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The mere mention of Salmonella invariably brings up the noxious notion of food poisoning. But it turns out, the nasty bug can be put to good use -- as a cancer-fighting agent. The company that uses Salmonella as a vehicle for good health is Vion Pharmaceuticals (VION), a biopharmaceutical outfit engaged in research, development, and commercialization of cancer-treatment technologies. Its core products are all aimed at the huge $8 billion anticancer drug market worldwide ($4 billion in the U.S. alone).
Vion has yet to make a penny, but its shares surged to 30 earlier in the year, as investors rediscovered the biotech group. When the market turned south in April, Vion went with it and tumbled all the way to 10. In recent weeks, the stock has edged up to 14.
Vion's flagship product, called TAPET, could prove to be a "groundbreaking drug delivery system," says Richard "Buddy" Yett, senior drug analyst at New York investment bank Monnes, Crespi, Hardt. It may yet "revolutionize the treatment of cancer," he asserts.
TAPET, Yett points out, has been shown to safely and effectively deliver anticancer agents directly to solid tumors with very minimal toxic effects to healthy tissue. (TAPET stands for tumor amplified protein expression therapy). TAPET uses Salmonella in delivering anticancer agents to cancerous tumors.
NO DISCRIMINATION. With Salmonella, TAPET avoids what other chemotherapeutic agents suffer from: toxicity. Patients whose cancer has spread usually go for chemotherapy, in which anticancer agents are intravenously injected into the body. Chemotherapy drugs destroy cancer cells by stopping their ability to divide and reproduce. But in the process, these drugs don't discriminate between tumor cells and normal cells. TAPET aims to eliminate that problem and still help destroy malignant tumors, says Yett.
The Salmonella used in TAPET is genetically modified, allowing the bacteria -- which rapidly divides and replicates itself -- to go directly to the tumor. There it can be employed two ways. This mutated form of Salmonella can be used alone to shrink and destroy the tumor, while leaving the healthy tissue alone. Or TAPET can use the modified Salmonella also to deliver standard anticancer treatments to the tumor, effectively doubling the assault on the malignant tissue.
The modified Salmonella continues to be receptive to antibiotics, so physicians can rid the patient's system of it should any unexpected adverse event occurs during therapy.
TAPET is currently undergoing phase-one clinical trials. "We expect that over the course of the next several months, more sites will be added to the phase-one studies currently under way," says Brian Ilardo, analyst at Brean Murray Research, who rates the stock a buy.
HUGE POTENTIAL. Vion has also been awarded a contract by the National Cancer Institute to study TAPET as a diagnostic imaging tool for cancerous tumors. Vion will collaborate with Memorial Sloan Kettering Cancer Center in this research and will share rights for any patents and revenues derived from products that result from the study.
The diagnostic application "presents a tremendous opportunity for Vion to expand the applicability of TAPET," says Ilard. It also advances the development work being done for TAPET as a cancer therapy, he adds. "The potential revenues that TAPET can garner is huge, with its broad applicability in many cancer therapies," says Ilardo. There's no reason, he says, why TAPET can't be potentially as big as Bristol-Myers Squibb's anticancer drug Taxol, which generates annual revenues of about $1.5 billion.
The Bristol-Myers comparision is particualarly apt: Vion Chairman William Miller was formerly vice-chairman of Bristol-Myers. Vion's board of directors includes some other well known business figures, among them Walter Wriston, onetime chairman and CEO of Citicorp; Frank Carey, a former chairman and CEO of IBM; and Michel Bergerac, former chairman and CEO of Revlon.
RAPID TRIALS . One other Vion anticancer product that's in phase-one trials is Triapine, a compound intended to arrest the replication of tumor cells by blocking the synthesis of DNA, a critical step in cell division. Monness Crespi's Yett thinks clinical trials will be rapidly conducted, and he expects phase-three tests for safety and efficacy to be held in mid-2001.
Over the near term, Yett sees Vion shares, rising to the high 20s. But in a year, the stock could hit 50, says Yett. The stock should "explode," he adds, when Vion concludes an agreement with one or two of several large pharmaceutical companies that are seeking to license TAPET.
Copyright 2000, by The McGraw-Hill Companies Inc. All rights reserved.
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