Opexa’s Surge Brings More MS Treatment Hope (OPXA, BIIB, NVS)

January 5, 2011 · Filed Under fda, Financial, multiple sclerosis, stem cells 

Opexa Therapeutics, Inc. (NASDAQ: OPXA) is on fire this morning with investor interest. The company announced that it has successfully completed two End-of Phase 2 meetings with the FDA over its Tovaxin.  This is the company’s lead-product candidate and is said to be the first ever personalized T-cell therapy aimed as multiple sclerosis.

The company believes that these FDA meetings put Opexa in position to move forward with a pivotal Phase 3 study of Tovaxin, which Opexa preparing for to being the Phase III study.

A Phase 2b study of Tovaxin demonstrated overall clinical and disability benefits over the placebo group, including a clinically relevant decrease in the Annualized Relapse Rate and improvement in disability score.  Another benefit beyond the efficacy measures that the FDA will ultimately evaluate is the safety profile.  Opexa notes an “excellent safety profile” with no serious adverse events related to the Tovaxin treatment.

There are MS drugs on the market.  Biogen Idec Inc. (NASDAQ: BIIB), which we recently covered as having risen above analyst expected targets, has the great MS drug called TYSABRI.  Unfortunately, the adverse effects that have greatly limited TYSABRI are rare instances of the potentially fatal brain infection PML.

It is probably too soon to call for a change of treatment regimens based upon already approved drugs against drug-candidates that still have to go through Phase III trials for broader data before the application process can even begin.  That being said, what makes Tovaxin different from current MS treatments is that it is a personalized cellular immunotherapy treatment.  It is derived from T-cells isolated from a patient’s peripheral blood, which is then expanded ex-vivo, and ultimately reintroduced into the patient by injection. This process then triggers an immune response against specific subsets of autoreactive T-cells known to attack myelin, which reduces the relapse risks through time.

Opexa noted, “The second meeting was a face-to-face End of Phase 2 clinical meeting in which Opexa presented its rationale and trial design for a Phase 3 pivotal study with Tovaxin in Relapsing Remitting-MS (RR-MS) patients. The FDA concurred with Opexa regarding its proposed clinical trial protocol including the patient population, end points, patient numbers and trial design. The FDA also offered several recommendations to further enhance a Phase 3 trial.”

Opexa is one we highlighted before on positive stem cell safety profiles.  Opexa is also one that has not been without controversy and has not been without financial liquidity measures.  Novartis (NYSE: NVS) put the company on the map on news in 2009 that it was acquiring the company’s stem cell technology.

The war against MS is a large one.  The National Multiple Sclerosis Society lists on its site that there are approximately 400,000 people with multiple sclerosis in the United States alone, with 200 more new cases diagnosed every week. The Society also noted that MS is thought to affect more than 2.1 million people on the planet.

It is still too soon to know if Tovaxin will be the next big MS treatment.  The FDA is a tricky institution and approvals have been more scrutinized of late.  So you know the good news, and you have at least some of the caveats.

The market is voting this one as a success today.  Opexa shares are up almost 60% at $2.49 on almost 6 million shares as of 11:30 AM EST.  The high for the day is $2.90 and the 52-week trading range is $1.02 to $3.07.

Even after the big gain, Opexa has a micro-cap value of only $45.9 million.  The company’s cash and equivalents was listed as only $4.73 million as of September 30, 2010.  Another round of funding is probably a safe assumption for the near future.  The company has noted funding and partner searches and the press release today noted: “Moving forward we are focused on implementing the necessary steps to advance toward a Phase 3 clinical trial, continuing discussions with potential development partners for Tovaxin and attempting to secure appropriate financing.”

If the company’s new MS treatment is as good as the investor reaction is signaling today, that funding should be easy enough to secure.  The question to ask on funding is probably “how much and when?” over other issues.

Stay tuned.

JON C. OGG

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