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Access Pharma (OTC: ACCP.OB): A Cancer Biotech Call Option Trade
By: Mike Havrilla   Wednesday, May 27, 2009 1:05 PM

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The cancer biotech space has attracted the interest of investors, traders, and diversified healthcare giants this year with Johnson & Johnson (NYSE: JNJ) announcing a $1B cash tender offer for Cougar Biotech (NASDAQ: CGRB) last week and Roche's (VTX: ROG) (OTC: RHHBY) mega-deal to acquire full control of Genentech earlier this year. In addition, positive clinical trial results for Dendreon's (NASDAQ: DNDN) Provenge and stock price turnarounds from the brink of zero at Cell Therapeutics (NASDAQ: CTIC) have fueled interest in the small and micro-cap cancer bio-pharma space among investors and traders looking for the next big trade. 

Access Pharma (OTC: ACCP.OB) is an emerging bio-pharma company which is focusing on the development of a late-stage, diversified oncology pipeline in addition to an FDA approved treatment for a common side effect of some cancer treatments known as mucositis (painful sores in the mouth and GI mucosal lining). Up to 40% of all patients receiving chemotherapy and/or radiation therapy develop moderate to severe mucositis, and almost all patients receiving radiotherapy for head and neck cancer and those undergoing stem cell transplantation develop mucositis. Updated clinical practice guidelines for the prevention and treatment of mucositis recommend the use of a preventive oral care regimen as part of routine supportive care along with a therapeutic oral care regimen if mucositis develops.

Valued at roughly $30M on a fully diluted basis, ACCP has multiple shots at goal in its clinical pipeline in addition to a reduced risk profile because the compounds in development are improved versions of existing drugs with established mechanisms of action. With a stock price that has hovered in the $1.30-$1.50 range over the past several weeks, ACCP represents a call option trade despite having a FDA approved treatment for mucositis and a deep pipeline (relative to its small market cap) of promising compounds focused on the treatment of cancer.

MuGard is the Company's FDA-approved product which functions like a liquid Band-Aid to protect the lining of the oral cavity in cancer patients who develop mucositis as a side effect of radiation or chemotherapy.


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The above story is the opinion of the author only and it does not reflect iStockAnalyst opinion. Further, the author is not personally advising you regarding the suitability of the story for your investment needs. In no event iStockAnalyst will be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from or arising out of, or in connection with the use of this information. Please consult your investment advisor before making any investment decision.
  
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