Current Decline in Share Price is an Opportunity to
By Grant Zeng, CFA
Balance Sheet Boosted By Public Offering
On February 13, 2013,
Novelos Therapeutics (OTC Markets:
announced the pricing of a public offering of 11,000,000 units at
$0.50 per unit for gross proceeds of $5,500,000.
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Each unit consists of one share of common stock, a Class A
Warrant with a one-year term to purchase one-half of a share of
common stock at an exercise price of $0.50 per share and a Class
B Warrant with a five-year term to purchase one share of common
stock at an exercise price of $0.50 per share.
We think this financing is positive to the Company in general.
Although this public offering dilutes shareholder base, it
greatly boosts the Company's balance sheet.
At the end of September 2012, NVLT had cash and cash
equivalents of $5.6 million. With the $5.5 million gross
proceeds, the Company should have about $6.5 million in cash as
of today. Current cash will last into 3Q13.
On Nov. 5, 2012, Novelos announced the closing of a private
placement of equity securities to an affiliated entity of
for gross proceeds to Novelos of $2 million. Novelos has
earmarked the proceeds for the build-out of an in-house
clinical-stage manufacturing facility for I-124-CLR1404
(LIGHT). The facility is expected to be completed in about
one year and is expected to cost approximately $3 million. The
build-out of an in-house clinical-stage manufacturing facility
for LIGHT is a key strategic initiative as the Company moves
toward larger Phase II and pivotal LIGHT imaging
trials. NVLT already has an operational in-house
clinical-stage manufacturing facility for HOT.
The financing will accelerate the development of the Company's
LIGHT, HOT and GLOW2 cancer diapeutic programs, which are all
progressing well. Current share price decline may be a good
opportunity to accumulate NVLT shares.
Diapeutic Technology Platform Presented at EMIT: Targeted
On January 31, 2013, Novelos Therapeutics (NVLT) presented an
oral presentation on research conducted by Novelos and its
collaborators at the EMIT: Targeted Radiotherapy international
conference taking place January 29 to 31, in Washington, D.C.
This presentation by invitation from EMIT describes the
mechanistic foundation for Novelos'
diapeutic (diagnostic + therapeutic) technology
together with animal data and initial findings in advanced cancer
patients that demonstrate selective and prolonged accumulation of
Novelos' PET imaging I-124-CLR1404
, therapeutic I-131-CLR1404
and optical imaging CLR1502
compounds in a range of tumor types. The presenter is Dr. Chris
Pazoles, who is the Senior Vice President of Research and
Development for Novelos.
NVLT's LIGHT, HOT and GLOW2 have been designed to exploit a
feature shared by most, if not all cancer cells including cancer
stem cells, which results in the selective uptake and prolonged
accumulation of the Company's proprietary, small-molecule
delivery vehicle in a wide range of malignant tumors compared
with normal tissues. By incorporating a unique functional
property in each - PET imaging, radiotherapy or optical imaging,
NVLT has generated an array of potential therapeutic and
diagnostic products that could, alone or in combinations,
significantly improve the detection and treatment of cancer in
Novelos' diapeutic platform, which includes cancer-targeted
PET Imaging, therapeutic and optical Imaging Compounds, offer
broad-spectrum diagnosis and treatment for solid tumors.
The presentation is titled "Cancer-Targeted Diapeutics:
Radioiodinated Phospholipid Ether Analogs for Broad-Spectrum
Imaging and Therapy". Dr. Pazoles presented data showing that
LIGHT, HOT and GLOW2 all share a common cancer-targeted core
chemical structure. Each attaches a unique moiety to this
delivery vehicle - LIGHT, a PET imaging agent (iodine-124), HOT,
a radiotherapeutic agent (iodine-131) and GLOW2, an optical
imaging agent (near-infrared tracer).
- Results described with LIGHT demonstrate broad-spectrum
tumor PET imaging in dozens of animal tumor models, and recent
human findings from ongoing
clinical trials show selective uptake and retention by primary
tumors and metastases in advanced non-small cell lung and brain
- HOT results shown include single-dose efficacy in a wide
range of animal tumor models, and clinical trials to date
demonstrate selective accumulation in cancerous tumors,
- Dr. Pazoles' presentation highlights the potential
diapeutic application of LIGHT and HOT, based on their chemical
identity, to provide individualized treatment to cancer
patients. For example, LIGHT serves as an ideal biomarker to
potentially identify patients most likely to benefit from
therapy with HOT.
- Dr. Pazoles' talk also describeed how selective uptake of
GLOW2 could provide better definition of tumor margins in real
time during cancer surgery, enabling more complete and
selective removal of malignant tissue and potentially improving
patients' prognosis. Data illustrating the potential use of
GLOW2 for non-invasive detection of tumors was also
We believe Novelos' platform technology has great potential
for cancer imaging and therapy, which can be used in various
NVLT is making good clinical progress with LIGHT and HOT
across multiple human trials while advancing GLOW2 towards human
trials. With all these progresses made in the past few months, we
believe Novelos' share price deserves further
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