Saturday, June 02, 2007

re Motley Fool's "Why We Love Wild Penny Stocks" article misses the mark by not explaining Adherex's unusual story

Dear Tim and Brian,

re your recent article on Motley Fool Why We Love Wild Penny Stocks

Your simple statements about Adherex do not do the firms efforts justice in the least, nor indicate the critical mass of promise Adherex holds likely to achieve in notable advances in cancer treatment prognoses.

Adherex's present modest valuation is a huge hangover from founding (business) management team's incompetence. The initial management now long since gone, since the merger/takeover by Oxiquant - bringing aboard Dr. Peters as CEO and refocusing the firms efforts far more productively. As such the present stock valuation in no way reflects the likely cancer pharma blockbuster successes the firm has moved forward well into FDA trials.

Granted most of Adherex's efforts are in FDA P1 / P2, but the scientific learning of substance has been significant, not merely promising, as there are numerous technical / scientific fundamentals that are hugely favorable with quite unusual characteristics for cancer pharmaceutical developments.

Some key technical points of note - there are 2 main cancer pharma programs pursued.

1st - ADH-1 - that of the the novel Cadherin technology which Adherex was founded on (Cadherin being a cell adhesion compound - the glue of the body's cells), developed initially by Prof. Orest Blaschuk of McGill University.

2nd - 5FU/ Eniluracil combo therapy - inlicensed from a failed Glaxo phase 3 trial ( described much further below )

back to ADH-1

The primary compound called ADH-1, is an N-Cadherin antagonist (early on was called Exherin, prior to merger with Oxiquant).

In laymans terms, a Cadherin antagonist will reduce the cell adhesion properties of the targeted Cadherin type by the chemical agent "antagonist". The practical significance to successful advances in cancer treatment will be described below, but in short there is selectivity in Cadherin targeting that means that destroying a particular soft tissue tumor Cadherin type, will not need to have any material effect on the rest of the body, both in primary targeting / tumor tissue destruction and in safety (almost total absence of side effects) for reasons that will elaborated below.

So keywords to note for ADH-1 here, are Safety, Absence of Side Effects, and Selective Targeting of ONLY Tumor Tissue.

There are various classes of Cadherin cell adhesion compounds in the body, and they perform different functions. In the case of tumors - tumor tissue can be classed as E-Cadherin marked or N-Cadherin marked. This is notable and fortuitous for a cadherin cancer pharma strategy.

These two cadherins (E&N) are important in tumor tissue evolution, as they reflect stages of how the tumor tissue grows. Generally speaking N-Cadherin tissue seems to be more immature and rapid growing cancer tissue, but there are greater subtleties. Plus as tumors grow there are pockets of regions of tumor tissue of each, such that both Cadherins E&N can coexist together in the tumor. The distribution and proportions of E&N Cadherins are not necessarily simple.

The two E & N Cadherins also present an unusual strategy to treat soft tissue tumors, that until the appearance of Adherex, were not addressed in the least as a possible means for cancer treatment.

In our case with ADH-1, N-Cadherin marked tumor tissue will offer up an opportunity to safely and quickly kill large amounts of N-Cadherin tumor tissue with unprecedented results using ADH-1's capability to cause N-Cadherin de-adhesion ( hence the firm's name Adherex ) ...

More specifically is that ADH-1 is effective in destroying N-Cadherin marked tumor soft tissue, and notably as yet largely unknown, is that most Chemos to date are effective mostly on E-Cadherin marked soft tumor tissue.

Very conveniently there is a complementary synergistic effect (N-Cadherin by ADH-1 & E-Cadherin by conventional Chemo ) with most present / prior chemos, and the potential for ADH-1 in combo to markedly improve cancer pharmaceutical efficacy.

This complementary characteristic only became apparent recently, from prior single agent ADH-1 FDA P1/P2 tests & subsequent preclinical Combo experiments, after Dr. Peters vigorous efforts to move single agent ADH-1 trials along. He learned brilliantly and the science is not merely superb in an academic sense, but amazing in the practical implications which seem to likely have promise across many soft tissue tumor types, using several existing conventional Chemos, in combination with ADH-1.

Salient characteristics of single agent ADH-1 -

Unusual natural compound normally produced in the body, and when tissue expression (production) of natural ADH-1 is lost, correlates to some small ~10-30% fraction of tumors. This is described in the open literature by some Cadherin research biologists?

One can infer from this, that natural ADH-1 is one of the human body's natural low level cancer scavengers.

But due to its natural presence in the body, ADH-1 has a near perfect metabolism (break down) in the liver (complete elimination in 4hrs by liver), so cumulative side effects are nil, so long as the dose RATE is kept below some critical threshold. In P1 single agent testing, Adherex found that if a rather unusually high dose RATE was exceeded, the common chemo side effect called Hands and Foot syndrome was observed, and if the ADH-1 dose RATE was reduced, no H&F ever appeared, and essentially no side effects were observed either.

But importantly there is NO limit to cumulative total DOSE in the least, also due to the unusual safe natural metabolic breakdown pathway in the liver, that ADH-1 possesses. This characteristic of ADH-1 as a cancer pharmaceutical agent having a safe natural metabolic (elimination) pathway is rare as hens teeth in chemotherapy agents, especially cancer chemo agents with as high activity as ADH-1 possesses..

Noting the 4 hrs to complete elimination by metabolic pathways, we can now also observe that the basic cancer action of ADH-1 - the chemical effect of destroying cell adhesion of N-cadherin marked tumor tissue, is noted by the rapid and selective onset of destruction N-Cadherin marked tumor blood vessels (vasculature) in 30 minutes.

N-cadherin tumor tissue blood vessels are well known to be very fragile, sort of immature thin spindly and almost leaky vasculature development structure. ADH-1 seems to safely and selectively target the N-Cadherin tumor vasculature with no significant effects on the rest of the body whose otherwise healthy vasculature is largely held together by E-Cadherin.

Furthermore onset of N-Cadherin tumor tissue vasculature destruction, by melting as it were, occurs in a rapid 30 minutes from ADH-1 infusion.... The result is that no blood can feed the N-Cadherin tissue, nor leave the tumor by the venous system, so the N-Cadherin tumor tissue will no longer be viable.

This fast rate of 30 minutes ADH-1 activity, is onset to beginning destruction of N-Cadherin marked tumors/ tumor tissue by melting the N-Cadherin blood vessels, is unprecedented.

Remember NO side effects below a critical level of dose RATE from ADH-1, and rapid N-cadherin tumor tissue blood vessel destruction !!!

The destruction of N-Cadherin marked tumor tissue blood vasculature by ADH-1, starts onset of N-Cadherin tumor tissue NECROSIS or tumor tissue death. IN 30 MINUTES. The actual tumor shrinkage from the necrosis onset is far slower (weeks to months), but necrosis onset by N-Cadherin vasculature destruction is relentless in shrinking the N-Cadherin marked tumor tissue.

[ June 5th 2007 - The second order effect is that residual N-cadherin tissue at the periphery of an N-cadherin region might survive ADH-1 treatment to some degree due to adjacent non-NCadherin blood supply. Notable but typically small effect ]

More subtly. tumor tissue seems to at times switch and evolve at some slow rate between N-Cadherin and E-Cadherin types. ADH-1 seems very effective against N-Cadherin tumor tissues in quite a number of soft tissue cancer tumors.

What is evident is that the COMBINATION of ADH-1 with its minimal to zero added side effects + the present normal conventional chemos of some good fraction of cancer treatments, will prove to be extraordinarily effective in cancer prognoses with few added side effects over existing chemo drugs used in combination therapies.

This unusual ADH-1 combo synergy/ efficacy arises due to the fact that most existing chemos are seemingly not effective against N-Cadherin marked tumor tissue (curiously, normal prior chemos seem to be mostly effective against E-Cadherin tumor tissue) and yet ADH-1 is devastatingly effective in quickly destroying N-Cadherin tumor tissue.

This is the salient technical advance for cancer treatment improvement that ADH-1 presents, derived from massive learnings of prior Cadherin cell adhesion science and recent single agent FDA p1/p2 tests of ADH-1.

At present ADH-1 has mostly completed single agent Phase 2 trials, and is now heading into P1 combo therapy trials.

Due to the fundamental confidence in the unusual properties of ADH-1, alone and in combination with conventional chemos, one of the first combo therapies being undertaken as a P1 combo for ADH-1 is MELANOMA.

The rational is unusual. Melanoma today is largely untreatable as is well known, if not caught very early. Apparently some early preclinical testing of ADH-1 with Mephalan for melanoma, has indicated unusual activity increases that arises in part from ADH-1's targeting of N-Cadherin tissue that conventional chemos do not attack well. One might infer that Melanoma might become the poster boy for Cadherin cancer treatment strategies, in that if the lethality of Melanoma is due largely to its possible unusual ratio of N-Cadherin melanoma tissue, this would all begin to make some unusual sense....

Adherex has indicated their likely intention to quickly move through Phase 1 Melanoma testing to an unusual Phase two randomized trial in an attempt to possibly gain an advanced approval by the FDA, possibly through a P2 phase alone without progressing to the typical P3. This strategy is unusual (done with Gleevec apparently) and is not without risks, but single agent ADH-1 properties and limits are well studied by now, and as such given the preclinical testing observations with ADH-1 combo with Mephalan for melanoma, there is some unprecedented promise here....

If Phase 2 combo ADH-1 / Mephalan for Melanoma was successful in a randomized P2 trial, the consequences for Adherex would be astounding as would be the improvement for Melanoma patient prognoses possibly be very unusually beneficial.

There is far more to the ADH-1 story at present, and there are intentions for numerous tumor types to be tested with Combo ADH-1 and various conventional chemos, and these will progress at a more normal pace for Adherex. But the Melanoma effort is very unusual, as one can gather Melanoma is a very tough nut to crack. This effort has some implications of risk and potentially huge upside for Adherex....

Clearly some soft tissue tumor types will likely respond better than others and this is what Adherex is presently exploring with a number of different tumors being brought into trial efforts. ADH-1 will not be a cure for cancer, but it seems to have unprecedented promise for a significant advance in cancer prognoses in the near to medium term, under the very capable even brilliant, Dr. Peters CEO and Dr. Norris President and COO.

some reading you might enjoy ...

a lead in blog post.

An article originally from Ottawa Citizen chronicling the early days till the aquisition / merger of the firm with Oxiquant - where Oxiquant's Dr. Peters takes over control of the firm, with Dr. Norris who had joined prior to the merger (and may have in fact suggested a merger, since the firm was nearly in bankruptcy prior to merger).

The key technical role of McGill University's Prof. Orest Blaschuk's development of Cadherin technchnology and his by now 40 issued patents held by Adherex is alluded to. [I had encouraged Bagnall to write this article for over 2 years till he succumbed to my pestering influence, and I contributed to guiding the subject matter contained. I was left off as 2nd co-author apparently since I own some small amount of Adherex stock]

article originally from the Ottawa Citizen newspaper (less relevant to Adherex but interesting)


2nd - the second pharma compound being pursued, is a formerly failed Glaxo Smith Kline project, that failed Phase 3 after ~$80m invested by Glaxo, due to a technical error that Glaxo did in phase 3, improperly ratioing the mix of two compounds tried for the hoped for combo chemotherapy advance of 5FU & Eniluracil.

[Note this was approximately what Dr. Peters described in one of the webcast conference calls to Adherex investors in Q3/4 2006? possibly early 2007 about how the 5FU/Eniluracil matters transpired at GSK and later]

[ Note 6-4-2007 11:30pm pst - some readers are being referred here from a google finance discussion of issues of other matters of GSK(by someone else posting a link to the article of mine here). I dislike what is being said about GSK at the google GSK vioxx referral posts, and think it wrong to not present a balanced picture of events present and in historical context for any and every firm (life happens to be complicated - never as good in the best of times nor as bad in the worst of times FWIW).

GSK has had a long productive and prestigious tradition of playing significant POSITIVE role in the pharmaceutical products the tenor of some of the discussions about GSK at the referred link at the Google finance topic on Vioxx is troubling and likely unfair to the firm... MY 2 Cents .. I think it important to never exaggerate the bad especially leaving out the context of all the good done by any firm one discusses - just to be fair to all concerned - MW ]

The goal here is the intention of taking the common chemotherapy agent 5FU which is old and without patent protection, but a mainstay of intravenous (IV) cancer chemotherapy for many many years, and transform it into an orally administrable pill, of hopefully longer half-life duration of the 5FU compound in the bloodstream. Glaxo failed in their 5FU/Eniluracil P3, but in the course of some partnering discussions with Adherex re ADH-1, offered up the failed 5FU/Eniluracil program to Adherex for in-licensing by Adherex.

Dr. Peters the brilliant fellow he is, knew likely immediately what Glaxo did wrong in their P3 execution of this program, and within 3 months has mouse model experiment data supporting his excellent performing fix to Glaxos P3 errors, showing orally administered 5FU/Eniluracil has all the intended promise when the RATIOS of the 2 compounds were dosed in the appropriate manner ( that Glaxo erred in Glaxos Phase 3 efforts ).

Due to the fact that the new Adherex 5FU/Eniluracil effort (now after complete in-licensing of all Glaxo IP of same) is leveraging some extensive prior work of Glaxo's, and that 5FU is very well known from many many years of use in intravenous cancer treatments, Adherex has an unusual opportunity to make a more effective application of present IV intravenous 5FU that is currently unprotected by patents, to become a more effective, orally administrable PILL, with increase in 5FU efficacy....and PATENTABLE....

So that is the second major thrust of Adherex's cancer pharma development efforts. Adherex's 5FU/Eniluracil efforts are now heading back to a fast pace of P1s for the remix of 5FU/Eniluracil, obviously leveraging profuse prior efforts by Glaxo.

In the simplest sense of stock price valuation, Adherex is a penny stock. In the promise of the firm and even the substance of the technical advances to date, Adherex is no common penny stock in the least.

I was initially introduced to the firm's Cadherin technology by a McGill University professor on a trip back to my hometown many years ago, from my then work / home in Santa Barbara.

Initially I was skeptical of the technology, as the specific unnamed McGill professor had his quirks, but it became apparent to me 1-2 years later, what Prof. Orest Blaschuk, the developer and inventor, has discovered is indeed a novel and effective means to likely upend common poor cancer prognoses, with a new brilliant Cadherin based technical strategy of unusual effectiveness.

The quick addition of 5FU/Eniluracil to the firm's development efforts is an added bonus of unprecedented opportunity and a testament to Drs. Peters & Norris obvious brilliance, especially in the quick demo of the fix to Glaxo's technical missteps, in a mere 3 months.

Unmentioned here as yet, is that both these major programs ADH-1 and 5FU/Eniluracil will possibly result in pharmaceutical products with > $B markets.

So is Adherex just yet another penny stock?

I'll let you think that over.

[ed - more of my prior Adherex posts are linked just below]






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