Last week we started to look into the “Curing Cancer Portfolio” tease from the Casey Research folks, and, as promised, today we’re going to finish up and identify the other three picks for you. He says optimistically. (I’m writing as I research here, so we’ll have to see if all three disrobe for the Thinkolator as easily as number one did on Thursday.)

The Casey Extraordinary Technology folks are teasing that they have four stocks that should benefit as new cancer cures are developed, and they’ll tell you what they are as soon as you subscribe. Here at Stock Gumshoe we like to do things the hard and cheap way, so we sniff out the hints they provide, toss the clues into the Thinkolator, and cogitate on the results a bit. Number one, revealed last week, was Seattle Genetics (SGEN) … so what’s number two?

Hints, please!

“A drug discovery and development firm designing molecular therapies that disrupt cancer cell growth

“In conjunction with the National Cancer Institute and Genentech – a company that’s widely considered the founder of the biotech industry – this small firm and its partners are so confident in its technology that instead of the usual one or two clinical trials a start-up would usually undertake, they financed a couple dozen clinical trials for the treatment of a wide variety of cancers.

“In January 2012, the FDA approved one of these treatments, a new medicine that disrupts molecular components within basal cell carcinoma cells (a slow-growing type of skin cancer). This disruption results in cell death.

“This is the first – and only – drug available for people suffering from an advanced form of basal cell carcinoma.

“This ‘Curing Cancer’ portfolio pick has another drug in the pipeline that shows great promise against cancers of the neck, lungs, breast, liver, and other organs.

“And with so many other promising cancer treatments in development, we believe this company could easily triple from its current price over the next three years.”

And voila! The Thinkolator tells us straight away that pick number two is … Curis (CRIS)

Which is indeed poised to receive milestone payments and royalties on a new basal cell carcinoma drug — the drug, Erivedge, is being developed by Roche and Genentech, and was approved in January for advanced stages of that disease (it’s in phase II for “operable” forms of basal cell carcinoma). Their approach is targeting signaling pathways and networks to disrupt cancer cells, and they have some solid partners for a couple of their compounds (including Erivedge) as well as a few compounds that they’re developing on their own (so far). Their lead candidate aside from Erivedge is CUDC-101, which is in Phase 1 right now for head and neck cancer and is expected to produce some additional news this year (possible results, possible filing for new trials in other cancers or for Phase II in head and neck). I don’t know anything about the science, you can see their basic explanation here and their pipeline summary here.

I like the general idea of smallish biotechs with strong partners and with a proprietary technology that can be applied to multiple cancer targets (or drug deliver targets, like SGEN’s tech), but I don’t focus on this sector enough to have a real bead on which technologies or drugs will be the strongest. The royalty and other payments projected for Erivedge give them a relatively stable revenue stream for a small biotech, but they’re still not going to be profitable within the next year or two if the analysts are correct (assuming, of course, that they don’t have a big lump-sum payment for a new partnership deal). Read on to see what the other picks are, and then you can tell us which is your favorite.

Pick number three? This spiel is a bit longer, with more hints:

“A drug discovery company with a proprietary platform for developing genetic therapies that fight cancer

“Inside every cell are molecules called RNAi. They act as a checkpoint of sorts – when a cell’s DNA sends a message (in the form of RNA) to your cell’s ribosomes requesting the creations of a particular protein (which comprise the building blocks of your body), the message first gets paired with a RNAi designed to match that particular signal.

“RNAi works like an email spam filter – it selectively rejects messages that shouldn’t get through. It’s there to protect against viruses and other parasites, which work by sending bad messages – spam – to cause ribosomes to build copies of the virus instead of healthy proteins. It also filters internal RNA messages to direct development and gene expression, a selective off switch for otherwise healthy functions.

“In short, it controls which proteins are NOT made, and what genetic traits DO NOT develop.

“So, by controlling RNAi function, certain disorders that individuals are genetically predisposed to developing are blocked.

“And that’s what this company’s drugs do. Each drug targets a specific RNA message, which means each drug fights a specific disease.

“Right now, this company has 23 drugs in various stages of development that fight cancer and a host of other diseases. Two of these drugs are in Phase III trials (the last step before going to market).

“And the platform from which all these therapies are being developed is proprietary and protected by patent.

“Because this company is discovering more drugs and treatments than they have the resources to develop themselves, they’re now licensing their drugs to partners prior to late-phase development and commercialization.

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“So through this they’re building a broad base of licensing fees, milestone payments, and royalty income.

“Can you see the profit potential here? We sure can – our estimate is this company could easily double your money – or better – within the next 18 to 24 months.”

This one is not quite as definitive, but we get a strong likelihood that he’s teasing Isis Pharmaceuticals (ISIS). Isis is one of the larger stand-alone developers of “antisense” RNA therapeutics, and they do have two drugs in Phase III trials right now along with 23 other compounds (if you don’t count the two Phase III trials, or the one approved drug that was developed by Novartis). Both of the Phase III compounds have partners, Teva and Genzyme, and they do state that they have so many potential targets that their goal is to license out their technologies as much as they can. The Phase III drug that is partnered with Genzyme, Kynamro, just got an “application accepted” notice from the FDA, which triggered a $25 million milestone payment from Genzyme to Isis and means they’re at least on the path to potential approval and future royalties (this one doesn’t happen to be one of their anti-cancer drugs, it targets a genetic predisposition to low “good” cholesterol).

Isis is big enough that this $25 million payment isn’t a “make or break” deal, and it hasn’t moved the stock noticeably — this is a (almost) billion dollar company, and the bet must be that their big pipeline will lead to a few blockbuster-size breakthrough drugs eventually, but so far analysts see tepid revenue growth for the next year or so and no sign of profits coming in the foreseeable future (which is the next year or two). RNA therapeutics has been a big area for investor enthusiasm, but there have been a lot of failed research projects and failed compounds in this space, so if Isis has the “magic” to properly target and tweak RNA I assume they’ll end up doing well … but, as you might guess, I don’t know the science at all and have no idea whether this will work out better than past failed programs like Sirna Therapeutics (they were bought out by Merck, so it worked out OK for investors, but from what I’ve read Merck effectively scrapped the RNA program a few years later). There are a bunch of other RNA-targeting stocks out there, including, perhaps, the next one that’s teased …

“Another bio-pharmaceutical company using RNAi therapy to kill cancer and prevent other diseases

“This company’s business strategy is to develop and commercialize a pipeline of RNAi therapeutic products. It’s also entering into collaboration and licensing agreements with companies like our “Curing Cancer” portfolio pick #3 to enable it to get the resources and funding it needs to advance its own programs.

“It’s in a prime position to advance the field of RNAi research, as its founders were the first to prove RNAi could bind to messenger RNA and prevent disease-causing genes from expressing themselves.

“Based on our evaluation formula, the prospective value of this stock is between $40 and $50. As of this writing, you can get it for around $12, giving you a chance to make 375% on your investment if you get in now.”

This one must be, sez the Thinkolator, Alnylam Therapeutics (ALNY), which was recently at around $12 (it’s “around $10” now), and is partnered with Isis. Like ISIS, ALNY has a pretty high short interest (meaning, more than 10% of the float is “sold short” in a bet that the stock will go down), and is nowhere near becoming profitable — but, also like ISIS, they appear to have quite a few irons in the fire, including a goal to have “five in 15” that focuses on getting five of their RNAi therapeutics in “advanced clinical development” by 2015. Here’s how they describe that program:

“By 2015, the company expects to have five RNAi therapeutic programs in advanced clinical development. These include ALN-TTR (for the treatment of transthyretin-mediated amyloidosis (ATTR), ALN-PCS for the treatment of hypercholesterolemia, ALN-HPN for the treatment of refractory anemia, ALN-APC for the treatment of hemophilia, and ALN-TMP for the treatment of treatment of hemoglobinopathies, including beta-thalassemia and sickle cell anemia.”

They do have six or seven drugs in the clinic, half on their own (so far) and half with partners, though most of those are in Phase 1, and they have about ten preclinical programs in “discovery and development” (“in the clinic” means that they’ve gotten FDA approval to test the drug on humans, which is what leads to that first Phase I trial).

So … there you have it, the Casey Extraordinary Technology “Curing Cancer” portfolio appears to consist of ISIS, ALNY, CRIS and SGEN. What do you think? Any favorites in that bunch, or are there other cancer-fighting biotechs out there that you believe have more potential? Let us know witha comment below.

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