By Javier Hasse, Editor
MabVax Therapeutics Holdings, Inc. (NASDAQ:MBVX) is a Nasdaq-traded nano-cap clinical-stage biopharmaceutical company currently working on the development of novel human antibody-based products for the diagnosis and treatment of metastatic solid tumor cancers. Right now, the firm is making progress in addressing unmet medical needs in various hard-to-treat cancers including pancreatic, small cell lung, sarcoma, ovarian, and breast cancer.
The Road To Nasdaq
Shares of MabVax gained more than 25%, from $4.81 a share on the opening on the Nasdaq Capital Market to $6.05 a share, within a matter of days following the start of trading on the Nasdaq, and have since fallen more than 21% from the initial opening when trading began on August 17.
Back in January, the company inked a $10 million loan agreement from Oxford Finance LLC, half of which the company drew at the time of initiating the loan.
In March, the firm commenced a Phase 1 clinical trial evaluating HuMab-5B1 in locally advanced/metastatic adenocarcinoma of the pancreas (PDAC), and has stated it would provide interim data before the end of 2016, and complete the study before the end of 2017.
In April, Paul Resnick, M.D., MBA, was appointed as VP and Chief Business Officer. Prior to joining the MabVax team, Resnick worked for Juventas Therapeutics.
With the help of an underwritten offering of $9.4 million and a 7.4 to 1 reverse split in August the company was able to simultaneously list on the Nasdaq.
After The Listing
On top of its lead antibody development program, HuMab-5B1, the company is conducting two clinical trials with a therapeutic agent (MVT-5873) and a new-generation PET imaging product (MVT-2163). This is aligned with the company’s “detect and destroy” methodology in cancer treatment; MVT-2163 is used to diagnose and identify cancer, MVT-5873 (or a combination therapy) is then used to attack the tumors.
The image below shows how the process works.
Source: MabVax public information
In September, the MabVax shared a report on interim progress of its programs. At the time MVT-5873 was undergoing a phase I clinical trial in patients with pancreatic cancer and other CA19.9 positive malignancies, and was at the stage of enrolling patients and “monitoring patient blood chemistry and hematology for safety as well as disease status using the standard RECIST 1.1 criteria to evaluate tumor response rate and duration of response.”
“Based on assessments conducted with available unaudited data to date from these patients, we are seeing a pharmacokinetic profile for MVT-5873 that is similar to other monoclonal antibody therapeutics. We are actively dosing patients and plan on generating sufficient safety data in this portion of the phase I trial to allow the initiation, during the fourth quarter of this year, of the second part of the phase I trial where MVT-5873 will be administered in front line therapy in combination with a current standard of care chemotherapy,” President and CEO J. David Hansen said. More comprehensive results are expected before the end of the year. Needless to say preliminary data is encouraging.
Although the equity offering provided some cash to the company, it has been estimated that its reserves will not last longer than a year. However, the firm does count on the support of Opko Health Inc. (NASDAQ:OPK), a pretty successful investor in the company that could provide some more cash in the future.
Having said all of this, it should be noted that funding is not secure, and, given its development-stage status, MabVax does not count with cash flow generation capabilities at the time. Investors should also take into account the elevated risk of investing in nano-cap companies.
Update: On Monday, November 7, the United States Patent and Trademark Office (USPTO) issued Patent No. 9,475,874 for the company’s clinical stage HuMab5B1 fully-human monoclonal antibody, which forms the basis for its MVT-5873 and MVT-2163 clinical development programs.
Talking With Management
Small Cap Nation’s Jane King recently had the chance to chat with MabVax CEO David Hansen and Crystal Research Associates Senior Analyst Jeffrey Kraws at the NASDAQ Marketsite in Times Square.
“The only cure for pancreatic cancer today is surgery, and even the best of the new chemotherapy agents are only prolonging life by roughly, on average, three or four months. So, it’s a very difficult area,” Hansen explained. “There are quite a few people working in this area but no one seems to have the breakthrough that everybody is looking for to really change the paradigm for pancreatic cancer.”
So, the Chief Exectuvie continued, MabVax is working with the Memorial Sloan Kettering Cancer Center, Rockefeller University and Heidelberg Pharma in several ways. “We are really trying to work out couple of levels. We are trying to help identify pancreatic cancer, identify its metastatic sites, which has always been a difficult problem, and then provide yet one more treatment for the disease,” he stated, adding that results had been quite encouraging.
Hansen moved on to explain why MabVax’s human antibodies are more effective than “other technologies that bring antibodies forward,” because the body recognizes them as human and is less likely to trigger an immune response.
The pancreatic cancer market is quite crowded and largely unaddressed yet, the CEO concluded. “So it’s a market that needs new therapies… [so] the hurdle that you have to get over in terms of efficacy is fairly low.”
Finally, Kraws shared some comments. “I like the differentiated approach you’re taking, not only worrying about the target and being able to get to the target early for identification, and doing it accurately, but also giving the pharmaceutical companies the ability then to treat and go specifically to that target.”
Other Players In The Field
A few days ago, The Street’s Kat McKerrow shared a look into the immuno-oncology field, one that, she argues, “Signals Big Potential Profits.” The list of “pioneers of this breakthrough form of therapy are household names such as” Novartis AG (ADR) (NYSE:NVS), Bristol-Myers Squibb Co (NYSE:BMY) and Merck & Co., Inc. (NYSE:MRK), she added.
However, given their large size, these big pharma names can’t offer investors the returns smaller companies can. On the other hand, they do offer much lower risk than small-caps.
For those investors that are not risk-averse, McKerrow recommended MabVax, which focuses on an especially hard-to-treat kind of cancer.
“The biggest money from small-cap stocks in the immuno-oncology field will be made from mergers and acquisitions, however,” the author concluded. “Pfizer Inc. (NYSE:PFE), in particular, is on a big acquisition gain. Keep an eye on MabVax Therapeutics and other small-cap companies that could become takeover targets in the near term.”
Considering An Investment
Even though this article does not constitute a recommendation, I do believe in the importance of supporting small biopharmaceutical and biotech companies that focus on treatments for rare or untreated deceases. Large profitable pharmaceutical companies often lack the incentives to develop treatments for populations of patients with unmet needs, especially since price gouging became an issue of public interest.
This does not mean companies should charge as much as they wish for much-needed drugs, but that we should not put all of them in the same bag. There is such a thing as fair and unfair drug prices. But the fact is that developing medicines is expensive, and one of the best ways of supporting this activity is by buying into smaller companies working on not-so-widespread conditions.
As stated above, however, investors should be aware of the risks implied in buying into a nano-cap company. I would advise further due diligence before making any decision.
Disclosures: Javier Hasse holds no interest in any of the securities or entities mentioned above. The statements above do not constitute recommendations.