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Access Pharmaceuticals – recent pull back could be a buying opportunity

Access Pharmaceuticals certainly has been making waves in the past six months, announcing a number of strategically significant deals to commercialise its oral mucositis treatment, MuGard in North America and Europe.

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Access Pharmaceuticals (OTCBB: ACCP) certainly has been making waves in the past six months, announcing a number of strategically significant deals to commercialise its oral mucositis treatment, MuGard in North America and Europe.

Shares in the junior biotech company have soared from a 52 week low of 75 cents per share to a high of $5.00 per share, and are currently hovering around the $3.00 mark.  This could be an opportune time for investors looking to gain exposure to a promising biotech stock with near term commercial potential.

Oral Mucositis is an unpleasant side effect of radiation treatment or chemotherapy for cancer patients.  In laymen’s terms, it is the appearance of ulcers or lesions in the mouth, tongue and oesophagus. Access Pharmaceuticals reckons that up to 80% of all patients receiving radiotherapy and around 40% of all chemotherapy patients develop oral mucositis.  If the radiotherapy is related to head and neck cancer, the number developing mucositis jumps to nearly 100%.  Clearly there is a considerable market for a product which can treat, or even reduce the occurrence of mucositis in cancer patients, as it is in the interest of hospitals to mitigate any undesirable side effects of cancer treatments, thereby improving patient care and recovery.

The current market for oral mucositis is currently estimated to be at least US$5 billion per annum globally.
Access Pharmaceuticals’ MuGard (click here for factsheet) product appears to largely tackle the problem and has a very large market is could address. MuGard is essentially a rinse.  It coats the inside of the mouth, tongue and once swallowed, oesophagus with a viscous coating that significantly reduces the likelihood of the onset of oral mucositis.

Furthermore, because MuGard does not include any active pharmacological agent, there are no known adverse interactions with medicinal or other products, and there is no risk in swallowing it.

MuGard is no early stage product either.


Several positive trials have been run or are ongoing, FDA approval has been received in the United States and CE mark certification in Europe, Accupac has been signed up to manufacture MuGard in the US, iMedicor (OTCBB: VMCI) has been signed up for e-marketing to the US healthcare industry, two patents were awarded to MuGard in June, and Access Pharmaceutical’s partner (SpePharm) in Europe has already launched the product in the United Kingdom, Germany, Italy, Norway and Greece, with France and other parts of Europe on the horizon.


“We are on track for an early 2010 commercial launch of MuGard, and look forward to bringing this important oncology supportive care treatment to the US market,” stated Frank Jacobucci, a consultant to Access in a press release today. “With the launch of MuGard, we believe clinicians will have a welcome addition to their oncology supportive care arsenal, filling a significant unmet medical need for a treatment of oral mucositis.”


Granted the process of rolling out a new product into several markets can be an arduous task, but the key point is MuGard is a product ready to go, the next big question now for stakeholders is how successfully will it be adopted?


Griffin Securities in New York has attempted to put some numbers to Access Pharma’s potential. In the broker’s most recent note, it placed a price target of $11.00 per share on Access, based on projected sales forecasts for
MuGard, plus potential milestone payments related to the company’s additional pipeline drugs including: ProLindac, a DACH platinum drug in Phase II trials,  Thiarabine, an anti-inflammatory drug for arthritis, and Cobalamin, a nanopolymer delivery technology based on vitamin B12.


Griffin is forecasting revenues of $2 million FY 2009, rising to $12.6 million in 2010, $29.5 million in 2011, US$48.6 million in 2012 and US$101 million in 2013.  Earnings per share rise at an equally fast pace from a loss per share of 61 cents in 2009 to earnings per share of $1.09 in 2013.


At the current market capitalisation of Access Pharmaceuticals, the company could easily undershoot the medium term forecast and still look significantly undervalued on today’s forward multiples.

Quick facts: Access Pharmaceuticals

Price: - -

OTCBB:ACCP
Market: Expert Market
Market Cap: -
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