BST Trade Alert: August 14, 2013
August 14, 2013
Recommendation:
Buy GTx (NASDAQ: GTXI) up to $4.75 per share.
About the Company:
GTx is an exciting biotech with huge upside potential. They’re developing drugs for the treatment of cancer, cancer supportive care, and other serious medical conditions.
What I find fascinating about this company is that it’s pioneering a new field in the biotech industry.
You see, GTx is developing a new class of drugs that target established hormone pathways. These next generation drugs are designed to provide the benefits of current drugs without the nasty side effects.
Now, drugs targeting estrogen and androgen receptors have been used medically for over 50 years. Known as steroids, the drugs activate hormone receptors in all tissue types in a non-selective manner.
The problem is… steroids can cause side effects like prostate cancer, hair loss (in men), hair growth (in women), and acne.
But within steroids’ problems lies opportunity for GTx.
The company’s drug candidates are non-steroidal in nature. They’re small molecules called selective hormone receptor modulators (SRMs).
And unlike steroids, SRMs are selective.
In other words, SRMs may either stimulate or block the same hormone receptor under different conditions. This is an important distinction. You see, the selective nature of an SRM may allow it to mimic the beneficial effects of steroidal hormones in one tissue while minimizing their unwanted effects in other tissues.
Now that you understand the significance of GTX’s technology… let’s take a look at their leading drug candidate.
About the Drug:
The company’s most clinically advanced drug candidate is Enobosarm. It’s an oral, non-steroidal, selective androgen receptor modulator (SARM) with potential to prevent and treat muscle wasting in cancer patients.
Enobosarm is similar to testosterone in activating androgen receptors in muscle. As such, it has potential to promote lean body mass (muscle) and help improve physical function.
However, because the drug is a SARM, it avoids the side effects that can accompany testosterone (hair growth, acne, and enhanced growth of prostate).
How’s the drug performing in clinical trials?
In a phase 2b study, Enobosarm achieved its primary endpoint of absolute change in total lean body mass compared to placebo. And the secondary endpoint of physical function, as measured by a stair climb after 16 weeks of treatment, was met as well.
Enobosarm is currently being studied in two phase 3 trials.
Each trial has 325 patients with Stage III or Stage IV non-small cell lung cancer randomized to receive either placebo or 3mg of Enobosarm. The co-primary endpoints are the effect of Enobosarm versus placebo on total lean body mass (muscle) and on physical function at three months. Durability of endpoint is being assessed as a secondary endpoint at five months.
In January 2013, the FDA designated Enobosarm as a fast track development program.
About the Market for This Drug:
Muscle wasting is a cancer-related symptom that can begin early in the course of the disease. It frequently leads to cancer cachexia, a complex metabolic condition characterized by accelerated loss of skeletal muscle and severe weight loss.
Cancer cachexia is usually viewed as an end of life condition in patients with advanced or incurable malignancies.
The common clinical symptoms are decline in physical function and impaired immune function. These symptoms in turn lead to increased disability, fatigue, diminished quality of life, and reduced survival.
Lung cancer is responsible for more deaths than any other cancer.
Worldwide, there are an estimated 1.5 million new cases and 1.3 million deaths annually. In the US, there are approximately 225,000 new cases and 160,000 deaths due to lung cancer each year.
About 85% of all newly diagnosed lung cancers are non-small cell lung cancer.
Up to 50% of non-small cell lung cancer patients have severe muscle wasting at diagnosis. And the majority develop severe wasting throughout the course of their disease.
Body functional limitations, such as the ability to walk up or down steps without rest, or the inability to lift 10 pounds, are present in almost 90% of lung cancer survivors.
There are currently no drugs approved by the FDA for the prevention or treatment of muscle wasting in non-small cell lung cancer patients. And two anabolic steroids that are sometimes prescribed off-label may result in liver toxicity or other adverse events.
According to the company’s market research, peak US sales for Enobosarm should be approximately $700 to $750 million.
That’s almost blockbuster sales status. And the figure doesn’t take into account sales outside the US, potential for treatment in other disease states, or potential for other indications.
No question about it, FDA approval of Enobosarm would be a huge win for GTx.
About the Potential Catalyst:
Top-line results from the phase 3 trials of Enobosarm are expected before the end of the current quarter.
About the Shares:
The highly anticipated phase 3 results for Enobosarm are expected over the next few weeks. It’s a very near-term catalyst that could send GTXI soaring into the stratosphere.
But as with any trial results, there’s no guarantee they’ll be positive.
In fact, one influential journalist is on record saying he thinks the Enobosarm studies will fail. And his negative article on GTx is credited for sending the stock tumbling through most of July.
However his opinion is just that… an opinion.
Trust me, he doesn’t have a better crystal ball than anyone else.
On the flip side, several Wall Street analysts are very bullish on the trial results and GTXI. Citigroup, Wedbush, Jefferies, and Stifel Nicolaus all rate GTXI a buy with respective price targets of $19, $9, $8, and $7.
With the stock trading at $4.29 currently, it’s upside potential to these targets is anywhere from 65% to 343%!
Let’s grab shares of GTXI as soon as possible to ride a potential rally into the results. And if the company reports positive trial results, the stock should shoot significantly higher from here.
Key Facts:
| Company: | GTx |
| Ticker: | GTXI |
| Recent Price: | $4.29 |
| Market Cap: | $271 million |
| Avg. Daily Volume: | 686,414 shares |
Chart:
Category: BST Trade Alert
