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Biotech / Medical : GlycoGenesys GLGS (formerly SafeScience SAFS)

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To: tuck who wrote (47)10/5/2005 2:35:15 PM
From: tuck  Read Replies (1) of 56
SmartMoney piece on GLGS:

>>The Book on GlycoGenesys

By Mark Glassman Published: September 23, 2005

WHEN THE BIOTECHNOLOGY gods were handing out company names, GlycoGenesys (GLGS) was probably not the first in line.
Named for the process by which glucose is converted into glycogen, GlycoGenesys might not stick with doctors quite as easily as, say, Amgen (AMGN) or Genentech (DNA). But this Boston-based microcap is developing a novel cancer therapy that has the potential to bring in enough revenue to make it a household name.

The experimental drug, now known as GCS-100, works differently than most cancer treatments. Instead of using protein or steroidal pathways like other chemotherapies, GCS-100 binds to certain cancer cells' carbohydrate receptors and disrupts some of the processes that help these cells develop and spread. Newton, Mass.-based Pro-Pharmaceuticals (PRW) also works with carbohydrate-based cancer therapies.

GlycoGenesys hopes to apply its drug to several different types of cancer, including solid tumors and blood cancers, thereby increasing its potential patient population and its revenue stream. "It is our belief that if GCS-100 is approved, it may certainly be one of the more successful cancer therapy treatments to hit the market in the past 10 years," wrote Paul Cohen, president of the San Rafael, Calif.-based Cohen Independent Research Group, in a July report. If all goes well on the clinical and regulatory fronts, Cohen projected sales as high as $74 million in 2009. (Cohen doesn't own shares of GlycoGenesys; Cohen Independent Research Group doesn't do investment banking.)

Since it has no drugs on the market, GlycoGenesys could certainly use the revenue. In May, the company raised $4.5 million through a private stock placement to fund its clinical trials. As of June 30 it had $4.1 million in cash left. Including a charge tied to preferred stock dividends, GlycoGenesys posted a second-quarter loss of $2.3 million, or 22 cents a share.

In one way, GlycoGenesys appears to be taking a page from the playbooks of large-cap biotechs like Genentech, developing a single compound with the ability to fight several types of solid tumors. Genentech's Avastin, for example, is effective against breast, lung and colorectal cancer — and possibly several others. Early research data suggest that GCS-100 could be a valuable weapon against pancreatic, prostate, colorectal, ovarian and breast cancers.

Several new findings released this month helped fuel interest in GlycoGenesys. On Sept. 16, the company announced that an article appearing in the medical journal Cancer Research explained how GCS-100 could also prove to be an effective therapy in treating multiple myeloma, a blood-borne cancer. Three days later, the company presented new preclinical data demonstrating how GCS-100 might tackle lymphoma, a cancer than can affect the body's immune system. The stock closed at $1.09 on Sept. 19, up 9% from before the data were released. Shares have since given back the gains.

In spite of the company's penny-stock status, the potentially widespread and high-dosage use of GCS-100 should be of real interest to investors with patience and a high tolerance for risk. The drug has an advantage over conventional cancer-fighting techniques in that its molecular structure and mechanism of action make it less toxic than some of its competitors.

"Radiation and chemotherapy are very effective treatments but are limited by their toxicity to normal cells," Cohen wrote. "This is a crucial point. If normal cells were not killed by these treatments then we could theoretically eliminate all cancers in the body through continuous exposure to radiation or infusion of chemotherapeutic substances. Unfortunately this is not the case. Treatments are often dose limited. This is where glycomics and GCS-100 make their impact."

GlycoGenesys is now conducting Phase I/II trials of GCS-100 to determine how much of the drug patients can endure. Rick Pierce, the company's vice president of development, says early results reveal the drug, which is administered intravenously, is "well-tolerated" when compared to similar treatments.

Pierce says GCS-100 acts as a kind of highly specific triple-threat. The drug is anti-metastatic, which means it keeps cancer from spreading; it is anti-angiogenic, which means that it prevents the formation of the blood vessels that feed tumors; and it causes targeted cell death by interrupting the metabolic processes of cancer cells often resistant to chemotherapy.

Although the company doesn't plan to file an application with the Food and Drug Administration until late 2007 or early 2008, it may soon partner with a larger biotech to help bear some development costs and enlist a sales force. Pierce says the company has been in discussions with several companies, which he declined to identify, and that GlycoGenesys will use upcoming safety data "to try and lock in a partner." Pierce hopes to bring in around $10 million within the next year from the partnering agreement.

Assuming a lucrative partnership and the accompanying boost in share price, GlycoGenesys just might become a little easier to pronounce.<<

Cheers, Tuck
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