Wall Street and Accentia Biopharmaceuticals Inc. seem to be at odds regarding the value of recently released trial results for the company’s cancer vaccine, BiovaxID.Accentia (Nasdaq: ABPI) reported in July that the vaccine, in Phase III trials, improved the disease-free survival of non-Hodgkin’s lymphoma patients. Dr. Frank O’Donnell, CEO, labeled the news “phenomenal,” calling BiovaxID the “holy grail” of cancer treatment.
However, Wall Street has responded less enthusiastically as Accentia’s stock continues to waver below the dollar mark. It closed Aug. 19 at 80 cents.
“We’re not happy about our stock price, but we’re very happy about the BiovaxID results,” O’Donnell said.
The company disclosed that on Aug. 13 it received notice that it is not in compliance with a Nasdaq rule because shares of its common stock had closed at a per share bid price of less than $1 for 30 consecutive business days. Accentia said in a release that it has until Feb. 9 to regain compliance.
BiovaxID is being developed by Worcester, Mass.-based Biovest International Inc. (OTC BB: BVTI), a majority-owned subsidiary of Accentia. When the data on the drug’s clinical trials was released in late July, Biovest’s stock rose 54 percent from 33 cents to 51 cents, but still remained well below its 52-week high of $1.01. The stock closed Aug. 14 at 41 cents.
Sluggish market
O’Donnell attributed the lackluster stock performance to the current sluggish market and an overall lack of optimism about potential cancer vaccines in light of recent failures.
Late last year, Fremont, Calif.-based Genitope (PINK SHEETS: GTOP) announced disappointing results in drug trials for its treatments for non-Hodgkin’s lymphoma. San Diego-based Favrille in May ended trials of its unsuccessful non-Hodgkin’s lymphoma drug, Specifid. Favrille has ceased operations and currently is selling off its office and lab equipment in an on-site and online auction.
“The field of anticancer vaccines has been so disappointing that there is major skepticism,” O’Donnell said.
Biovest is now seeking accelerated approval from the U.S. Food and Drug Administration for BiovaxID, and the company hopes to bring the product to market in 2009 or 2010, O’Donnell said. The company also is seeking approval for BiovaxID in Europe, and anticipates European sales will begin in 2009, Biovest CEO Dr. Steve Arikian said in a recent conference call.
Joseph Pantginis, a New York City-based analyst with securities firm Canaccord Adams Inc., said that BiovaxID could be the first cancer immune therapy approved in the United States.
“This is clearly a positive result for the cancer immunotherapy space, which continues to have both strong supporters and strong skeptics,” he said in a recent research report. “In our opinion, the data represent the first definitive Phase 3 positive outcome in the cancer immunotherapy space. We believe the data will surprise a lot of investors after previous failures by Genitope and Favrille.”
Cash burn rate slowing
Accentia’s stock plummeted in March when disappointing clinical trial results were reported for SinuNase, a treatment for sinus congestion and one of Accentia’s key products. Upon the March 25 announcement, Accentia’s stock fell 79 percent from $3.06 to 65 cents before closing the day at $1.20.
O’Donnell said the company currently is focused on the development of BiovaxID, but expects to announce “important news” about both SinuNase and Accentia’s third product, Revimmune, within the next 60 to 90 days. Revimmune is a therapy for multiple sclerosis.
In June, the company landed$8.5 million in additional funding from existing institutional investors through a private placement. O’Donnell said the company’s cash-burn rate should drop dramatically now that clinical trials from both SinuNase and BiovaxID are complete.
“The BiovaxID trial was a well-designed, carefully constructed trial that started in 1999,” he said. “It’s been very expensive.”
Accentia reported a net loss of$11.7 million, or 25 cents a share, for the three months ended June 30, compared to a net loss of $25 million, or 71 cents a share, in the same period a year ago. The company was able to cut its research costs by 70 percent in the quarter.
Revenue was $3 million in the just-ended quarter, the third quarter of the company’s fiscal year, compared to revenue of $3.6 million in the prior fiscal year third quarter.