Get the Latest Investment Ideas Delivered Straight to Your Inbox.

TICKERS: DMPI

Biopharma's Brain Cancer Therapeutic Compelling, Its Stock Undervalued
Research Report

Source:

A description of the asset and its potential are provided in a Dawson James report.

In a July 11 research note, Dawson James Securities analyst Jason Kolbert reported that coverage of DelMar Pharmaceuticals Inc. (DMPI:NASDAQ) transferred to him and, subsequently, he issued a lower target price on the company, $3 versus $4 per share. In comparison, the Buy-rated biopharma is trading today at about $1.37 per share.

Kolbert described the firm's lead drug candidate and its initial target indication. DelMar is developing VAL-083, a first-in-class small molecule chemotherapeutic for glioblastoma multiforme (GBM). The agent is a "bifunctional alkylating agent that causes DNA methylation of guanine at the N7 position," he explained.

The analyst purported that VAL-083 is "a good asset and is supported by plenty of patient-based data." Since it was introduced in the 1970s, it has been evaluated in more than 40 clinical trials and given to more than 1,000 patients, he relayed. Data from the National Institutes of Health have shown it to be efficacious against brain and lung tumors, melanomas and sarcomas as well as safe.

GBM is the most common type of brain tumor occurring in adults. Each year, 29,000 people in the U.S. and the European Union are diagnosed with it. It is frequently inoperable and associated with a poor prognosis.

Kolbert noted a key characteristic of VAL-083 that could make it superior to the current standard of care for GBM, Temodar (temozolomide). Temodar damages the DNA of cancer cells, and GBM cells respond by turning on multiple DNA repair pathways, including MGMT, to demethylate the DNA. As a result, patients can develop resistance to Temodar and, consequently, have a poor treatment outcome.

Unlike Temodar, MGMT does not repair VAL-083, Kolbert highlighted. In clinical trials, VAL-083 overcame MGMT-related resistance and was shown to be more potent against brain tumor cells than Temodar. "This suggests that VAL-083 has the potential to significantly benefit patients and create a higher, new standard of care for patients facing MGMT-unmethylated GBM," Kolbert added.

Currently, VAL-083 is being evaluated as a treatment for GBM in Phase 2, open-label clinical trials with partner facilities to generate proof-of-concept data while managing operating costs, relayed Kolbert. With the MD Anderson Cancer Center, DelMar is pursuing a recurrent GBM study and a maintenance-stage GBM study. The trial in collaboration with the Sun Yat-sen University Cancer Center in China is on patients with newly diagnosed GBM.

"Based on the outcome of these two trials, VAL-083's designated orphan and fast track status, we believe the company can raise the needed capital to run a pivotal program (by mid-2020)," commented Kolbert. Capital needed to advance VAL-083 is substantial. A recent raise generated $3.6 million, enough to support DelMar's operations through year-end 2019.

About DelMar, Kolbert concluded, "We see little downside to the stock but recognize the challenges ahead for the company to raise capital." DelMar's valuation is "at a severely distressed level" with a market cap below $10 million.

[NLINSERT]

Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures for Dawson James Securities, DelMar, July 11, 2019,

The Firm does not make a market in the securities of the subject company(s). The Firm has engaged in investment banking relationships with DMPI in the prior twelve months, as a manager or co-manager of a public offering and has NOT received compensation resulting from those relationships. The Firm may seek compensation for investment banking services in the future from the subject company(s). The Firm has NOT received any other compensation from the subject company(s) in the last 12 months for services unrelated to managing or co-managing of a public offering.

Neither the research analyst(s) whose name appears on this report nor any member of his (their) household is an officer, director or advisory board member of these companies. The Firm and/or its directors and employees may own securities of the company(s) in this report and may increase or decrease holdings in the future. As of June 30, 2019, the Firm as a whole did not beneficially own 1% or more of any class of common equity securities of the subject company(s) of this report. The Firm, its officers, directors, analysts or employees may affect transactions in and have long or short positions in the securities (or options or warrants related to those securities) of the company(s) subject to this report. The Firm may affect transactions as principal or agent in those securities.

Analysts receive no direct compensation in connection with the Firm's investment banking business. All Firm employees, including the analyst(s) responsible for preparing this report, may be eligible to receive non-product or service specific monetary bonus compensation that is based upon various factors, including total revenues of the Firm and its affiliates as well as a portion of the proceeds from a broad pool of investment vehicles consisting of components of the compensation generated by investment banking activities, including but not limited to shares of stock and/or warrants, which may or may not include the securities referenced in this report.

Analyst Certification: The analyst(s) whose name appears on this research report certifies that 1) all of the views expressed in this report accurately reflect his (their) personal views about any and all of the subject securities or issuers discussed; and 2) no part of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst in this research report; and 3) all Dawson James employees, including the analyst(s) responsible for preparing this research report, may be eligible to receive non-product or service specific monetary bonus compensation that is based upon various factors, including total revenues of Dawson James and its affiliates as well as a portion of the proceeds from a broad pool of investment vehicles consisting of components of the compensation generated by investment banking activities, including but not limited to shares of stock and/or warrants, which may or may not include the securities referenced in this report.




Want to read more about Biotechnology / Pharmaceuticals investment ideas?
Get Our Streetwise Reports Newsletter Free and be the first to know!

A valid email address is required to subscribe