The Twelve Biotechs of Christmas: Two

By DrKSSMDPhD, December 16, 2016

[Ed. Note: Dr. KSS writes about medicine and biotech stocks for the Irregulars. He has agreed to our trading restrictions, chooses his own topics, and his words and opinions are his own. All of his past articles and most recent comments are on his Stock Gumshoe page.]

After the New Year, we plan to look deeply into small Durham, NC, firm Argos Therapeutics ($ARGS), about which there are whispers of greatness.

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Argos co-founder Ralph Steinman, MD, won the 2011 Nobel Prize in Medicine or Physiology for being co-discoverer of dendritic cells, elusive master regulators of the immune system so-named because of fine retractable protoplasmic extrusions. Argos is deep into clinical research using methods for dendritic cell activation to fight cancer, and will announce results of a pivotal phase 3 study in metastatic renal cell carcinoma in 2017.

What are its prospects for success? Well, we think Argos knows something. It’s building a new $57M-dollar plant in Research Triangle Park, NC. People often don’t know how to think about this area of North Carolina, which is my home. Answer: it’s brainiacville, and you need a PhD to move there (kidding, only slightly). But it’s also an open area of rolling soothing green where $57M buys you extraordinary real estate. We don’t think it would be planning upscaling and hiring more than 200 new staff if it didn’t have intimations of success in its cancer immunotherapy programs. And it recently added former Genentech VP, former Duke University Medical Center chancellor and biotech mover and shaker Ralph Snyderman, MD, to its board of directors. Snyderman casts a large shadow in American medicine, and from having a passing acquaintance with him, I can tell you he won’t trifle with anything that seems oddball or out there. He must see something in the science.

While the market cap of $ARGS stands at only $188M now, insiders have been nibbling all year. 67 percent of shares are spoken for by large block owners. While we have tended to doubt the “cancer vaccine” approach, Argos, flying below radar, had compelling results in phase 2 metastatic renal cell cancer, and may surprise to the upside, as is predicted by sell-side analysts.

Argos is also exploring HIV therapeutics, looking to eradicate HIV using a combination of agent vorinostat and its proprietary dendritic cell activation methods.

Dendritic cells are go-betweens for the innate and adaptive ...

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