May 11, 2010
By Janet Whitman, Financial Post
Published: Tuesday, May 11, 2010
Not many early-stage biotech startups can boast a robust revenue stream, but Immunovaccine Inc. -- which is working on a cure for cancer -- is a rare exception.
The Halifax, N.S.-based company got roughly $2-million upfront and the promise of additional milestone payments and royalties from U.S. pharmaceutical giant Pfizer Inc. for a global licensing deal to use its patented "rocket-booster" vaccine technology for cattle vaccinations to fight diseases.
The revenue is helping fund research and development for a much more lucrative target: humans, says Dr. Randal Chase, chief executive of Immunovaccine.
After getting clearance from the U.S. Federal Drug Administration in December, Immunovaccine has started a "Phase I" clinical trial for ovarian, breast and prostate cancer vaccines to test its safety and tolerability of its technology -- trade named DepoVax -- on humans.
In preclinical studies on mice DepoVax cancer vaccines eradicated 100% of tumours with a single dose.
"I'm optimistic about its safety," says Dr. Chase.
The company got its start back in 2000 when the Federal government asked researchers at Dalhousie University to develop a contraceptive vaccine to control the seal population.
The vaccine delivery system was so effective that, after one shot, 90% of seals were fixed for 10 years. Immunovaccine's technology -- which has a huge advantage over other vaccines because it only requires a single dose to be effective -- also helps control Hong Kong's monkey population.
But the real promise is in humans, a focus the company shifted to about four years ago.
If the "rocket-booster" technology is proven safe for humans, it would open up a wide array of opportunities to develop many more new and improved, next-generation vaccines that would benefit from its faster and stronger immune responses.
"In terms of risk mitigation, we have revenue that will come from the animal business," says Dr. Chase. "And if the human vaccines are successful then clearly the upside is fantastic."
The fledgling company, which had about $20-million from angel investors and government grants, raised millions more from investors in late September by getting a stock listing (IMV) on the TSX Venture Exchange through the acquisition of capital-pool company Rhino Resources Inc. in a reverse takeover.
The stock, which debuted at around 70 cents a share, is currently trading at $1.19.
Sarah Chiasson, an analyst with Beacon Securities in Halifax, started coverage on the Immunovaccine in December with a "buy" rating and 12-month price target of $2 a share, saying it could be an attractive candidate for a takeover down the road of "Phase II" trials are a success.
Dr. Chase said Immunovaccine hopes to get a U.S. stock listing, either on the Nasdaq or the American Stock Exchange in the coming months.
He said the company also might look to shift its headquarters to the United States, where many of its partners are based.
"We'd keep the research and development in Halifax," he said. "That's where the expertise is."
URL
http://www.financialpost.com/story.html?id=3012776
Source
Copyright © The Financial Post, May 11, 2010