Published: March 26, 2010
Every year, about a quarter million cases
of liver cancer are diagnosed in the United States; around the
world the number is estimated to exceed two million. According
to the American Cancer Society, the five-year survival rate of
liver cancer is just 10.8%. This is one of the most fatal of all
cancers -- prostate (98.4%), breast (88.6%), and even lung
cancer (15.0%) have significantly better survival rates.
Today, surgery is the only option to cure liver cancer, and it
comes in two forms: tumor removal and transplant. Completely
removing the tumor is not usually possible, as the cancer is
often large, in many different parts of the liver, or has spread
beyond the liver. Additionally, most people with cirrhosis have
too little healthy liver remaining to allow for surgery.
Transplant is no panacea, either, even though survival rates for
those that do get one are about 75%, according to the American
Liver Foundation. Liver transplants cost over $500,000, and few
livers are available. One notable beneficiary is Apple Inc. (Nasdaq:
AAPL) co-founder and CEO Steve Jobs, 54, who received a
liver transplant about a year ago after suffering complications
from pancreatic cancer several years earlier.
In most instances involving liver cancer, transplants are used
in only select cases where there are a few small tumors that
cannot be removed by surgery. There are also non-surgical
treatments, including radiation and chemotherapy, neither of
which cures the disease or even helps people live longer.
New treatments are obviously needed for the vast majority of
cases that do not qualify for surgery.
One company has a treatment currently in Phase III FDA trials
that may change the way doctors treat liver cancer. This
treatment has a fast-track designation from the U.S. Food and
Drug Administration (FDA), meaning that the FDA believes that it
shows promise in treating a life-threatening disease that no
other treatment currently addresses well.
Delcath Systems (Nasdaq: DCTH) is a $246.4 million New
York-based drug developer focused on treatments for liver
cancer. The company expects data from its current clinical trial
available in the next month and to submit its FDA application
for its first approval, a treatment for metastatic melanoma of
the liver -- skin cancer that has spread to the liver -- by the
middle of this year.
The treatment isolates the liver from the rest of the body by
restricting blood flow. Then, a huge dose of chemotherapy, about
ten times what is typically administered intravenously, is given
to the liver. But since it is targeted and not spread throughout
the body, the liver sees about 100 times more drugs. Blood in
the liver is then removed, cleaned of the toxic drugs, and
returned to the body. This delivery system allows for much more
of the drugs to go where doctors want them while minimizing the
amount of drugs that get exposed to the rest of the body.
While focused on the liver, the company's drug delivery
technique could be more broadly used. Other organs can be
isolated and treated in the same manner, and the company plans
to address these in the future, either itself or through
partnership deals. The company has received the go-ahead
from the FDA to begin Phase III trials for its treatment on
primary liver cancer, but it is currently looking for partners
in Asia to do the study as it will be less expensive and easier
to find patients. In February, Delcath announced an agreement
with the Taiwanese company Chi-Fu Trading. The agreement gives
Chi-Fu the exclusive right to market Delcath's liver treatment
in Taiwan and could bring in up to $10 million for the company,
assuming the treatment received the necessary approvals.
As a biotech development company, Delcath has no revenue. If the
company gets its drug approved -- the ultimate
profit catalyst in this industry -- an investment would likely pay
off big time. In the meantime, good news in the coming month
could move shares upward.
The company has said that it expects approval of its treatment
for metastatic melanoma of the liver in mid-2011. At the end of
2009, the company had about $35.5 million in cash, no debt, and
a burn-rate of about $1.8 million per month.
Risk-tolerant investors looking for big potential upside may
consider DCTH. Keep in mind, however, that bad news from its
clinical trials or from the FDA could push shares down quickly.
-- Anthony Haddad