Advaxis Inc.: Initiating coverage with a Outperform rating
We are initiating coverage of Advaxis Inc. ([stock]ADXS[/stock]) with an Outperform rating. Our twelve-month price target is $ 0.50.
Advaxis (ADXS) is a development stage biotechnology company focused on the research, development and commercialization of safe and effective therapeutic cancer vaccines that utilize multiple mechanisms of immunity.
The Company is developing a live, attenuated Listeria vaccine technology under license from the University of Pennsylvania which secretes a protein sequence containing a tumor-specific antigen. This vaccine technology is capable of stimulating the body’s immune system to process and recognize the antigen as if it were foreign, generating an immune response able to attack the cancer. This is a broadly enabling platform technology that can be applied to the treatment of many types of cancers, infectious diseases and auto-immune disorders.
This technology involves the creation of genetically engineered Listeria that stimulates the immune system to induce antigen-specific anti-tumor immune response involving both innate and adaptive arms of the immune system. In addition, this technology facilitates the immune response by altering tumors to make them more susceptible to immune attack, and increasing the number and maturation of development of specific cells that underlie a strong therapeutic immune response.
The Listeria platform technology is unique and holds advantages over its peers in three ways.
- Advaxis’ Listeria-based cancer vaccine can deliver bioengineered cancer antigen fused with a unique, proprietary strong adjuvant LLO which elicits both innate and adaptive immune systems in the body to fight cancer. The immune response elicited by Advaxis’ cancer vaccines has been the most comprehensive and robust so far in the industry.
- Advaxis’ cancer vaccines can reduce the amount of regulatory T cells and myeloid suppressor cells which help protect tumors from attacking by cytotoxic T cells.
- Another distinctive feature of Advaxis’ cancer vaccines is their ability to change the ratio between killer T-cells and regulatory T cells (the Kill Ratio) inside the tumor from 1:1.3 to 22.7:1.
Based on its proprietary Listeria technology, Advaxis has established a pipeline targeting various cancer indications. The Company’s lead candidate is ADXS11-001. Pre-clinical and Phase I clinical trials have demonstrated that ADXS11-001 is well tolerated and has shown impressive efficacy in cervical cancer patients.
ADXS11-001 is currently under two Phase II clinical trials for the treatment of cervical cancer and cervical dysplasia respectively. Another two Phase II trials for the treatment of cervical cancer and head and neck cancer are planned to initiate in 2Q2011.
The Company’s early stage candidates include ADXS31-142 for prostate cancer and ADXS31-146 for breast and brain cancer as well as canine osteosarcoma. Phase I trials for these two candidates will be conducted if funds are available.
We believe Advaxis’ Listeria technology is a viable drug delivery system which targets the rather large cancer market. The Company’s shares are undervalued in our view. Risk is higher though at this point, return should be also high if any progress can be made in advancing its pipeline.
Risks include cash burn concern, early to middle stage development risk, and over-the-counter market trading.
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