ZioPharma Oncology (ZIOP)

Investment Analysis Clubs Saul’s Investing Discussions
1

I believe that the Car-T treatments that Kite is working on are truly disruptive (a single treatment of an “untreatable” cancer patient, and that patient is alive 24 months later?)

One of the posts on one of the Kite threads on our board mentioned several other small companies in the same field. One, which caught my eye, is ZIOP (ZioPharma Oncology). They have developed a rather remarkable method (called Sleeping Beauty) of turning the T-Cells on and off at will (with a single pill, I believe). This has the potential to markedly reduce side effects. Zio has also markedly cut the time of production of the T-cells (from 28 days to 2 days!?), and thereby markedly cut expense. (Side effects, time of production, and cost are all important factors limiting usage of Car-T treatments).

ZioPharma has worked on glioblastomas in kids and on breast cancers. Glioblastomas in kids are a particularly vicious brain cancer that usually kills within 12 months, and when recurrent, is usually close to 100% fatal in about six months. A diagnosis of glioblastoma has been, up to now, a rapid death sentence.

As with Kite, ZIOP is also working with the National Cancer Institute and MD Anderson, and others. They made ‘a strategic decision’ to put breast cancer on the back burner (there are other treatments), and concentrate on the pediatric brain tumors (where there are no alternatives that work).

After a quite successful Stage 1 trial, the FDA has just apparently approved them to bypass Stage 2 and go directly to a ‘pivotal’ Stage 3 study. Of course that puts them at least 18 to 24 months away from approval, but it also means they are virtually certain to be approved after the big study (with a successful treatment for a previously untreatable childhood illness).

I have taken a position a third of the size of my already small Kite position and decided to just tuck it away and not worry about it for a while. If you are interested I’d suggest you go to the Investor Relations section of their website, go to Events and Presentations and listen to the Feb 23 presentation (with useful slides).

I hope you find this interesting, but remember that it’s a long and uncertain time line, and they are burning cash. This is not your grandfathers type stock, which is why I only took a smaller than tiny position.

Saul

21 Likes
2

Well, no financials to really analyze here, pretty much have to make a bet on the success of the technology. The CEO (I forgot his name already) really gives a compelling presentation, but of course, that’s his job. But yeah, OK, a tiny position is probably a worthwhile gamble. It’s got better odds than a roulette wheel I think. Maybe not . . .

3

Interesting therapy. Glioblastoma took my grandfather a few years back. Nasty stuff. Here’s to their success. Like the other reply stated, does seem quite promising.

4

how they doing for cash vs. cash burn?

5

TomFool,

From the ZioPharma 10K:

As of December 31, 2016, we have approximately $81.1 million of cash and cash equivalents. Given our development plans, we anticipate cash resources will be sufficient to fund our operations into the fourth quarter of 2017 and the Company has no committed sources of additional capital.

Seems like ZIOP is living year-to-year.

To get through 2015 ZIOP issued 10MM common shares for about $90MM and received ½ of an upfront fee of about $57MM for an agreement by ZIOP and Intrexon with a Merck subsidiary. The 2015 loss from op’s was $120MM. The 2016 loss was $165MM.

The 81MM currently in the cash account is what’s left of a $118MM preferred share issuance to partner Intrexon. The preferreds carry a 6% payout. The preferreds were issued relaxing the royalty agreement with Intrexon from 50% to 20% of profits.

Here’s an article detailing the relationship with Intrexon. https://www.fool.com/investing/2016/10/14/better-buy-ziophar…

I know Saul said it’s only worthy of a tiny position. With Intrexon, who don’t seem to have a big cash cow of their own, as ZIOP’s only backstop I’m not sure if I even want to invest a tiny amount. KITE and one I owned for a time, SGEN, seem like they have better backers and license agreements. They are also both further along in developments.

Joe
Community Fool - Ticker Guide OKE, PRLB, MTZ, & SRCL
click link for my profile & holdings
http://my.fool.com/profile/CMFJambo/info.aspx

1 Like
6

I suspect a buy out is coming if the technology is really good

Way too risky for me.

Drug trials are there for a reason. Presumably the best scientists at companies think their drug will work, but often it doesn’t. If they can’t succesfully predict, how can I ?

7

There’s a lot of good (biased) discussion at Investor Village (IV) concerning Ziopharm.

Overall, the Sleep Beauty process is the diamond in the rough many investors, including myself, are betting will succeed and gain FDA approval for a variety of uses. And the potential is quite large…

On the IV blog, there’s been various discussions concerning Randall Kirk (XON) and ZIOP.

Currently, Sleeping Beauty has a great success record but convincing investors requires looking at the totality of information on the process. Not easy reading but that’s what oncologist friends are for :slight_smile:

Good luck assessing ZIOP.

~Scott

Long
ZIOP & XON

1 Like
8

mauser,

suspect a buy out is coming if the technology is really good

I agree and suspect this is the reason the Merck subsidiary is lurking.

Joe