With an innovative cancer treatment: the company that signs a significant commercialization agreement

Company Alpha buffalo which develops a new radiation therapy for cancer, announced today (Wednesday) a strategic cooperation agreement with the American company Tolmar. The agreement is for the commercialization of Alpha Teu’s treatment in the field of urological cancers, and first for the treatment of prostate cancer. The company’s market value stands at $807 million, after an increase of about 85% in the stock since the beginning of the year, and a jump of 198% in the last year.

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According to the deal, Tolmer will invest $15 million in the establishment of a dedicated plant for Alpha Theo’s product in the US, another $20 million will be used to purchase the company’s shares, at a 25% premium over the last month’s price. In addition, it will pay Alpha Theo up to $161 million in payments for milestones, of which approximately $96 million will be until the product is approved for marketing. If and when the product is indeed approved, Alpha Theo will receive royalties in the amount 60% of the net sale price to the end customer, a royalty rate that is considered very high in the field.

Alpha Theo has developed a new method of focused radiation to treat cancer patients. Its technology is in advanced trials for the treatment of cancers such as GBM brain cancer, pancreatic cancer, head and neck cancer and certain types of skin cancer. All of these she continues to develop independently. In the field on which Tolmer will receive exclusivity, the urological field, the company has not yet conducted organized experiments or published results, but in the past it treated patients from diverse fields, including from this field, apparently to Tolmer’s satisfaction.

The first product that the companies will develop together is intended for the treatment of recurrent prostate cancer. Today, there are many approaches to treating prostate cancer the first time, but if the cancer recurs, it is more complicated to perform radiation of the classic type the second time. Alpha Tau’s product uses a different, more focused radiation called alpha radiation. The company injects tiny radiation sources (Alpha DaRT) into the tumor area, where they emit radiation that is focused on the spot.

The agreement includes additional indications in the field of the prostate, and an option to extend the agreement to bladder cancer for an additional fee.

“Very efficient in performing our experiments”

According to Alfa Tao CEO Uzi Sofer: “Tulmer is a well-networked company in the field of urology in the US. We decided to give exclusivity to one of our most promising but least advanced indications. In the field of recurrent prostate cancer, there are currently no good solutions for local treatment. These are 60-80 thousand potential patients per year.

“Today we have three manufacturing plants, one in Jerusalem and two in the US. We are building another factory for them. It is very important to build a factory that will be accessible by overnight delivery all over the USA, because it is a radioactive material whose intensity of radiation fades over time. In principle, the product can also be marketed from the country, but then we will have to load it with radiation that will mostly decay on the way. If the material can be shipped overnight to any point in the USA, then there is almost no decay.

“In the company’s independent indications, the most advanced field is in the field of skin cancer, where we hope to submit the results of the clinical phase of the trial to the FDA in 7-8 months,” meaning the potential for approval, if the results satisfy the FDA, as early as next year. In the field of the pancreas, the company is in a trial in which its product will be combined with chemotherapy for metastatic and advanced patients. At the same time, the product has already received marketing approval in Japan, for head and neck cancer. “Now we are talking to the paying authorities,” says Sofer.

You conduct many experiments at the same time, less focused than some of the other companies, and now the products enter advanced experiments that can be expensive. Do you have the necessary resources for this?
“We are very efficient in conducting our experiments, and not only do we have the resources, but we are sitting on a rather large cash fund of 80 million dollars. Some of the expected payments for the urological indication may be used for this purpose.”

Positive recommendations from analysts

As mentioned, Alpha Theo is on a growth trend and about a week ago the investment bank Barclays began to survey the company with a target price of $15 per share, compared to $8.9 in today’s trading before the announcement of the deal was published. The recommendation states that: “Even though biotechnology is a risky area for investment, differentiated platforms with a clear scientific rationale, clinical data and risk-reduced mechanisms, have a positive effect on the level of risk.”

HC Wainright also recommended a buy at a price of $15 per share and confirmed this recommendation this week, but the investment house Piper Jaffray recommended the hold with a price of $8 per share.

Tolmer is an American company founded in 2007 as a dedicated company for the field of urology (urinary system), oncology (cancer), endocrinology (hormonal system) and pediatric endocrinology. The company has several dozen products on the market. It is a private company, and its revenues were estimated on the Crain Chicago Business website at between 100 and 500 million dollars.