September 26, 2012
Accentia Biopharma (ABPI) Appears Undervalued
Accentia Biopharmaceuticals Inc. (OTCQB: ABPI), majority owner of Biovest International Inc. (OTCQB: BVTI) and other subsidiaries, operating in the same space as companies like Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) and Ariad Pharmaceuticals Inc. (NASDAQ: ARIA), appears to be an undervalued cancer stock given its extensive clinical backing.
Innovative Solution to Unmet Needs
Accentia Biopharmaceuticals’ majority-owned subsidiary, Biovest International, has developed an innovative solutions designed to target B-cell cancers. B-cells are the most prevalent type of lymphocyte in the bloodstream that produce antibodies to fight infections. The problem occurs when these cells mutate and become cancerous. 
While most monoclonal antibody-based therapies like Rituxan®, Bexxar® and Zevalin® target CD20, a cell-surface protein expressed by both tumor and healthy B-cells, Biovest’s BiovaxID® targets tumor-specific idiotype, a protein unique to the tumor and not found on healthy B-cells. Ultimately, this makes for a far safer and more efficacious therapy. 
Non-Hodgkin’s lymphoma, the company’s primarily focus, represents the fifth most common type of cancer in the U.S., with an estimated 454,378 cases in 2008 in the U.S. Moreover, the condition accounts for approximately 3.4% of all cancer deaths in the U.S. With few efficacious treatments, the company could likely achieve blockbuster status with an approved drug.  
Phase III Studies with Extensive Data
Biovest International is developing a personalized therapeutic cancer vaccine called BiovaxID® for the treatment of non-Hodgkin’s lymphoma and potentially other B-cell blood cancers. In clinical trials to date, the company has demonstrated both a strong safety record and prolonged disease-free survival in FL patients. 
Currently, the company is undergoing an extensive clinical development program in conjunction with the National Cancer Institute (NCI) that includes both Phase II and Phase III programs.  In its most recent ASCO abstract, the company demonstrated that its therapy initiated an antitumor cellular immune response that significantly delayed tumor growth. 
Ultimately, these programs are expected to lead to approvals in the European Union and Canada in less than a year and a product on the market as early as the latter part of 2013, according to the firm’s management.  Despite this near-term potential, the company’s stock trades with a market capitalization of just $19.1 million, according to Google Finance. 
Near-term Catalysts, Long-term Potential
Accentia Biopharmaceuticals and its subsidiary Biovest International have both near-term catalysts and long-term potential. While the stock was hit by bankruptcy concerns in the past, the potential for a near-term regulatory approval backed by many years of data could make it an attractive investment opportunity with a sub-$20 million valuation.
For more information, please see the following resources:
- Management Interview Call
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