeted inhibitors. The regenerative medicine space is making significant strides. We also think the RNA and DNA therapeutic space is destined to generate significant clinical benefit to patients in the future.

TLSR: Ren, you are heavily weighted in oncology. This space is served by several different platform technologies and approaches. Do you see an emerging platform that could become a new standard in cancer care over the next decade? Immunotherapy, perhaps?

RB: In my mind, immunotherapy is already at the forefront of oncology. For example, the monoclonal antibody ipilimumab (Yervoy), from Bristol-Myers Squibb Co. (BMY:NYSE), was approved for late-stage or metastatic melanoma back in the spring of 2011, and it is now being evaluated in a whole slew of other tumor types. It is already part and parcel of the physician's armamentarium. As we look out over the next decade, I see the immunotherapy space growing significantly, with the addition of targeted therapies, DNA vaccines and the advancement of new types of cellular therapies, such as chimeric antigen receptor (CAR) T cells.

TLSR: Give me a bit of color on that. We all know about Dendreon Corp. (DNDN:NASDAQ), with its Provenge (sipuleucel-T) vaccine. Who else is involved in immunotherapeutic management of cancers?

RB: Big players like Merck & Co. Inc. (MRK:NYSE) and Roche Holding AG (RHHBY:OTCQX) are in the space, with late-stage trials evaluating checkpoint inhibitors that bolster a patient's immune system so that the body can mount a significant immune response against tumors. A lot of investment and research are going into this area right now.

A slew of nascent products are also moving through development. These include the CAR T-cell programs from players such as Celgene Corp. (CELG:NASDAQ) and bluebird bio Inc. (BLUE:NASDAQ), the latter of which is a recent initial public offering (IPO). Novartis AG (NVS:NYSE) is also playing in this field.

The clinical data to date have been clinically significant and robust, and we believe continued big pharma partnering interest will grow as issues such as manufacturing and delivery of cell therapies are resolved. A yet-to-be discovered name in the space is Lion Biotechnologies (LBIO:OTCBB), which is evaluating its tumor-infiltrating lymphocytes in solid tumors such as melanoma. In this case, we believe any news from any of the companies listed above, could be beneficial for the entire space—a rising tide lifts all boats.

TLSR: You mentioned targeted therapies. As you said, targeted therapy is a broad term, but it implies a specific objective for a drug or antibody. Did you want to comment further?

RB: You can see how quickly this field is advancing in that inhibitors are getting approved in record time, many with breakthrough therapy status from the U.S. Food and Drug Administration (FDA). This includes Novartis' anaplastic lymphoma kinase (ALK) inhibitor, LDK378, which was given breakthrough status back in March. It also includes Pharmacyclics Inc.'s (PCYC:NASDAQ) Bruton's tyrosine kinase (BTK) inhibitor, ibrutinib (Imbruvica), which was approved in record time by the FDA in November.

Gilead Sciences Inc.'s (GILD:NASDAQ) idelalisib, targeting phosphoinositide 3-kinase delta (PI3K), was in a phase 3 study for chronic lymphocytic leukemia (CLL) that was stopped early because the data monitoring committee saw the interim data and determined that the efficacy was very good, the safety profile was acceptable and there was a clear favorable benefit-to-risk ratio. These very targeted, very specific inhibitors are already, or soon will be, part of mainstream cancer therapy.

TLSR: I know that oncologists would like to be rid of chemotherapy if they have another option, and patients certainly would. Do you actually see the end of chemotherapy?

RB: If you look at the recent approval of ibrutinib, you'll see that it's approved in mantle cell lymphoma (MCL). However, the standard of care for CLL is FCR—fludarabine, cytarabine and rituximab (Rituxan). The fludarabine/cytarabine is the chemotherapy part and rituximab is the monoclonal antibody. Pharmacyclics has shown a significant benefit in CLL using just ibrutinib and rituximab—better than what has been seen with chemo, especially when looking at the side-effect profile.

This is the direction that many of these novel targeted therapies are headed. Chemotherapies are, frankly, very effective, but they come with a cost: side effects. During the next decade, we think less chemo will be used and more targeted therapies will be employed in their place.

TLSR: You mentioned RNA/DNA therapeutics a bit ago. Can you speak to that? Who are the players?

RB: Small interfering (double strand) RNAs (siRNAs) are used in RNAi, where Alnylam Pharmaceuticals Inc. (ALNY:NASDAQ) plays. Players like Isis Pharmaceuticals Inc. (ISIS:NASDAQ) have antisense (single strand) technologies; Idera Pharmaceuticals (IDRA:NASDAQ) has technologies to inhibit toll-like receptors (TLR) to treat autoimmune diseases.

TLSR: Researchers have been looking at RNAi and antisense as proposed therapies for two decades or longer. No RNAi products are on the market yet for patients, and only one antisense molecule is on the market: Kynamro (mipomersen sodium) developed by Isis and marketed by Genzyme, a division of Sanofi SA (SNY:NYSE), for homozygous familial hypercholesterolemia, an orphan disease indication. Both the double strand RNAi and the single strand antisense oligonucleotides are charged, linear molecules, and they both resist crossing cell membranes. Do you see this problem being solved?

RB: The easy answer is yes; however, investors should be aware that the solution is very much a work in progress. Very few companies are still working on the classic sort of antisense technology. Isis is clearly the leader in that area, and has partnered with several big pharmas to continue exploring that modality of therapy.

The 800-pound gorilla in the RNAi space is Alnylam, which is enrolling a phase 3 clinical study evaluating its proposed therapy with ALN-TTR02 (patisiran), targeting the transthyretin (TTR) gene to treat TTR-mediated amyloidosis. Delivery has been an issue in this space, given that ALN-TTR02 is being delivered systemically, but the company has overcome such issues with the development of novel delivery technologies. Other companies in the RNAi space include RXi Pharmaceuticals Corp. (RXII:OTCQX) and Tekmira Pharmaceuticals Inc. (TKMR:NASDAQ; TKM:TSX). The antisense oligos in later-stage development—and Kynamro, the one that has been approved—are second-generation antisense molecules. They have had chemical modifications that allow for less degradation in the bloodstream, as well as improved penetration across membranes.

The RNAi space has gone through the same type of evolution as the antisense space. When it started, there was clearly an issue with delivery—how to get across cell membranes and get enough molecules into cells. That appears to have been largely solved, either by changing the chemistry or by attaching the RNAi molecules to a liposomal shuttling system or some sort of peptide conjugate, which allows the nucleic acid therapeutic to get across the membrane.

As a matter of fact, Tekmira has licensed its delivery technology to Alnylam, so the majority of Alnylam's products have the Tekmira technology, which improves delivery of the therapeutic. RXi is different, in that its compound's structure seems to attribute unique characteristics that facilitate delivery. It doesn't seem to have the need for a delivery molecule, and based on the preclinical work that the company has shown, its platform demonstrates robust entrance into the cell.

One other area of focus for RNA and DNA therapeutics—with a different mechanism of action—is the alternative splicing area. For example, companies like Sarepta Therapeutics Inc. (SRPT:NASDAQ) and Prosensa Therapeutics B.V. (RNA:NASDAQ) are using DNA antisense therapeutics to treat Duchenne muscular dystrophy (DMD). In DMD, the therapy does not facilitate degradation of a messenger RNA (mRNA) and prevent it from synthesizing its encoded protein, but rather influences the exon-skipping of those mRNA genes to produce a new protein—to skip out a diseased portion of the protein and potentially make it fully functional.

We have seen some very tantalizing data in phase 1 and phase 2 studies, where exon-skipping therapeutics seem to be not just getting across the cell membrane barrier but also, in tough disease tissues like muscle, are providing a therapeutic benefit. We have seen this in some of the boys with DMD, although the patient numbers are quite small.

The unfortunate news is that a phase 3 trial with Prosensa and GlaxoSmithKline Plc's (GSK:NYSE) drisapersen, which induces exon 51 skipping in the dystrophin gene and is a proposed therapy for roughly 13% of all DMD patients, has just failed. The primary endpoint was not met. It doesn't mean we have to scrap the entire mechanism of action, but it definitely means we have to figure out what went wrong and try to address it. Was it patient selection? Was it dosing? Was it delivery, or some other issue?

At the end of the day, antisense or RNAi have hurdles to cross—but if they're worthwhile in some population of patients, they'll make it.

TLSR: You mentioned RXi Pharmaceuticals. I'm interested because the company seems to have technology designed specifically to get the oligo into the cell. Can you comment on it?

RB: Let me say first that even though Alnylam is clearly the leader in RNAi, and may have first-mover advantage from a revenue perspective, it's the first movers in biotech who typically pave the way and resolve development difficulties, whether it's clinical trial design or in surmounting the regulatory hurdles. RXi and Tekmira are two key players that I think show significant promise.

RXi is relatively new in the field, with a strong intellectual property position and a compound, RXI-109, currently being evaluated in a phase 2 trial as a post-surgical antiscarring agent. Data are expected in H1/14. We are agnostic, if you will, to the company's therapeutic focus, dermal scarring. What we do like about this indication is that it's topical. This oligo does not have to be injected systemically, with the hope that it gets to the scar area. From a clinical trial design point of view, this is a very intriguing indication.

From a target perspective, RXi is going after connective tissue growth factor, which appears to be overexpressed in scarring and fibrotic diseases. The inhibition of that mRNA works very well with the mechanism of action of RNAi.

From a clinical trial perspective and a science perspective, we think RXi has a lot going for it, and the company is not well known in the marketplace. It is a company that investors should definitely take a look at.

TLSR: Having access to the dermis makes this more of a low-hanging fruit drug development proposition, doesn't it?

RB: Yes. That's the way I would look at it, because the company is taking out one potential hurdle. Typical RNAi therapeutics are intended to be given systemically. They have the potential for degradation before ever getting into the target tissue, or there may be trouble getting enough drug to the target tissue. That is not the case with RXi's therapeutic.

TLSR: You said that regenerative medicine is making significant progress. Could you address this field, which is dominated by the cell therapy companies?

RB: In the cell therapy space, Mesoblast Ltd. (MSB:ASE; MBLTY:OTCPK) is the 800-pound gorilla in terms of market cap. But we think investors should realize that there is a significant amount of pharmaceutical and investor interest out there.

When we look at the space, we focus on several players, including ThermoGenesis Corp. (KOOL:NASDAQ), Neuralstem Inc. (CUR:NYSE.MKT), Athersys Inc. (ATHX:NASDAQ) and NeoStem Inc. (NBS:NASDAQ), which is followed by my colleague, Andrew Fein, here at H.C. Wainwright. International Stem Cell Corp. (ISCO:OTCBB) also fits in that bucket. ThermoGenesis, Neuralstem, Athersys and NeoStem are already in clinic, as is Mesoblast, of course. Several other companies are still preclinical and moving their programs forward.

TLSR: Mesoblast has a $1.8 billion ($1.8B) market cap—many times that of the other companies you've mentioned. How do you see this difference in valuation?

RB: First let me say that in any investing environment, you will see both undervalued and overvalued names. Sometimes we can't explain the valuation for a particular company. Sometimes the valuation turns out to be true, and other times it doesn't. My qualification for the Mesoblast market cap is only that the company does not have a product on the market generating revenues. It is listed on the Australian Securities Exchange (ASX), with an American depository receipt trading in the U.S. on the Over-the-Counter (OTC) market. The company has a 1,700-patient phase 3 study in progress, evaluating its lead compound, Revascor (mesenchymal precursor cells), in congestive heart failure—clearly a big market. The company has significant cash, and I believe the trial has already begun enrolling worldwide.

That being said, most other phase 3 regenerative medicine companies—or even phase 2 regenerative medicine companies—trade at a significant discount compared to Mesoblast. When we look at similar-stage companies with an equal chance of clinical trials producing positive data, we tend to focus more on the lower market cap companies because of the growth opportunities.

When considering companies already in the clinic in the stem cell space, investors should definitely take a look at ThermoGenesis. Though the company was, in a previous lifetime, more device focused, if the pending merger with TotipotentRX (private) takes place, we believe the company could become a dominant player in the space. The merged company would have a phase 2 trial with an autologous stem cell approach for critical limb ischemia. Future partnerships will likely facilitate development of the cellular therapy in a variety of indications. ThermoGenesis also sells products for the regenerative medicine space, providing a stable source of revenue that can offset a portion of the clinical burn.

Another company we believe is making significant strides in the regenerative medicine space is Neuralstem. The company is in a phase 2 trial for Lou Gehrig's disease (amyotrophic lateral sclerosis/ALS). Some very promising anecdotal evidence has been reported from patients participating in the trial. Several universities are currently involved in the study, including Emory University, and we believe the readout for the ongoing trial could generate some significant interest for the company in 2014.

TLSR: What about the area of DNA vaccines? Could you comment?

RB: Just as in the antisense/RNAi therapeutic space, where there are different ways to approach problems, there are different ways to approach immunotherapy. You can use DNA-based vaccines, peptide-based vaccines or even cellular- or viral-based therapies. One area that, unfortunately, has not been all that successful thus far—but continues to be a strategic area of focus—is DNA vaccines.

Vical Inc. (VICL:NASDAQ) had a huge phase 3 failure back in mid-August with its most advanced DNA vaccine, Allovectin (velimogene aliplasmid), which failed to meet its efficacy endpoints in metastatic melanoma. But just because one company has a failure doesn't mean others in the space will necessarily fail. Both Inovio Pharmaceuticals Inc. (INO:NYSE.MKT) and OncoSec Medical Inc. (ONCS:OTCBB), which my colleague Andrew Fein covers, are developing and advancing DNA vaccines with a twist. They are both using electroporation, a small electrical pulse, to differentiate themselves from "plain vanilla" DNA vaccine players.

Inovio is more focused on infectious disease or cancers caused by infectious disease, such as cervical cancer due to human papillomavirus (HPV). Back in September Inovio partnered two preclinical compounds with Roche—one in prostate cancer and one in hepatitis B. OncoSec is more focused on the oncology space, focusing on conditions that have shown huge responses to the immune system, such as melanoma and renal cell carcinoma. Both companies have significant phase 2 data due out in 2014.

TLSR: Inovio's lead candidate, VGX-3100, is in phase 2 for cervical dysplasia or cervical intraepithelial neoplasia (CIN). We are supposed to hear topline efficacy data in mid-2014. The primary endpoint is to convert a CIN grade II or III down to a grade I in nine months. Do you have any thoughts on that?

RB: On the one hand, you could argue that if you're not seeing a response in nine months, you may never see it. But we've learned the hard way, through multiple failed trials, that the immune system revs up at its own pace. The response is patient specific, dependent on what that patient is going through and the other medications she may be on. This is the first time we will be able to evaluate this type of therapy in this kind of indication. Is this the best endpoint? We don't know.

I agree with you that the primary endpoint represents a significant hurdle. However, we will learn a lot from this trial, because it is placebo controlled. And because it's not a registrational (pivotal) study, you can pick your endpoint of choice and continue to evaluate, to see if that is the best endpoint for a phase 3 registrational study. The FDA will, of course, weigh in on this. If the company hits the primary endpoint—if the trial does show people on the vaccine have the conversion—we think that will bode very well for Inovio and for the DNA vaccine space.

TLSR: Early in our conversation you mentioned cancer stem cell technology as one of your subthemes. We are hearing more about these cells as therapeutic targets. Where are we with that?

RB: There is more knowledge every year as to how instrumental these cells are in cancer—not just in forming new tumors, but also in being resistant to cancer therapies that are now in use. Early data seem to suggest that cancer stem cells, while they may be few and far between, are important to target, because otherwise you're all but guaranteeing that the cancer comes back. Will we be seeing new standards of care? If we look into our crystal ball—and if the data that we're seeing right now pan out—we will see cancer stem cell inhibitors, used in conjunction with other therapies, become a new therapeutic approach within the next decade.

TLSR: Do you know or follow Verastem Inc. (VSTM:NASDAQ), which is involved in the cancer stem cell space?

RB: Yes, we know Verastem very well. We also know Boston Biomedical Inc., which has two products in the clinic, one of which is in phase 3 for colorectal cancer. Boston Biomedical was bought out by Osaka, Japan-based Dainippon Sumitomo Pharma Co. Ltd. (DNPUF:OTCPK) in April 2012 for more than $1B for its cancer stem cell inhibitors. Other players in the cancer stem cell space include Stemline Therapeutics Inc. (STML:NASDAQ), which IPOed last January, and a more recent IPO, OncoMed Pharmaceuticals Inc. (OMED:NASDAQ), which went public in July, and recently signed a marquee licensing deal with Celgene.

These companies are going after vastly different targets. Verastem is now in a phase 2/3 trial for malignant pleural mesothelioma with its focal adhesion kinase (FAK) inhibitor, VS-6063 (defactinib). Stemline is in phase 2b studies in pediatric glioma with its interleukin-3 receptor vaccine, SL-701. OncoMed has several molecules in development and several trials ongoing, and big pharma partners are already interested. Besides Celgene, OncoMed also has a partnership with GlaxoSmithKline to develop monoclonal antibodies against cancer stem cells. The company is targeting the Wnt and hedgehog signaling pathways, which have been shown to be involved in not just embryogenesis but also cancer stem cell development.

TLSR: Speaking of the hedgehog pathway, do you follow Curis Inc. (CRIS:NASDAQ)?

RB: Yes. This company was able to get the first-ever hedgehog inhibitor, Erivedge (vismodegib), for advanced basal cell carcinoma, onto the market with its partner Genentech/Roche. The product is being sold worldwide and is generating royalties for Curis. But that's where the story ends with regard to the hedgehog pathway, because all the rights belong to Genentech/Roche. Curis gets to sit back and enjoy the fruits of its labor as sales increase worldwide.

Although Genentech/Roche is developing Erivedge in a whole slew of other indications, Curis is now focused on its small molecule pipeline, looking at both PI3K inhibitors and CUDC-427, an antagonist of "inhibitor of apoptosis protein" (IAP) in phase 1 that it got from Genentech/Roche.

TLSR: In early November a patient in the CUDC-427 trial died. The FDA put a partial clinical hold on the study. IAP is a wonderful target, understanding that tumor cells use IAP proteins to evade apoptosis (natural cell death). How long could a hold like this last?

RB: It's a good question and, frankly, it depends on how fast Curis can get back to the FDA with data and answers to the agency's questions. In most cases, a hold like this would last a couple of months. Barring any sort of back and forth with the FDA, it should be resolved fairly quickly.

It is important to remember that when companies develop therapies for cancer in phase 1 studies, they are typically seeing the worst of the worst—patients with the most advanced disease. My understanding is that the patient who died was already compromised with liver metastases. I believe the company will be able to address any and all concerns with the FDA and resume clinical trials by January 2014.

TLSR: This phase 1 trial only has 36 patients, so I'm thinking it should not take too long to get patients' liver enzyme studies to the FDA.

RB: Yes. Curis just needs to pull it all together and send it to the FDA.

TLSR: You joined H.C. Wainwright in September, and it takes time to perform diligence prior to initiating research on new companies, but you now have three under coverage. They are Keryx Biopharmaceuticals Inc. (KERX:NASDAQ), Spectrum Pharmaceuticals Inc. (SPPI:NASDAQ) and Cell Therapeutics Inc. (CTIC:NASDAQ). All three are rated Buy. Give me a bit of an overview and then speak to these ideas, please.

RB: Spectrum already has revenues, and hopefully will be cash-flow positive again in the coming year. Keryx has already reported positive phase 3 results and is seeking approval for its phosphate binder Zerenex (ferric citrate coordination complex) in chronic kidney disease; we'll have that decision by the middle of next year. Cell Therapeutics is one of several players in the Janus kinase 2 (JAK2) inhibitor space.

TLSR: Go ahead and start with Cell Therapeutics.

RB: Cell Therapeutics is looking for ways to help patients with myeloproliferative neoplasms and, in particular, myelofibrosis (MF).

Before I address Cell Therapeutics, I think it's important to provide a bit of background on the myelofibrosis space. Many of your readers are likely to have heard of Incyte Corp. (INCY:NASDAQ), which has been a wonderful investment over the last five to 10 years. Incyte got the first JAK2 inhibitor for the myelofibrosis indication, Jakafi (ruxolitinib), approved in November 2011. Incyte was the first mover and paved the way clinically, designing the right clinical trials and dealing with the regulatory requirements.

Multiple drugs can be developed for the same indication, and they don't necessarily have to differ in efficacy. They could differ in their side-effect profiles. Physicians already have Jakafi from Incyte, but they want more than one product for myelofibrosis because their patients come in with various side effects. That's where players such as Cell Therapeutics, Geron Corp. (GERN:NASDAQ) and others are trying to make their mark.

The myelofibrosis space has gone through some consolidation. A year ago, smaller-cap companies YM BioSciences Inc. and TargeGen Inc. were involved. YM BioSciences was acquired for $500 million ($500M) by Gilead, which is now developing its MF product in a phase 3 trial. Sanofi SA bought out TargeGen, but unfortunately reported, before its phase 3 results were out, that the FDA had placed a clinical hold on its MF program. Several days later, Sanofi declared that it was stopping development altogether for the product, fedratinib. With the loss of the Sanofi program, this space is now less competitive.

So, what's to prevent Cell Therapeutics from going through the same failure with its novel JAK2/FLT-3 inhibitor, pacritinib? Well, it just secured a partnership deal with Baxter International Inc. (BAX:NYSE), with $60M upfront and a deal worth $362M for copromotional rights in the U.S. As we saw with Sanofi and the failure of fedratinib, a big pharma partnership does not guarantee that Cell Therapeutics' drug will have smooth sailing. But we like to think that the due diligence conducted under a confidential disclosure agreement by Baxter gives the Cell Therapeutics program the right therapeutic and risk profile. After all, Baxter did plunk down $60M. That bodes well for investors, because the kind of diligence a big pharma can perform is much more than we, as normal investors, could ever conduct.

The side effect profile that differentiates Cell Therapeutics' pacritinib from Incyte's Jakafi is that it causes little neutropenia (abnormally low levels of white blood cells), and it has the potential to treat patients who have already low levels of platelets. We never saw that sort of side-effect profile with Sanofi's fedratinib. Importantly, while some neuropathy has been seen with other inhibitors, including Sanofi's, it has not been seen with pacritinib.

We think Cell Therapeutics, with its big-pharma validation, is in the right space with the right type of inhibitor. Clearly, with both of those things going for it and with the therapy already in phase 3, we think the company has a lower risk profile and is an intriguing investment compared to other players.

TLSR: Is the Baxter partnership only for pacritinib?

RB: Yes. Cell Therapeutics also has Pixuvri (pixantrone), for non-Hodgkin's lymphoma (NHL), in phase 3. It's a DNA major groove binder with reduced cardiac toxicity and good efficacy. This product is now being marketed with conditional approval in the European Union.

TLSR: Spectrum has four marketed products, as well as several in development—a phase 3, a phase 2 and a phase 2/3, all in cancers. What are the growth drivers here?

RB: Spectrum has become much more of a revenue story. Last year, it generated north of $200M. Earlier this year it had a hiccup that cut the shares in half. That had to do with an inventory problem for its lead drug, Fusilev (levoleucovorin), originally approved as a rescue therapy to counteract toxic effects of chemo, but now also used in conjunction with 5-fluorouracil for colorectal cancer.

Investors like to think of Spectrum as an oncology-focused hodgepodge of drugs addressing various indications. We like to think about it as a company focused on patient benefits, trying to find drugs that have been discarded but still have significant therapeutic potential. Aside from Fusilev, the other drugs in the Spectrum portfolio include as Zevalin (ibritumomab tiuxetan), a radiotherapeutic antibody for NHL, Folotyn (pralatrexate injection) for peripheral T-cell lymphoma and Marqibo (vinCRIStine sulfate, liposome injection) for Philadelphia chromosome-negative acute lymphoblastic leukemia (ALL), launched in September. All these drugs are approved and provide an obvious and significant benefit for the right patients.

We feel that Spectrum's "shtick," if you will, is to be the champion for these smaller drugs. If you went to the American Society of Hematology (ASH) conference, just held in New Orleans, you saw and heard a whole slew of presentations talking about the therapeutic benefit of Zevalin. But Zevalin, which has been approved since the early 2000s, has never taken off in terms of sales.

Keryx Pharmaceuticals recently reported positive phase 3 data in patients with end-stage renal disease, as well as positive phase 2 data in earlier-stage renal disease patients. Its compound, Zerenex, is a phosphate binder—by itself, this is not exciting, since the space is saturated with phosphate binders. However, Zerenex appears to have several unique qualities that could result in signficant cost savings to the healthcare system and dialysis centers, specifically. The compound appears to not only control the hyperphosphatemia seen in patients with chronic kidney disease, but also has an anemia benefit, resulting in the use of fewer ertythropoietin-stimulating agents and intravenous iron, both of which add a significant burden to the long-term care of these patients. We are confident that the drug will get approval in June 2014, and hopeful that Keryx is acquired by a bigger biotech that wants entry into the space.

TLSR: Do you know TG Therapeutics Inc. (TGTX:NASDAQ)?

RB: Yes. When we talk about the targeted therapeutic space, some of the names that we want to highlight are Curis, TG Therapeutics and MEI Pharma Inc. (MEIP:NASDAQ). TG Therapeutics has a PI3K delta inhibitor, TGR-1202, in phase 1 for hematological cancers. This inhibitor is very similar to Infinity Pharmaceuticals Inc.'s (INFI:NASDAQ) IPI-145, which is in phase 2 development. Preliminary data released at the 2013 ASH meeting suggested that TG Therapeutics' inhibitor has a different side effect profile than Infinity's. The company has also initiated a combination study evaluating TGR-1202 with TGR-1101, the company's enhanced CD20 inhibitor, similar to Gazyva (obinutuzumab; Genentech/Roche), which was recently approved for the treatment of CLL.

TLSR: Thank you so much, Ren. We've covered a lot of ground today.

RB: Yes, we have. I look forward to doing this again in the future.

Dr. Reni Benjamin is a managing director and equity research analyst at H.C. Wainwright & Co. His expertise and coverage focuses on companies in the oncology and stem cell sectors. Benjamin has been ranked among the top analysts for recommendation performance and earnings accuracy by StarMine, has been cited in a variety of sources including The Wall Street Journal, Business Week, Financial Times and Smart Money, and has made appearances on Bloomberg television/radio and CNBC. He authored a chapter in “The Delivery of Regenerative Medicines and Their Impact on Healthcare,” has presented at various regional and international conferences, and has been published in peer-reviewed journals. He currently serves on the UAB School of Health Professions' Deans Advisory Board. Prior to joining H.C. Wainwright, Benjamin was a managing director and senior biotechnology analyst at both Burrill Securities and Rodman & Renshaw. He was also an associate analyst at Needham and Company. Benjamin earned his doctorate from the University of Alabama at Birmingham in biochemistry and molecular genetics by discovering and characterizing a novel gene implicated in germ cell development. He earned a bachelor's degree in biology from Allegheny College.

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1) George S. Mack conducted this interview for The Life Sciences Report and provides services to The Life Sciences Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: Inovio Pharmaceuticals Inc.
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3) Reni Benjamin: I or my family own shares of the following companies mentioned in this interview: None. I personally am or my family is paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
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