One area of the market that has started to clearly outperform over recent months is the Biotechnology space. The iShares Biotechnology ETF (NASDAQ:IBB) is up 17% since late May, while the Nasdaq 100 Index is up just 3% over the same period.
One of the drivers of that outperformance has been consolidation in the space, as big pharma/biotech giants gobble up promising midcaps and small caps with strong platforms and pipelines.
According to industry-leading publication Statnews.com, experts are predicting a coming surge of mergers and acquisitions in biotech, which bodes particularly well for early-stage players in the space.
The piece notes that the last surge in biotech acquisitions occurred from 2013-2018. During that period, nearly 25% of the acquisition targets hadn’t ever begun even a phase 2 trial. That period represented an evolutionary shift toward targeting earlier stage players relative to previous consolidation periods in the space.
With that as a backdrop, we would point to one very interesting early-stage player in the oncology space: Nascent Biotech, Inc. (OTCQB:NBIO), which bills itself as a clinical-stage biotechnology Company pioneering the development of monoclonal antibodies targeting treatment of various cancers and viral infections.
Pritumumab in the Spotlight
NBIO’s main asset is Pritumumab, or PTB, a natural human antibody that binds to cell surface Vimentin (also referred to as ectodomain vimentin), which is a protein expressed on the surface of epithelial cancers.
PTB is used as a targeted immunotherapy that “seeks out” cancer cells while leaving normal, healthy cells unharmed.
The R&D journey for Pritumumab began in 1982 with R&D in Japan, which showed in research that there might be real benefits for patients with brain cancer. However, due to unrelated issues, there wasn’t much follow-up to initial research, and it took Nascent Biotech to move in and re-engineer PTB through the more common and cost-effective Chinese Hamster Ovary (CHO) cell line manufacturing platform for monoclonal antibodies.
NBIO saw more promise to the drug and filed an IND request with the FDA in late 2018, which was granted, allowing clinical research to move forward. The start of the company’s clinical research on PTB was delayed due to the onset of the pandemic, but research got into full swing in March 2021.
NBIO was subsequently given permission by the FDA to enter human clinical trials for Primary and Metastatic Brain cancer.
Ripe for the Picking?
For NBIO investors, the company’s Phase I trial process has progressed smoothly so far, a fact reflected in shares of the stock so far this year. The company announced the successful completion of dosing of the second cohort (of five) in the trial in January 2022. Since then, shares of NBIO have moved as much as 800% higher.
Yet, even after this move, NBIO shares only price at about $0.40/share with a market cap of less than $42 million. For a biotech potentially on the verge of entering phase II research in the cancer space in a consolidating industry, this is still a micro-cap that has yet to receive much attention from mainstream investors.
In any case, the PTB Brain Cancer Phase I trial has clearly proceeded smoothly. The company just announced the successful completion of dosing of the fourth cohort. It is now recruiting patients for its fifth cohort according to its latest release. When that cohort is complete, Phase I will be complete, and the company will prepare and send its data to the FDA.
As noted at the top, this is a consolidating biotech space right now. And recent history suggests deals are increasingly being made ahead of Phase II trials, which means a company like NBIO, with its relatively unique treatment platform, could be lined up for some attention from larger peers in the space.
We would also note that NBIO has been expanding its IP protection of late, recently announcing that the USPTO issued a Notice of Allowance for claims related to Pritumumab – which only happens after the USPTO makes the determination that a patent should be granted from an application.