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FEBRUARY 12, 2007
How Access Helps Treat Cancer  Access pharmaceuticals (ACCP
) is a tiny biotech trading over the counter. But its two cancer drugs—one of which, MuGard, is already O.K.'d by the Food & Drug Administration—are catching the eye of investors. Oracle Investment Management, a top-ranked health-care hedge fund, owns a 10% stake. An Oracle portfolio manager says that, with one product approved and another in clinical trials, Access is extraordinarily cheap—at a market cap of only $10 million. MuGard is a rinse to prevent and treat oral mucositis, a side effect that afflicts 40% of patients undergoing radiation and chemotherapy. Chairman Jeffrey Davis says MuGard addresses a $1.5 billion market. Access just inked a sales pact with a pharma in Europe and expects to find a U.S. partner soon. Its other product, ProLindac, now in Phase II clinical trials, is aimed at various oncology applications, including refractory ovarian cancer, a $2.5 billion market. "This drug is a potential blockbuster," says Kevin Raidy of health-care hedge fund H4 Capital, which has a stake of close to 5%. MuGard's FDA approval, he says, "removes any risk in the stock," because that drug alone is worth more than the stock's current price of 2.95 a share. He sees Access climbing to between 10 and 20 in two years. Steven Rouhandeh, chairman of SCO Capital Partners, the biggest stakeholder, with 30%, says Access is at the top of his portfolio because of the huge potential of MuGard and ProLindac. "The stock is incredibly undervalued," he says.
Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.  By Gene G. Marcial
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