Source: George S. Mack of The Life Sciences Report (11/13/14)
http://www.thelifesciencesreport.com/pub/na/thinking-differently-about-ebola-virus-disease-wbb-securities-steve-brozak
What do we get when we mix a top-ranked courtesy researcher with a late vital colonel from a U.S. Marine Corp.? You get Steve Brozak, who brings his one-of-a kind viewpoint on a intricacies of Ebola pathogen illness to this talk with The Life Sciences Report. His troops background, total with 20 years as a biotech and medtech analyst, has authorised a WBB Securities cofounder to rise a reasoned viewpoint on how West Africa’s Ebola widespread competence be humanely halted. Brozak also mentions small-cap names that could extremely raise investors’ portfolios.
The Life Sciences Report: Steve, we wanted to residence Ebola pathogen illness (EVD) from a socioeconomic indicate of view. Please give us your thoughts on a highlight EVD could put on medical systems in a U.S. and worldwide.
Steve Brozak: Let me start by paraphrasing a quote that we listened from a unequivocally intelligent person. Ebola is a horrific disease, and since of that, unfortunately, it is a initial made-for-television illness that we’ve witnessed. It will not be that prolonged before we see some vital Hollywood studio make a film about a events we’re looking during on a news today.
But we don’t consider people who are watching—and positively not a vast partial of a investing community—really know EVD or a ramifications. That unequivocally is a many guileful partial of this disease—the fact that it is not understood.
TLSR: How is EVD not understood?
SB: What people don’t know is that it is unreal to lift out mass diagnosis protocols here in a U.S. You can't set adult any singular trickery in this nation to bargain with Ebola. Even sourroundings adult specific centers to bargain with something like Ebola is impractical. It is distant some-more practical, distant some-more efficacious, distant some-more fit and distant some-more benevolent to bargain with Ebola during a center, that everybody acknowledges is in West Africa. That’s what people don’t understand, unfortunately. Instead, a media have been stating on comforts in Dallas, Atlanta and New York, and creation observations about a patients who are being treated there.
The existence right now is that we are during a infamous juncture. Médecins Sans Frontières (MSF; Doctors Without Borders) has been a usually classification that has been awake in providing medical infrastructure in West Africa. However, MSF is depleted to a indicate where a U.S. Centers for Disease Control (CDC) can no longer mount by. CDC is actively recruiting people to support with a MSF goal in Africa, though this is not a one-for-one fit, since we are not unequivocally good capable in this kind of venture. We are entering into uncharted domain that, candidly, gives me good means for concern.
TLSR: Aside from a infamous inlet of a illness and a fact that some medical workers have been infected, what is it that gives we good courtesy right now?
SB: I’m endangered when we see, in newspapers, online or on TV, people creation assumptions that there are drugs or products accessible currently that will save a day. That is simply not factual. Yes, there are notable products, though there is a unequivocally hapless dichotomy in that a products we know a lot about don’t unequivocally work, and we don’t have adequate of a products that seem to be efficacious. Everyone is finger-pointing, though a existence is that we are not addressing a issues that we have to address.
TLSR: Steve, we have pronounced we unequivocally do know how to conduct viral illness outbreaks like this one. What is a justification for that? Give me an example.
SB: Having lonesome pandemics and epidemics now for 10 years, we would contend that, for a initial time, we indeed know how to control an conflict like this, and it’s usually since of poignant supervision spending for other threats.
For example, take H5N1, or bird flu. A decade ago, everybody pronounced that bird influenza was going to come to a U.S., though it didn’t. We still set adult and retooled a vaccine systems in a U.S. in response to a threat. If we hadn’t finished that, suppose where we would be today. H1N1, or hog flu, literally became a pestilence in 2009, and in 2014 it is resolutely confirmed in a influenza ecosystem here in a U.S. We hold this problem during a final probable moment—H1N1 became a initial instance where we could know a hazard and stop it regulating a infrastructure a supervision invested in. That was probable since a supervision invested in a evidence resource in credentials of bird influenza that authorised us to check for surprising viruses. It was a notice apparatus we grown for H5N1 that saved us from H1N1. Today, when we get your unchanging anniversary influenza vaccine, we accept insurance from H1N1. All this was probable since of supervision funding.
TLSR: Would we fast discuss a few companies charity some earnest ideas to quarrel EVD?
SB: I’ll go over companies that are interesting, and I’ll also explain a shortcomings of each. We need to know a stipulations and strengths of any technology, since Ebola is not an removed incident. It is unfortunate, though predictable, that there will be some-more outbreaks, and we have to be prepared. That is a reality.
Everyone looks during Mapp Biopharmaceutical Inc.’s (private) product, ZMapp (three chimeric monoclonal antibodies done in tobacco plants, privately Nicotiana benthamiana). If anyone says a supervision isn’t obliged for advancing science, they should know that ZMapp is prima facie evidence for supervision support in enrichment of drug development, drug prolongation and all related.
ZMapp was saved by a U.S. around a U.S. Army Medical Research Institute of Infectious Diseases (USAMRIID). Its prolongation was accelerated by USAMRIID personnel, who have assisted in differentiating a antibodies that would work with a biggest efficacy. The usually problem is that a prolongation process for ZMapp is plant-based which, in itself, is a unequivocally good technology, though doesn’t lend itself for large, ramp-up manufacturing. As such, we have to wait. That is ZMapp’s limitation.
Another association operative in a area is Chimerix Inc. (CMRX:NASDAQ), that has a extended spectrum antiviral called brincidofovir that has been saved by a U.S. National Institutes of Health and is now in Phase 3 trials for cytomegalovirus and other viruses in bone pith transplant patients. It’s also a intensity therapy in adenovirus.
Chimerix’s module is also being saved by a U.S. Biomedical Advanced Research and Development Authority for diagnosis of smallpox underneath a Animal Rule. This order allows drugs or biologics to pursue regulatory capitulation to turn partial of a inhabitant vital save formed on preclinical studies in animals and reserve studies in patients. Brincidofovir competence also be germane to EVD, though again, we have a product that we can’t exam in nonhuman primates for EVD since there is no cross-reactivity there. It’s a bit of an unknown, that is problematic. There’s usually not adequate information for anyone to design a specific outcome. A Phase 2 custom has been grown with a U.S. Food and Drug Administration (FDA), and a investigational new drug concentration has been certified to exam brincidofovir in Ebola patients. This hearing could start anytime.
Then we have BioCryst Pharmaceuticals Inc. (BCRX:NASDAQ), that is also operative with a supervision contract. Its candidate, BCX4430 (an adenosine analog), is another broad-spectrum antiviral. We could see contrast in humans in H1/15. This drug height represents critical technology, though we will take a wait-and-see proceed as to what it can do privately in EVD.
I’m unequivocally meddlesome in Tekmira Pharmaceuticals Inc. (TKMR:NASDAQ; TKM:TSX). Again, it has seen supervision resourcing, and it is operative with a good technology, RNA division (RNAi). The association has begun to manufacture, on a singular basis, a new healing representative privately targeting a Ebola-Guinea variant, that is obliged for a EVD widespread now in West Africa. There will indeed be some supply accessible for investigators in early December, though again, these will be singular quantities. What we need is a product that can be done in such a proceed that we can indeed start to exam it, and examination it in tangible margin use. That doesn’t exist here.
I wish to discuss one association that, trust it or not, people are not articulate about with courtesy to EVD, Sarepta Therapeutics Inc. (SRPT:NASDAQ). In a past, we didn’t trust Sarepta’s proceed to FDA contrast was going to pass muster, and we took a lot of grief for that. But a association got response behind from a FDA, and we started to see a group ask good questions about how to exam Sarepta’s EVD candidate, AVI-7537, and how to exercise a technology. Sarepta has a module we trust in since it can make a antisense products to scale. I’m not going to contend a product can be done quickly, though it can be done in a picturesque volume of time, with a ability to exam for efficacy. This is something that we consider should be explored, and if it works, should be exploited.
TLSR: What about vast pharma? Which companies have assimilated a Ebola fight?
SB: Johnson Johnson (JNJ:NYSE) says it is dedicating itself to formulating a vaccine answer. The association has a record that is sincerely easy to understand. Again, a problem is that customary vaccines need time to make. The same goes for GlaxoSmithKline (GSK:NYSE). Your readers should keep in mind these are impossibly vast organizations that are not as focused on a response to EVD as a smaller biotechs we have discussed.
TLSR: On Nov. 4, Republicans took control of a U.S. Senate, and now they control both houses of Congress. What do we consider a domestic sourroundings is going to be with courtesy to appropriation research? Do we suppose that a infancy in Congress is going to continue to be resistant to investing in elementary science?
SB: we would contend to those who now control both houses of Congress, be unequivocally clever what we ask for, since we competence unequivocally good get it. If we do get your cuts, we will be hold obliged for what takes place on your watch.
Also, awaiting a quarantine or besiege to stop Ebola is foolishness. If politicians ratify something like that, there will be a response, though it will not be a response that they want. we would contend to we that a longer we do not residence this emanate globally, commencement in West Africa, a some-more costly this conflict will be in, both banking and tellurian life.
TLSR: Steve, if we have suspicion about this, what do we consider happened during Texas Health Presbyterian Hospital in Dallas? One would have to assume that this establishment has a top-flight complete caring unit, though a sanatorium unsuccessful to strengthen a health workers. How did dual nurses turn putrescent with EVD in a U.S. sanatorium after treating an EVD patient?
SB: We looked it over and came to a end that it was a elementary order of physics. The patients who humour by Ebola chuck off rubbish products a likes of that no one practice typically. Your concentration as a medical provider is to be benevolent and contend certain standards; however, a realities are that a volume of rubbish generated in a form of feces, vomitus, blood and blood products is so poignant that containment though correct protocols and adequate personal protecting apparatus is difficult. There is an destined plunge in caring and technique—at slightest when a providers haven’t had before knowledge in this disease. It’s not like anyone can perform during 100% underneath these circumstances, so mistakes happen. When mistakes happen, unfortunately, a costs are high. These systems will positively improve. Hospitals all over a nation are now operative on protocols.
TLSR: Steve, we have a vast list of small-cap companies in your coverage. Looking divided from Ebola for a moment, could we discuss a few names that we feel have considerable expansion prospects?
SB: There are 5 companies with seminal moments on a horizon, and sparkling technologies that are not flash-in-the-pan approaches. Looking behind during Sarepta and Tekmira, we see technologies that are going to change a proceed drugs are developed. That kind of change presents significantly critical considerations for investors. Instead of stealing a 28% lapse annualized for a year and a half, we competence now get a tenbagger, that is a ultimate lapse that small-cap investors seek.
TLSR: Go brazen with a initial name.
SB: It’s a branch dungeon association called NeoStem Inc. (NBS:NASDAQ). On Nov. 17, during a American Heart Association’s annual meeting, a association will announce formula from a Phase 2b PreSERVE-AMI hearing with NBS10 (autologous bone marrow-derived CD34+/CXCR4+ enriched cells) to yield shop-worn heart flesh following an strident myocardial infarction (AMI). PreSERVE-AMI is a smaller trial, with 160 patients, though it’s double-blind and placebo-controlled. This is a opposite kind of record that we like unequivocally most since NBS10 has intensity to be a physic product. we demeanour brazen to saying a results.
TLSR: Another name, please.
SB: The subsequent would be Omeros Corp. (OMER:NASDAQ). Its product, Omidria (phenylephrine + ketorolac), was authorized on May 30 of this year. Omidria is a elementary multiple of dual comparison drugs that have been in a open domain for utterly some time. One is a mydriatic or pupil-dilating agent, and a other is an anti-inflammatory and analgesic. The product was designed for use in deluge and intraocular lens deputy surgery, and it formula in patients carrying reduction post-operative pain. The association will start offered Omidria on Jan. 1, 2015, and usually recently, on Oct. 30, a product perceived pass-through payment capitulation from a Center for Medicare Medicaid Services. Now Omidria can be reimbursed by Medicare, Medicaid and many private insurers over a cost of a surgical procession itself. Omeros’ payment will be formed on a product’s indiscriminate merger cost of $465 per single-use vial, that would cover a singular procedure.
TLSR: Steve, ophthalmologists have been regulating these same drugs as homebrews, or stealing them from compounding pharmacies, for a unequivocally prolonged time. What’s a value tender for Omidria?
SB: Instead of carrying to use compounded products or homebrews to do lens surgery, a surgeon can now use a product that is FDA-approved, proven waste and safe, and reimbursable by payers. Physicians should be regulating it as customary of care. we don’t consider there is an barrier to adoption of Omidria during this point.
TLSR: Another name?
SB: We have lonesome Navidea Biopharmaceuticals Inc. (NAVB:NYSE) for a long, prolonged time. Back in mid-June, a association perceived FDA capitulation for intraoperative sentry lymph node mapping for head-and-neck cancer with a radiopharmaceutical agent, Lymphoseek (technetium Tc 99m tilmanocept). Back in Mar 2013, Lymphoseek was authorized for lymphatic mapping in breast cancer and melanoma. With Lymphoseek, a surgeon uses a gamma detector to support in anticipating infirm lymph hankie to disintegrate out. It’s a proceed of preventing metastasis by stealing tumor-draining lymphatics that enclose active growth cells.
By a FDA’s possess description, Lymphoseek represents a biggest alleviation it has seen in 30 years for a head-and-neck cancer application. There is usually no comparator. It is also engaging that this record guides clinicians to inflammation, that means there’s intensity for many opposite diagnostic, and presumably even therapeutic, applications. Hospitals are now reevaluating all their showing approaches, and we trust that they will be looking during Lymphoseek unequivocally seriously.
TLSR: After Lymphoseek was initial authorized in 2013, Navidea partnered with Cardinal Health Inc. (CAH:NYSE), a vital distributor of radiopharmaceuticals. Is Cardinal Health giving a best bid in selling Lymphoseek? How is this operative out?
SB: Cardinal plays an critical purpose for Navidea, and brings a hold indicate to a chief pharmacist. While that’s important, and continues to be important, it was some-more so with a before label. With a new label, Navidea can settle a hold indicate directly with surgeons and additional preference makers on a diagnosis team. This is how Lymphoseek can excommunicate a decades-old representative and a unequivocally confirmed mentality. Surgeons are set in their ways to use colloids, that are aged agents. Now there’s a tag that differentiates Lymphoseek, and allows Navidea to call on a surgeon directly.
We’re looking brazen to saying what Navidea’s newly allocated CEO, Rick Gonzalez, has in store for 2015. His credentials is in handling blurb products, and their sales and marketing. On a new discussion call, he pronounced that he’s focused on enhancing Navidea’s operations to assistance element Cardinal’s sales and selling efforts. Navidea now has a right product with a right tag and a right CEO.
TLSR: The subsequent name?
SB: The subsequent name is another association we’ve followed for a series of years— Cempra Inc. (CEMP:NASDAQ). It has an antibiotic called solithromycin, that we trust to be a singular strongest antibiotic we have ever seen. It’s a broad-spectrum antibiotic in a macrolide family. The stress is that solithromycin doesn’t usually conflict bacteria, it prevents them from replicating within dungeon membranes. The antibiotic is in Phase 3 for community-acquired bacterial pneumonia. It can be used as step-down therapy from intravenous to verbal administration, and that is a extensive advantage.
Cempra has several ongoing collaborations with a U.S. government, by a agreement valued during $58M in nondilutive funding. The association has been means to precedence these programs to account solithromycin’s expansion in pediatric use. All of a pediatric expansion and trials are being paid for by a government, that is significant. The U.S. supervision is profitable courtesy to this company.
Viruses like EVD are awful, though with germ we are articulate about bad bugs that could pierce by a race with equally catastrophic results. Cempra has a ability, with solithromycin, to bargain with not usually a bad bugs we are wakeful of today, though with a bad bugs out there that could turn some-more prevalent and dangerous in a future. This form of broad-spectrum antibiotic could be a usually thing we have that could even try to residence that kind of situation.
TSLR: Steve, go brazen with your final company.
SB: Tetraphase Pharmaceuticals Inc. (TTPH:NASDAQ) is another antibiotic association that’s also operative with a U.S. government. Its candidate, eravacyline, a next-generation tetracycline, is now in Phase 3 for difficult intra-abdominal infections, as good as difficult urinary tract infections. Tetraphase’s product is in modernized trials, and we consider it would be unequivocally appealing to intensity vast pharma partners. The medicine village is unequivocally informed and gentle with tetracycline, and that will play good if Tetraphase is means get a next-generation chronicle of a product to market. We have a Buy rating on Tetraphase.
TLSR: We lonesome a lot of belligerent today. Thank you.
SB: Thank we too.
Steve Brozak is a handling partner and boss of WBB Securities, an investment bank and financial methodical organisation intent in a biotechnology, curative and medical device sectors. Before cofounding WBB Securities, he worked for several Wall Street firms, including Salomon Brothers, Dean Witter, Cowen Company, and Alex. Brown Sons. As WBB Security’s Senior Equity Analyst, Brozak has been concurred for his investment astuteness and equity investigate opening by a vital researcher ranking systems. In 2013, he was comparison as a #2 ranked researcher in a pharmaceuticals zone by a StarMine/Financial Times Industry Analyst Awards system. The Wall Street Journal renowned Brozak as a Best on a Street Medical Equipment and Supplies financial researcher in a 19th Annual Best on a Street Survey in 2011. In 2010, Brozak perceived StarMine Thompson Reuters/Financial Times Best Brokerage Analyst endowment for his preference of top-performing companies in a biotechnology space. With a 25-year lane record in banking and investigate in a life sciences space, Brozak also works as media commentator on a life sciences zone on a web, on television, and in imitation media. Brozak served in a United States Marine Corps and now serves on a Secretary of a Navy’s Navy and Marine Corps Retiree Council, where he focuses on healthcare, advantages and other maestro issues. He perceived a bachelor’s grade and a master’s grade in business administration from Columbia University, and also binds FINRA licenses 3, 7, 8, 24, 63, 65, 79, 86, 87 and 99.
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1) George S. Mack conducted this talk for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and he provides services to Streetwise Reports as an eccentric contractor. He owns, or his family owns, shares of a following companies mentioned in this interview: None.
2) The following companies mentioned in a talk are sponsors of Streetwise Reports: Omeros Corp., NeoStem Inc. The companies mentioned in this talk were not concerned in any aspect of a talk credentials or post-interview modifying so a consultant could pronounce exclusively about a sector. Streetwise Reports does not accept batch in sell for a services.
3) Steve Brozak: we own, or my family owns, shares of a following companies mentioned in this interview: Navidea Biopharmaceuticals Inc. we privately am, or my family is, paid by a following companies mentioned in this interview: None. My association has acted as a financial confidant with a following companies mentioned in this interview: NeoStem Inc., Cempra Inc. we was not paid by Streetwise Reports for participating in this interview. Comments and opinions voiced are my possess comments and opinions. we dynamic and had final contend over that companies would be enclosed in a talk formed on my research, bargain of a zone and talk theme. we had a event to examination a talk for correctness as of a date of a talk and am obliged for a calm of a interview, though refrain from financier bearing decisions.
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