The Speculator

Viralytics expands its cancer targets ... and is expanding its capital base.

PORTFOLIO POINT: Viralytics expands cancer targets ... and international biotech analyst gives company an enthusiastic wrap.

Cancer cure hopeful Viralytics (VLA), now in the middle of a share purchase plan that closes on Friday, this week announced a further expansion of clinical trials on a wider range of cancer sufferers.

Already focused on Phase 2 trials in the US on destroying melanomas in late stage sufferers, the company will expand its trials to target late stage non-small cell lung cancer, castrate-resistant prostate cancer and metastatic bladder as well as melanomas through intravenous injection of its proprietary CAVATAK viral agent.

As I’ve pointed out previously, Viralytics is one of only two stock exchange listed companies in the world with technology that uses viruses to target and destroy cancer cells.

The new study will be centred on the UK with lead investigators being Professor Hardev Pandha (University of Surrey), Prof Kevin Harrington (Institute of Cancer Research and The Royal Marsden, London) and Prof Alan Melcher (St James University Hospital, Leeds).

The clinical trial profile is being completed for submission to the UK Medicines and Healthcare Products Regulatory Agency (MHRA) for approval to begin the trials involving 30 patients with late stage cancers.

Meanwhile, a leading European-based entity specialising in biotech company research, Van Leewenhoeck Institute Inc, has fulsomely endorsed Viralytic’s potential in an initial 27-page report released last week.

Author of the report is the institute’s chief research officer, Marcel Wijma, who in 2009 was awarded by the Financial Times/Starmine as one of the Top-3 biotech analysts in Europe. Unlike some other reports that are commissioned and paid for by the subject company, the institute declares that the report or its conclusions are not dependent on paid compensation.

Melanoma: Fastest growing cancer worldwide

The report claims statistics around melanoma are astounding. “One-in-50 Americans have a lifetime risk of developing melanoma,” the analyst points out.

“The combined market potential that Viralytics drug development programs are addressing is large. The annual US market potential represented by the 70,000 US melanoma patients diagnosed annually could be as high as US$8.4 billion if pricing for oncolytic virotherapy is comparable to Bristol Myers Squibb’s pricing for its approved antibody Yervoy (US$120,000). Other cancers targeted by VLA’s CAVATAK, which include head and neck, breast, lung and pancreatic cancer, could double this estimated market potential.”

Viralytics, with 75.4 million issued shares priced at 32c, carries a market capitalisation of $24.1 million, with remaining cash of around $4.5 million plus an R&D tax concession awarded last month of $1.46 million.

The share purchase plan closing on Friday (underwritten to the extent of $2 million by Patersons Securities Ltd) offers existing investors at November 21 to buy up to 15,000 new shares at 30c – a 16.5% discount to the volume weighted average market price to the previous market price of trading.

Golden Gate board battle

Shareholders in junior Texan petroleum explorer, Golden Gate Petroleum (GGP), will vote on a reshuffle of the board at an extraordinary meeting called for next Wednesday, December 19.

Executive chairman Steve Graves this week urged shareholders to vote against the appointment of two nominees, Thomas Kelly and Thomas Burt, proposed by a group of investors holding some 5% of the stock.

Following the recent resignations of two veteran directors, geologist Frank Brophy and Melbourne public accountant Frank Petruzzelli, the chairman is urging shareholders to support the re-election to the board of two recent appointments: Oil geologist and petrophysicist Chris Porter and engineer Ron Oliver, who has extensive international engineering experience in petroleum exploration and production.

In the past six weeks, GGP’s shares have slipped from a year’s low of 0.007c to a new low last week of 0.005c, the price at which the company is endeavouring through Sydney’s Novus Capital to raise $5 million through an offering of 100 million convertible notes.

It is then proposed to launch a one-for-four issue of up to 646,241,998 shares at 0.005c to existing shareholders together with an attached option to acquire another new share at 2c on or before December 31, 2014. The planned entitlement issue, underwritten by Novas Capital, will enable the raising of a further $3.23 million before costs.

Graves will no doubt emphasise to shareholders that in the current market there is little option about raising new capital which will be vital in completion of the so far successful horizontal well drilling program launched on the company’s 100%-held 8800 acres of ground in West Texas.

I believe most other shareholders will agree for there appears to be little option for any other solution.

Image completes $6.7 million capital raising

Emerging heavy minerals miner Image Resources (IMA) announced today the successful placement of 33,500,000 shares at 20c each to raise $6.7 million.

Together with current working capital, the new funds exceed the estimated costs for Image to complete a bankable feasibility study on its Boonanarring and Atlas projects on the North Perth Basin scheduled to be completed by July, 2013.

Image has a 10.5 million tonne JORC measured and indicated resource at Boonanarring as part of 52.9 million tonnes overall in the North Perth Basin, with resource upgrades expected to bring the Boonanarring project alone up to 15-25 million tonnes depending on the cut-off grade used.

Image’s initial target is to build a 3.3 million tonne/annum single mine and wet plant at Boonanarring to by late 2014.

With the success of the capital raising, it looks like Image managing director Peter Davies and founder and exploration manager George Sakalidis won’t be stretched in buying me a beer or two when I front up for their Christmas party at Black Tom’s bar in Perth tomorrow.

David Haselhurst writes a monthly column for Money magazine. Please note that he is not able to provide personal replies to emails.

The Speculator portfolio (as at December 11, 2012)

CompanyCodeNo of sharesBoughtPurchase priceCurrent priceCurrent value
Image ResourcesIMA*20,00031/12/2010* $0.338 av$0.200$4,000
Robust ResourcesROL6,00031/12/2010*$1.49 av$0.365$2,190
Scotgold ResourcesSGZ27,50031/12/2010*5.5 av$0.055$1,513
GoConnect LtdGCN250,00031/12/2010*0.034 av$0.013$3,250
Broken Hill ProspectingBPL30,00022/02/2011*0.132 av$0.090$2,700
Austpac ResourcesAPG40,0002/03/2011*$0.060$0.033$1,320
Potash West PWN11,05030/03/2011*$0.220$0.260$2,873
Cortona Resources CRC25,00013/04/2011*0.146 av$0.093$2,325
Golden Gate Petroleum GGP408,50020/04/2011*0.0145 av$0.005$2,043
TNT MinesTNT4,44022/07/2011*$0.000$0.250$1,110
Quickstep HoldingsQHL20,00023/11/2011*$0.185$0.165$3,300
Orpheus EnergyOEG19,25017/08/2011*0.164 av$0.085$1,636
Black Mountain ResourcesBMZ10,00017/04/2012$0.300$0.180$1,800
Chesser ResourcesCHZ12,00027/08/2012$0.360$0.345$4,140
Orinoco GoldOGX2,00030/11/2012$0.400$0.375$750
Total value of portfolio$46,068
Owe the bank-$9,655
Portfolio change since January 3, 2012 (started with $50,000)-27.17%
All Ordinaries change since January 3 2012 (then 4155.22)10.25%
All Ordinaries close 11 December 20124581.3

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