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Argos Therapeutics: A Cure For Cancer?

Summary

Argos Therapeutics is developing a kidney cancer treatment (AGS-003) and a HIV drug (AGS-004).

Long term investors could expect a share price of $63 within 6-8 years from now in case of a successful AGS-003 Phase III.

Insider ownership of 58% suggests that the management is very confident on the drug pipeline and the overall company success. No insider selling is seen during the past 12 months.

Recent deal with Lummy International expands AGS-003 potential commercialization to China.

Argos Therapeutics (NASDAQ:ARGS) is a small biopharmaceutical company focused on personalized immunotherapies for the treatment of cancer and infectious diseases.

Their Arcelis Technology platform consists of two main product candidates:

  • AGS-003 for metastatic renal cell carcinoma ((mRCC)) in Phase III with the full patient enrollment expected in Q2-2014. The final results should come out in the second half of 2016. The primary endpoint of the study is the overall survival.
  • AGS-004 for HIV eradication or long term remission that is in Phase II for adults. A pediatric Phase II is planned to start in the end of 2015. AGS-004 development has been non-dilutive for the shareholders as several external institutions have brought in almost $40m in financing.

We believe that Argos' shares could be a good investment for the following reasons:

  • Arcelis platform products' drug safety profile is compelling based on Phase I/II data. Both AGS-003 and AGS-004 have been well tolerated by the patients. Some typical adverse events included mild injection site reactions with both and flu-like transient symptoms in case of AGS-003.
  • AGS-003 has shown excellent benefits in Phase II for mRCC in combination with a competing product Sutent. The investigated patients survival rate increased by 300% at the 30 months checkpoint in comparison to Sutent treatment alone.
  • The mRCC treatment market opportunity is over $2b worldwide. There are 20,000 to 25,000 new cases each year in the US alone based on Argos' 10-K report.
  • A recent licensing agreement with Lummy International is a catalyst for a quick commercialization of AGS-003 in China, Hong Kong, Taiwan and Macau. This would be an extra revenue source besides the US.
  • Lummy International will continue Arcelis Platform expansion to other cancers in line with the licensing agreement.
  • Insiders own 58% of Argos Therapeutics. No insider has sold even one share during the past 12...

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