Acquisition, Revenues and Clinical Trials: 2017 Looking Good for OncBioMune Pharmaceuticals

SANTA MONICA, CA, Dec. 14, 2016 /PRNewswire/ - Too many small biotechs stagnate for years unable to move forward, but such does not seem to be the case with OncBioMune Pharmaceuticals (OTCQB: OBMP).  After coming public late in 2015, 2016 was a year of moving forward with a Phase 1 trial of ProscaVax, the company's novel therapeutic cancer vaccine, and aligning for growth going forward outside of just ProscaVax.  Management's efforts look to be paying off as measured by what seems to be in store for 2017.

In the Phase 1 trial, for which the U.S. Department of Defense contributed over $5 million in funding as part of its Navy Cancer Vaccine Program, ProscaVax was shown to be safe and effective in prostate cancer patients who failed other therapies.  Following an initial vaccination, 9 out of 11 patients had an increased immune response to prostate specific antigens (PSA) 31 weeks after their first vaccine.  In line with all other data from the vaccine platform over years of development, no serious adverse events were reported.  A compelling testimonial by Steven Karalakas, a ProscaVax patient now 10-years cancer free, can be viewed at https://vimeo.com/183563997.

ProscaVax is a therapeutic vaccine, meaning that it is for treating prostate cancer not prophylactic, or a preventative vaccine, like a flu shot.  An immunotherapy, ProscaVax is a combination of PSA and the biological adjuvants interleukin-2 and granulocyte-macrophage colony-stimulating factor (GM-CSF), which cumulatively help the body to fight the cancer by stimulating the body to produce blood cells that promote the function of the immune system.

OncBioMune is skipping the 1b portion of that trial in favor of conducting a Phase 2 trial at Beth Israel Deaconess Medical Center and network partners.  A key difference in the upcoming trial is the intent to treat population.  Instead of treating late-stage prostate cancer patients, ProscaVax will be used to treat early-stage patients, people for which there are no drugs approved by the FDA.  These patients are in the "active surveillance" category, meaning that they refuse to undergo treatments like a radical prostatectomy (surgical removal of the prostate) or radiation.  Because the disease was caught early and hasn't spread to other parts of the body, patients choose to avoid potential serious side effects associated with radical excision and radiation, instead taking a watchful approach by undergoing scheduled testing to monitor for disease progression with more extreme measures taken if/when warranted.

According to the American Cancer Society, about 180,890 new cases of prostate cancer will be diagnosed in 2016 and the disease will claim the life of about 26,120 American men this year.  One in every seven men will be diagnosed with prostate cancer during their life.  With no FDA drugs available to help patients in the earliest of stages – when it is best to treat cancer – OncBioMune is addressing an area of great unmet medical need with ProscaVax.  Human studies need to be successfully completed, but OncBioMune hopes that it one day could become the standard of care in treating prostate cancer at any point of diagnosis.

The shift to active surveillance patients in the U.S. clinical trials doesn't mean OncBioMune is abandoning work on late-stage prostate cancer patients.  A Phase 2/3 trial is nearing commencement in Mexico through a joint venture with Vitel Laboratorios.  This trial is similar in design to the Phase 1 trial in the U.S. in treating PSA recurrent prostate cancer in hormone-naïve and hormone-independent patients.  Thanks in part to Vitel's deep understanding of the Mexican markets and a series of meetings with regulators, the trial is designed as a registration study.  This means that, if supported by the clinical data, ProscaVax could be commercialized in Mexico following the Phase 2 portion while the Phase 3 portion is ongoing.

In October, OncBioMune was awarded a patent in Mexico protecting ProscaVax.  OncBioMune's IP covers the vaccine and other assets in about 50 countries worldwide.

Originally introduced as a JV, OncBioMune and Vitel have agreed to simply merge via OncBioMune acquiring Vitel.  On Wednesday, OncBioMune said that the acquisition is getting to the latter stages.  Subsequent to customary non-binding documents being signed by both parties, negotiations were conducted and definitive agreements have now been drafted, according to a OBMP news release. Vitel management is reportedly heading from their headquarters in Mexico City to OncBioMune's offices in Baton Rouge to sign the documents during "mid-December," presumably next week.  This would keep the transaction on schedule to be completed early in 2017 as forecast when the discussions were first disclosed in September.

The implications of the merger are significant for OncBioMune, who by all accounts is still a very early-stage company.  Merging with Vitel jumps the company ahead years.  Vitel is the latest project of founder Manuel Cosme Odabachian, a man with a history of successful investments in the Mexican pharma markets.  Odabachian has a penchant for licensing drugs that are approved in other parts of the world and either completing development or immediately bringing them to market in Mexico and throughout Latin America.

With the merger, Odabachian is joining the executive team of OncBioMune and will continue to oversee developments and commercialization efforts south of the U.S. border.  Judging by comments from OncBioMune press releases, efforts are ongoing to acquire other assets, as the company seems to be taking on a "growth by acquisition" business model.

In buying Vitel, OncBioMune will bring under its umbrella 12 drug candidates licensed for the Mexican markets from companies like Germany's Cheplapharm Arzeimittel GmbH and ROHA Arzneimittel GmbH and NASDAQ-listed Kamada Ltd.  Vitel licensed the over-the-counter products Bekunis® for constipation and Cirkused® for stress from ROHA and began selling them in Mexico in September.  Exact sales goals for the initial launch through the end of 2016 were not disclosed, but it has been noted that sales were approximately $100,000 after about six weeks on the market.  On December 7, it was reported that Vitel's 2016 sales projections for the two products were exceeded with several weeks remaining in the year.

As Vitel works to expand distribution of Bekunis and Cirkused, it is aiming for commercialization of Vesanoid® (tretinoin), an oral retinoid anti-cancer chemotherapy drug, during the first quarter of 2017.  The Mexican health authority Cofepris has already approved Vesanoid as indicated for Acute Promyelocytic Leukemia (APL), the M3 subtype of Acute Myelogenous Leukemia (AML). Current data on diagnosis rates in Mexico are scarce, but the Leukemia and Lymphoma Society in its APL fact sheets notes that APL accounts for 10-15 percent of all adult cases of AML in the U.S.  While AML is less common in Hispanics than Whites, when AML is diagnosed, APL appears comparatively more common in Hispanics.

For a company that came public about 16 months ago with only a single Phase 1 study in tow, OncBioMune has made significant strides to set the stage to transition into a multi-product, revenue-generating company with an international reach in 2017 should the acquisition of Vitel be consummated as it seems it's going to.  Add in the clinical studies of ProscaVax in the Northeast U.S. and in Mexico and there are plenty of milestones on the horizon for this often overlooked company.

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