Scancell Holdings Forum

SELLING THE KEYS TO THE KINGDOM

Scancell has a very simple strategy. Produce a better cancer vaccine than the global leader and sell Scancell on to the highest bidder by the end of the year.

So far only one company has had a therapeutic cancer vaccine approved for commercial use by the FDA. The Dendreon Corporation. Dendreon is therefore the one and only global leader in therapeutic cancer vaccines. But each treatment uses the blood of the patient to prepare it, so because of rejection, can only be given to one person at a time. This is inordinately expensive. So Dendreon's business model has proved to be fatally flawed with each course of treatment costing more than $90,000!

Scancell has found a way round this. It has patented a technology capable of providing the same treatment without having to extract the patient's blood first. Scancell's DNA vaccine can be given to any number of patients from the same batch so is therefore more cost effective, leaving plenty of room for profit.

In other words Scancell has found a short cut to becoming 'King of the Hill.' Whoever buys Scancell and brings its vaccines to market will become straight away the global leader of the cancer vaccine market. That's what's on offer. The keys to the kingdom. And in the expected bidding war to come, that's what will be fought over.

The Intellectual Property of Scancell's skin cancer vaccine, SCIB1, alone has been valued at a billion dollars! But Scancell's DNA vaccine technology allows its vaccines to be reprogrammed to treat different cancers. In fact, any kind of cancer. Indeed its already started the ball rolling for whoever buys Scancell by pre-preparing a second vaccine to treat lung cancer.

The industry will pay at least £12 a share (around $4 billion) for Scancell's existing vaccines in combination with its reprogrammable vaccine platform. They wont be able to resist it. If a company doesn't buy Scancell they hand over to the competition the top global position in cancer vaccines for a generation. A wise person will know that no pharmaceutical company can stand by and let that happen! Four billion dollars will prevent such a disaster. For they will fight like dogs to get Scancell. And as they do, its shares will rise and rise. In the end they could climb even higher than £12.

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SCANCELL'S RISE IS DENDREON'S DOOM!

The Dendreon Corporation is the one and only global leader in therapeutic cancer vaccines. The technology they use requires extracting immune system alarm cells (dendritic cells) from the patient's blood, pulsing them with cancer antigens and injecting them back into that same patient. This has proved prohibitively expensive. Scancell therefore designed an alternative solution and has provided the industry and the regulatory authorities with a more commercially viable product: a DNA dendtritic cell vaccine which coats the alarm cells with epitopes of cancer antigens while those alarm cells are still in the patient's body. This provides a solution with no rejection problems and can therefore be given to any number of patients without having to manufacture a fresh batch.

Dendreon's Provenge, to treat prostate cancer, is the first and only therapeutic cancer vaccine commercially approved to date but the business model behind it is fatally flawed and the industry knows it. The treatment is simply unaffordable. So as Dendreon's stock has plummeted, Scancell's stock has risen, making Scancell London's best performing stock of 2012. Without doubt Scancell remains the most significant ongoing threat to Dendreon's dominance.

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Here is a useful and informative post from Alan Turing, a poster with a good scientific background who writes on LSE's Scancell Chat. He is commenting on the recent Phase 1 results for Scancell's lead vaccine to treat melanoma, SCIB1:

PHASE 1 PRELIMINARY RESULTS

Well they were pretty astonishing really. Firstly because they were only measuring a group of patients in a study to test for toxicity, so there were only a few patients who actually received the vaccine at full strength.

The key 'stand out' was the tumour shrinkage in the patient with lung metastases. Dendritic cell vaccines have never before shrunk tumours without a toxic additive. Gp100 for instance was the first dendritic cell vaccine that was said, with much fanfare, to shrink tumours but only with the addition of the highly toxic Interleukin 2 (which defeats the purpose of using a non-toxic dendritic cell vaccine in my book). But previously without this additive Gp100 showed no signs of being able to shrink tumours. This is the most important achievement so far by SCIB1. It now has to repeat this in the proposed 8mg dose trial. If this tumour shrinking capability is confirmed then SCIB1 will have outdone all previous dendritic cell vaccines.

This extra power may be a result of its DNA delivery. The ImmunoBody vaccine consists of strands of DNA which are like a computer program. This DNA program is processed by the patient's healthy cells very much like a computer. Tens of thousands of antibodies are produced by the patient as instructed by Scancell's DNA program. Each antibody is shaped like a Y and on one of the arms of the Y is a 'pretend' cancer chemical unique to the cancer being treated. These antibodies, which in SCIB1's case, 'smell' like melanoma, stick to the surface of the immune system's sentinel cells (dendritic cells). They go crazy. To them they are covered in a foreign material that should definitely not be there. They then charge in their thousands to warn the immune system that something foreign has entered the body that needs to be searched for and destroyed. The immune system's army of T cells is dispatched. First the sappers, the Helper T-cells. They find the tumours and mark out a killing zone and change the blood chemistry inside this zone to make the tumours easier to kill. Then come the commandos, the Killer T-Cells to burst and destroy the tumours there.

This is so far ahead of what Dendreon does, Scancell's main competitor, that I suppose its no wonder that it achieved these promising results, albeit in just one particular patient. All eyes should be on the upcoming 8mg tumour trial, because so far, apart from its non-patient specific capability, the ability to shrink and eradicate tumours unaided is Scancell's most thrilling achievement. They have the pharmaceutical industry's attention for sure. Now they must show that they can repeat this success. I'm looking forward to the next instalment.

The market potential for dendritic cell vaccines is considerable. Scancell's vaccine is the only DNA (non-patient specific) version that has been shown to elicit an immune response. So if I was a buyer for a large pharmaceutical company looking for a dendritic cell vaccine to enter that sector of the market I would definitely choose Scancell's product first. The ability to shrink tumours is a unique one among this class of therapuetics so whatever this vaccine achieves on that front would be a bonus.

SCIB1 SKIN CANCER VACCINE - "GLOBAL DEMAND COULD BE ABSOLUTELY HUGE."

According to the World Health Organisation, 132,000 melanoma skin cancers occur globally each year and the incidence is increasing, especially in the United States, Europe and Australia. The vaccine has patent protection in the UK, Europe and Australia and has recently been granted patent protection in the US. Protecting the technology is vital because if the vaccine is a success, the global demand could be absolutely huge.

SCIB2 LUNG CANCER VACCINE

A developed product, ready for clinical trials might be some way off yet but the potential is there to develop it further and target an even bigger market.

HEALTHY CASH BALANCE

One of the problems with small biotech companies is that they can often burn cash and need constant capital raisings, which dilutes existing shareholders. But when Scancell announced its interim results, covering the six month period to 31 October, its cash balance was a very solid £1.9 million. Just one month later, the company said it would be receiving a payment of £2.85 million relating to a number of antibodies it had sold previously.

Under the terms of that deal, if any antibodies were used in clinical trials within a certain time frame, the company was entitled to the payment. The conditions were met and Scancell got the cash. With this extra money, Scancell’s bank balance has been boosted to a very healthy £4.75 million.

SHARES SURGING

In June Scancell said that the Gene Therapy Advisory Committee ('GTAC') and the Medicines and Healthcare Products Regulatory Agency ('MHRA') have given their approval to increase the maximum treatment period from 6 months up to a further 5 years in its Phase I/II clinical trial. This is a very big deal for Scancell because it means the company can gather much more data as it proves its treatments work. Subsequently the shares have enjoyed an incredible run. In fact, we have almost quadrupled or initial investment in the company.

Why have the shares been surging? Put simply, the new technology could, in the words of the company’s CEO “have a profound effect on the way that cancer vaccines are developed”. The technology is now called Moditope, which “stimulates the production of killer CD4 T cells with powerful anti-tumour activity.”

SHARES COULD BE WORTH CONSIDERABLY MORE IN THE FUTURE

Scancell Directors are evaluating the technology and looking into its strategic options. At this point, it’s virtually impossible to attach a value to the technology. Even though Scancell shares have surged, I’d be tempted to hold onto the shares until Moditope’s true value emerges. The shares could be worth considerably more in the future.

This is a summary; here is a link to the complete research note:

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SCANCELL HOLDINGS (SCLP). Last week Scancell doubled in value after a breakthrough which "has the potential to transform the therapeutic cancer field".

I featured Scancell in this column in March. At that time I told you that Scancell has developed a therapeutic DNA vaccine. Once injected, this DNA is then read by cells which start to make specific proteins. The body recognises these proteins as foreign. This, in turn, awakens the immune system, which then produces ‘T cells’ that zap the cancer tumours and prevent the spread of the disease.

This vaccine is now in human trials with results expected next year. But in the meantime Scancell has gone a step further….

A CANCER VACCINE IS THE HOLY GRAIL

Scancell has now developed a platform technology called Moditope that could boost the effectiveness of the many therapeutic cancer vaccines that are under development, at Scancell and elsewhere. The field of cancer vaccines is a highly promising one, and many experts believe that immunotherapy - the use of the body’s own immune system - can be the most effective weapon against cancer.

Scancell’s Moditope seeks to improve the impact of the CD4 T-cells that destroy tumours.

HERE'S HOW IT WORKS

Antigens are proteins that exist on the surface of cells. Some antigens are much more common on the surface of cancer cells than of normal cells. These cancer specific antigens can form the basis for developing vaccines that selectively alert the immune system to find and destroy them.

The particular part of the antigen that is recognised by the immune system is called the epitope. The immune system works by recognising these epitopes and then sending out CD8 and CD4 T-cells to kill the cancer cells.

But while it is relatively easy to tell CD8 cells what to do, it’s far harder to get a response from the CD4 T-cells. Scancell has found a way to force the CD4 T-cells to wake up and start killing cancer cells.

In short, Scancell's Moditope technology produces killer CD4 T-cells that destroy tumours, but without toxicity. It can potentially boost the impact of many different types of cancer vaccine.

DANCING FOR JOY

I’m assured that Professor Lindy Durrant, the brains behind this invention, as I write to you is dancing for joy.

When I spoke to joint chief executive Dr Richard Goodfellow he gave the usual warnings about the need for lengthy future trials and the uncertainty of outcomes. But nonetheless, he is clearly excited.

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