Conjuchem Biotechnologies: A Risky Canadian Diabetes Play
by Andrew Vaino
Conjuchem Biotechnologies (CJB.TO) is a Canadian penny stock, and trades on the Toronto Stock Exchange. Your broker can obtain these stocks for you, though you may need to press. The stock also trades on the Pink Sheets as CJBFF.PK. The TSE shares are preferable, in my opinion, as they are more liquid. Average volume on the TSE is about one million shares per day and on the Pink Sheets just under 200K. Bear in mind they use the metric system in Canada.
To be very clear, this is the riskiest stock I have recommended. The stock trades at less than a Canadian dollar.
ConjuChem is currently conducting a randomized, double-blind, multiple-dose Phase I/II study looking at safety and tolerability of Exendin-4 (a glucagon-like-peptide) bound to the human albumin protein. Exendin-4 (Amylin’s Byetta) acts to lower blood glucose levels and is useful in controlling diabetes.
Type 2 diabetes develops over 15-20 years and can result for high sugar consumption. According to the US Department of Agriculture, US per capita consumption of sugar has been increasing dramatically since 1985. Incidence of type-2 diabetes in North America has already started to increase, and will continue to increase at a faster rate going forward, making a great market for diabetes treatments.
Now, the drug itself is a peptide and, like all small peptides, suffers from rapid degradation in the body. By attaching the peptide to a huge molecule like albumin—Conjuchem refers to this as a “Drug Affinity Complex, DAC”—the metabolic destruction of the peptide is reduced. One could draw the analogy of a school kid walking beside his big brother to avoid getting beat up.
Attaching a drug to a protein requires walking a fine line between preventing degradation by keeping catabolic enzymes away and still permitting the peptide to interact with its desired receptor. Conjuchem published a very nice paper in Bioorganic & Medicinal Chemistry Letters in 2004 describing some of their work in optimizing this combination. While the conjugate’s activity is in all cases lower than for the free peptide, through judicious optimization they were able to still retain substantial activity together with a conjugate that was stable for 24 hours in the presence of enzymes that degrade the peptide.
Clinical results in humans demonstrated that the drug had a half life of approximately a week. Being able to control diabetes with a single weekly injection is impressive. The clinical data also showed good regulation of blood glucose levels. A randomized, double blind Phase 1/2 study is underway, and preliminary results are expected this quarter.
In addition to this work on diabetes Conjuchem has published papers (in J. Endocrin. Metab. and in Endocrinology) applying this technology to delivering human growth hormone releasing factor. This could also be a big product.
According to recently released results for their fiscal year which ended October 31st, they were burning over $40M annually. On November 28th they announced they had raised an additional $120M through an equity financing round. This gives them some breathing room
This is clearly a very risky play and the stock will likely be subject to high volatility—definitely not a stock for the faint of heart. I really like this idea, and I see much potential for this stock. I already own Conjuchem stock, and I am buying more.
RELATED READING:
- Transition And Elan To Develop Alzheimer's Drug
- Sangamo BioSciences Initiates Phase II Diabetes Study
____________________
Conjuchem Biotechnologies (CJB.TO) is a Canadian penny stock, and trades on the Toronto Stock Exchange. Your broker can obtain these stocks for you, though you may need to press. The stock also trades on the Pink Sheets as CJBFF.PK. The TSE shares are preferable, in my opinion, as they are more liquid. Average volume on the TSE is about one million shares per day and on the Pink Sheets just under 200K. Bear in mind they use the metric system in Canada.To be very clear, this is the riskiest stock I have recommended. The stock trades at less than a Canadian dollar.
ConjuChem is currently conducting a randomized, double-blind, multiple-dose Phase I/II study looking at safety and tolerability of Exendin-4 (a glucagon-like-peptide) bound to the human albumin protein. Exendin-4 (Amylin’s Byetta) acts to lower blood glucose levels and is useful in controlling diabetes.
Type 2 diabetes develops over 15-20 years and can result for high sugar consumption. According to the US Department of Agriculture, US per capita consumption of sugar has been increasing dramatically since 1985. Incidence of type-2 diabetes in North America has already started to increase, and will continue to increase at a faster rate going forward, making a great market for diabetes treatments.
Now, the drug itself is a peptide and, like all small peptides, suffers from rapid degradation in the body. By attaching the peptide to a huge molecule like albumin—Conjuchem refers to this as a “Drug Affinity Complex, DAC”—the metabolic destruction of the peptide is reduced. One could draw the analogy of a school kid walking beside his big brother to avoid getting beat up.
Attaching a drug to a protein requires walking a fine line between preventing degradation by keeping catabolic enzymes away and still permitting the peptide to interact with its desired receptor. Conjuchem published a very nice paper in Bioorganic & Medicinal Chemistry Letters in 2004 describing some of their work in optimizing this combination. While the conjugate’s activity is in all cases lower than for the free peptide, through judicious optimization they were able to still retain substantial activity together with a conjugate that was stable for 24 hours in the presence of enzymes that degrade the peptide.
Clinical results in humans demonstrated that the drug had a half life of approximately a week. Being able to control diabetes with a single weekly injection is impressive. The clinical data also showed good regulation of blood glucose levels. A randomized, double blind Phase 1/2 study is underway, and preliminary results are expected this quarter.
In addition to this work on diabetes Conjuchem has published papers (in J. Endocrin. Metab. and in Endocrinology) applying this technology to delivering human growth hormone releasing factor. This could also be a big product.
According to recently released results for their fiscal year which ended October 31st, they were burning over $40M annually. On November 28th they announced they had raised an additional $120M through an equity financing round. This gives them some breathing room
This is clearly a very risky play and the stock will likely be subject to high volatility—definitely not a stock for the faint of heart. I really like this idea, and I see much potential for this stock. I already own Conjuchem stock, and I am buying more.
RELATED READING:
- Transition And Elan To Develop Alzheimer's Drug
- Sangamo BioSciences Initiates Phase II Diabetes Study
____________________
posted by Nico at
10:36 AM
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