Home | Medical-Newswire.Com:
(EMAILWIRE.COM, March 21, 2012 ) New York, NY -- NovaBay Pharmaceuticals (NBY) released news this week that offers to broaden the scope and reach of the company's Aganocide compounds, which are being positioned as anti-infectives and could potentially replace modern day antibiotics as resistance to such treatment grows.
On Tuesday NovaBay announced a deal with Virbac Animal Health to bring its technology to the veterinary market. According to the agreement, NovaBay will receive an upfront payment - and some additional support for research and development - while Virbac will retain the option to license any of the Aganocide compounds that are successfully applied to treating veterinary indications.
The deal could provide NovaBay with a steady revenue stream in the future if Virbac exercises its licensing option. According to the Tuesday press release, if the option is exercised,
"NovaBay may receive additional payments, which include an exercise fee as well as development and pre-commercial milestones for a line of veterinary products. NovaBay will also receive royalties on sales of any successfully commercialized Aganocide products to arise from this agreement."
Few companies are going to become superpowers in the field of medicine on treating veterinary indications alone, but the deal brings some attention back to NovaBay and gives us another chance to consider this company's technology on the open market - should the pipeline products make it that far.
It also gives us the opportunity to determine whether or not the current market capitalization for NBY justifies that pipeline potential, which, in the opinion of this writer, the determination is "probably not."
First, let's revisit the problem of antibiotic resistance.
When introduced into society seventy years ago, antibiotics changed the shape of medicine, and provided what - at the time - was considered a huge leap forward in treating bacterial infections. Having been so widely-used since then, however, the infectious organisms against which the antibiotics are administered have grown increasingly resistant, and sometimes immune, to today's antibiotic treatments.
The Centers for Disease Control and Prevention considers the developing resistance to antibiotics as a "crisis", noting on its website that, "These drugs have been used so widely and for so long that the infectious organisms the antibiotics are designed to kill have adapted to them, making the drugs less effective. People infected with antimicrobial-resistant organisms are more likely to have longer, more expensive hospital stays, and may be more likely to die as a result of the infection."
Medical professionals themselves understand the growing risks associated with antibiotic resistance, as noted by Dr. Marc Siegel, associate professor of medicine and medical director of Doctor Radio at NYU Langone Medical Center, this week in an article published on FoxNews.com. Dr. Siegel also notes that Doctors continue to over prescribe these treatments, thereby strengthening the resistance of the surviving bacteria and creating new "super colonies" that will eventually be uncontrollable.
This dilemma has created a huge monetary burden on the global health care system and is possibly setting up a one-time "miracle cure" as irrelevant.
That's where NovaBay comes into the picture.
NovaBay has developed, through its proprietary Aganocide compounds, a pipeline of synthetic anti-infectives that are designed to mimic the body's own defenses against infection. Namely, these synthetic molecules, based on the Aganocide compound NVC-422, essentially act in the same manner and processes of a body's white blood cells and not as antibiotics, therefore significantly reducing the risk of a resistance being developed.
The potential of such a technology has market-moving implications, and under the circumstances, it's understandable why NBY could be tagged with an 'undervalued' label.
There are, however, a couple of reasons why investors may not yet have fully embraced the company and its technology. The first reason may be the most obvious one; that NovaBay still has nothing beyond Phase II, and therefore any investment in the company is highly speculative and risky at this point, which is a fair assessment.
That said, the best deals in biotech are the ones that are found early, when patience is needed as the trial results pan out. It's also worth noting, however, that he trend of staying away from speculative "Phase II" investments may be shifting.
Take Lpath, Inc. (LPTN), for example. Lpath also has a novel and potentially groundbreaking technology in the works, but Pfizer (PFI) has bucked the Phase II label of the company and jumped in with a very significant partnership.
CellDex Therapeutics (CLDX) is another one that has traded very highly during its Phase II stages, even when Pfizer decided to divorce itself from a partnership with the company.
In both cases, investors may have started to become clued in to how much market potential is contained within those respective pipelines and tossed the standard "wait until Phase III" strategy to the side. As investors with similar strategies in mind research NovaBay, the same potential for price appreciation exists; especially give the fact that NBY has a powerhouse partner of its own in Galderma SA, with whom NovaBay is developing a treatment for the highly-contagious skin condition, Impetigo.
Another reason why NovaBay may be missing the mark in terms of market cap right now, and this one may be more relevant than the last, is that an earlier clinical trial conducted with then-partner Alcon in the treatment of adenoviral conjunctivits - better known to the average Joe as "pink eye" - failed.
Shares slumped badly after that news hit the presses and have only barely recovered since.
On the flip side to the endpoint miss, however, which sent sent investors running for the doors, is that a further look at the data from the same trial did show that efficacy was demonstrated against Epidemic Keratoconjunctivitis (EKC), possibly the most contagious form of the infection, and which often threatens a victim's vision.
Based on that data, trials have continued, but the fact that the company has a failed trial under its belt most certainly deters some investors from jumping back in, at least until they see more results.
A Phase IIb trial for this indication is expected to begin within months, while another Phase II trial for the Impetigo condition is also slated for this year.
Results from 'Part A' from a trial testing NVC-422 as a treatment for urinary catheter blockage and encrustation (UCBE) have already rolled in, with results from 'Part B' also due within months.
The pending trial results provide some short term catalysts, but another catalyst due for this year could be the one that puts NovaBay on the map.
A commercial launch is planned for the short to mid term for NeutroPhase, NBY's first FDA-cleared product and a treatment for chronic wound in both hospital and personal care. A successful launch for NeutroPhase could alleviate many of the monetary concerns normally associated with a small company bringing its pipeline through trials, and just a couple of months ago the company announced its first strategic partner for NeutroPhase.
Having a product already on the market and bringing in revenue will go a long way to validating this small company in the eyes of potential investors, especially if the NeutroPhase commercial launch goes off without a hitch.
Based on the pending trial catalysts, the commercial launch of NeutroPhase, and most importantly, the potential of NVC-422 products on the open market as eventual substitutes for antibiotics, NBY may still be trading under the radar and could still be lightly valued, when all is considered.
By 2013 the NovaBay could have three Phase III trials ongoing with an FDA approved product on the market.
If that's the case, it's a fair bet to assume that the market cap will be significantly higher than thirty five million at that point.
For an example of how a shift from Phase II to Phase III can effect a market cap, one could look at Keryx BioPharmaceuticals (KERX). During the early to mid stages of Phase II, the KERX market cap was similar to NBY's now, but when Phase II trials were successful and Phase III came along?
Prices quickly quadrupled.
NovaBay's target market of anti-infective care is a multi-multi-billion dollar market annually, and NBY could quickly penetrate that market, as Doctors are currently looking for a way around antibiotic resistance.
As I've previously discussed, this company may be at the right place at the right time. For investors being in the right place at the right time means being "in" before any price run starts, and it's possible that NBY has a ways to move, should the pending catalysts turn out positive.
Disclosure: Long NBY.
For more information and commentary regading NBY, visit: http://vfcsstockhouse.com/blog/article/-novabay-may-be-in-the-right-place-at-the-right-time-with-an-answer-for-antibiotic-resistance
Contact VFC's Stock House: email@example.com
VFC's Stock House offers research-based investment information, insights and ideas on a variety of different companies in numerous sectors, with a focus on biotech stocks and healthcare.
For full reports on Celsius Holdings and other companies visit: http://vfcsstockhouse.com
Follow VFC's Stock House on Twitter: https://twitter.com/#!/VFCsStockHouse
'Like' VFC's Stock House on Facebook: http://www.facebook.com/pages/VFCs-Stock-House/143724412345213
For full disclaimer visit: http://vfcsstockhouse.com
VFC's Stock House
Health News Headlines - Yahoo News
Get the latest health news headlines from Yahoo News. Find breaking health news, including analysis and opinion on
top health stories.
WHY IT MATTERS: Health care
23 Oct 2012 at 12:23pm
Burkina Faso bans big buttocks beauty contest
27 Aug 2016 at 4:35am
The government of Burkina Faso has banned an annual beauty contest for women with the biggest buttocks, saying such events are sexist. Adverts for this weekend's third edition of 'Miss Bim-Bim', carrying an image of two fully clothed women with exaggeratedly large behinds, provoked an outcry on social media. "Our role is to do everything to avoid damaging the image of women," said Minister Laure Zongo in a statement, adding that social media criticism had persuaded her to act.
Italy grieves as state funeral held for victims of powerful quake
27 Aug 2016 at 4:24am
Amongst the 35 coffins laid out in a sports hall were small caskets holding the bodies of an 18-month-old baby and a nine-year-old girl, two of the 21 children who are known to have died when the quake hit central Italy early on Wednesday. "What we need is a reconstruction in record time.
Japan's Abe pledges $30 billion for Africa over next three years
27 Aug 2016 at 3:52am
By George Obulutsa NAIROBI (Reuters) - Japan's Prime Minister Shinzo Abe told African leaders on Saturday that his country will commit $30 billion in public and private support for infrastructure development on the continent. Resource-poor Japan has long been interested in tapping Africa's vast natural resources, even more so since dependence on oil and natural gas imports jumped after the 2011 Fukushima nuclear disaster shut almost all of Japan's nuclear reactors. Abe, in the Kenyan capital Nairobi to attend the sixth Tokyo International Conference on African Development (TICAD), said the package would be spread over three years from this year and include $10 billion for infrastructure projects on the continent, to be executed through cooperation with the African Development Bank.
Yellow fever vaccination drive in Congo's capital hits target
27 Aug 2016 at 12:51am
A vaccination campaign against yellow fever in Congo's capital is almost complete, but the gains may be reversed by the looming rainy season and the spread of the disease to areas where people have not yet been vaccinated, the World Health Organization (WHO) said on Friday. Health officials began a campaign to vaccinate 7.5 million people in Kinshasa last week to combat the worst outbreak in decades of the hemorrhagic virus. More than 400 people have died in Congo and neighboring Angola since December.
FDA recommends Zika testing for all blood donated in U.S.
26 Aug 2016 at 10:15pm
By Julie Steenhuysen and Letitia Stein CHICAGO/TAMPA, Fla. (Reuters) - The U.S. Food and Drug Administration recommended on Friday that all blood donated in the United States and its territories be tested for Zika virus, as it moves to prevent transmission of the virus through the blood supply. The agency said its decision to expand blood screening in the United States was based on concerns about more cases of local transmission in Florida, the growing number of travel-related infections and concerns that Zika-tainted blood could unwittingly be given to a pregnant woman, putting her unborn baby at risk of severe birth defects. ?The transfusion of a pregnant woman with blood infected with the Zika virus could have terrible consequences,? Peter Marks, director of the FDA?s Center for Biologics Evaluation and Research, said during a conference call with reporters.
Hong Kong's first Zika case tests negative
26 Aug 2016 at 9:38pm
Hong Kong's first Zika patient tested negative for the virus on Friday and was discharged from hospital, the government said in a statement. On Thursday, the Centre for Health Protection had said the 38-year-old woman, who had returned to Hong Kong after spending two weeks in in the Caribbean, had tested positive. Zika was detected in Brazil last year and has since spread across the Americas.
FDA expands Zika screening to all US blood centers
26 Aug 2016 at 7:59pm
The government told all U.S. blood banks Friday to start screening for Zika, a major expansion intended to protect the nation's blood supply from the mosquito-borne virus. Previously, blood testing was ...
U.S. judge will not block California school vaccination law
26 Aug 2016 at 4:54pm
(Reuters) - A federal judge on Friday refused to block a California law tightening vaccination requirements for schoolchildren in the state. The measure eliminated the so-called personal beliefs and religious exemptions from California's school vaccination law, meaning that only children with a valid medical excuse could forego vaccinations for such childhood diseases as measles and polio. The lawsuit, filed in U.S. District Court in San Diego last month, asked for an injunction to stop the requirements from going into effect, but Judge Dana Sabraw ruled that state legislatures have a "long history of requiring children to be vaccinated as a condition to school enrollment," and not allowing personal or religious exemptions.
Minnesota sets broadest U.S. limits on chemicals blamed for bee declines
26 Aug 2016 at 4:48pm
Minnesota's governor on Friday ordered the broadest restrictions yet in a U.S. state on the use of agricultural pesticides that have been blamed for hurting bees, fueling concerns that farmers there will not be able to protect crops from insects. Gov. Mark Dayton issued an executive order that requires farmers to verify that they face "an imminent threat of significant crop loss" before using the chemicals, called neonicotinoids. Details of how farmers would prove their need have not yet been determined.
Correction: Hospital Superbug Outbreak story
26 Aug 2016 at 4:40pm
In a Feb. 20, 2015 story about an antibiotic-resistant "superbug" outbreak at Ronald Reagan UCLA Medical Center, The Associated Press mischaracterized a statement an expert made about proving ...
Judge won't block California's strict child vaccination law
26 Aug 2016 at 4:32pm
SAN DIEGO (AP) ? A federal judge will not immediately block a California law that requires all schoolchildren to be vaccinated and is one of the strictest in the nation for eliminating exemptions based on religious and personal beliefs.
Timeline: Zika's origin and global spread
26 Aug 2016 at 4:05pm
The following timeline charts the origin and spread of the Zika virus from its discovery nearly 70 years ago:
Factbox: Why the Zika virus is causing alarm
26 Aug 2016 at 4:02pm
Global health officials are racing to better understand the Zika virus behind a major outbreak that began in Brazil last year and has spread to many countries in the Americas. Zika is transmitted to people through the bite of infected female mosquitoes, primarily the Aedes aegypti mosquito, the same type that spreads dengue, chikungunya and yellow fever. The Pan American Health Organization (PAHO) said Aedes mosquitoes are found in all countries in the Americas except Canada and continental Chile, and the virus will likely reach all countries and territories of the region where Aedes mosquitoes are found.
Whiplashed investors stay skittish about St. Jude
26 Aug 2016 at 3:43pm
(Reuters) - One day after a short seller claimed that St. Jude Medical Inc's heart implants are vulnerable to deadly cyber attacks, investors appear most concerned about whether the accusation will derail St. Jude's $24 billion planned deal for Abbott Labs to buy it.St. Jude's stock at one point fell around 3 percent on Friday, though it ended the day slightly up, following a drop of around 5 percent on Thursday after Muddy Waters Capital leveled the accusation against St. Jude. The stock continues to trade well below its price on Wednesday of around $82 per share. ...