Custom Cancer Care With a Little Help from Giant Sea Snails

One of the reasons we succumb to cancer so easily is that our immune systems are reluctant to attack it. Since tumors are a part of us, killing them is tantamount to self destruction, at least from the point of view of an immune system.

Wouldn’t it be great if you could trick the immune system into ignoring its natural reluctance to attack tumors? That’s the strategy used by a cancer therapy being developed by the biotech company Genitope (GTOP).

The process starts by identifying unique proteins on tumors and taking out a small sample. Those proteins are mixed with other proteins from giant sea snails living off the coast of California – of all things. They are grown into a brew that’s able to entice the immune system into attacking proteins like the ones on tumors.

The mixture is injected back into your body where it arouses the immune system to kill the cancerous tumors which have the protein targets. The giant sea snail comes into play because the protein it contributes is highly “immunogenic.” That means the immune system reacts strongly to it -- and anything attached to it.

“If you make enough of that target and activate the immune system against that target, you can apparently eliminate or at minimum control any of the residual tumors,” says Genitope chairman and chief executive Dan Denney.

Low cost manufacturing

This ingenious approach, which Genitope calls “MyVax,” has actually been known to work for a long time. Cancer patients were treated at Stanford University as long ago as the late 1980s. “About half of the patients immunized starting in 1988 have gone out very far in time and have never relapsed. It is looking like these patients may never relapse,” says Denney.

So why isn’t everyone using MyVax? The techniques originally used to produce the tumor protein brew were not commercially viable. That’s where Genitope comes in. The company has developed a system of “gene amplification” for growing the anti-cancer brew. The technology is called Hi-GET.

The target cancers

Genitope is in late stage, phase III, testing of MyVAx for use against follicular non-Hodgkin’s lymphoma (NHL), a cancer that begins in cells in the immune system. “Follicular” means the lymphoma cells are grouped in clusters or follicles in the lymph node. This cancer strikes about 55,000 people a year in the U.S. It is the second most prevalent NHL worldwide.

If tests prove beyond a doubt that MyVax works, Denney predicts it could be on the market in two years. WR Hambrecht analyst Patrick Flanigan estimates annual sales could reach to $500 million. But you won’t have to wait for two years for the stock to move.

As early as this summer, Genitope may present convincing data that MyVax works against lymphoma. It’s hard for anyone to know how these studies will turn out. But a Genitope director’s recent purchase of $212,000 worth of the stock at $8.50 suggests Genitope may be on the right track.

Other potential therapies

Genitope is also doing early phase testing of MyVax testing against chronic lymphocytic leukemia, another market that could be worth $500 million in annual sales. MyVax will also likely also be tested for use against other kinds of lymphoma and NHL.

The company is also developing monoclonal antibodies – a class of therapy made famous by Rituxan, Avastin and Herceptin from Genentech (DNA). Success of drugs like these has helped Genentech stock more than double in the last year.

Monoclonal antibodies work by attacking tumors directly and convincing them to commit suicide, or helping other defense mechanisms in the body kill them off.

Cash levels

Genitope just raised $58 million in February -- bringing cash levels to around $148 million. That should be enough to last well into 2007, says chief financial officer John Vuko. The company is spending tens of millions of dollars right now to build a new manufacturing facility and headquarters.

No sure bet

As we know by now, biotech companies are always a crap shoot. Cancer “vaccine” companies like Genitope in particular are viewed with suspicion because of the difficulty in proving that cancer vaccines work. Keep in mind, however, that these aren’t really “vaccines” in the traditional sense because they are used to combat an ailment that has already set in – instead of neutralizing one ahead of time.

For what it’s worth, Brean Murray, Carret analyst Jonathan Aschoff has a medium-term price target of $21 on Genitope. He bases that on projections that Genitope could make $2.11 per share in 2009. But we also know biotech companies can easily flop.

The bottom line: This one looks promising. But you should only own it as part of a basket of biotech companies you hold with the hope that a few big winners will offset all the losers.

Disclaimer

At the time of publication, Michael Brush did not own or control shares in any of the companies listed in this column. Mr. Brush is an independent columnist for this web site.

For more on Insiders Corner disclosure, see the disclosure section in About Insiders Corner: http://www.investorideas.com/insiderscorner/. InvestorIdeas.com Disclaimer: www.InvestorIdeas.com/About/Disclaimer.asp. InvestorIdeas is not affiliated or compensated by the companies mentioned in this article.