Scancell Holdings (PLUS: SCLP) - Scancell continues to fire on all cylinders
SCLP.L
Full Report by Objective Capital , Oct 13, 2010 download full report
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Key Points:

• First drug candidate officially in the clinic
  With the first patient enrolled back in June, all three trial sites are now fully approved and up-and-running. The first cohort, consisting of three patients, is in the process of being dosed with SCIB1, Scancell’s cancer vaccine for melanoma. As a result, Scancell has officially graduated from developmentstage to clinical-stage.

• Successful funding expected to carry Scancell to exit
  Earlier this year, Scancell raised ￡2.54 million, before expenses, through an underwritten Open Offer and the placing of new Ordinary Shares. Strong interest in the market enabled the Company to bring in more capital than originally sought. In this environment, selling new shares and bringing in new capital is never a given. This new financing, combined with expected licensing revenues late next year or in early 2012, should preclude Scancell from needing to tap the capital markets for additional funds – always a “feather in the cap” for an early stage biotech company.

• Spotlight shining on Scancell and industry
  With the entry of SCIB1 into the clinic and the recent move from the PLUS market to the AIM market of the London Stock Exchange, Scancell has heightened its visibility and made its media rounds as a result. The industry has also been in the limelight of late with the U.S. FDA approval of Dendreon’s cancer vaccine, Provenge, for prostate cancer earlier this Spring. Media coverage and investor interest, when positive of course, can act as fuel for a Company’s stock price as Scancell can attest to over the past few months.

• Partnerships are piling up
  Scancell has worked hard to add to its stable of development partnerships, inking three deals in just over two months earlier this year. While all of these research collaborations and partnerships hold promise, the initial stages are typically investigative in nature. However, the strategic rationale for these relationships appears sound and acts to potentially enhance the long term potential of the franchise, as evidenced by the recent positive announcement related to the Company’s partnership with ImmuneRegen BioSciences.

• Entry into the clinic supports higher target price
  In our model, the evolution of Scancell from a development-stage company to a clinical-stage one has increased the probability of success for SCIB1 and, therefore, driven up the estimated value of the enterprise. With the success other cancer vaccines have had in the clinic, our confidence in the outlook for SCIB1 has gone up and, in turn, our estimation of fair value for Scancell shares has increased to 99 pence per share, up from 59 pence per share in our initiation report last year.

• Share price reflects execution
  After hitting a yearly low of 40.5 pence per share on March 5th, Scancell’s stock has reacted favourably to the avalanche of positive news items that have come out of the Company this summer, sending the shares up close to 135% to a recent close of 95 pence per share. Interim share movements will likely remain volatile as liquidity attempts to build, but as the momentum grows and the Company continues to execute on its business strategy risks will diminish.