 |
Snapshot |
|
|
| Trading
Data |
| Last
Trade: |
2.01 |
| 52wk
Range: |
1.29
- 3.97 |
| Avg
Volume (3 mo): |
169,608 |
| Avg
Volume (10 day): |
675,256 |
| Beta: |
3.97 |
| 50-Day
Moving Average: |
1.79 |
| 200-Day
Moving Average: |
2.19 |
| Share
Data |
| Market
Cap: |
56.87M |
| Shares
Outstanding: |
28.29M |
| Float: |
13.88M |
| %
Held by Insiders: |
40.03% |
| %
Held by Institutions: |
22.00% |
| Balance
Sheet |
| Total
Cash (mrq): |
13.45M |
| Total
Cash Per Share (mrq): |
0.475 |
| Total
Debt (mrq): |
5.94M |
| Ratios |
| Total
Debt/Equity (mrq): |
7.355 |
| Current
Ratio (mrq): |
1.031 |
| Book
Value Per Share (mrq): |
0.029 |
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Contact
Info |
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Advanced
Life Sciences Hold., Inc.
1440
Davey Road
Woodridge,
IL 60517
United
States
Phone:
630-739-6744
Fax:
630-739-6754
Web
Site: http://www.advancedlifesciences.com |
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Feature
Report: Advanced Life Sciences Holdings Inc. |
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The
research staff of the Micro Cap Press has discovered what it believes to
be a highly-promising biotechnology opportunity. This company recently
completed Phase III trials of a pneumonia treatment...a market worth $2
billion on an annual basis. Their clinical trial results show similar efficacy
to one of the current preferred treatments, but without the adverse side
effects of that preferred treatment.
The company
is looking forward to submitting this drug to the FDA, and ultimately,
the commercialization of it. And, the odds seem to favor such an approval.
Moreover, this company has a handful of other drugs in various stages of
the FDA approval process.
 Advanced
Life Sciences Holdings, Inc. (NASDAQ:
ADLS) is
a biopharmaceutical company focusing on the discovery and development of
drugs designed to treat infectious disease, cancer/tumors, and inflammation.
Its lead drug
candidate, CL-05 (cethromycin), has just completed Phase III of
its clinical development as a pneumonia treatment, and is waiting submission
to the FDA for approval. Cethromycin is a 'ketolide' antibiotic licensed
to Advanced Life Sciences by Abbott Laboratories (NYSE:
ABT).
Other biopharmaceutical
projects include the use of cethromycin as a treatment against Anthrax,
ALS-357 as an anti-tumor/malignant melanoma therapy, and ALS-886 (currently
in preclinical development) as a treatment for inflammation-related tissue
damage (including tissue damage associated with acute respiratory ailments).
Other Advanced
Life Sciences projects include 'natural' compounds derived for treatment
of infectious diseases, synthetic chemotherapeutics (to fight several types
of cancer), and a treatment for Alzheimer's disease.
Advanced Life
Sciences recently completed both of its concurrent Phase III trial regiments
of using cethromycin as a pneumonia treatment. One test group included
patients from Europe, South America and Israel. The other test group studied
patient response to cethromycin in the United States, Canada and South
Africa.
Cethromycin
cured pneumonia in 92.8% of patients (1,100 patients in all for both sets
of trials). For comparison, a more common current treatment for pneumonia
- Abbott Laboratories' Biaxin - cures 94.9% of pneumonia. Statistically
speaking, the effectiveness of both are similar. The difference between
the two was that fewer side effects were recorded with cethromycin.
Some analysts suggest there's a 90% chance the drug will indeed receive
an FDA approval for use as a pneumonia treatment.
To that end,
Advanced Life Sciences is looking at their drug with more than just
pneumonia in mind.
Cethromycin
is also considered a 'ketalide' antibiotic. This new class of drug has
become remarkably important in recent years. Bacteria and microbes are
becoming 'resistant' to older versions of antibiotics, many of which
are macrolides. For instance, macrolides Biaxin and Pfizer's (NYSE:
PFE) Zithromax are now ineffective in the fight against approximately
30% of bacteria and microbes thanks to newly-resistant strains.
Ketalides, on
the other hand, are (so far) believed to be more likely to overcome
bacterial and microbial resistance. The assumed reason for this is that
cethromycin binds to two separate receptors inside a bacterial body. By
doing this a bacteria strain is less likely to even have an opportunity
to develop resistance.
Advanced Life
Sciences will also be taking its oncology product (ALS-357) into
phase I and II clinical development stages in early 2008. ALS-357 demonstrates
effective anti-tumor characteristics against malignant melanoma by inducing
apoptosis (programmed cell death) in tumor cells. In animal testing the
drug has not been observed to be toxic. In initial testing, the treatment
has been shown to be effective when administered in vitro as well as in
vivo.
Better still,
ALS-357
has been given an 'Orphan Drug' status by the FDA.
The U.S. Orphan
Drug Act is designed encourage the development of effective therapies for
the treatment of rare diseases and disorders. The FDA grants this status
to a particular drug for a particular disease that affects fewer than 200,000
Americans. This designation also includes a seven-year period of orphan
drug production exclusivity upon approval, potential tax credits for research,
potential grant funding for research and development, and assistance with
clinical trial protocol review.
More generally
it validates that the FDA sees a specific unfilled need for a treatment.
With an Orphan Drug status, we believe the odds are now better that ALS-357
will ultimately be approved for commercialization once testing is completed.
There are approximately
55,000 new cases of melanoma diagnosed in the United States each year.
.
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Financial/Valuation
Analysis |
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 To
study Advanced Life Sciences' fiscal results would seem almost fruitless
- the company has no revenue yet. Rather, investors are only able
to judge the merits of being a shareholder based on the type of revenues
the company may generate in the near and distant future. Therefore, we
acknowledge the critical initial element here is the FDA's approval of
cethromycin. The company intends to submit a 'new drug' application to
the FDA in early 2008, and could be selling the drug by 2009 if the application
is accepted.
However, as
speculative as it may seem, investors can and do reap rewards with
biotech investments well before the underlying company produces profits.
The
market frequently prices biopharma shares based on a drug's trial efficacy,
recognizing that the required FDA approval, or other regulatory approval
process, can be a lengthy (sometimes unnecessarily) process.
With that in
mind, based on the success of clinical trials so far, we feel the odds
of said approval are high enough to create an acceptable risk-versus-reward
scenario.
With no sales
record to use as a foundation we will conservatively estimate cethromycin's
early penetration of the $2 billion pneumonia market to be 5%. That estimate
translates into a possible $100 million in revenue per year. As the success
of cethromycin is realized within the medical community, and if/when other
drug candidates are granted approval, the total sales figure could rise
significantly. Just for comparison the company's current market cap is
$56.9 million.
Based on our
hypothetical sales of $100 million - and assuming at least some degree
of profitably - we believe a plausible market cap would be somewhere
in the $200 to $300 million range. This figure was based on the average
biotech price/sales ratio of 3.14, and represents a potential share price
appreciation of 300% to 500% within a few years - pending FDA approval.
 We
feel the chart of Advanced Life Sciences' shares (ADLS) further suggests
an appreciation may be looming following a significant decrease in price
in June and July. After reaching a low of $1.29 in August, the stock has
since moved up to Friday's closing price of $2.01. Many traders, however,
are said to be eyeing at least a recovery up to the $4.00 area seen in
May, fueled by a still-lingering oversold condition.
Additionally,
ADLS shares have recently moved back above their 50 and 100 day moving
average lines - a sign considered bullish by some technical analysts.
Fundamental
and strategic analysts have also correctly pointed out the recent efficacy
announcement about cethromycin, as well as the Orphan Drug designation
for ALS-357, brings the company closer to revenues and profits than
they've ever been. A valuation of $6.00 has been discussed by some of these
same analysts which would take ADLS well into new all-time high territory.
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Updated: 8:15 pm PDT (03:15 GMT), November 2, 2010
