Feuerstein's Biotech-Stock Mailbag

By Adam Feuerstein

Senior Writer

6/9/2007 10:04 AM EDT

Auszug aus Feuerstein's Biotech-Stock Mailbag vom 09.06.2007
(www.thestreet.com)

Welcome back to the Biotech Mailbag, the post-ASCO edition.I returned home Tuesday from five days in Chicago at the annual meeting of the American Society of Clinical Oncology. I'm still trying to catch up on sleep and work though a lot of unanswered email, but let's hope this column takes care of some of your unanswered questions. As always, email me here.There will be no mention of cancer drugs in next week's mailbag. I promise. I think cancer needs a rest, and so do you, probably.

Page 4/5

I'm not averse to risk-taking. Heck, that's what biotech investing is all about. To prove my point, take another look at YM BioSciences (YMI - Cramer's Take - Stockpickr - Rating) and its EGFR-inhibitor drug nimotuzumab.

This is a stock that still trades near cash (it closed Friday at $1.80), yet data presented this weekend at ASCO suggests that nimotuzumab, or "nimo" for short, has the potential to be a real drug.

Let's put the ugly stuff up front: YM BioSciences is better known in biotech circles by its ticker symbol YMI, as in "Why am I invested in this dog of a stock?" A breast cancer drug under development blew up last year, which didn't exactly bolster the company's track record.

But nimo is interesting. In form and function, nimo is in the same class as ImClone's (IMCL - Cramer's Take - Stockpickr - Rating) Erbitux, but without causing the nasty skin rash. This also makes nimo controversial because conventional wisdom says that with EGFR inhibitors, rash equals potency equals efficacy. That might mean that if nimo equals no rash, nimo might also equal a big fat zero.

But this orthodoxy over EGFR and rash is being challenged. Dr. Leonard Saltz, a colon cancer expert who spearheaded Erbitux's development, sits on YM's scientific advisory board. A phase II study of nimo in colon cancer patients is being conducted in Canada, which should give us an answer to the basic question of whether nimo can work without rash. Data should be ready in late 2008.


Meantime, YM and its partners are moving nimo forward as a potential therapy for kids suffering from severe brain tumors. This was the data presented at ASCO, and it was encouraging. Some of the kids had a life expectancy of just four weeks, yet treatment with nimo resulted in some tumor shrinkage and a meaningful extension of survival.

It's too early to say with any definitive confidence that nimo is a real drug, but YM and its partners are moving the drug forward and the early signs are encouraging. And with a stock price of $1.80 and about $1.30 per share in cash, it's not a huge bet to make.