cellceutix corporate logoNote I will be posting an interview with the CEO next week, where we will discuss more about the company and valuation. Stay tuned!

Hedging Biotech Risk with Strong Potential Puts Cellceutix in Limelight

The speculative nature of biotechnology investing makes it one of the most intriguing industries in the markets.  The true beauty of a successful drug is not only the ludicrous amount of revenue that can be generated for the company, building strong value for its shareholders, but the fact that there are compelling humanitarian benefits as well.  Sifting through the thousands of drugs in development and the companies researching them is all too often a daunting task.  After all, each biotech earnestly is attempting to develop a significant breakthrough.  News hit the wires this week from Cellceutix Corporation (OTCBB: CTIX), a near clinical stage biotech, that certainly separated the company from its many peers and commanded a closer look.

With even the quickest glimpse, Cellceutix looks different than other developmental biotechs.  A robust portfolio containing eight compounds for a variety of diseases and a scientific team that includes Dr. Emil Frei, “the father of the cure for childhood leukemia”; Dr. Krishna Menon, a lead researcher for the blockbuster cancer drugs Alimta and Gemzar; and Dr. Samuel Danishefsky, a Wolf Award winner and Chairman of the Laboratory for Cancer Research Bioorganic Chemistry at Memorial Sloan-Kettering Cancer Center.

Kevetrin, Cellceutix’s flagship compound, is being developed as a completely new class of chemistry that has demonstrated potent anti-tumor properties across a wide array of cancer strains in pre-clinical studies.  The company’s research has shown that Kevetrin re-activates p53, a key tumor suppressor protein that is often called “the Guardian Angel of the Human Genome.”  In more than 50 percent of all cancers, p53 is either damaged or mutated, stopping the crucial protein from regulating tumor growth.  Additionally, according to Dr. Menon, Kevetrin’s Mechanism of Action (MOA) also affects the retinoblastoma (RB) pathway as recently discovered by their team of researchers.  The RB protein is a second pivotal tumor suppressor protein that is dysfunctional in the majority of cancers.  Damaged or mutated p53 and RB is observed in nearly 100 percent of all types of cancer, giving Cellceutix a major competitive edge over pharmas pursuing specific strains of carcinomas.

“Initially, we simply knew that Kevetrin was working against every cancer that we tested, but we didn’t exactly know why,” explained Dr. Menon.  “Researching the MOA revealed the p53 connection earlier this year and now we are realizing the RB pathway.  It’s amazing to this point as to how extremely effective it has been in xenograft and in vivo studies.  We hope to replicate the results in clinical trials.”

Regarding clinical trials, Cellceutix disclosed this week that the Investigational New Drug (IND) application for Kevetrin has been filed with the Food and Drug Administration.  Adding an immeasurable amount of validation to the potential of this new drug is the fact that Dana-Farber Cancer Center and Beth Israel Deaconess Medical Center have agreed to host the planned clinical trials.  As two of the world’s leading cancer research centers, the two organizations do not make a habit of hosting clinical trials for company-sponsored trials of small biotechs, wending way to the conclusion that they must see something substantial in the pre-clinical research and plausibility of a breakthrough in cancer research with Kevetrin.

Researchers at biotechs big and small have been hard on the path of p53 and RB for many years, but with little to no success at restoring the critical proteins.  Cellceutix appears to have leapt to the forefront of the industry with its novel compound and should be testing it in humans in only a matter of months.  Major pharma already has their eyes locked on Cellceutix as announced in company press releases, opening the door as an acquisition target in the future.  If Dana-Farber and big drug makers are interested in this little biotechnology firm, it seems only a matter of time before the general investment community starts learning about them as well.  A price tag of only 36 cents per share translates to a market cap of only $31 million, a paltry figure given the lucrative future that could be in store for Cellceutix.  If the p53 works, one could hope for  a market cap of many billions of dollars.  Similar to what Pharmasset (VRUS)  accomplished with its unique hepatitis C drug (still in clinical trials)and sporting a five billion dollar market cap. At 37 cents it’s like buying an option on a potential blockbuster.