BST Trade Alert: September 19, 2014
September 19, 2014
Recommendation:
Buy Argos Therapeutics (NASDAQ: ARGS) up to $10.00
About the Company:
Argos Therapeutics is a biopharmaceutical company focused on the development and commercialization of fully personalized immunotherapies for the treatment of cancer and infectious diseases using its Arcelis™ technology platform.
The company has two drugs in development that are expected to reach key milestones in 2014:
- AGS-003 – is in an ADAPT Phase 3 trial for the treatment of metastatic renal cell carcinoma (mRCC).
- AGS-004 – phase 2 trials of this treatment for HIV infected patients were recently completed.
For this trade, we’re focusing on the results for the phase 3 trials of AGS-003. Those results are expected in the first half of 2015.
Argos Therapeutics is also in excellent financial condition.
As with most developmental stage biotechnology stocks, ARGS is currently losing money. So far this year, ARGS has generated $1.3 million in revenue while R&D expenses have totaled $19.0 million and general and administrative expense have totaled $3.8 million. The company currently has $71.8 million in cash. So they are in a strong position to continue operations without the need to raise additional money for another year.
Let’s now take a closer look at one of the company’s leading drug candidates…
About the Drug:
ARGS is in the enviable position of having two very promising new drugs in AGS-003 and AGS-004. Both of these treatments are founded on the Arcelis Technology platform.
In essence, this technology seeks to overcome the human body’s response to those chemicals that are intended to treat the cancers and viruses.
Here’s how the company describes it…
Arcelis is a fully personalized immunotherapy technology that captures mutated and variant antigens that are specific to each patient’s disease. It is designed to overcome immunosuppression by producing a durable memory T cell response without adjuvants that may be associated with toxicity. The technology is potentially applicable to a wide range of different cancers and infectious diseases and is designed to overcome many of the manufacturing and commercialization challenges that have impeded other personalized immunotherapies.
The Arcelis process uses only a small tumor or blood sample and the patient’s own dendritic cells, which are collected and optimized following a single leukapheresis procedure. The proprietary process uses RNA isolated from the patient’s disease sample to program dendritic cells to target disease antigens. The activated, antigen-loaded dendritic cells are then formulated into the patient’s plasma and administered via intradermal injection.
Needless to say, if the personalized treatment of cancer, AIDs, and other infection diseases are proven to be more effective and have fewer side effects, then ARGS will have a blockbuster on its hands.
About the Market for This Drug:
The beauty of the Arcelis technology is that it’s not just a new drug for one disease. It’s a way of personalizing drugs and treatments so they treat each individual better.
The market for this type of personalized medicine is simply astronomical.
About the Potential Catalyst:
The ongoing phase 3 trial of AGS-003 recently surpassed 50% of the target enrollment. This is an important milestone for this trial. Results are expected in the first half of 2015.
About the Shares:
We have an opportunity to grab shares of ARGS for $9.06.
As you can see on the chart below, the stock is 34% below the $13.74 52-week high and 62% above the 52-week low of $5.61.
At $9.06, ARGS is changing hands at just 2.5x its $3.65 in cash per share. If we subtract out the cash from the company’s market cap of $173.4 million, investors are valuing Argos Therapeutics at $102.6 million.
I think that’s just too low given the potential of the upside and potential market for personalized treatments.
Grab your shares of ARGS as soon as possible. This biotech stock’s a great buy up to $10.00 per share.
Key Facts:
| Company: | Argos Therapeutics |
| Ticker: | ARGS |
| Recent Price: | $9.06 |
| Market Cap: | $173 million |
| Avg. Daily Volume: | 61,970 shares |
Chart:
Category: BST Trade Alert
