We are now into the final quarter of 2016, and there looks set to be plenty of activity across the biotech space before the year draws to a close. Companies with a range of target indications have near-term catalysts, but some of the most volatility inducing are rooted in oncology. Here are three companies with fourth quarter catalysts in the cancer space, which we feel have some upside potential.
DelMar Pharmaceuticals Inc (NASDAQ:DMPI)
Let’s kick things off with DelMar Pharmaceuticals Inc (NASDAQ:DMPI). This company is developing a host of different target assets, but by far the most advanced, and the one that we are interested in for the purposes of this discussion, is a brain cancer target called VAL-083. It is a chemotherapy agent, but not in the traditional sense. At least, that is, its mechanism of action differs from standard chemotherapy agents, and it’s this difference that makes it interesting.
The drug is able to form DNA cross-links in tumor cells, and then halt progression of the cell’s replication process at what is called the S phase – the phase at which the DNA in the cell is copied before division. This is fatal for tumor cells, but not for healthy cells (at least not to a particularly high degree). The upside of this is that the drug can be used to target cancers while minimizing toxicity, and in turn, the side effects associated with traditional chemotherapy agents.
There is also the potential for a combination treatment with a type of drug called a topoisomerase inhibitor (TOPO inhibitor). TOPO inhibitors are already pretty widely used in cancer treatment, but their mechanism of action requires that they hold a tumor cells in its S phase in order to do the damage. This requires quite high dosing levels, and sustaining those levels can be toxic for a patient. VAL-083 makes the cell stay at the required stage of replication, so that lower active levels of the inhibitor could potentially be used – efficacy maintained, toxicity reduced.
So what is the catalyst on which we are focusing?
As mentioned, DelMar Pharmaceuticals Inc (NASDAQ:DMPI) is currently investigating VAL-083 in a brain cancer indication, and the company reported some great data earlier this from a phase 2 trial. A post trial meeting with the FDA put in place a framework that will form the base of a pivotal, and this pivotal (assuming all runs smoothly) will form the basis of a new drug application (NDA). We are looking to the initiation of the phase 3 as a major upside catalyst, and we expect it before the close of the year. One to watch.
We take a look at Celldex and Pfizer’s cancer treatments on the next page.