Equities continue to shrug off anything the world throws at them as we sit on the precipice of huge technological breakthroughs in energy, biotech, AI, and other fields. The wall of worry is in place, and it’s functioning as a nice ramp for stocks to climb.
But investors looking for bargains face the age-old problem: how do you find value once the bull has left the barn?
Today’s piece is a straightforward exercise in proving to you that it’s still possible. Our case in point: Nascent Biotech Inc. (OTCMKTS:NBIO), an early-stage biotech with a pipeline now reaching phase 2 for the first time. The IP is in place. The FDA support is in place. And the stock is dirt cheap.
NBIO shares are trading at $0.06 a piece right now despite just receiving word from the FDA that the company has been approved to begin Phase II clinical research on its flagship compound, Pritumumab (PTB), as a treatment for brain cancers including Glioblastoma.
The Big Moment
Specifically, NBIO just announced that it has been cleared by the FDA to begin Phase II clinical trials for brain cancer. This milestone allows the company to continue advancing Pritumumab through the regulatory clinical processes in its use against Brain Tumors including Glioblastoma.
Nascent CEO, Sean Carrick, commented, “This is an exciting development milestone for Nascent. Phase I data was shown to be safe in five ascending independent cohorts. The data also suggested favorable clinical outcomes in various stages of disease development, that we hope to build upon in Phase II and better understand just how effective this treatment can be for patients suffering with brain cancer”.
PTB is used as a targeted immunotherapy that binds to the tumor and recruits the immune system to eliminate cancer cells.
NBIO has been working toward this moment for years. The advent of Phase II research is often the breakout point for biotech players. In fact, according to research from Stat news, the leader in biotechnology news and information, early-phase-2 acquisitions are becoming the norm among big pharma players looking to scoop up promising new biotech platforms.
PTB’s Phase I research process went smoothly and clearly generated results promising enough to warrant Phase II exploration: 15 patients received PTB and were evaluated for safety and efficacy analyses. 12/15 patients had a diagnosis of glioblastoma and one patient each had anaplastic astrocytoma, oligodendroglioma, and non-small lung cancer with brain metastases.
There were no dose-limiting toxicities to this natural human IgG mAb. Overall, the study reportedly found that single agent Pritumumab is safe up to a dose of 16.2 mg/kg every 7 days in brain tumor patients. One partial response showed nearly a 98.0% and 40.8% reduction in 2 tumor lesions for 17 months on study.
“The presentation displayed our Phase I data, which included our safety data at various dose cohorts and early outcomes data, was well received and viewed by interested parties at the conference. In summary, it showed the drug to be very safe at 5 ascending dose cohorts and definitive bioactivity in several patients,” stated Dr. Mini Gill who presented for the Company at a recent conference.
In essence, PTB has a clear chance at commercial viability.
Shoring Up IP Control
A further likely positive signal is the fact that NBIO has also been actively shoring up its IP stronghold, recently announcing a move, in partnership with China based BioRay Pharmaceutical, to terminate the license agreement entered into on March 31, 2021.
With the move, Nascent regained its worldwide marketing and distribution rights previously licensed to BioRay. Management has clearly decided that regaining worldwide rights will put NBIO and its shareholders in a stronger position going forward.
This is an unambiguously positive development. It points to confidence among insiders about PTB’s prospects in phase 2 research. It’s a signal that shouldn’t be ignored.
Biotech Stocks 101
It’s important to understand how markets generally price biotechs. The key is about probability. It’s a bit like quantum physics—you don’t know if there’s an electron there or not, you only that there’s a 55% chance that the electron is there.
Hypothetically, we don’t know if Drug A is going to make it to market. We only know there’s about a 50% chance it will. And if it does, it stands to generate a billion dollars in profits over the next 5 years. Hence, Stock A sees a rally in shares to price in about half of that. From there, it will either crash or blast off on the next round of definitive data on its efficacy.
At this point, PTB isn’t pricing in anything at all in NBIO shares. This is a cancer drug with potentially multiple applications because it binds to cell surface Vimentin (also referred to as ectodomain vimentin), which is a protein expressed on the surface of epithelial cancers.
Ectodomain vimentin (EDV) is an ideal target for immunotherapy as it is expressed on the surface of tumor cells and is significantly overexpressed in glioblastomas (GBM). In theory, the upshot is that PTB binds to the tumor to “recruit” the host immune system to eliminate cancer cells.
Monoclonal antibodies (mAbs) are laboratory-produced molecules that can mimic the immune system’s ability to target and destroy cancer cells. These antibodies are designed to bind to specific antigens (proteins) that are present on the surface of cancer cells, triggering an immune response that can lead to the destruction of the cancer cells.
Hence, PTB is a generalist that could end up being viable as a treatment for multiple cancers. That puts its potential value well into the billions of dollars. And yet, as of now, the stock is still trading at a market cap under $10 million. That’s deep value.
