The Lowdown on a Promising Biotech

11/12/2012 7:45 am EST


When it comes to life science companies, sometimes it's helpful to see what the experts in the space have to say...and in this case they're very bullish, notes the staff at The Life Sciences Report.

The Life Sciences Report Interview with John McCamant (10/4/12): "OncoGeneX Pharmaceuticals (OGXI) shows promise. The company has no near-term catalyst because the two phase 3 prostate cancer trials for its OGXI-011 (custirsen) molecule will run for two years, as will another trial for non-small cell lung cancer. Teva Pharmaceutical Industries (TEVA) is its partner in all three trials.

"Since we last talked, OGXI-047 has shown some good phase 2 data. It looks active in prostate cancer, and potentially in bladder cancer. We see a pipeline developing here, along with a very comfortable cash position, especially given that Teva pays most of the freight for OGXI-011.

Another reason OncoGeneX might be underfollowed that it is using antisense molecules licensed from Isis Pharmaceuticals (ISIS)...Kynamro (mipomersen), intended to treat very high cholesterol, comes before the FDA panel next month. If Kynamro receives FDA approval, I suspect investors will start to wonder about other companies with antisense molecules.

"At some point, OncoGeneX will get significant attention. A near-term catalyst might be a partnership for OGXI-047. Otherwise, we will have to wait until 2013 for data. But if OGXI-011 starts delivering in phase 3, OncoGeneX could be a five- or could be a home run."

Greg Wade, Wedbush (9/19/12): "We commissioned a survey of 53 medical oncologists and urologists who treat advanced, castration resistant prostate cancer (CRPC) patients...the goal of the survey was to gather insight into physician awareness of new treatments for CRPC and their opinions of new therapies recently approved and still under development.

"While OncoGeneX Pharmaceuticals' Custirsen was not well known among the physicians surveyed (34% were "somewhat familiar" or "very familiar" with Custirsen), we are encouraged by the physicians' willingness to use a therapy with its profile. Specifically, if Custirsen were to show an overall survival benefit, 95% of physicians would use it...we are maintaining our Outperform rating and fair value of $38/share."

Stephen Willey, Stifel Nicolaus (9/5/12): "We believe OncoGeneX Pharmaceuticals' wholly owned economics here are likely to emerge as a meaningful source of upside in FY13 as more data visibility emerges. We remain Buy rated ($13.65) and expect investor interest to pick up as we approach pivotal data milestones in FY13. We reaffirm our $30 target price and Buy rating for the company."

Howard Liang, Leerink Swann (8/3/12): "OncogeneX Pharmaceuticals Inc. reported Q2/12 results yesterday and highlighted its continued progress in development of Custirsen and OGX-427. Two phase 3 studies for Custirsen will begin this year...[and] OGX-427 has recently completed enrollment in its phase 2 study for chemotherapy naïve metastatic castration-resistant prostate cancer.

"With a cash runway that extends to 2015, we believe that investor interest will increase as further visibility is gained on OGX-427 and as we get closer to the date of the initial phase 3 data readout for the Custirsen SYNERGY trial expected by year-end 2013. We maintain our Outperform rating and $19 12-month valuation."

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