Vaxil Biotherapeutics Ltd. (TASE: VAXL-M) merged with a stock market shell around the same time as Bonus Biogroup Ltd. (TASE: BONS). Although Vaxil says that it is developing a universal vaccine for most types of cancer, it has created little interest on the capital market.
Foreign media, however, have been very excited by the story and the potential. Last April, Vaxil received coverage from Britain's "The Daily Telegraph" and other major newspapers. On the TASE, however, these public relations exercises made a smaller impression, and the company is currently traded at a market cap of NIS 16 million. Turnover in the share has been negligible to nonexistent, and its share price is just 10% above its days as a stock market shell. Only last week was there a jump in the share price.
Professional sources said that Vaxil's product was interesting, and that its hypothesis about how it works on the immune system was plausible. They caution, however, that many companies are operating on a similar premise, and some have already failed.
Vaxil faces big challenges, but it seems that the main reason why it has not yet received any investment from a venture capital fund or industry partner is because it is an early-stage company, which means considerable uncertainty alongside the great potential.
Separate clinical trials for each type of cancer
Vaxil CEO Dr. Lior Carmon and CFO Julian Levy founded the company in 2006. Carmon is a graduate of the Weizmann Institute of Science, and previously founded and served as CEO of BioKine Therapeutics Ltd., which commercialized its main cancer treatment through BiolineRX Ltd. (Nasdaq: BLRX); TASE:BLRX). Levy, an entrepreneur in the life sciences, is responsible for Vaxil's financial and business side.
Vaxil is developing preventative vaccines for cancer, which means injecting into the body a substance that the immune system identifies as an invader that is very similar to the substance found in cancer cells. When the immune system learns to attack the invader, it also learns to attack the cancer cells.
The first cancer preventative vaccine, Provenge, was brought to market two years by Dendreon Corporation (Nasdaq: DNDN). But its launch is considered one of the weakest ever in the life sciences industry, compared with the expectations for the product. This was because of unimpressive clinical results, and the complex treatment method, which requires the extraction of blood from the patient, which is then treated, and re-injected into him.
Vaxil's technology acts differently. "We began with an algorithm, which identified fixed and unchanging sequences in cancer cells," Carmon told "Globes". "When the immune system is taught to attack this sequence, it is possible to obtain a specific therapy, with very few side effects."
Vaxil is focusing on MUC1 receptors, which are known to appear more frequently in tumor cells than in healthy cells.
"This field has known many failures in the late stages, in large and less homogenous groups of patients," BioAssociate Biotech Business Consulting managing partner Dr. Ofir Levi told "Globes". He adds that even though Vaxil believes that its product is suitable for all types of cancers, it will have to prove this in full clinical trials for each type. The first trial is underway for multiple myeloma (a blood cancer), and the interim results have already been received.
"Investors want us traded in the US"
Prof. Rafael Catane of Sheba Medical Center Tel Hashomer told "Globes" that while the creation of antibodies that attack specific sites in tumor cells is a fairly successful cancer treatment, encouraging the immune system to attack a specific target in a tumor cell is an innovative and less proven approach.
"There are all kinds of scenarios in which a product like this can go wrong. It is also possible that, after the treatment, the immune system will not find the cell, or that it will reach the cell, locate the target, but not destroy it, and there is the possibility that the immune system will also attack healthy cells," says Catane.
Carmon does not believe that this will happen to Vaxil. "We identified a part within the MUC1 which does not change even when the tumor cells undergo mutation. In addition, the area within the MUC1, which our vaccine targets, is found only in the tumor cells, but not in blood cells. When the immune system attacks the MUC1 in the blood, it is liable to mask and even suppress the activity of the immune system cells against the tumor cells."
Vaxil conducted the first clinical trial on only seven patients. "The results indicate a good response by the immune system, and initial signs are encouraging in terms of the response of the cancer cells," says Carmon. A few weeks ago, the recruitment of all 15 patients for the study was completed, and the final results are due in 2013.
Carmon believes that the product will initially be indicated for combined use with chemotherapy, because of doctors' conservatism and concerns about offering only the vaccine therapy. It is also possible that the medication will be offered after the treatment is completed, as a way to reduce the risk of the appearance of tumors, if it is found to be safe and with few side effects.
"Globes": Why did you go public at such an early stage?
Levy: "The current financing environment is more challenging than in the past. We didn’t want to repeat the mistakes of other companies, and we decided that the TASE was the way for us. We reached a hot market with good clinical data."
Carmon: "We were contacted by investors who wanted to us traded in the US."
Before reaching Nasdaq, Vaxil will have to deal with a difficult financial problem. The next clinical trial could cost millions, or even tens of millions, of dollars. At the end of June, the company had NIS 517,000 in cash and NIS 1.8 billion in current liabilities. It has since raised an additional NIS 1.2 million. "Some of the company's liabilities are convertible into shares at a public offering," says Carmon.
Published by Globes [online], Israel business news - www.globes-online.com - on September 10, 2012
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