OncoGenex focuses on cancer treatments

Despite some short-term concerns, this biotech is setting the stage for long-term success.

By TheStockAdvisors Mar 27, 2012 1:34PM
Image: Insurance Money (© Comstock Images/Jupiterimages)By John McCamant, The Medical Technology Stock Letter

OncoGenex (OGXI) has had a busy few weeks as the stock ran to over $17 before dropping below $14. 

First, OncoGenex and its partner Teva Pharmaceutical (TEVA) announced changes to their Phase III development plan for OGX-011 (custirsen). Then, the company priced a secondary offering at $12 and raised $46.8 million.

The 30% discount was large and meant dilution for current shareholders. However, it also made a better negotiating position with potential partners for OGX-427.

In addition, there should be much better sponsorship from Wall Street if the underwriters follow thorough and recommend OGXI.  

The new trial Phase III will evaluate the ability of custirsen to improve survival for patients with prostate cancer when combined with recently approved, second-line chemotherapy, Jevtana (cabazitaxel).

OncoGenex continues to work with Teva to finalize clinical development plans for custirsen in non-small cell lung cancer and expects to initiate this program in the second-half of 2012.

Meanwhile, the SYNERGY Phase III trial, evaluating a survival benefit in first-line chemotherapy castrate-resistant prostate cancer (CRPC), continues to accrue patients and is expected to complete enrollment later this year.

The SYNERGY study (first-line CRPC patients) is on track with recruitment and data is still expected by the end of 2013.

The study has been increased from 800 to 1,000 patients with a revised hazard ratio of 0.75(previously 0.725). Thus, it could be easier to reach statistical significance.

In sum, it was a crazy few weeks for OGXI and their shareholders. However, we are pleased that the company and Teva are flexible in their development plans for OGX-011 as the treatment landscape continues to evolve in prostate cancer. 

The key is getting the drug candidate to the market as we continue to believe that it will be a success given its unique ability to counter drug resistance, particularly when used in combination with taxol. 

We know that many OGXI shareholders are frustrated that the stock’s momentum has been stopped and the offering was at a steep discount. 

We believe that longer term, the benefits of increased sponsorship and an attractive partnership for OGX-427 will more than make up from the short term pain. OGXI is a buy.

Related articles:

Tags: OGXITEVA
0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

116
116 rated 1
274
274 rated 2
447
447 rated 3
698
698 rated 4
633
633 rated 5
652
652 rated 6
650
650 rated 7
491
491 rated 8
268
268 rated 9
125
125 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
TAT&T Inc9
VZVERIZON COMMUNICATIONS9
EXCEXELON CORPORATION8
AAPLAPPLE Inc10
ATVIACTIVISION BLIZZARD Inc10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.