Thursday, April 3, 2014

Del Mar Pharmaceuticals Inc.

Del Mar (DMPI) a Canadian based Pharmaceutical company founded in 2010 with its main player VAL-083 which is currently in the clinical trial stage in the U.S. for refractory glioblastoma multiforme (GBM).  Glioblastomas are the most aggressive form of brain cancer so aggressive that even under high levels of radiation the tumors may show no sign of ever receiving radiation.  The small-molecule
chemotherapeutic is already approved in China for lung cancer and chronic myelogenous leukemia. 
The bar is set higher in the U.S. both clinically and regulatory. 

As an investor I stay away from most OTC securities as they come with high risk.  As a man of medicine obsessed with the brain and cancer the stock seems promising and may surprise investors with a blockbuster drug.  Yet I have traded for quite a while so I know best to look for fundamental or technical analysis.  According to SeeThruEquity a NYC independent equity research firm they had modeled that Del Mar would have raised $2mn in 2014 yet DMPI reported a working capital of $4.1mn said to last the biotech company well into the first quarter of 2015 in regards to R&D. SeeThruEquity has a $4.53 price target for the company.

It is typical that newly founded pharmaceutical companies operate on negative cash flow during the clinical trial process.

Del Mar could be uplisted to either the NYSE or NASDAQ.  Making it a good investment for the long run or until it gets FDA approval.  The FDA already gave VAL-083 Orphan Drug Status.  Temodar and Avastin are the current drugs on the market for GBM.  The drug is a last result treatment but if it is approved it could become a front line treatment.  The company will make updates in regards to VAL-083 at the American Association Cancer Research Annual Meeting (April 5-9) in San Diego, CA. 

The Board of Directors includes two MBAs, a Ph.D and a Doctor of Medicine who practices at Columbia-Presbyterian.  Del Mar has three Advisors who either practice Neurosurgery or Neurology.

The stock has stayed in the $1-$1.4 range (after hitting a high of $2.4 in May 2013) for almost a year typical of a OTC security.

Without treatment victims with GBM will only survive for 4-5 months.  With treatment (chemo, radiation & Temodar) the survival rate is about 15 months.

If approved VAL-083 may generate $100s of millions in North America and possibly billions worldwide.  On the other hand if the drug fails to receive approval that will most likely be the end of Del Mar and a monetary loss to investors.  
Glioblastoma Multiforme - this one has crossed the midline
to the opposite hemisphere.
Neoplasms are quite vascular.

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