AVAX Technologies, Inc.

(Public, OTC:AVXT.PK)

AVAX Technologies, Inc. has gone through a vast number of ups and downs throughout 2006 to 2007. At this time StocksHaven Investments profiles the company and takes look at what investors may expect within the near future.

AVAX had a number of expectations to meet in order to sustain ongoing business operations: equity financing, FDA registration for phase II and phase III clinical trials, and collaborations and expactions.The successful completion of these goals has paved the way for a fresh and optimistic 2008 and 2009 for AVAX. Having raised $10M in equity financing, and $1.2M in a collaboration of CTCA on the OVARIAN trials (Ovax), dilution should be out of the question for the remainder of 2010. Despite all of this, there remains one main reason which makes AVAX a solid company: their pipeline which targets some of the fastest growing markets within the biotech medical industry. MVax is aiming towards a $775M Melanoma treatment market by 2010, while Ovax looks to enter a potential Ovarian cancer drug market of $1.6B by 2016. Moreover, AVAX’ currently trades at a highly undervalued estimated market cap of 27.10M when comparred to a similar cancer treatment company in Cell Therapeutics (NASDAQ:CTIC), which is sitting at roughly 627.11M market cap without any drugs currently being approved by the FDA. 2010 should prove to be an eventful year for this up and coming rising small cap biotech. MVax® is AVAX’s lead product candidate and it is currently in an International Phase III Registration trial with centers in the U.S., Europe and Israel. To date over 600 patients have been treated with the AC Vaccine Technology.

About AVAX Technologies, Inc.

AVAX Technologies, Inc. is an internationally integrated biotechnology company focused on developing and commercializing its AC Vaccine® technology for the treatment of cancer. The AC Vaccine Technology is an immunotherapeutic treatment that educates the patient’s immune system to recognize cancer cells as foreign through the process of haptenization. Haptenization is a re-education of the immune system through a chemical modification of antigens on the cancer cell which allows for the development of an immune response to cancer cells that were previously ignored by the immune system. To produce AVAX’s AC Vaccine cancer cells are obtained from tumors excised during routine surgery. These cells are then treated with the hapten dinitrophenyl (DNP). Injection of the DNP-modified vaccine induces an immune response against native cancer cells in the patient’s body, and, under the best of circumstances, kills them or controls their growth.

AVAX is headquartered in Philadelphia, PA with operations in Lyon, France where it has established a cGMP manufacturing facility that is currently producing the vaccines for the ongoing Phase III Registration trial of MVax®, the AC Vaccine for Melanoma.

*All information provided from the company’s website at http://www.avax-tech.com

AVAX is an internationally integrated development stage biotechnology company specializing in the development and future commercialization of individualized vaccine therapies and other technologies for the treatment of cancer. Their vaccine consists of autologous (the patient’s own) cancer cells that have been treated with a chemical (“haptenized”) to make them more visible to the patient’s immune system. AVAX refers to their cancer vaccine technology as autologous cell vaccine immunotherapy and to the vaccine as the AC Vaccine.

The AC Vaccine is processed directly from the patients tumor. The tumor is broken down to the basic cancer cells. These cancer cells undergo a series of treatment steps and then the cells are modified with DNP, which attaches to the proteins on the surface of the cells. These DNP modified tumor cells are then re-administered to the patients with adjuvants in accordance with the previously optimized schedule of vaccine administration.

MVax^® for the Treatment of Melanoma

Entering Phase III Study: MVALDI

AVAX has launched an International Phase III Registration trial entitled “Comparison of MVax® plus Low Dose Interleukin-2 versus Placebo Vaccine plus Low Dose Interleukin-2 in Patients with Stage IV Melanoma”. The study, which has initiated enrollment, is recruiting centers in the U.S., Europe and Israel. The Company will consider adding additional sites and countries as the study progresses.

Registration study enrollment commenced in November 2007. The study is the subject of a Special Protocol Assessment Agreement (SPA) with the U.S. FDA. An SPA is a written agreement between AVAX and the FDA regarding the trial design, surrogate endpoints to be used as a basis of filing for accelerated approval of MVax®, and the statistical analysis plan necessary to support the full regulatory approval of MVax®. An SPA agreement is binding upon the sponsor and the agency.

The Phase III study will enroll up to 387 patients with stage IV melanoma, who will be assigned in a double-blind fashion at a 2:1 ratio to MVax® pt or Placebo vaccine. The MVax® arm will consist of an initial dose of MVax® pt (autologous DNP-modified tumor cells) followed by cyclophosphamide (CY) and then six weekly doses of MVax® administered with Bacillus of Calmette and Guerin (BCG). Following vaccine administration patients will receive a specific schedule of low dose IL-2. Patients assigned to the control group will receive a treatment identical to the MVax® group, except that a Placebo Vaccine will replace MVax®. The primary endpoints of the study are best overall anti-tumor response rate and the percentage of patients surviving at least 2 years. Secondary endpoints of the study will include overall survival time, response duration, percentage complete and partial responses, progression free survival and treatment related adverse events.

The data analysis plan for the study includes an interim analysis of Best Overall Response Rate (complete and partial) to be performed when half the patients (194 patients) have completed assessment of their best anti-tumor response. The comparison of the best overall response rates for the MVax® and control groups will be used as the basis for an expected initial Biologics License Application (BLA) submission under 21 CFR 601 Subpart E, which allows for accelerated approval using a surrogate endpoint in certain life threatening diseases. The analysis of overall survival will be performed when patients have reached the two-year point.

The protocol is based on published data showing that administration of MVax® alone can induce clinically meaningful anti-tumor responses in patients with stage IV melanoma. Moreover, data from other clinical trials and from animal models suggest that the addition of low dose IL2, properly timed, can greatly increase anti-tumor response rates. Finally, because IL2 will be given at a low dose, AVAX expects that its use will not be limited by serious toxicity.

Phase I/II Study Results

AVAX recently announced the successful completion of its Phase I/II study of the treatment of patients with Stage III & IV melanoma. The results of this study will be presented at the 2008 American Society of Clinical Oncology (ASCO) Meeting in Chicago.

The study was designed to evaluate four doses of MVax® with dose defined by the number of cells injected in each vaccine; the doses tested were: 5×106 cells (high dose), 2.5×106 cells (medium dose), 0.5×106 cells (low dose), and 0 cells (zero dose). All dosages were administered according to a previously developed optimum schedule, which included an induction dose without adjuvant followed by low dose cyclophosphamide and then 6 doses admixed with the immunological adjuvant, BCG, Endpoints of the study were safety and an immunological endpoint of delayed-type hypersensitivity (DTH), which is a T-cell-mediated immune response to autologous melanoma cells. The study was also designed to demonstrate that the frozen formulation of MVax® is bio-equivalent to the original, freshly-prepared autologous, hapten-modified vaccine.

The high dose arm of vaccine was highly effective immunologically with positive DTH responses to hapten-modified autologous melanoma cells observed in 22/29 (76%) patients following a course of MVax®; baseline DTH responses were negative, as a condition of enrollment. In contrast, the zero dose arm was ineffective. Linear regression analysis of DTH responses of all evaluable patients showed a clear dose-response relationship when DTH responses for each patient were plotted against the MVax® dose received. These results are important, because previously published studies by AVAX and others showed a statistically significant relationship was seen between survival and induction of DTH after MVax® administration.

The safety profile of MVax® appeared to be very favorable. There were no Serious Adverse Events attributed to MVax®. Non-serious adverse events were similar to what has been observed in previous trials of the autologous, haptenized vaccine: mild-moderate injection site reactions in all patients, mild nausea from cyclophosphamide in some patients, and mild constitutional symptoms, such as fatigue, in some patients after MVax® administration.

LungVax^® for the Treatment of Non Small Cell Lung Cancer

This is the first ever study conducted with the AC Vaccine in the treatment of Non Small Cell Lung Cancer. The study is treating patients with Stage I, II & III disease that undergo complete surgical resection. The vaccine is given to the patients prior to any other post surgical intervention (chemotherapy, etc.).

The study is designed to evaluate three doses of LungVax® with dose defined by the number of cells injected in each vaccine; the doses tested are: 5×106 cells (high dose), 2.5×106 cells (medium dose), and 0.5×106 cells (low dose). All dosages are administered according to a previously developed optimum schedule, which includes an induction dose without adjuvant followed by low dose cyclophosphamide and then 6 doses admixed with the immunological adjuvant, BCG, Endpoints of the study are safety and an immunological endpoint of delayed-type hypersensitivity (DTH), which is a T-cell-mediated immune response to autologous lung cancer cells.

OVax^® for the Treatment of Ovarian Cancer

In data previously presented on the use of OVax®, two phase I-II clinical trials were performed. In the first trial, 9 evaluable patients with newly diagnosed adenocarcinoma of the ovary underwent standard debulking surgery plus six cycles of chemotherapy (taxol + platinum) prior to receiving OVax®. In the second trial, 13 evaluable patients with bulky, chemotherapy-refractory disease were treated. Positive DTH (5-mm induration) to autologous DNP-modified tumor cells was elicited in 19 of 22 patients (median = 14-mm induration). More importantly DTH to unmodified tumor cells was induced in 17 of 22 patients and (median = 6).

Unexpectedly, a clinical responses was observed as well: one patient, who had previously had excision of a peritoneal tumor, exhibited complete regression of a residual peritoneal mass by computed tomography (CT) and a concomitant fall in serum CA-125 from 65 to 6. Both the CT and CA-125 responses were maintained for 6 months.

The past month for AVXT has been very exciting and signaled a Bullish trend may have just started.  In fact, only three weeks ago, the classic bull signal was given when the 100 day moving average crossed up and over the 200 day moving average.  Currently, both averages are trending upward in bullish fashion. Just today, the price clearly broke a 2-year-old level of resistance around the .15 cent range.  This was the third attempt to break that resistance and, as we have seen numerous times, the third time is the charm. This resistance also corresponded to the top trend-line of a price channel that has been in control since 2007.  This move indicates the price channel has expanded and the previous top trend-line (dashed Blue line) now appears to be the new mid-line.  Typically, one doubles the height of the previous channel and this could indicate the new top trend-line of the expanded channel (Blue lines on the chart) is near the .29 cent level.  Interestingly, the price actually touched the new ¾ trend-line today and gave further proof the expanded channel is now in control.  With so much interest in this company’s activities, as evident by the significant increases in volume (Gray bars on the chart), the stock appears ready to carry on into the upper level of the expanded price channel and beyond.  It’s also good to keep in mind that in the past this stock spent over a year trading at prices well above the top of the newly expanded channel reaching prices above .40 cents.

Overall Sentiment

Having finally managed to find the means for capital in order to fund ongoing research and development costs, all the while establishing stability by joining the OTC market, the company seems to have moved past its most troubled times and onto greener pastures. The end of 2009, and beginning of 2010 should provide a rebirth for AVAX, boosting investor confidence as they begin to focus on the phase II and phase III clinical trials respectively. The results of these trials remains unknown, however, when taking a look at other struggling cancer biotechs which are entering or have entered phase III, it is easy to depict which way this stock and its market cap of 27.10M will go — just take a look at Cell Therapeutics (NASDAQ:CTIC).

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Disclosure: Long AVXT.PK