EC Bioniche: A Home Run Buying Opportunity In Biotech

Scouting for asymmetric opportunities in the small caps universe, I discovered Bioniche Life Sciences (US listing: BNHLF, Toronto: BNC.TO). This company is:

  • A full-fledged Phase III biotech. The test results were so good that FDA has allowed Bioniche to file for market approval in Q1 2015.
  • Addressing a $1 billion large and critically unmet medical need in bladder cancer with a ground-breaking technology.
  • About to receive an Orphan Drug Designation.
  • Fully funded. Bioniche has ample cash, and virtually no debt.

You would expect such a company to be valued at $150 million minimum. That's a minimum, most Phase III biotechs are valued much higher. Not so in this case: the market values Bioniche at a mere $25 million. This doesn't make any sense. Bioniche is so ridiculously undervalued - exceptionally low valuation for a Phase III biotech stock - that it could be today's most undervalued biotech stock on the market.

But I bet you never heard of Bioniche. Only 30 people are registered to receive email alerts on Seeking Alpha and there is no research to be found anywhere on the internet. If you're looking for a stock that is completely off-the-radar, Bioniche is. This article is the first research on Bioniche ever available for you to read, and explains why this is a genuine 10-bagger opportunity from current price levels.

About Bioniche

Bioniche focuses on the discovery, development, manufacture, and marketing of proprietary products for the human health markets. Its lead product, Mycobacterial Cell Wall-Nucleic Acid Complex (MCNA) suspension, is a complex biologic immunotherapy designed for the treatment of non-muscle-invasive bladder cancer in humans, which is in Phase III clinical development.

Bioniche's lead drug MCNA has shown excellent results

MCNA is, in technical terms, an acid composition prepared from the culture of Mycobacterium phlei. The composition contains nucleic acids and other cell wall constituents known to elicit an immunomodulatory (affecting the body's immune response) and anti-proliferative response. The components of MCNA have been shown to activate innate immune receptors known as pattern recognition receptors (PRRs). Activation of PRRs is thought to be responsible for the range of immunomodulatory and direct anti-cancer activities of MCNA.

Following successful completion of Phase I and Phase II studies with earlier formulations of MCNA, Bioniche completed the first leg of the Phase III trial with MCNA suspension. The objective of this Phase III trial test was to evaluate the efficacy and safety of MCNA in patients with non-muscle-invasive bladder cancer (NMIBC) at high risk of recurrence and progression who had failed the so-called intravesical Bacillus Calmette-Guérin (BCG) therapy. A total of 129 patients who had failed to respond to one or more courses of BCG were enrolled across 25 centers in the U.S. and Canada.

The results were very encouraging:

- Regarding efficacy, the overall 1-year disease-free survival rate increased significantly. Durable responses were also observed, as well as a noticeably lower rate of progression and cystectomies in patients who responded to MCNA as compared to those who did not respond.

- In terms of safety, the results showed that intravesical administration of MCNA was well tolerated, with most adverse events being mild to moderate in severity and few leading to discontinuation of treatment.

In a high-risk, BCG-failure patient population where limited treatment options beyond a surgical removal of the bladder are available, MCNA, characterized by a clinically meaningful activity and excellent safety profile, appears to be a superior alternative to patients who are unfit for or who decline a surgical removal.

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Disclosure: The author is long BNHLF

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Chris Kisnik 6 years ago Member's comment
Risk can be good sometimes!