ACCP: Poised to Deliver Shareholder Value - Analyst Blog

Grant Zeng, CFA

Investors Update Conference

On March 23, 2011, Access Pharma (ACCP) updated investors on its marketed MuGard, major clinical programs, and its drug delivery technologies.

On the MuGard side, management has seen great progress in its commercial launch in the US. Access officially launched MuGard in the US in August 2010. This program is still in its early commercialization stage. In order to successfully penetrate the market in the future for MuGard, Access has been making every effort to raise MuGard awareness for the management of oral mucositis (OM) in the cancer supportive care community. One of the important measures is the sampling program in which the Company provides free MuGard samples for cancer patients. So far, the feedback from a majority of patients, physicians and nurses are very positive for MuGard. Doctors have started to write scripts. Access has assembled over 100 independent sales reps targeting most metropolitan areas in the US.

One important positive result of the sampling program is that MuGard could change the landscape of OM treatment as a routine prophylactic script for cancer patients treated with radiation or cycle chemotherapy as more and more doctors and nurses gain the positive clinical experience with MuGard.

In order to further push hard for a successful MuGard launch in the US market, Access recently appointed Anthony Mottola as its Vice President of Managed Care and Market Access. A 16-year industry veteran, Mottola brings to Access an extensive pharmaceutical industry knowledge and experience in specialty pharmacy, healthcare services and reimbursement solutions.  Anthony will lead the overall management of reimbursement and market access for MuGard within Access Pharmaceuticals.  

In the EU market, Access' partner SpePharm is using the data from the ESMO trial (announced in 4Q last year) to reinvigorate its marketing efforts, and is making a new push there.  SpePharm is working on expanding its efforts geographically. In Korea, JCOM Co. continues to prepare to launch MuGard. Access is discussing with JCOM a supply agreement. Access' China partners RHEI and Jian An have made the regulatory submission to the sFDA, and expect to hear back affirmatively, and be in a position to launch in China within months.

On the drug delivery technologies front, Access has been making efforts to monetize these programs and has made great progress.

For the CobOral technology, the Company has co-operations with big pharma or biotech companies in oral insulin program, diabetes and prostate cancer. These pre-licensing programs are progressing very well and full license deals could be closed any time soon.

For the CobaCyte targeted platform, the Company is also pushing hard for potential co-operations in RNAi and targeted cancer therapy. The Company will have more information on this matter very shortly.  

On the conference call, Access also updated its clinical programs, ProLindac and Thiarabine. ProLindac is under a Phase II clinical trial and Thiarabine is under a Phase I/II clinical program. Both clinical trials are progressing well and investors will be updated shortly.

What Should Investors do with Access' Shares?

We think Access is heading in the right direction. We are encouraged by the positive impacts MuGard has given to cancer patients/doctors/nurses. The integration of MuGard into patent care regimes coupled with the clear clinical benefits observed so far further validate the important role MuGard plays in the prevention and management of oral mucositis in patients under radiation and chemotherapy for many different cancers including head and neck, lung, colon and breast cancer. We believe the ongoing clinical success and the positive feedbacks from some prescribers will further convince more physicians to use MuGard as part of their cancer treatment regimes.

As we pointed in our previous reports, initial slow sales ramp of MuGard is expected considering a brand new product for a small company like Access without marketing power like Pfizer. But we believe sales should pick up steam once the sampling program takes effect and more doctors/nurses are convinced by MuGard clinical benefits.

One wild card for Access is its CobOral programs under pre-licensing co-operation. The Company is making excellent progress and a full licensing deal could be sealed any time soon. This is important because it not only provides the Company with much need cash to advance its development programs, but also further validates its technologies and clinical efforts.

Therefore, we continue to maintain our Outperform rating for Access' shares and reiterate our $8 per share price target. Investors just need some patience. We believe Access has great potential to grow in the coming years.  

For a free copy of the full research report, please email scr@zacks.com with ACCP as the subject.

Follow Zacks Small Cap Research on Twitter at Twitter.com/ZacksSmallCap