Access Pharmaceuticals Inc. poised to become a key player in the cancer/cancer supportive care market
We are initiating coverage of Access Pharmaceuticals Inc. (ACCP) with an Outperform rating. Our 12-month price target is $8 per share.
Access Pharmaceuticals, Inc. (Access) is an emerging biopharmaceutical company focused on developing a range of products primarily based upon the company’s three key drug delivery technologies: Synthetic Polymer Targeted Drug Delivery System, Cobalamin Mediated Oral Drug Delivery System and Cobalamin Mediated Targeted Drug Delivery System.
The company currently has one approved product, MuGard, which is indicated for the management of oral mucositis, a frequent side effect for cancer patients under radiation therapy and chemotherapy. MuGard has been approved by the US, EU and South Korean health authorities. Global registration in other countries is underway.
The company’s EU partner, SpePharm Holding, B.V. is already marketing MuGard in some European countries, and expansion into other EU countries has been planned. Access plans to officially launch MuGard in the US in third quarter of 2010. Korean partner JCOM Co., Ltd. also plans to launch MuGard in Korea soon.
We believe MuGard will strongly boost the company’s top line in the coming quarters when the company officially launches MuGard in the third quarter of 2010. MuGard has competitive advantages over its competitors for the management of oral mucositis. Peak sales of MuGard could reach $300 million in the US alone.
We are optimistic about the company’s pipeline, which should provide sustainable growth for years to come. Its pipeline includes two products at phase II of clinical development and several products in pre-clinical development. ProLindac is a replacement for Sanofi-Aventis’ (SNY) Eloxatin using the company’s Synthetic Polymer technologies. ProLindac, representing a $3 billion plus market opportunity, is currently under phase II clinical studies for relapsed ovarian cancer.
Another phase II candidate is Thiarabine, a novel nucleoside analogue for the treatment of blood cancers and solid cancers. Other product candidates include Cobalamin-based oral therapeutics and Cobalamin-targeted therapeutics, which are in preclinical studies.
We see great potential for the company’s three key proprietary platform technologies, which create multiple product opportunities and mitigate single product exposure. We are especially impressed with the company’s Cobalamin-based oral delivery system. Both the oral insulin and oral human growth hormone have achieved unprecedented oral bioavailability in preclinical studies. The two products boast multi-billion blockbuster potential. Clinical studies have been planned for the two candidates.
Risks related to our call include cash burn concern, competition in the cancer market and clinical and regulatory failures.
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