OncoSec Medical Incorporated (ONCS.OB) www.oncosec.com Are we ready for electro-oncology therapy? This year over 1.5 million Americans and 2.4 million Europeans face the daunting possibility of undergoing surgery, chemotherapy or radiation. Each of these cancer treatment options can produce harmful or even deadly side effects. A treatment alternative that can be less invasive and harmful as well as more effective by delivering thousands of percent more of a drug past the protective membrane into a cancer cell would be a major change. OncoSec Medical's revolutionary electroporation technology offers exactly this kind of alternative, taking the idea of "scalpel like precision" to new heights with its "Precision Tumor Destruction" localized drug delivery system. Inovio Pharmaceuticals, from which OncoSec acquired this promising technology, has already shown efficacy and a strong safety profile in clinical trials involving more than 400 patients with skin, head and neck, breast, prostate and pancreatic cancer tumors. To advance and commercialize this revolutionary electroporation delivery technology, ONCS has raised $6 million and is now poised to initiate multiple Phase II skin cancer trials in Europe and the U.S. by the end of 2011. Co-founder and Chairman Avtar Dhillon, M.D., has led several highly successful turnarounds. His nephew Punit Dhillon, who has helped to raise over $125 million so far in his career, serves as president and CEO. These high energy, intensely focused executives are actively involved in shaping the direction of this startup to speed the acceptance and use of its electroporation-delivered cancer-killing agent (ElectroChemotherapy) to extend the quality and potentially the length of life for cancer patients. Its second product, its ElectroImmunotherapy using DNA based cytokines, promises to strengthen immune systems to fight local and metastatic tumors. Over the next few years the goal is to develop this ElectroOncology platform to the point where a powerful global giant possessing the necessary marketing and financial credentials will be attracted to partner with or acquire OncoSec. Recent Price: $0.66 June 21 ,2011 Recommendation Price: $1.12 Average Daily Volume (3 m) 106,358 52-Week Range: $1.99 - 0.65 Total Assets: ~$5.5 million *
Market Capitalization: $34.7 million *includes $5.0 million gross aggregate Shares Outstanding: 56.6 million+ proceeds raised post recent reported quarter. Float Outstanding: 45.8 million +includes recent private placement. By Robert J. Flaherty and Arnaldo Arroyo Buy Recommendation Our BUY report this issue on OncoSec Medical Inc. features this company's very promising ElectroOncology solid tumor treatment platform, which is based on certain proprietary applications of electroporation. The improved drug and DNA delivery directly into the cell that is achieved with electroporation has already been shown in previous early and late-stage clinical trials of more than 400 patients to clear or shrink solid tumor cancers without causing damage to surrounding healthy tissue. While most small med-tech enterprises usually start out as private companies, OncoSec, which began operating in March, decided that the best way to advance its technology was to go the public route. If successful, ONCS has the potential to improve the quality of life for millions of cancer patients and in a few years become an acquisition target for big pharma. "We own or have privileged rights to dominant electroporation technology and patents," says OncoSec's co-founder and Chairman, Avtar Dhillon, M.D. Very few companies other than ONCS focus on electroporation and its leading IP and advanced human testing are what will attract the interest of big pharma. But first there is a lot of work to do and milestones to accomplish. What currently sets ONCS apart from most start ups is its historic clinical data and experience on over 400 patients treated, which shows that its electroporation delivery system can increase cellular uptake of therapeutic agents by thousands of percent, permitting sharply reduced overall dosage levels, enhanced treatment outcomes and improved quality of patient life. It is already planning to initiate Phase II trials in the U.S. and Europe. Unlike conventional treatments like mutilating surgery, OncoSec's therapeutic approaches for killing cancer do not harm healthy normal tissues. ONCS has two ElectroOncology products. The first, ElectroChemotherapy, utilizes its electroporation technology for the local delivery of the cancer drug bleomycin to treat solid tumors. The second, ElectroImmunotherapy, uses electroporation to enhance the local delivery of DNA-based cytokines as immunotherapy agents that produce both a local and systemic immune response that can treat both local and metastatic tumors and cancerous cells of various cancer types. Both of these new cancer treatment methods present a number of benefits for doctors, patients, health insurance companies and other third parties. First of all, the treatments provide improved patient cosmetic, functional and pain outcomes plus quicker recovery time. Secondly, the technology can be used to treat a wide range of solid tumor cancers, some currently untreatable. Thirdly, since the procedure is fast, health insurance companies will be able to save on operating room cost and post-operative care. Fourth, doctors will be able to treat more patients and generate higher income. OncoSec has strong insider ownership. With approximately 56.6 million shares outstanding, management currently owns about 20 million shares. The company expeditiously raised its startup funding of $6.1 million and on June 21 announced an additional $3 million institutional private placement. With the new funds OncoSEC is positioned to execute all the necessary steps of its business and clinical plan for the next year - which is to take its ElectroImmunology cancer treatment into three Phase II trials in the U.S. and Europe in the second half of 2011. OncoSec's corporate mission is to attract an acquirer or significant partnership with a marketing giant over the next few years and its business strategy is sharply focused on achieving clinical validation in the right disease areas to achieve that goal. To accomplish this, management expects that ONCS will need additional funding of $20 million to $25 million, a relatively modest amount of capital in the world of life science development The Dhillons (Chairman Avtar and President Punit) have a very strong track record for raising money as an enterprise needs it and in a timely manner. So securing this additional capital should not be an issue although getting good terms in this very difficult capital raising market will be a challenge. While just a start-up, OncoSec is in a situation that only periodically materializes in microcap investing: it has secured promising assets that move it far beyond the ground-floor R&D usually associated with a start-up. This edge makes it an intriguing investment opportunity. This very beneficial opportunity was made possible by ONCS signing an asset purchase agreement with Philadelphia, PA-based Inovio Pharmaceuticals for the purchase and licensing of certain non-DNA vaccine technology and intellectual property relating to electroporation technology useful for electrochemical and cytokine based immune therapies for treating solid tumors. Inovio had years ago made a business decision to focus on the narrower different opportunities of DNA vaccines and major diseases. After recently deciding to monetize this unappreciated asset sitting on a shelf, struck a deal with startup OncoSec. Cancer is a big business and in many ways treatment is barbaric. Surgery is brutal and chemo and radiation produce harmful side effects which can cure the cancer but kill the patient. A gentler alternative such as OncoSec Medical is trying to develop is badly needed. Striving to commercialize an alternative to Cancer Surgery: Wow, success would improve patient quality of life by saving healthy tissue and reducing harmful often deadly treatment side effects. That's the long run corporate mission of OncoSec Medical Inc. The lives of millions of cancer patients would be changed for the better. The goal of a Flaherty Special Situation is a gain of 50% to 100% over two years. We believe the stock of ONCS can achieve probably double that range and perhaps more if management achieves real progress toward commercialization. Read on and see if you agree. History Having a doctor's compassion and an entrepreneur's penchant for turning business opportunities into successful ventures, Avtar Dhillon, M.D., co-founder and chairman of OncoSec Medical, foresees a large market opportunity for the company's electroporation-based drug and DNA cancer-killing treatment system. "Our conservative estimate is at least four million people in the U.S. and Europe could be helped by it," he says. "Where the even larger market lies is in emerging markets. That could exponentially increase the market." Dr. Dhillon is an entrepreneur with high energy and deep dedication. Because of his life-long interest in science and healthcare, he initially pursued a career in medicine. As an athlete who enjoys playing a variety of sports, he was led to focus on sports medicine. He opened his first clinic in a busy mall. The practice quickly grew, and the enterprising young doctor took the opportunity to open two more clinics in other busy malls. Dr. Dhillon and his partnering physicians provided a wide variety of medical services, including surgical procedures, for a broad spectrum of patients. His diverse exposure to medical conditions and treatments during his 12 years in practice provided valuable experience which he was able to capitalize on when he moved into venture capitalism. "I've always had an interest in business, but I wanted to keep the business exponent away from my individual patient care," he says. "That's when I looked at other opportunities and I started investing in large pharma and went into smaller companies. I very quickly learned that British Columbia was one of the major centers for emerging biotech companies." When Dr. Dhillon took over as president and CEO of Inovio Pharmaceuticals, then called Genetronics Biomedical, in September 2001, the company was on the edge of bankruptcy, while its coffers had barely two months of cash. Two weeks after he joined, 9/11 hit. He was not only able to keep the company afloat, during his subsequent tenure at Inovio Dr. Dhillon successfully led the turnaround of the company through a restructuring, acquisition of technology from several European and North American companies and a merger with VGX Pharmaceuticals to develop a vertically integrated DNA vaccine development company with one of the strongest development pipelines in the industry. He led nine successful financings, raising over $136 million for Inovio and concluded several licensing deals valued at over $200 million that included global giants, Merck and Wyeth (now part of Pfizer). In March, 2011, OncoSec acquired from Inovio certain non-DNA vaccine electroporation technology and intellectual property useful for an electrochemical therapy against solid tumors. OncoSec also licensed the right to use this electroporation technology to deliver gene-based cytokine immune therapies for treating solid tumors. Based on the agreement, ONCS made an initial payment of $250,000 for the assets and is required to make additional payments totaling $2.75 million by March 24, 2013, as well as pay a royalty on commercial product sales. With this deal, OncoSec has secured a prominent intellectual property protection for these non-DNA vaccine applications, with 27 issued U.S. patents backing its ElectroChemotherapy treatment. It also has 32 patents in other jurisdictions and two pending. The company also acquired a non-exclusive, worldwide license to 28 electroporation related U.S. patents and 80 patents granted in other jurisdictions to support its ElectroImmunotherapy treatments. In addition, ONCS has the right to sublicense these patents. OncoSec also has four registered trademarks. "At the earliest stage, you can go out without having to look over your shoulder about IP considerations," says Dr. Dhillon. "But ultimately, when you start getting closer to commercialization, it becomes very important. There's only a few other companies like us in the electroporation business, one of them being our related company, Inovio. Suffice it to say, we are the dominant player where the use of a chemotherapeutic agent in conjunction with electroporation is concerned and we have a unique and complementary position with respect to electroporation delivery of an immunotherapy. Historically, we did quite a job of being able to wrap up very strategic electroporation IP for delivering drugs and genes by buying companies and establishing exclusive licenses. Now we've had the opportunity to secure strategic components of that IP for OncoSec." Inovio's management knew that with its exclusive focus on advancing electroporation-delivered DNA vaccines for cancers and infectious diseases, this hidden, on-the-shelf technology was not creating any value for the company and its investors. And it knew the necessity of keeping its management team and capital sharply focused on advancing this technology. Furthermore, to turn resources toward a non-vaccine product would invite worries something was wrong with the DNA vaccines. So the solution to unlock the hidden value was a spinoff into a new entity to develop electroporation as an alternative to cancer surgery. So far the market response to OncoSec Medical is an early vindication of the spinoff strategy. What is electroporation? So what is elecroporation? Electrical cell membrane stimulation allows molecules to get into cells better than any other technology out there. The system can deliver a cancer killing molecule like Bleomycin or immune response stimulating DNA plasmid into the cells of a tumor and surrounding tissue. Immediately after injection of the drug or DNA, OncoSec's electroporation technology applies brief, controlled electrical pulses to the same targeted tissue. Application of these pulses temporarily opens tiny pores or channels and increases the permeability of the cell's protective outer membrane. This allows significantly increased entry of the injected agent into the cells by hundreds or thousands of percent. The intended function of killing rapidly dividing cancer cells or stimulating the body's immune system to enhance cancer killing capabilities is increased. The toxic side effects of passing greater dosage amounts through the blood system to reach the target cells is sharply reduced. The agent is injected using a syringe and needle; the electric current is delivered via an array of multiple needle electrode pairs positioned on a handheld applicator. The company's selling point is that this method allows for faster, safer and more-targeted delivery and significantly increased therapeutic benefit of an agent. "We can put in bleomycin, a generic anti-cancer drug that has been around a long time but is very toxic to the lungs if you send the necessary doses through the blood system," Avtar Dhillon continues. "Instead of doing that we put as little as 1/10th of the systemically used dose directly into the tumor area and then apply electroporation, which increases the uptake of the drug by all the cells in the treatment area by several thousand times just by pulsing that tissue with electroporation. After bleomycin goes into these cells, it breaks the DNA of the cell. When that cell tries to divide, it commits suicide whereas the healthy cells are able to repair that DNA before they try to divide. And that is how you separate killing the cancer cells from the healthy cells." Since the electroporation therapy can be used to treat a wide range of cancers, Dr. Dhillon believes that OncoSec has "a cancer franchise that can be picked up by anybody that has the global marketing power." We have a platform that can treat just about any kind of solid tumor. This is not just a product for skin, prostate or breast cancer. It's about all those types and potentially more. "Going to the broader picture, no matter what kind of solid tumor you have, as long as you can reach that tumor, put in bleomycin and pulse it, you can then kill those cancer cells. So beyond the clinical work already done on skin, head and neck and breast cancer, you have a technology which would treat all sorts of tumors. You can create a significant company out of this." In addition to being useful for delivering a cancer drug to a direct area, the system can transport DNA immunotherapies and, in the case of Inovio, DNA vaccines to fight cancers and infectious diseases like the flu. Market Opportunity While there can be no single panacea for cancer, there is significant opportunity for a minimally invasive treatment that can diminish the detrimental cosmetic and functional impacts of surgery and radiation and the general harmful side effects of chemotherapy. What's more, there is motivation by budget-constrained healthcare providers to embrace lower cost oncology solutions. Electroporation-based therapies can provide these benefits for many oncology indications, and have significant potential to be adopted initially as an adjuvant or secondary treatment, and ultimately as a new primary treatment method. Despite advances in cancer research, the average five-year relative survival rate of patients with non-cutaneous (skin related) cancers has only improved from 50% in 1974 to 1976 to 66% in 1999 to 2006. Plus, traditional therapies continue to negatively impact the patient's quality of life as surgery affects appearance and organ function, and radiation and chemotherapy produce significant side effects based on the non-selective cytotoxic effects on normal tissues. This year, it is estimated that in the U.S. there will be 1.5 million new cancer cases diagnosed and 560,000 deaths. In the U.S., the costs of cancer, including mortality, morbidity and direct medical costs, exceeded $228 billion in 2008. In the European Union, the rate of cancer is even higher at 2.4 million cases diagnosed annually and 1.2 million deaths. OncoSec Medical has two legs. One is the tumor ablation side using bleomycin, referred to as ElectroChemotherapy. The other half focuses on immune-therapy, referred to as ElectroImmunotherapy. Here a DNA plasmid designed to produce specific cytokines is delivered into cells via electroporation. The cytokines produced in the cells activate the immune system to recognize the cancer cells, which it was not doing before and thereby eliminating the cancer locally and systemically. On this second leg, multiple Phase II programs are being planned. The hoped for goal is that potential acquirers will recognize that OncoSec Medical has global potential for an oncology franchise based on both enhanced chemo as well as immune-therapy approaches. Electro-immunotherapy consists of a DNA-based cytokine delivered using electroporation. A DNA plasmid (manufactured circles of DNA) coded to produce a specific cytokine is injected into locally targeted tumors and followed by electroporation to increase gene expression by 1000% and immune responses by 100% compared to unenhanced delivery of a DNA plasmid. A management team with extensive medical, technology, commercial and capital markets expertise Avtar Dhillon, M.D., 50, is a co-founder and chairman of OncoSec Medical Incorporated. Dhillon is the former president and CEO of Inovio Pharmaceuticals, Inc. and currently is Inovio Executive Chairman. During his tenure at Inovio, he successfully led the turnaround of the company through a restructuring, acquisition of technology from several European and North American companies and a merger with VGX Pharmaceuticals to develop a vertically integrated DNA vaccine development company with one of the strongest development pipelines in the industry. Dhillon led nine successful financings, raising over $136 million for the company and concluded several licensing deals valued at over $200 million that included global giants, Merck and Wyeth (now part of Pfizer). Prior to joining Inovio, he was vice president of MDS Capital Corp. (now Lumira Capital Corp.), one of North America's leading healthcare venture capital organizations. In July 1989, he started a medical clinic and subsequently practiced family medicine for over 12 years. Dhillon has been instrumental in successfully turning around struggling companies and influential as an active member in the biotech community. Prior to 1998, Dhillon was a consultant to Cardiome Pharma Corp., a biotechnology company listed on the Toronto Stock Exchange and NASDAQ. In this capacity he led a successful turnaround based on three pivotal financings, establishing a clinical development strategy and procuring a new management team. Prior to 2001, he acted as consultant to Forbes Meditech and in this capacity helped raised $28 million and increased investor awareness of the company. In his role as a founder and board member of companies, Dhillon has been involved in several early-stage healthcare focused companies listed on the Toronto Stock Exchange and TSX-V which have successfully matured through advances in their development pipeline and subsequent M&A transactions. Most recently, he was a founding board member of Protox Therapeutics, Inc. and had maintained his board position until the execution of a financing of up to $35 million with Warburg Pincus in November 2010. In addition to his Chairman of the Board role with OncoSec and as Executive Chair at Inovio, Dhillon currently sits on the board of BC Advantage Funds, the largest venture capital corporation in British Columbia. He was also a member of the Securities Practice Advisory Committee to the British Columbia Securities Commission from July 1998 to September 2001. Dhillon has a Bachelor of Science with honors in Human Physiology, and an M.D. from the University of British Columbia.To help him stay focused and in shape, the former high school wrestling champ is an enthusiastic tennis player and avid biker. He also likes water sports and weight lifting. Punit Dhillon, 30, is a co-founder, president and CEO of OncoSec Medical Incorporated and a nephew of Chairman Avtar Dhillon. Punit Dhillon was formerly vice president of finance and operations at Inovio Pharmaceuticals until March 2011. In his corporate finance role, Dhillon was pivotal in helping to raise over $125 million through multiple financings and several licensing deals including early-stage deals with Merck and Wyeth, now part of Pfizer. He was responsible for implementation of Inovio's corporate strategy, including achievement of annual budgets and milestones. He was also instrumental to the successful in-licensing of key intellectual property and a number of corporate transactions, including the acquisition and consolidation of Inovio AS, a Norwegian DNA delivery company, and the merger with VGX Pharmaceuticals, which solidified Inovio's strong position in the DNA vaccine industry. Dhillon has played an effective role in the integration of the VGX-Inovio merger including cost-cutting of over 30% through the synergy assessment of both companies, consolidation of four operating locations to two bi-coastal offices, corporate rebranding and management of existing shareholders from both companies. He has been a consultant and board member for several TSX-V listed early-stage life science companies which matured through advances in their development pipelines and subsequent M&A transactions. Most recently, Dhillon was involved in the completion of a trilateral merger between three capital pool companies listed on the TSX-V, which completed a qualifying transaction in April 2010 with a company specializing in conservation and demand management accessories for the utilities industry. Dhillon has a Bachelor of Arts with honors in Political Science and a minor in Business Administration from Simon Fraser University. Michael Cross, PhD, MBA, 46, is a co-founder and chief business officer of OncoSec Medical In. and has nearly two decades of life sciences venture capital and biotech industry experience. Previously, Cross was in senior roles in venture investing and portfolio management at both GrowthWorks as vice president and Jovian Capital as senior vice president in Toronto. In these roles he served on the boards of both private and public life sciences and biotech companies. Cross also had lead operational responsibilities as COO of a public oncology company, Viventia Biotech, where he helped bring an anti-cancer product into worldwide pivotal clinical trials. From 1996 to 2003, he held a variety of increasingly senior positions at MDS Inc. and MDS Capital and helped start MDS Proteomics. Before joining MDS, he was with the Department of National Defence, including serving as a post-doctoral fellow with the Trauma and Physiology Group of the Defence Research Agency in Toronto. Cross received his Masters in Business Administration and his Doctorate in Philosophy from the University of Toronto. Caryn Peterson serves as vice president, regulatory affairs. She has more than 30 years of pharmaceutical industry experience in research and development, operations, and regulatory affairs. Prior to joining OncoSec, Peterson led worldwide regulatory affairs for Syndax, a late-stage oncology company. She also managed regulatory affairs at Ascenta Therapeutics and FeRx Inc., both oncology focused companies. She also worked in regulatory affairs at Amylin Pharmaceuticals, with a focus on first-in-class diabetes therapies. Peterson is a founder and general partner of DSC-Associates, a pharmaceutical consulting group specializing in providing preclinical and clinical strategies to streamline product development. She has authored several research publications and been a co-inventor on multiple patents. Veronica Vallejo,CPA, 38, serves as controller and primary financial officer of OncoSec Medical Incorporated. She has worked in public accounting since 1997, most recently working as a senior manager with Mayer Hoffman McCann P.C., from January 2001 to December 2010. Vallejo has extensive experience in public company operations and all finance and accounting functions, including SEC reporting, compliance and internal controls. Vallejo holds a B.S. in Business Administration with an emphasis in accounting from San Diego State University. She is a certified public accountant and a member of the American Institute of Certified Public Accountants. James M. DeMesa, M.D., Director. He has been a practicing physician and served as a senior executive with several international pharmaceutical and biotech companies in the areas of corporate management, regulatory affairs, and pre-clinical and clinical pharmaceutical and medical device product development. In August 2008, DeMesa retired from his role as president and CEO and a director of Migenix Inc., a public biotechnology company focused on infectious and neurodegenerative diseases. From 1997 to 2001, he was president and CEO and a director of GenSci Regeneration Sciences Inc., a public biotech company involved in the field known as orthobiologics, which is the use of biotechnology to treat musculoskeletal disease and injury. From 1992 to 1997, he was vice president, medical and regulatory affairs at Biodynamics International, Inc., and from 1989 to 1992 was vice president, medical and regulatory affairs of Bentley Pharmaceuticals. DeMesa is a co-founder of CommGeniX, a medical communications company, and MedXcel, a medical education company. He is a member of the board of Stem Cell Therapeutics, a public biotechnology company based in Calgary, and Induce Biologics, a private Toronto-based biotechnology company. He attended the University of South Florida where he received his B.A. (Chemistry), M.D. and M.B.A. degrees and did his medical residency at the University of North Carolina. He is the author of two books and speaks regularly to companies and organizations throughout North America. Anthony E. Maida, III, M. D., Director. For over 20 years Dr. Maida has focused on clinical development of immunotherapies to treat patients with cancer. As a Chairman, CEO and senior executive, Dr. Maida has managed and executed all critical functions for biotechnology companies in early and late-stage development of cancer therapies. He believes ONCO's novel approach to the challenge of treating solid tumors in a manner that is less invasive is very promising. His experience should be valuable to OncoSec when they are moving toward advanced clinical trials. Finance A brand new start up, OncoSec's mission is to develop its two ElectroOncology technologies until they become attractive enough to attract a wealthy partner or acquirer. To reach this stage will probably require an additional roughly $20 million to $25 million. In March, the company issued 1.4 million units at a price of $0.75 per unit for gross proceeds of $1.1 million. Each unit consisted of one share of common stock and one share purchase warrant entitling the warrant holder to purchase an additional share of common stock at a price of $1 per share for a period of five years from closing. In June, OncoSec raised an additional $3.0 million, which allows the company to fund its first three ElectroImmunotherapy Phase II clinical studies. With the initial raise, OncoSec used $250,000 as first payment to Inovio for certain assets s part of an asset purchase agreement. ONCS will also pay Inovio an additional $2.75 million in scheduled payments over a period of two years and a royalty on commercial sales related to the March 24, 2011 acquisition from Inovio related to certain non-DNA vaccine technology and intellectual property relating to selective electrochemical tumor ablation. These technologies relate to the use of electroporation to facilitate delivery of chemotherapy agents or nucleic acids encoding cytokines into tumors and surrounding tissue for the treatment of tumors. This included some tangible assets, engineering and quality documentation, contracts and certain of Inovio's patents, including applications and trademarks and all goodwill associated with the related technology. Pursuant to a cross-license agreement Onco Medical granted Inovio a fully paid up, non-exclusive, worldwide license to certain of the technology patents for the following consideration: a fee for any sublicense of Inovio technology, a royalty on net sales of any business ONCS develops with Inovio technology. OncoSec Medical must repay any amount Inovio pays to the licensor of Inovio technology that is a direct result of the cross license agreement. On June 21 OncoSec disclosed the terms of its $3 million institutional Rodman & Renshaw private placement. Besides agreeing to sell institutional investors 4 million common shares at $0.75, ONCO agreed investors will receive Series A warrants to purchase another 4 million shares at an exercise price of $1.20 for a term of five years , Series B warrants to purchase up to 4 million shares at $0.75 for a term of between eight and l9 months and Series C warrants that vest proportionally upon the exercise of the Series Be warrants and provide the holder with the right to purchase up to 4 million shares at the exercise price of $1.20 for five years. If the company performs well, funds from the exercise of warrants should bring in a possible crucial $12.6 million of new growth capital. Competition There are only two other companies beside OncoSec which focus on electroporation: Ichor, based in California, and Igea, based in Italy. Cancer treatment delivery is a big business and a number of other companies also see the damage from side effects of sending treatment all through healthy parts of the body to reach a cancerous area. Many are also developing new delivery systems to treat the cancer areas more directly and so reduce collateral damage and preserve healthy tissue. The primary front line treatment of and competition for treating solid tumors involves surgical resection and/or radiation to shrink and control tumor growth prior to initiating systemic therapy with chemotherapeutic agents. Because of the concern of microscopic disease in the tissue surrounding a tumor and that it is often difficult or impossible for surgeons to determine the border, or margins, between healthy and diseased tissue, surgeons will often remove or resect an area outside of the obvious tumor mass to ensure that they have excised all of the cancerous tissue. Due to the lack of selectivity of conventional treatments, patients may experience loss of function and appearance of the surrounding tissue and organs, reducing the patient's quality of life. Examples include the loss of speech from resection of tumors on the tongue or larynx or loss of erectile function from resection of the prostate. Recent advances in non-surgical forms of tumor ablation, such as cryoablation, microwave and high frequency radio ablation therapy, fail to meet the clinical need to preserve normal healthy tissue. However, given the desire for improved outcomes in the surgical resection of a large number of solid tumors such as those of the head and neck, skin, pancreas, breast and prostate, OncoSec anticipates significant demand for its technology from patients, dermatologists and surgical oncologists. Risks OncoSec Medical's resources are focused on its two electroporation products, one to directly treat cancer and one to increase the immune system's ability to kill cancerous cells. Management believes it will require as much as $25 million to reach the stage where OncoSec would become a desirable partner or be acquired by a suitable global marketing giant with the resources to commercialize the technology. In the meantime, management must continue to raise capital as it goes along until this turning point is reached. Failure to finance progress in a timely manner could slow or even derail completing its research and development programs. Assuming regulatory approvals are obtained, OncoSec Medical's future U.S. and European Phase II trials will have to show beneficial results for the company to be attractive to a wealthy partner and reach its potential. Unexpected disappointing trial results obviously would be the biggest risk. Warrants would not be exercised and new growth capital would become scarce. All the usual other risks such as unexpected new required tests, regulatory or intellectual property setbacks, technological breakthroughs by competitors, etc. are also present. On the positive side, management has developed start ups before and knows how to react to the unexpected. CONTACT INFORMATION OncoSec Medical Inc. www.oncosec.com 4690 Executive Drive, Suite 250, San Diego, CA 92122 Punit Dhillon President & CEO Phone: 855-OncoSec (1-855-662-6732) Email: [email protected]
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