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DelMar Pharmaceuticals: Emerging Biotech Stock

Published 05/06/2013, 06:26 PM
Updated 07/09/2023, 06:31 AM

Looking for the next gem in the biotech sector is hard work, because you can end up losing your money very quickly. I think every investor should allocate a certain amount of money in this sector not only for diversification, but also for the benefit of patients enrolled in the thousands of research programs worldwide.

I already wrote an article about DelMar Pharmaceuticals because I think it could be a nice trading opportunity going forward.

This clinical and commercial stage oncology company has a lead product candidate called VAL-083. Val-083 is a bi-functional alkylating agent, with potential antineoplastic activity. VAL-083 crosses the blood brain barrier (BBB) and appears to be selective for tumor cells.

The product has been marketed in China for over 20 years, primarily for the treatment of hematologic cancers and lung cancer. VAL-083 is supported by numerous preclinical and more than 40 U.S.-based clinical research publications demonstrating efficacy as a potential treatment for glioblastoma multiforme (GBM) and other cancers.

In January 2013 the company went public by a reverse merger and is trading now at the OTCQB under the ticker DMPI. The company has 30.6 million shares outstanding and has a market capitalization of $62.7 million.

Much research is done to cure or stop Glioblastoma Multiforme (GBM). Glioblastoma multiforme (GBM) is the most common and deadliest of malignant primary brain tumors in adults and is one of a group of tumors referred to as gliomas. Standard treatment is surgery, followed by radiation therapy or combined radiation therapy and chemotherapy. If inoperable, then radiation or radiation/chemotherapy can be administered.

VAL-083
VAL-083 is a novel “first in class” small-molecule therapeutic agent that the company is developing as a new cancer chemotherapy.

VAL-083 has been assessed in multiple NCI-sponsored clinical studies in various cancers including lung, brain, cervical, ovarian tumors and leukemia. Published pre-clinical and clinical data from the late 1970s and 1980s suggest that VAL-083 may be active against a range of tumor types; however, further research was not pursued in the United States due to an increased focus by the NCI on targeted biologic therapies during the era. VAL-083 is approved as a cancer chemotherapeutic in China for the treatment of chronic myelogenous (or myeloid) leukemia (“CML”) and lung cancer.

The mechanism of action of VAL-083 is understood to be a bi-functional alkylating agent. Alkylating agents are a commonly used class of chemotherapy drugs. They work by binding to DNA and interfering with normal processes within the cancer cell, which prevents the cell from making the proteins needed to grow and survive. After exposure to alkylating agents, the cancer cell becomes dysfunctional and dies. There are a number of alkylating agents on the market that are used by physicians to treat different types of cancer.

VAL-083 has been assessed in multiple studies as chemotherapy in the treatment of newly diagnosed and recurrent brain tumors and other cancers. In general, tumor regression in brain cancer was achieved following therapy in greater than 40% of patients treated and stabilization was achieved in an additional 20% - 30%. In published clinical studies, VAL-083 has previously been shown to have a statistically significant impact on median survival in high grade glioma brain tumors when combined with radiation vs. radiation alone.

In February 2012, the company announced that VAL-083 has been granted protection under the Orphan Drug Act by the FDA. Based on historical development of other products in GBM, DelMar believes that it may be able to obtain FDA approval from an open-label Phase II registration-directed clinical, which will save significant costs of a large Phase III clinical trial. The company also believes that the FDA may grant fast-track, accelerated approval and/or priority review status to VAL-083, which will enable the company to begin filing for commercial approval during the clinical trial process. Fast Track, Accelerated Approval and Priority Review are approaches established by the FDA that are intended to make therapeutically important drugs available at an earlier time.

The company presented initial data from its clinical trial in November 2012 at the Society for NeuroOncology annual meeting. A summary of these data is shown in the table below. The data support that VAL-083 is safe and well tolerated with no drug-related adverse events (AE) observed to date. An overall response rate of 28.5%, where tumor growth had stabilized or regressed, has been observed at doses investigated to date. In the past, the FDA has approved drugs to treat GBM with a response rate of less than 20%.

While these data with VAL-083 are interim in nature, the company believes the results to date demonstrate a strong potential for successful development of VAL-083 as a chemotherapy for the treatment of GBM. DelMar plans to continuing working with their clinical investigators to determining an optimal dosing regimen for future registration trials.

VAL-083 Target Markets

DelMar is targeting cancer indications which it believes represent market opportunities in the hundreds of millions of dollars in North America and potentially in the billions of dollars worldwide.

DelMar believes the market for treating GBM patients the post-Avastin failure exceeds US$200 million annually in North America. Subject to successfully completing clinical trials and obtaining approval by the FDA and other applicable regulatory agencies globally, the company also believes that VAL-083 could potentially generate sales in excess of $1 billion world-wide as a potential front-line therapy for GBM.

Final Note
DelMar Pharmaceutical is an emerging biotech stock that has a potential blockbuster product VAL-083 in the company’s portfolio. DelMar’s unique commercial and development partnership in China with Guangxi Wuzhou Pharmaceutical Company, a subsidiary of publicly traded Guangxi Wuzhou Zhongheng Group Co., Ltd. for the development of VAL-083 (marketed as “DAG” in China), is the a big plus. The collaboration expands the exclusive supply relationship between DelMar and Guangxi Wuzhou Pharmaceuticals to include the Chinese market and all markets outside China. The companies will work together to insure the product specifications meet global standards in order to accelerate international development and regulatory approval. Guangxi Wuzhou Pharmaceuticals will provide funding for clinical trials conducted in China and will be the exclusive supplier of DAG for injection and DelMar will be responsible for development and commercialization.

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