Advaxis, Inc. (NASDAQ:ADXS) is a stock that we have looked at on quite a few occasions here at Insider Financial over the past 12 months.
The company is a development stage biotechnology stock that is trying to bring a whole host of different treatments to market and has one of the deepest (and most diverse) pipelines that we have seen for a company of its size and at this end of the market.
Despite that, however, it’s down a little over 30% during the last three months and just shy of 40% year-to-date. Over the last 30 days alone, the company lost 40% of its market capitalization.
These declines (and especially the latter) come on the back of essentially no news and as far as going back to the start of the year is concerned, we have seen numerous positive updates that – as we have pointed out – we feel have been misinterpreted by wider markets.
On September 27, however, we did get some degree of validation of our long-term thesis for Advaxis, albeit not by way of an upside revaluation. The company filed this 13 G/A with the SEC, outlining an increased position taken and held by Adage Capital Partners, L.P.
The latter now holds shares accounting for 11.45% of Advaxis with the aggregate total amount held coming in at a little over 4.7 million shares of common stock. Many reading will likely already be familiar with Adage, but for those that are not, it’s a very well respected hedge fund that specializes in taking activist positions in early-stage biotechnology companies and driving them (from both a capital requirement and an operational one) towards successful revaluation.
If a fund like Adage is willing to pick up shares at current prices, adding to its existing position, it suggests that our undervaluation thesis is very much on the money right now and that the fund expects Advaxis to hit some near-term catalysts that should drive a rebalancing.
So what might these catalysts be?
As of the most recent financials, third quarter this year, management has outlined the separation of the company’s core focus into four distinct areas of operation. These are HPV- Associated Cancers, Prostate Cancer, Personalized Therapies Targeting Neoantigens, and Targeting Shared Hotpot Mutations and Tumor Associated Antigens.
Each one has an associated catalyst set to hit press during the coming 6 to 12 months, with each catalyst individually having the potential to get the stock turned around and moving upwards.
In the HPV- Associated Cancers franchise, the company expects to submit for conditional approval in Europe with its lead franchise asset, axalimogene filolisbac.
The same drug is also enrolling right now in a combination trial with AstraZeneca plc (ADR) (NYSE:AZN), and a combination trial with Advaxis’ ADXS-DUAL and Bristol-Myers Squibb Co (NYSE:BMY)’s nivolumab for the treatment of women with persistent, recurrent or metastatic cervical cancer will be initiated in the first half of next year.
In the Prostate Cancer franchise, there is an ongoing trial investigating a drug called ADXS-PSA in combination with Merck & Co., Inc.(NYSE:MRK)’s pembrolizumab. We should see interim data from this study had press early 2018.
In the Neoantigens franchise, a study that’s being carried out on the back of a partnership with Amgen, Inc. (NASDAQ:AMGN) will dose its first patient during the first half of 2018.
Finally, in the Tumor Associated Antigens franchise, multiple (and we are quoting here) INDs will be filed during the first half of 2018, each of which should precede an advance into clinical testing in the target oncology indication of the company’s choosing.
Very rarely in development stage biotechnology, and especially with a company that is valued at less than $200 million, do you get exposure to combination studies with the flurry of big-name healthcare entities detailed above.
Sure, these trials will cost money, but the company has around $90 million on hand and its collaborations offer a degree of cost-risk mitigation. Dilution is out of the question, of course, but it’s unlikely near term.
This is a one-of-a-kind biotechnology play and Adage has recognized this fact and increases exposure ahead of what could be a pivotal six-month period.
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Image courtesy of Fabian Schmidt via Flickr
Disclosure: We have no position in ADXS and have not been compensated for this article.