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OncoSec Medical Incorporated: The Best Immuno-Oncology Biotech You've Never Heard Of

Summary

Newly uplisted, small cap biotech OncoSec is making big advancements in the immuno-oncology space with its unique ImmunoPulse intratumor delivery technology.

OncoSec has a market cap of only ~$100M, over $30M in cash, several Phase 2 clinical trials underway, impressive clinical data and the potential to revolutionize immuno-oncology treatment.

Phase 2b clinical trial with Merck is poised to turn the 70-80% of PD-1 inhibitor non-responders into responders representing a huge market opportunity.

In line with recent analyst projections, I believe a $200-$300M market cap is justified representing 200-300% upside from current levels.

My investment strategy is simple. Find small-cap undervalued biotech companies with promising drugs and significant short and long term upside. My last article published a couple weeks ago detailed Tokai Pharmaceuticals (NASDAQ:TKAI) and why its prostate cancer drug Galeterone is highly de-risked going into Phase 3. The stock quickly increased 25% in just a few days. My latest research brings me to a hidden gem in the hot field of immuno-oncology. Biotechnology investors are well aware of the emerging cancer cellular immunotherapy treatments in which the body's own immune system is used to target and kill cancer cells. This is no doubt the future of cancer treatment. Due to exciting early clinical results and the potential for huge revenues, many start-up companies in this space like Juno Therapeutics (NASDAQ:JUNO) and Kite Pharma (NASDAQ:KITE) sport hefty billion dollar market caps. Likewise, it seems every month there's an announcement by a big pharma that they've partnered with or acquired an Immunotherapy. Companies are racing to stay ahead of the competition. There are a lot of options available for investors to choose from in this space and picking the right one will likely make you a ton of money in the future. The newly uplisted small cap OncoSec Medical Incorporated (NASDAQ:ONCS) has a very promising core technology with outstanding Phase 2 clinical results in melanoma. The company is poised to significantly enhance the proportion of people who respond to checkpoint inhibitors like the newly FDA approved immunotherapy PD-1 inhibitors. With several Phase 2 clinical trials in progress in various cancer types, stellar clinical results, strong collaborations, a healthy balance sheet and a unique technology platform for immuno-oncology, I believe the current ~$100M market cap of OncoSec leaves a lot of room for significant upside.

ImmunoPulse IL-12 delivers Impressive Results

The ImmunoPulse technology platform is the core of OncoSec's business strategy. Immunopulse utilizes electroporation to deliver molecules directly into tumor cells. The short electrical pulses cause temporary permeability of the cell plasma membrane allowing DNA to enter the tumor. This strategy has important benefits compared to using viral vectors to integrate the DNA of interest, which most other companies employ. First, there is no possibility for an immune reaction to a viral vector which can complicate and minimize subsequent dosing efficacy. Second, the procedure can be done in an outpatient setting with very little hands on time. Third, the technology allows for an almost limitless number of molecules which can be transferred and importantly its impeccable safety profile allows clinicians to combine with other therapeutic approaches.

*Slide from 2015 Corporate Presentation

Currently OncoSec is focusing its attention on using ImmunoPulse to deliver Interleukin 12 (IL-12), a pro-inflammatory cytokine, to tumor cells in order to elicit an immune response. IL-12 is a multifunctional cytokine with properties that bridge the innate and adaptive immunity. Cells that express IL-12 drive a response from CD8+ Killer T cells, which as their name suggests targets and kills the tumor cells. Interestingly, IL-12 also has anti-angiogenic properties which disrupts the tumors ability to maintain a proper blood supply. Clinical trials in the past studying IL-12 showed minimal efficacy as the systemic exposure to IL-12 was extremely toxic. The novel ImmunoPulse technology enables IL-12 to be delivered directly into the tumor site with virtually no side-effects to the patient. The Phase 1 and Phase 2 clinical trial results to date using ImmunoPulse IL-12 by itself in advanced metastatic melanoma have been extremely impressive and illustrate the potent immune response the OncoSec platform can achieve.

In the Phase 1 dose escalation study 24 metastatic melanoma patients received ImmunoPulse IL-12 as a monotherapy. The injected melanoma lesions had a complete remission rate of 13% and an objective response (OTC:OR) rate of 76%. Interestingly, a 58% response was achieved at other untreated lesions detailing the ability of the immune cells to travel to distant sites. There were no dose limiting toxicities observed or severe side-effects. What really caught my eye from...


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