Leukemia, Lymphoma and Thyroid Cancers Will Steeply Rise in 2017 and Beyond

My Disclaimer: I wrote this article myself and am being paid by no one to do so.  I am long Sarepta (SRPT).

Summary

  • The end of the world likely won’t come in a merciful, pain-free moment but, rather, as a slow, grinding, disease plagued testament to the folly of human greed.
  • The ongoing disaster at Fukushima Daiichi is unprecedented and will result in many times more deaths than those experienced since the Chernobyl catastrophe of 1986.
  • Consequently, the one subcategory within the healthcare sector that stands to gain the most, and lose the least, in the coming five years is developmental, blood-cancer oriented, biotechnology.
  • My thesis is predicated upon a rapid escalation of illnesses in the coming years due, in part, to the ongoing effects of the 2011 Fukushima nuclear disaster.
  • While there are many possible investment choices at your fingertips, your focus is best narrowed to those companies which now possess or are developing leukemia or lymphoma assets.

Oh, mercy, mercy me.
Ah, things ain’t what they used to be, no, no, no.
Radiation underground and in the sky;
Animals and birds who live near by are dying.

Oh, mercy, mercy me.
Ah, things ain’t what they used to be.
What about this over crowded land?
How much more abuse from man can she stand?

Songwriters: Marvin Gaye, Marvin P. Gaye

© Sony/ATV Music Publishing LLC 1971

A Message To My Followers

I have struggled mightily to convince myself to return to the Seeking Alpha platform.  2015 was a year of great success there with 3-digit gains in Amarin (AMRN) and Synergy (SGYP), as well as near doubles in Trevena (TRVN) and Ocata (OCAT) and 50% or more gains in Seattle Genetics (SGEN); Nektar (NKTR) and Celldex (CLDX).  I was most proud of dispelling the rumors that check point inhibitors such as  Nivolumab would displace Seattle Genetics’ Adcetris in therapeutic indications where CD-30 malignancies were present.  There were, of course, the disappointments in Zafgen (ZFGN) and NovaBay (NBY).  But even in those instances there were things I got right especially in my take on Avenova’s chances of commercial success while ignoring the outstanding warrant issues and my Thaumaturgical analysis of NovaBay in favor of the former CEO’s gobbledygook.

What I miss most, however, is the recognition that my work on TipRanks generated where I broke into the Top 100 analysts out of 9,000 or more, falling back of course, as I withdrew from the Seeking Alpha platform.  But even in 2016 I accurately predicted the approval of Sarepta’s (SRPT) eteplirsen; the equity price upon approval of $60; and that the FDA would comment on the process thereby sinking the equity in approval’s aftermath.  Regrettably, I will not return to ideation on the Seeking Alpha platform because it simply isn’t me.  I’m different.  Unique in ways that make being published there far too painful an experience in an avocation that offers far too much joy.

That noted, I intend to return to biotech blogging in a very, very big way.  I begin that intrepid endeavor here with what I believe is the most important investment thesis you will ever read.  In the future, I will return to Thaumaturgical analyses of biotechnology stocks which is my strength.  As always, you are encouraged to read my disclaimer and to know that it is the most important part of any document or video I publish.  Get ready for the most exciting time in Scrying Biotech history.  Let’s make some money!

Fukushima is an Existential Threat to Humanity

One of many blueprints to successful investing in this sector is to find a change in either a therapeutic landscape or technology that could provide an opening to a greater opportunity. These usually are discovered at the micro level of analysis but sometimes rise to that of the macro. The ongoing ecological disaster at Fukushima Daiichi is as much a profound investment opportunity as it is an existential threat to humanity. It is, therefore, a macabre key that you can use to unlock future profits. I will leave the discussion of how you can best position yourself within the sector to capitalize to a future date.  But, for now, let’s take a closer look at the ongoing calamity itself.

[A conversation recently overheard at my dental office.] Little Girl: “What’s this for?” [referring to the heavy x-ray apron laid over her chest] Dental Assistant: “This protects your heart from radiation.” Little Girl: “What about my head?” [Nervous laughter]

What I’m about to tell you is going to be troubling. So much so that you might want to change the channel of your focus in order to preserve your peace of mind. If you dare stay with me, I fully expect that many readers will become angry. Some will say that I’ve donned my tinfoil hat. While others will proclaim much ado about nothing. Every statement, however, that I’m about to make is properly sourced. And while we might disagree about the severity involved, Fukushima Daiichi is, nonetheless, a severe blow to human life.

Fact! X-ray machines at your dental office give off far less radiation than they once did. And the biennial frequency of exposure may well be worth the cumulative risk. But Fukushima Daiichi is not the one-off event many of us thought it to be back on that dreadful day in 2011. While there are many causes of cancer including, but not limited to, a genetic predisposition; dietary deficiencies; compromised immune systems; viruses; harmful pollutants both passive and purposefully ingested [carcinogens]; and a proclivity towards a sedentary lifestyle, there is also the increasing exposure to radiological elements transmitted through x-rays; roadside speed guns; and outdated nuclear reactor facilities running long beyond their decommission dates. I found several studies demonstrating, for instance, that children age 0-9 living near one of these nuclear power plants were 24% more likely to die from leukemia. And while no one can draw a direct line between the dots, a difficulty that those in the nuclear power industry profit from through liability insulation, it is equally true that no one can deny the association being made, at least, not credibly.

Three Missing Cores At Least One Of Which Cannot Be Located

We were told three partial meltdowns. Don’t worry about it! Now we know it was a 100% core melt in all three reactors.

Quote attributable to, Dr. Michio Kaku, Theoretical Physicist.

Complete transparency on the part of any public or private entity is impossible. We know, for instance, that governments have, for as long as they’ve existed, hidden away facts relevant to any human or manmade disaster. Wanting to avoid a panic is a justifiable motive. Biotech companies do this every day and are given leeway through a number of legal machinations including the cover of patient privacy [see Zafgen (NASDAQ:ZFGN) and Beloranib].

Consequently, the critiques I’m about to make regarding the lack of information provided us by Tokyo Electric Power Company, hereafter, TEPCO, ought not to be interpreted as judgment. I have none. But you need to pay careful attention to the facts I’m about to share with you because they have profound long-term implications for not only Japan but for the Americas as well.

Fact #1: Fukushima Radiation Levels Are Worse Today Than They’ve Ever Been Before

March 11, 2011 will forever be remembered by the citizens of Japan as a day of terror when a 9.0 earthquake located 80 miles offshore and lasting for over 5 consecutive minutes rocked the entire nation. Hours later a massive tsunami had washed away coastal villages and instigated a nuclear power plant disaster unquantifiable in magnitude. Within 24 hours, officials of the federal government and TEPCO had declared the damage to be contained. They further reported that there had only been 3 partial meltdowns at plants 1, 2 and 3, a story they recanted 2 months later.

The situation is now, in many ways, as bad as it has ever been. Of the 4 plants located at Daiichi, plant 4 was able to be shut down. In 2014, spent fuel rods coated with fissionable materials and located in a pool of draining water suspended precariously 50 feet above ground for easy access were removed and placed in a safer location. Plants 1, 2, and 3, however, remain completely unstable. Their fuel rods remain inaccessible. But it is the missing cores in each of these reactors that are causing the most concern.

In Building 2, TEPCO has authorized and deployed the use of several remote controlled robots at a cost in excess of $3m each to find them. Unfortunately, the environment is so hot that the circuitry in the first which looked like a boat fried within an hour and the second which looked like a scorpion was made useless within 2 hours but not before a 6′ gash was discovered in the steel containment structure likely caused by a core burn through. If true, that core is now wedged within the containment floor or resides somewhere on the water table poisoning the Pacific Ocean with a daily dose of cesium and strontium.

In a February 8, 2017 FOX News Insider report, Adam Housley lent credence to just how hot these reactors are by indicating that radiation levels are now being detected at 530 sieverts per hour the highest since 2011. The brave men and women of TEPCO who position and control these robots remotely from inside the buildings operate in shifts of one hour each because it only takes 4 sieverts to kill a handful of people.

Fact #2: Millions Of Gallons Of Radiated Water Have No Place To Go But Back Into The Ocean

When Fukushima Daiichi lost power on that horrifying day, they lost the ability to cool the reactors. So, instead, they began flushing the buildings with sea water. Because sea water contains salt, the pumps used to circulate the water became inoperable. Since that time, approximately 300 to 400 tons of water has been cascaded downhill and into the containment structures of plants 1, 2 and 3 on a daily basis. What doesn’t flow into the Pacific ocean is then pumped out into containment structures made up of steel segments isolated with rubber gaskets. In 2016, there were over a thousand of these barrels containing over 900k tons of radioactive water occupying most of the available land on the hillside property. More durable long-term structures have been built but TEPCO is requesting that they be allowed to bury some of those tanks in the Pacific Ocean in order to complete a process that could take 40-100 years according to experts at a cost of $300bn to taxpayers.

Fact #3: Wind And Ocean Currents Sweep Fukushima Radiation Directly Toward North America

The weeks that followed in the aftermath of the disaster at Fukushima were horrific in their own right. Onshore winds caused for radiation to blow towards densely populated Tokyo. Cooling system failures at the plant were reported on the Sunday following Friday’s debacle and another hydrogen explosion was reported at the plant on Monday. Then, another state of emergency was declared when 3 nuclear reactor units to the northeast of Fukushima were reported leaking and near meltdown at the Onagawa plant.

Sadly, Japan was entering a period where onshore flows were more common thereby endangering more of the inland population. Still, the prevailing wind patterns were, as they always have been, toward the east.  Much of the airborne isotopes fell over the Pacific ocean on their 12-day voyage to Seattle and Los Angeles but the U.S. government reportedly stopped recording airborne radiation levels during that period of time. In fact, it gave no warning to its people that the radiation was about to fall unlike, for instance, the U.K. government which did.

The opening graphic in this article features a map issued by the National Oceanic and Atmospheric Administration in the upper left hand corner depicting the flow of underwater currents from Japan outward toward both North and South America. What is clearly visible is that the land of North America is first in line by sea and by air to be assaulted by Fukushima’s army of radiation. That has already occurred. And while those levels were far below those considered harmful by way of direct exposure that belies a greater truth where the Pacific ocean is concerned as Dr. Helen Caldicott explains.

Radioactive iodine 129 it’s half-life is 17 million years, plus strontium, plus cesium, plus tritium and I could go on and on. If it gets into the sea, the algae concentrated hundreds of times, then the crustaceans concentrated hundreds of times, then the little fish, then the big fish, then us – because we stand at the apex of the food chain. You can’t taste these radioactive elements. You can’t see them. And you can’t smell them. They’re silent.

Long before elevated levels of radiation were discovered in bluefin tuna and sockeye salmon, the U.S. government had already set about to raise the acceptable levels of radiation exposure back in 2013. The problem is that all radiation within the human body accumulates over time. And all forms of radiation are naturally absorbed into the body. The thyroid, for instance, can’t distinguish between regular iodine and radioactive iodine and will take up whichever chemical is presented to it. It is believed that half of all Americans are iodine deficient. Consequently, an uptick in thyroid cancers is one of the first after effects of a nuclear event.  Cesium 137 appears to the muscles in the same manner that potassium does and so on.

Some people will tell you that the 1986 Chernobyl nuclear disaster in the then Soviet Union was far worse than Fukushima because of the 9-day graphite fire that released large doses of radiation into the atmosphere. The weakness of this argument twofold.  First, Chernobyl was located in the vast remoteness of the countryside.  Fukushima is less that 150 miles from one of the most populous cities in the world – Tokyo.   Second, Chernobyl was contained, a word I find grossly exaggerated as a descriptor, on land in a relatively short period of time. It took nearly 600k heroic citizens to dump concrete and lime over the grounds in 10 minute intervals followed by the construction of a concrete and steel dome which has since been replaced to accomplish this. To date, there is no plan to fully contain Fukushima which remains a simultaneous source of oceanic heating and poisoning.

Bizarre incidents of sea-lion starvation have been reported in which NOAA failed to test for either pollutants or radiation as causal factors but, instead, suggested that mothers had to forage further from their offspring to find food due to warmer ocean currents. Fukushima residents on land have been attacked by wild boars which used to be a source of meat on the table but are now carrying doses of radioactive contamination 300-times in excess of acceptable limits. Scientific studies have been conducted to fathom the depth of the problem. And recently, forest fires on the hillsides above Fukushima have released radioactive particles back into the air.

The Elephant In The Room

No one can avoid the obvious – that Fukushima will remain a problem as long as the cores in reactors 1, 2 and 3 remain on the lam. But the real problem that no one wants to talk about is the vulnerability of the site to further earthquake damage which would almost certainly result in a spent fuel rod fire that would make Chernobyl seem like child’s play at a family picknic not to mention 1-million tons of radioactive water in those storage tanks being flushed out to sea. I have little doubt that the U.S. military presence in the China Sea has something to do with the additional concern that Kim Jong Un might target those reactors with conventional ballistic missiles that he already possesses. And the threat of nuclear war looms large in that region as well.

But no matter how one assesses the threat level the truth remains that the worldwide increase of airborne and underwater nuclear contamination is ongoing and rising. Whether related to wars in the Middle East; North Korea’s nuclear tests; failing nuclear power facilities; or the ongoing crisis in Japan – the atmosphere in this world is becoming more toxic every day. And the potential for nuclear power facility meltdowns is increasing as well. The precarious GE design of the Fukushima facility with those suspended fuel rod ponds has been duplicated at 23 other sites worldwide.

Our Investment Thesis Is Simple

We’ll start seeing lung cancer, leukemia, I think, two to five years from now. And then solid cancers will start appearing 15, 16, to 17 years later.

Quote attributable to Dr. Helen Caldicott and previously sourced.

For the people of Japan, there’s no way of getting around this. There are already increasing incidents of birth defects – the pictures of which are too disturbing for me to show you. And while future death rates attributed to cancer from Chernobyl by the UN organization UNSCEAR come in at a modest 3.94k in all of Europe, private scientific organizations not influenced by the nuclear industry peg future incident rates at 16k cases of thyroid cancer and 25k cases of other cancers. Fukushima becomes an added concern with the more lethal dimension of oceanic contamination.

I believe, as do many of my colleagues, that there will be at least a hundred-thousand, and as many as one-million or more cancers in Japan’s future as a result of this meltdown.

Quote attributable to: Arnie Gundersen, FaireWinds Energy Education

I encourage you to view the video linked above and published on YouTube by Mr. Gundersen who is an engineer with over 44 years of experience in the nuclear industry.  Pay special attention to the slides he presents which demonstrate the amount of airborne radiation that the people of Tokyo and Seattle were subject to.  We already know that the incident rate of childhood leukemia has increased by 35% since 1975. Sharp increases in anecdotal incident rates of leukemias in small towns around the world since Fukushima have been reported. And it should be lost on no one that over-all healthcare costs in the U.S. have risen by the most in 34 years.

In Conclusion

Add this all up and we have a compelling case for investment in existing companies with approved therapies in hematological spaces and in developmental enterprises that will give us the new therapies of the future that patients and, possibly even, governments will demand.  In Japan alone, I believe we will seen incident rates of leukemia increase not incrementally but, rather, by multiples.  In a future video, I will show you a company that I’m moving a good deal of my discretionary biotech funds into for the next three to six months that fits this profile.

Always be well…

Additional disclosure: Any information or opinion expressed herein may not be true, accurate or correct and it does not constitute a suggestion to buy, sell, hold or adopt any investment strategy for this stock or any stock that may be mentioned. Reliance upon information in this article is at the sole discretion of the reader. The sole purpose of my article is to entertain by providing an opinion and information the accuracy of which is as good as the public sources it was derived from. Do not act on anything I have written. Rather, do your own due diligence and consult a professional investment advisor before making any investment decision. Acting on what any one writer has imparted to you is foolish at best. I have no better access to resources than you do. I sometimes make mistakes. And there are a myriad of things, which can happen in lieu of any forward-looking statement I have made. Any stock featured or mentioned in an article I compose is subject to all manner of influences, which can change its value in dramatic fashion both higher and lower. These events can be of a wide variety – news related; managerial decisions; trial failures; stock manipulations; and so on. I make every effort to declare positions I have in stocks I cover or mention in an article but reserve the right to move in and out of said investments at my own discretion based upon the wisdom of doing so. I implore you to do your own due diligence and invest at your own considerable risk attaining the just reward your efforts have wrought. Additionally, if you are aware of any misstatements of fact contained in this or any article I have written, you are encouraged to email me immediately at the link given in the header above. Always be well…

A Message To Spiro Rombotis – CEO Cyclacel Pharmaceuticals

I am long 2,036 shares of CYCC and adding.

Dear Mr. Rombotis,

I feel compelled to share with you a Thaumaturgical analysis I conducted on CYCC today, Friday, April 21st 2017.  The messaging in this analysis is more important for you than it is for shareholders.  And by “shareholders” I don’t mean any investment bank you work with, hedge fund(s) or institutional equity holders (which are coming in).  I mean retail investors such as myself.

My guides are telling me that this is a new beginning for the company.  The importance of this new beginning can’t be understated.  It has sparked a genuine interest in the company.  And while Adam Feuerstein, with motives known only to himself, has derided and derailed this fresh start it, nonetheless, is a very real phenomenon worth building upon.

At the present time, we see that you are troubled.  Your tendency, as it has been in the past, is to pull away into yourself as a means of managing your emotions.  You must avoid this.  But the only way to do this successfully is to think of your retail shareholders first, last and always.  And this is clearly not what you have done in the past.

At the present time, you are receiving your first genuine partnership interest revolving around CYC065.  Big pharma knows that you are in a distressed financial situation not as it pertains to your runway of cash under current operating conditions but as it concerns any ambitions you have for placing CYC065 into a large enough Phase-2 trial to engage the FDA in Accelerated Approval discussions on a positive outcome.  Consequently, the offers are, and will be, far below what you would hope to entertain.  Regardless, you must not become depressed by this to the point of withdraw or becoming jaded.  To keep the proper emotional disposition, keep your arguments focused on what’s best for your shareholders.  You should note that this is what you’ll be hearing from your over fed counterparts.  And while it comes across as disingenuous it is effective.

In Q3 you will be fielding offers from two parties.  You must be careful not to play one off against the other but, rather, to treat each as an opportunity to gain clarity on mutual benefit.  A large upfront cash payment will likely not be proffered given the fact that a smaller amount will be viewed by the supplicant as more than sufficient given your circumstances.  A way around this would be to place the backend milestones in a near-term position.  Instead of a $300m upfront payment, $100m might be sufficient if the first backend milestone were, for instance, a $40m Phase-2 payment upon first patient dosed.  The prospective partner will be able to tell his or her shareholders that this deal was a steal given the low upfront payment while you’ll be able to tell us that more money will be realized in a shorter period of time.

Letting interested parties know that getting CYC140 into the clinic quickly and onto a large Phase-2 study is of the utmost importance will allow you to get more than what you’ll need.  And an equity raise at a larger market-cap of say $80 to a $100m on news of this deal for CYC065 will add even more operating capital to your reserves.

And finally, it’s important for me to add the following caveat.  Make a break with the past!  Do not play data mining games!  This will only add to an already poor image in the retail investment community and solicit Feuerstein’s added critique.  Reporting the DNA Damage Response data from Phase-2 is fine.  But if that data is, in fact, so-so, let both sapacitabine and seliciclib go.  Focus all of your efforts and communications on the bright future you know in your heart that we possess.

This is the moment that will define you forever.

Always be well…

Michael Webb

Adam Feuerstein Foments Fear Pitching CYCC Into Beggars Hell

I am long, Cyclacel Pharmaceuticals (CYCC).

“The oldest and strongest emotion of mankind is fear, and the oldest and strongest kind of fear is fear of the unknown.”  H. P. Lovecraft – Author

It is no small irony that the Phobos of biotech has demanded that the SEC step in to regulate all other social media voices over the meteoric rise in micro-cap stock prices.  From his dual vantage points on Twitter with over 50 thousand followers, and lofty bully pulpit of The (darkening) Street, it would seem far easier for Adam Feuerstein to see the bigger picture that includes his own disproportionate influence over potential bag holders.  That, however, would require turning his gaze inward a perspective that few urchins of the dark underbelly of Wall Street possess.   It’s not surprising then that uber analyst Feuerstein is equally unwilling to identify the greater and more frequent malady of downside price manipulation that is far easier to accomplish with roughly the same skill set of lies and distortions.

The Hidden Bliss of Willful Ignorance

Now, you can’t foment.  That’s a violation of…  You can’t foment.  You can’t create, yourself, an impression that a stock’s down.  But, you do it anyway because the SEC doesn’t understand it.  So, I mean, that’s the only sense that I would say it’s illegal.  But a hedge fund that’s not up a lot really has to do a lot now to save itself.

Jim Cramer – Executive Editor of The Street

When Feuerstein labelled Cyclacel Pharmaceuticals “a zero” and it’s position holders as “trading worthless pieces of paper” he knew the devastating effects his derogatory commentary would have on the stock price because he’d done the same thing seven months prior, albeit, with several strands of justification and far less fear mongering.  And while these threads hadn’t become fibrous wisps over the course of two changing seasons Feuerstein had to willfully ignore the avalanche of mounting preclinical evidence that was piling up regarding Cyclacel’s Phase-1 CDK2/9 Inhibitor, CYC065, if only because investors weren’t.  Consequently, Feuerstein rummaged through his old articles to solicit a tired narrative about a company that, seemingly, unbeknownst to him was in transformation.  This absence of a fresh perspective frequently substitutes due diligence with a cocky, careless disregard of the present day facts.

Let me state from the outset that I agree with Mr. Feuerstein’s historical assessment of the company and while I would phrase it a bit differently, Cyclacel has been both adept at conducting equity raises and deceptive about the timing of those events.  And their lead drug candidate, sapacitabine, an underpowered nucleotide analog, failed miserably in a late stage trial, the reported outcome of which was delayed whilst the company tapped their ATM agreement for roughly $6.5m in badly needed cash.  It then goes without saying that I’m no fan of Cyclacel’s executive leadership though I have, and do now, own shares.  Fixing one’s sight on past performance alone, however, is no way to navigate the ever changing landscape of a biotechnology equity.

“The ‘Dumb & Dumber’ Cyclacel Investor”

It was in August of 2016 that Feuerstein penned his last article on Cyclacel the title of which referred to equity holders as dumb and dumber.  In my own article entitled: Cyclacel Pharmaceuticals – What You Don’t Know, I didn’t disagree with most of his assessments at least as they pertained to past performance.  And any shareholder that thought sapacitabine’s SEAMLESS trial had more that a lottery ticket chance of success hadn’t read my extensive coverage on Seeking Alpha which included numerous misgivings about apples to oranges comparisons of past trials and the almost ridiculous SPA requirement of a 27.5% beat of decitabine in the active arm.  That noted, I had two strong disagreements with Feuerstein’s presentation.

Firstly, his use of pejoratives to describe corporate executives who lie, cheat and distort information germane to shareholder concerns is forgivable.  I’ve rightfully referred to many of them as psychopaths for shedding one’s conscience seems to be requisite for ascension to the role of CEO.  But calling shareholders “Dumb and Dumber” is another thing altogether.  It’s designed to suspend critical thinking by shaming someone into selling their shares.  When you read a Feuerstein missive on his home base of The Street, you’ll rarely find links to trial studies, SEC documentations or press releases.  He’s long on bloviating and short on information.  And this article was no exception.

Secondly, Feuerstein went only half way down the clinical pipeline and did a poor job of even that.  He continues to ignore the fact that CYC065, Cyclacel’s second generation CDK2/9 Inhibitor has been in a Phase-1 dose escalation study since September of 2015.  In fact, he didn’t mention it at all!  It has now reached the sixth level of dosing without incident and is, according to the company, 40 times more powerful that seliciclib which Feuerstein did deride as “not worth anything”.  Interestingly, it too has been in a Phase-1 study that reported promising results in June of 2016 shortly before Feuerstein wrote his disparaging remarks.  In that trial, seliciclib is combined with sapacitabine to treat patients with advanced solid tumors.  It has since been expanded to treat a specific subgroup of patients that were more amenable to treatment.

Developmental Biotechnology Companies Are Valued By Promise Alone

Immature and struggling enterprises that fail one day often succeed the next after a late stage candidate steps front and center or an altogether new compound is bought and developed.  Regado Biosciences (RGDO) which later became Tobira (TBRA) would be a perfect example of the latter while Cyclacel, with time, might prove itself to be a stunning example of the former.  This is not to say that Tobira ever had a commercial therapeutic.  It didn’t!  That’s the very definition of the word “developmental” – non-commercial.  In fact, its acquired candidate failed a phase-2 study.  But the therapeutic market size was large enough to warrant an approximate $150m market-cap (7x the size of CYCC’s today) and Allergan paid a 500% premium to buy the company on a gamble that it might succeed.  In developmental biotech the word “might” can and often does carry a lofty price tag.

There is a middle ground between possible and probable, between might and maybe, which is occupied by the word plausible and investors appreciate that.  So, when study group after study group added to a mounting pile of evidence suggesting efficacy in one of oncology’s prized MOAs investors logically acknowledged that Cyclacel’s $16m market-cap was woefully low.  A company with a promising CDK2/9-Inhibitor in the top therapeutic landscape of oncology warrants a market-cap far in excess of the one Cyclacel sports today.  After all, Pfizer’s (PFE) CDK-Inhibitor, Ibrance, approved as recently as 2015, is expected to bring in $3.5bn in 2017 revenues.  And once investors made those logical connections, Feuerstein stepped in to quash that awakening.  And he did so in willful violation of SEC rules regarding making false statement to promulgate false impressions.  But why?

Qui Bono?  Who Benefits?

Allow me to state with confidence that Adam Feuerstein holds no positions himself in any of the stocks he writes about.  This provides a veil of objectivity that reinforces the idea of his independence from subjective influence.  It does not, however, mitigate the possibility of external bias.  And this is what people need to consider when Feuerstein renders his harsh verdicts on the equities he covers.  What other people perceive of as courage in his cutting remarks is nothing more from my vantage point than complete indemnification from libel lawsuits afforded to him by his employer.  I’m running a great risk writing this article of ruffling Feuerstein’s plumage and incurring his renowned wrath.  That, however, is a risk that someone, somewhere, and at some time needs to take to stop this manipulation of micro-cap equities from taking place.  I am now ready to take that stand!

To determine a person’s motives we have to ask the question: who benefits from their actions?  I found the appearance of Feuerstein on Benzinga’s Premarket Prep to be extremely enlightening.  The link I posted also contains an audio file in which two Benzinga analysts on BZ TV talk about AF’s earlier remarks.  Here’s a quote from Brent Slava.

So, Adam is probably the top biotech reporter out there. He’s at The Street right now. He has a ton of connections. He’s probably the most connected biotech reporter out there right now. So, he’s a source you absolutely need to listen to if you’re in the biotech space.

So whom, you might ask, is Adam connected to?  Well, for one, hedge fund operators.  His mentor at The Street, Jim Cramer is one of those larger than life personalities that populate the airwaves of the main stream media and got his start in that capacity.  And since many of the editors at Seeking Alpha have come over from The Street and have an array of friendships with prominent hedge fund managers contributing on that platform, you can bet Feuerstein is connected in that way as well.  Feuerstein has hinted at connections with the FDA.  But in the Premarket Prep show, Feuerstein also revealed his connections to investment bankers.  He cautioned that a lot of the micro-cap run-ups in value that we see today are followed by add-on offerings at huge discounts to the going price.  What he didn’t tell you is that a lot of these micro-caps like Cyclacel are deserving of larger market-caps that will give them the more favorable financing terms that they need to remain viable.  Deserving because their pipeline candidates are succeeding and generating a logical response from the investment community.  By capitulating the stock price with falsehoods that foment fear, Feuerstein holds them in bondage to stock purchase and sale agreements that are highly dilutive to shareholder value but do feed the lower end of the investment bank food chain.

What happens when you get caught buying this thing and then the company announces an offering?  You know, you’re caught and then the offering comes in at a discount and you’re caught owning this thing much higher.  So, I think, what I worry about, what I do see is that a lot of people sort of just start making a lot of fundamental justifications for why these stocks deserve to be trading higher.

Adam Feuerstein – Benzinga Premarket Prep – April 5th 2017

Those investors that Feuerstein professes concern for are now caught.  But not because of an offering announced at a discount but because the narrative he created – that the company and stock have no value created a fearful sell-off that has many of them stranded at $8, $9, or even $10 a share.  It could very well be that Feuerstein’s connectedness to biotech companies, investment banks and hedge funds had nothing at all to do with his commentary.  And truthfully, it doesn’t have to!  The commentary itself is what is wrong and stands on its own as the single force driving the downward trajectory of the equity.

Feuerstein is Right!  But for the Wrong Reason

The question also has to be asked: why would Adam use his social media platform on Twitter to tank Cyclacel’s stock rather than allow for a gradual slowing of the upward trend that would have provided access to logical and profitable exit points?  What Feuerstein did was to yell fire in a crowded theater when there wasn’t any.  News, validated by research professionals and presented at respected oncology conferences drove the upward excitement.  And the very investors he claims to be “worried about” are indeed now caught and stranded at those higher price points.  And while Feuerstein seemed to dial back his charges of social media manipulation of Cyclacel’s price on Benzinga’s premarket show, none of the hosts had the courage to ask him why his own remarks, being the most feared voice in biotech, should have fallen out of the reach of his own regulatory concerns.

The SEC should step in and investigate whether or not Feuerstein’s claims that CYCC is “a zero” having no value is anything other than a blatant lie given that Cyclacel in its entire history as a developmental biotech has never been valued at zero.  In fact, over the past 52 weeks, CYCC has been valued at between $3.05 and $10.50 a share.  And while I’ve retained my holdings acquired prior to Feuerstein’s calculated tirade that included those follow on discussions on Benzinga, my position has been damaged as the company’s quest for relevance has been significantly compromised by Feuerstein’s false claim that we “are trading worthless pieces of paper.”

This week will mark the first time in my four year biotech investment career that I will have completed the filing of a SEC complaint against Mr. Feuerstein for blatant stock price manipulation.  It won’t be the first time I’ve seen it.  But, rather, the first time I’ve been directly effected by it.  On Seeking Alpha, for instance, I witnessed two hedge fund managers manipulate the price of a nano-cap biotech equity all while investing millions of dollars in the company.  My investment of $10k in Cyclacel may seem laughable to many of you who read this article.  But I worked 10 to 14 hours a day, 5 to 7 days a week as a bus driver to make that happen.  And each dollar means many times more to me than it will to any hedge fund manager anywhere.

Will it do Any Good?

I doubt it!  You see after hearing Jim Cramer’s very public confession of stock manipulation in the video linked to above, I have resolved that the SEC fully approves of Cramer’s tactics and those of his counterpart on The Street.  The system works for those who belong in jail.  It does not work for hard working, circumspect investors like you and me.

Always be well…

 

Tap, Tap, Tap Cyclacel Does It Again

In an August 22nd article entitled: Cyclacel Pharmaceuticals: What You Don’t Know, I mused upon the motivations behind Andrew Fein’s $173 price target on an equity that was trading for a scant $4.48 on the day prior to publication.  Was this based upon the notion conveyed by Cyclacel’s controversial CEO Spiro Rombotis in a promotional video found here that indicated a slower than expected evolution of the trial since enrollment had closed in December of 2014?  Or was this the precursor to tapping an ATM agreement with FBR Capital Markets & Co struck in June?  The answer came within the Q3 2016 Report, issued on November 14th, which showed that Cyclacel had tapped that agreement for $5m.  That’s right!  $5M.  And then again in October for an additional $1.5m bringing their cash on hand to $19.5m at the time of publication.  This for a company sporting a market-cap today of roughly $17M according to Seeking Alpha and $12m according to Yahoo.  I suspect that the former is more accurate as they’re likely taking into account the added and highly dilutive shares.

I don’t know why I’m susceptible to falling into the retail investor trap that is Cyclacel Pharmaceuticals time and again but I am.  And it’s becoming a very expensive habit.  It’s undoubtedly one of the more difficult stocks to read.  And August 22nd was no exception.  We had Andrew Fein valuing the equity at $60 per share without (SEAMLESS) success.  I too found Cyclacel’s developmental pipeline to be underrated.  And the possibility remains that sapacitabine’s historically long tail at the end of the KM curve could still allow for an epic Hail Mary result but management’s greedy sale of shares tells a different story.  As disappointing as the fire sale has been to the value of our holdings, even more frustrating for me was viewing that video now posted on the Cyclacel website.  Nowhere within the 6m:52s conversation is any mention of the DSMB assessment that the study’s futility boundary had already been crossed indicating a likely failure to meet the 27.5% improvement in overall survival.  That makes the video not only promotional but highly deceptive as well.

At one point in the conversation, the staggeringly uninformed host recaps sapacitabine’s strengths by stating: “So, no more infusion therapy, caregivers are freed up, patients are in-home, um, fantastic technology.”  To which Spiro Rombotis responds: “Well, we think so.”  But there’s a problem.  The sapacitabine only arm was dropped in this trial due to, most likely, lack of efficacy.  The active arm is composed of alternating infusions with decitabine.  Consequently, there would be infusions upon approval and patients would be in home half of the time over the course of their treatment.  The drug could be given on its own but that would be done without proof of efficacy as a standalone therapy.  What bothers me is that Rombotis makes no effort to be forthcoming by correcting the mistaken perception.

If you want a good look at what the hidden hand of ATM dilutions looks like, feast your eyes on this screen grab featuring a typical day’s trading of CYCC.

Note the two large volume spikes just prior to noon and just after 3 PM.  They are most likely the handiwork of a value diluting investment banker and his desperate partner.  And just below is what the Cyclacel chart looked like on the day of Fein’s enthusiastic appraisal and after the ensuing punishment inflicted on us all by way of the ATM agreement.  If you’re wondering why Cyclacel resorted to this retail investor unfriendly method of financing its operations you need only ask yourself who would subscribe to a public offering of a company with a pivotal study that was sure to read out poorly.

Wrapping it up, I’m underwater (again) on CYCC and have no choice but to hold.  The chance of SEAMLESS success is about 100k -1 given the amount of money the company has raised.  I have a small amount of dry powdered that I’d be tempted to wager on the day of published failure but the ATM facility would, no doubt, leap into action were the equity to jump off the floor thereby mitigating any chance I’d have to recover my losses.  And since CYCC’s market-cap has swollen by nearly 50% since before this all began, Fein’s price target would of necessity be cut by at least a third or more.  Therefore, the upside is downsized, though it remains significant.  But only, however, if the company starts to think of its shareholders well being.

Always be well…

Additional disclosure: Any information or opinion expressed herein may not be true, accurate or correct and it does not constitute any suggestion to buy, sell, hold or adopt any investment strategy for this stock or any stock that may be mentioned. Reliance upon information in this article is at the sole discretion of the reader. The sole purpose of my article is to entertain by providing information, the accuracy of which is as good as the public sources it was derived from. Do not act on anything I have written. Rather, do your own due diligence and consult an investment professional before making any investment decision. Acting on what any one writer, including me has imparted to you is foolish at best. I have no better access to resources or gift of opinion formulation than you do. I sometimes make mistakes. There are a myriad of things, which can happen in lieu of any forward-looking statement I have made. Any stock featured or mentioned in an article I compose is subject to all manner of influences, which can change its value in dramatic fashion upwards or downwards. These events can be of a wide variety not limited to news-related occurrences, managerial decisions, trial failures, stock manipulations and so on. I make every effort to declare positions I have in stocks I cover or mention in an article but reserve the right to move in and out of said investments at my own discretion based upon the wisdom of doing so. I implore you to do your own due diligence, invest at your own considerable risk attaining the just reward your efforts have wrought.

Madness

ava-in-the-black-and-white-room

I have no position in any of the stocks mentioned but may initiate a position in Sarepta (SRPT) in the next 72 hours.

Love

I wish I could help you to understand what it is I’m experiencing.  Or, perhaps, that would be to burden you unnecessarily.  Who wants to be the one to awaken someone from their slumber?  To intrude upon their self-imposed sleep.

I’ve failed miserably as an analyst.  But I was meant to fail.  For it is through the exertion of our futile efforts that we at last abandon all sense of self direction.  Amidst the cacophony of greed that is the biotechnology sector of the stock market one’s voice cannot possibly be heard.  If there’s one thing that trumps Love it is agenda.  It appears that the carefully laid plans of men are no match for the consciousness of Christ Jesus.  But appearances are, as they say, deceiving.

After recoiling in disgust from the hedge fund dominated platform of Seeking Alpha, I sought refuge in the salt mines of the Yahoo Message boards.  The very same venue that had caused me so much pain in the past.  The pain of betrayal.  The pain of realizing the weakness of men.  Only my naiveté could possibly lead me back to such misery.  But I retraced these steps of innocence time and time again.  I had to.  If only to learn that the same vested interests control the flow of communication there too.  It seems that the vested agents of finance are everywhere to be found.

It would be nothing more than folly to recite what it is that I said on the Sarepta (SRPT) message board.  But a wounded ego and loss of memory where the log in my own eye is lodged compels me to do so.

My Original Thesis

On Seeking Alpha I told you that Biomarin’s Kydrisa, or drisapersen, would be rejected at adcom.  This formed the basis of my investment thesis.  Namely, that one of these two drugs – eteplirsen or drisapersen would have to be approved.  And since drisapersen was not, eteplirsen would be.  Parenthetically it’s worth noting that the much reviled Ronald Farkas chaired the drisapersen adcom just as he did the eteplirsen debacle but with no complaints from the YMB crowd.

After Adcom

I stopped authoring content on Seeking Alpha following the publication of that article.  Amidst the ripples of negativity infusing that bureaucratic fiasco, I changed my investment thesis to: the FDA would have to approve the eteplirsen application due to the enormous political pressures exerted by DMD professionals; U.S. Congressmen (most notably Senator Marco Rubio of Florida); patient advocates (especially their parents); and because the performance of FDA representatives at adcom was so deplorable as to dissuade opening the door to public censure.  Board participants clung to the scientific precepts contained in the company NDA documentation.

A Warning

Although I repeatedly wrote of “disappointment” attending to Accelerated Approval which arrived in the most decelerated of fashions, I did so with the unpopular caveat that the FDA would include something in the wording of approval to discourage a rampant rise in the stock price.  This cautionary proviso of a poison pill, if you will,  brought upon me the universal disdain of board participants who sought to marginalize my effect on the platform viewership.  Sadly, it worked.  Several contributors to the conversation asserted that formal approval wasn’t typically accompanied by agency appraisals on the application but was, rather, a straightforward yes or no.

What I Stated

I repeated the following points based upon my Thaumaturgical analysis.

  • Approval would be disappointing to those with high expectations.
  • The share price upon approval would be between $45 and $60.
  • There would be something discouraging in the FDA official press release.

What Happened

The application was approved.  In that press release, the FDA unexpectedly required a confirmatory study in exon-51 that was not named (PROMOVI) or (ESSENCE).  It was these latter two trials that board participants focused upon.  The former, was believed to be sufficient by some as it was already designated conformational, and the latter, was thought to be the outgrowth of a cooperative effort between the agency and the applicant.  Neither proved to be true.  And it was this added burden assigned that kept the stock price from a sharp ascension that many believed to be inevitable.

If that wasn’t bad enough, the agency also formally requested that the study which had formed the bedrock of justification for scientific consideration of approval be invalidated.  For the most part, this latest jab at the company’s integrity has been ignored by the investment community.

What’s Next

On the conscious plane of thought, I’m writing this to alert you to an opportunity.  I’ve already made a good deal of money on this equity, albeit, while diminishing my holdings so as to reduce my risk exposure.  That said, I’ll be looking to reinitiate a position in light of my new findings.  Yes, the company is now at a hefty $3bn market capitalization.  But the recent equity raise participants, in at just below $60 per share, are due a boost up for their display of loyalty.  And I believe they’ll get it.  The source of this catalyst, or these catalysts, could come from the following quarters.

  • A positive readout from the Phase-1 flu study.
  • A European approval or talk of interest from the EU.
  • An ex-U.S. marketing partnership.  Yes, they’ve played this down but that’s a sure sign of interest in consummation.
  • A sale of the Priority Review Voucher, or PRV.  This was granted shortly after approval was given.  A PRV voucher is a highly prized asset that grants a reduced time frame of consideration relative to a commercial application.  Many are bought by big pharma companies not to take advantage of their intrinsic worth but to keep them from falling into the hands of companies with competing products to their own marketed drugs.
  • And finally, a big pharma buyout.  Yes, every desperate retail investor dreams of an acquisition that will double or triple their stake in an equity despite the fact that most of these occur at a modest premium to the previous days closing price (Allegan’s recent purchase of Tobira (TBRA) being a notable exception).  But in the case of Sarepta, the likelihood is greater if only because their product, Exondy51, will bring in an immediate flow of uncontested cash revenue.  That PRV voucher becomes an added bonus.

pents01rx

In Conclusion

I honestly believe that Sarepta will release stock tickling news this very morning.  It’s only fitting given the fact that I cashed out for a sizeable gain while other loyalist hung in there in my absence.  If that proves not to be the case, I’ll reinitiate a large position at the earliest opportunity.  Hopefully, fear of an assault on the outrageous price of therapeutics in the U.S. by our two presidential debate participants will cause the sector to stumble today and Sarepta right along with it.

Staking out a position in the equity at this point in time is an easy call for me.

Always be well…

Additional disclosure: Any information or opinion expressed herein may not be true, accurate or correct and it does not constitute any suggestion to buy, sell, hold or adopt any investment strategy for this stock or any stock that may be mentioned. Reliance upon information in this article is at the sole discretion of the reader. The sole purpose of my article is to entertain by providing information, the accuracy of which is as good as the public sources it was derived from. Do not act on anything I have written. Rather, do your own due diligence and consult an investment professional before making any investment decision. Acting on what any one writer, including me has imparted to you is foolish at best. I have no better access to resources or gift of opinion formulation than you do. I sometimes make mistakes. There are a myriad of things, which can happen in lieu of any forward-looking statement I have made. Any stock featured or mentioned in an article I compose is subject to all manner of influences, which can change its value in dramatic fashion upwards or downwards. These events can be of a wide variety not limited to news-related occurrences, managerial decisions, trial failures, stock manipulations and so on. I make every effort to declare positions I have in stocks I cover or mention in an article but reserve the right to move in and out of said investments at my own discretion based upon the wisdom of doing so. I implore you to do your own due diligence, invest at your own considerable risk attaining the just reward your efforts have wrought.

 

 

Cyclacel Pharmaceuticals: What You Don’t Know

I am long (CYCC).  I wrote this article myself and have not be compensated for it by any party mentioned or unknown.

Spiro Rombotis

“We are pleased to report that subsequent to the end of quarter the required number of events have been observed in the study approximately 1.7 years after the last patient was enrolled.”

Spiro Rombotis – August 10, 2016 – 4:30 PM ET – On the Phase 3 (SEAMLESS) Trial

Investing in nano to small-cap biotechnology stocks is hit or miss gambling at its finest.  At its finest because unlike a roulette wheel the gambler has an informed, albeit, clouded idea of where the ball will land.  The better the idea, or investment thesis if you will, the better your chances are at winning.  And should you come across a piece of information that advantages your chances, such as the quote above, you will do better than those who don’t.  And while we all might read the same report, or listen to the same conference call, what we comprehend there will be different.  And those differences are what separate the winners from the losers in biotech investment.

As previously mentioned in my introductory video, I left Cyclacel Pharmaceuticals (CYCC) for dead back in December of 2014 after having been notified by the company that the Phase 3 (SEAMLESS) trial had crossed the futility boundary and would be unlikely to readout in a statistically significant way.  The stock, which had been in steady decline dropped nearly 50% on that day and has not since recovered.

To say that I was surprised when on August 12th, H.C. Wainwright’s analyst Andrew Fein put a price target on CYCC of $173 a share is to understate that by quite a lot.  It did, however, get me to thinking about his possible motivations for doing so.  Before I address these issues, it should be noted that Fein’s price target is based upon a (SEAMLESS) surprise.  His estimate, sans (SEAMLESS) success, is, nonetheless, a lofty $60 per share.

In An Asymmetrical Investment Opportunity The Downside Risk Must Be Limited

And the best way to achieve that buffering is to find an equity which is already significantly undervalued.  So, why then is Cyclacel, a biotechnology company in this most lucrative sector of oncology, so steeply undervalued?  The answer to this question can be sourced in two ways.

First, if we go to the most recent quarterly report, we find that Cyclacel has lost investors over $329m since its United Kingdom inception in 1996.  This birthplace of Cyclacel will be important to our operating thesis and referred to as this article unwinds.  In 2007, shares reached a relative value of $600 each.  Since then, the company has executed numerous and unexpected equity raises and several reverse stock splits which have undermined investor confidence.

Second, with the cloud of a negative report on the (SEAMLESS) pivotal trial in elderly Acute Myeloid Leukemia hanging overhead, investors are rightfully loath to jump in ahead of that storm.  If one already knows that bad news is on the other end of the ringing phone, why pick it up in the first place?  That’s logical.  But sometimes it’s best to abandon logic in favor of a deeper understanding of what the issues are.  Because, in some peculiar instances, the bad news is that you’re just not getting everything you’d hoped for.  Only half.  I’ll explain that later.

To give you an idea of just how undervalued Cyclacel is relative to other oncology focused developmental biotech stocks, I’ve constructed a comparative graphic for your consideration.  Cerulean Pharma (CERU), a company applying its nanoparticle drug conjugate technology to cancer therapy recently suffered a setback in the development of its lead compound CRLX101.  In a Phase 2 trial targeting Renal Cell Carcinoma, CRLX101 in combination with Avastin or standard of care (SOC) failed to demonstrate statistically significant benefit against SOC alone.  In fact, the control arm outperformed the active arm.  Shares of Cerulean were cut by more than half on this day and, yet, Cerulean is still valued 50% higher than Cyclacel.

Ceurlean Comp

As you will note in this graphic, Cerulean is nearly 85% dependent on the positive perception of CRLX101 as a measure of its importance to the developmental pipeline.  Yes, there are other opportunities when pairing this compound with existing therapies but that is cause for concern when assessing the potential commercial value of the asset moving forward.  Contrast this with Cyclacel’s pipe which features a good mix of attractive candidates including a CDK inhibitor; a variety of MOA’s; and addresses a good mix of therapeutic populations and you are left to the inevitable conclusion that Cyclacel’s real worth has yet to be unearthed.  In fact, it is my considered opinion, that were you take sapacitabine out of the mix entirely; rename Cyclacel as, for instance, AdromedaBio; and launch the company within the framework of a fresh IPO, the resulting market-cap would reach in excess of a quarter billion dollars.  And yet, here we sit at $20m.

Fein’s Price Target On A (SEAMLESS) Homerun Could Be Way Off

In the world of greed that is Wall Street banks and biotech companies, we must always speculate on the motives of sell-side analysts in establishing what to casual observers might be fantastical price targets.  In the already referenced Q2 2016 report, we can clearly see that Cyclacel entered into an At Market Issuance Sales Agreement with FBR Capital Markets & Co. on June 23, 2016 to sell $4m worth of the company’s common stock.  To suggest that Fein’s comments which led to a $3.43 or 64% climb in the share price over 3 market days didn’t open the door to executing on that ATM agreement would be to bury one’s head in the proverbial sand.  While not knowing the specifics of this particular contract, ATM’s are usually structured so that the investment bank (FBR) buys shares at the lowest price within a specified period of time and is thereby able to sell them later for a sizeable profit.  That speculative bit of expedience noted, let’s see if we can’t find some logic in Mr. Fein’s generous assessment.

The Long Tail Of The Sapacitabine Kaplan-Meier Curve

In my last, and most critical, article on Cyclacel published June 10, 2014 I included the following graphic provided by the company depicting a long tail to the Kaplan-Meier curve.

Kaplan-Meier Plot MDS

And here is what the clinical trial leader of the (SEAMLESS) study, Hagop Kantarjian M.D., said at Cyclacel’s presentation regarding the shape of that curve.

You know, we’re noticing this in the long-term follow-ups, because people say there are no cures but when you look at the long-term follow-up of the frontline, and Dr. Manero makes that point, there is a tail to the curve which is in the range of 10 – 20%, even without the transplant. And these are patients who continue therapy. So it is possible. He makes that point consistently and people just dismiss it, but there is a tail of the curve with hypomethylating agents, even in the frontline setting. So it’s possible that maybe in the salvage set that that’s what we’re seeing in that context with sapacitabine. That is, there could be a population of patients that’s more sensitive to a particular drug where they stay longer on it.

So essentially, what is being said is that patients who respond well to sapacitabine tend to respond very well.  They live considerably longer creating a longer tail to the curve.  This is important because, unlike other molecules in other studies that may have crossed the futility boundary early, sapacitabine in the (SEAMLESS) setting may have been late to separate from control.  This study was supposed to have concluded in late 2015.  But the final events (deaths in both arms) didn’t happen until early in Q3 of this year.  Please go back to that first quote from Spiro Rombotis and reread it carefully.

The above graphic examines only 3 doses of drug and does not compare it to a control.  However, we can clearly see that early disappointment in survival by the majority of patients is met with encouraging longevity later.  I’m not saying that this will be enough to overcome an inauspicious start but I am saying that hope is still alive and in biotechnology investing that sentiment is meaningful.

Sapacitabine Remains Desirable If Only Because Oral Administration From Home Is Preferable To Intravenous Delivery In A Hospital

The population of patients in the (SEAMLESS) pivotal trial is age 70 and above.  Their constitutions don’t lend themselves to transplants or chemotherapeutic regimens that often save the lives of younger patients.  Many choose to simply die as peacefully and painlessly as possible in hospice settings.  Consequently, providing a milder treatment option that can be taken from home would be attractive to this sick and needy patient population.

Decitabine, commercially named Dacogen, was first approved by the European Medicine Agency on a failed Phase 3 trial (DACO-016) and is currently standard of care in elderly AML.  In the (SEAMLESS) trial, Dacogen is used alone in the control group.  This will give both the EMA and FDA their first look at the actual performance of decitabine in the clinical setting since 2011.  If sapacitabine, an orally administered alternative to Dacogen improves upon patient outcomes, both primary and secondary, even without being statistically significant, there is still a possibility that Cyclacel, originally a European company, could gain commercial approval there.  A nod in Europe would make access in the United States to sapacitabine almost mandatory on a patient-provider basis.

Additionally, Cyclacel is in ongoing conversations with the EMA to open the door to investigational trials involving sapacitabine in the pediatric population.  Positive trends in (SEAMLESS) will, no doubt, widen possibilities there as well.

Catalysts

Cyclacel is perhaps the least promotional company in biotechnology today.  Among the many that I’ve followed, Cyclacel is the least likely to toot its own horn.  And while, selfishly, I wish this weren’t so, I can appreciate the integrity of that approach.  Regardless, CEO Rombotis mentioned several upcoming catalysts that could drive the price higher.

  • (SEAMLESS) Phase 3 data report in Q4 2016
  • DNA Damage Response Program (Seliciclib + Sapacitabine) Progress Phase 1 Extension Cohort in a breast cancer patient population enriched for BRACA mutations
  • CDK Inhibitor Program (CYC065) Report topline results of the Phase 1 trial in patients with solid tumors
  • Investigator Sponsored Trials in Rheumatoid Arthritis and Cystic Fibrosis Report data when made available

It should be noted that recent and prior data readouts from some of the aforementioned trials were very positive with stock surges in excess of 50%.

In Conclusion

Cyclacel is becoming somewhat of the lovable loser on Wall Street.  Once thought to be underwhelming, the company’s early stage pipeline is showing signs of efficacy and gathering investor interest.  (SEAMLESS) remains an eyebrow raising study that could open the doors to commercial approval in the EU even without demonstrating statistical significance on its primary endpoint of overall survival.  And while Andrew Fein’s outrageous price target of $173 per share on a (SEAMLESS) homerun might be the most eyebrow raising of all, it too could be a lowball estimate should that dream come true.  How much of the AML and off-label MDS market could sapacitabine capture is unknown.  While my estimates are considerably lower than others, I’m no expert on this or any other subject.  Many qualified assessments run as high as $500m.  Should that be the case, Cyclacel would fetch a market capitalization of roughly $2b.

I’ll leave it to you and your calculator to do the math.

Always be well…

Additional disclosure: Any information or opinion expressed herein may not be true, accurate or correct and it does not constitute any suggestion to buy, sell, hold or adopt any investment strategy for this stock or any stock that may be mentioned. Reliance upon information in this article is at the sole discretion of the reader. The sole purpose of my article is to entertain by providing information, the accuracy of which is as good as the public sources it was derived from. Do not act on anything I have written. Rather, do your own due diligence and consult an investment professional before making any investment decision. Acting on what any one writer, including me has imparted to you is foolish at best. I have no better access to resources or gift of opinion formulation than you do. I sometimes make mistakes. There are a myriad of things, which can happen in lieu of any forward-looking statement I have made. Any stock featured or mentioned in an article I compose is subject to all manner of influences, which can change its value in dramatic fashion upwards or downwards. These events can be of a wide variety not limited to news-related occurrences, managerial decisions, trial failures, stock manipulations and so on. I make every effort to declare positions I have in stocks I cover or mention in an article but reserve the right to move in and out of said investments at my own discretion based upon the wisdom of doing so. I implore you to do your own due diligence, invest at your own considerable risk attaining the just reward your efforts have wrought.