Every time I am presented with the data that details what the average compensation of people working on Wall Street is, I have to wonder where as a society we lost our way?
These Wall Street people are very bright obviously, but they add basically nothing to society yet end up accumulating the most wealth.
I think that is why I like to follow young biotechnology and pharmaceutical companies that are working every day to cure a disease, manage our pain and improve our quality of life.
Now don't get me wrong, I realize that like the people on Wall Street the CEOs and employees of these biotech companies are also motivated by the prospects of great personal wealth. (These aren't charities, afterall.) But I think our society should be set up so that people who are working on curing disease and bettering everyone's life have the potential for big financial rewards.
Case in point: When a Wall Street trader does something great his accomplishment is buying a piece of paper at one price and selling it to someone else for much more. When a biotechnology company finds a cure or a treatment for a disease it can impact or even save the lives of tens of thousands of people.
The latest young biotechnology company that has caught my eye is Actinium Pharmaceuticals (NYSE: ATNM). This company is well down the road towards helping a lot of people and at the same time making a lot of money for its shareholders.
The good cause that drives Actinium's day to day operations is making advancements in the treatment of blood borne cancers, the primary being leukemia.
The company's products are based on its patented technology that was co-developed with Memorial Sloan Kettering Cancer Center. This technology involves combining the cancer targeting precision of monoclonal antibodies (which allows targeting of specific cells) with the power of alpha emitting radioisotopes (the most potent cancer killing agents in existence).
What that basically means is that the technology allows for only the cancer cells to be targeted, and they are targeted with some heavy duty radiation weaponry.
Radiation therapy is used to weaken and destroy cancer cells. It is good at that task and is often used in addition to chemotherapy. The problem with radiation is that it also destroys healthy non-cancer cells, which is dangerous for patients. Obviously, if the treatment kills both the cancer and the patient it is not useful.
Actinium's platform allows the radiation to penetrate less tissue and is not as harmful to non-cancerous healthy cells.
This technology was originally discovered at the Sloan Kettering Cancer Center prior to being licensed to Actinium for commercialization. And the technology is being backed up by some very encouraging trial results.
Actinium's technology has been tested on 300 patients in Phase I and Phase II trials. The clinical results show Actinium's therapy has a 300% greater efficacy at extending one-year survival relative to current best care options. Over a two-year period Actinium's therapy posted a 29% survival rate versus 0% for the current standard of care.
Even more important than these encouraging results is the fact that Actinium's drugs can be used by virtually anyone. For the current standard of care for blood cancer, most patients over the age of 50 are ineligible. That means that they have no viable treatment alternatives and do not even have a fighting chance when diagnosed.
So not only are the results much better than the current level of care, but many more people can be helped.
What's most exciting is Actinium's two main drugs are targeting 90,000 cases of Leukemia and HCST (Hematopoietic) which have a worldwide revenue potential of almost $5 billion.
That is big money relative to Actinium's current enterprise value of $280 million. Just 10% of the market would provide annual sales that are twice the company's current enterprise value.
Actinium's main drug is soon to head into phase III trials and that has put the company onto the radar of the big pharmaceutical companies. In fact, Actinium looks to be a likely takeover candidate for one of the big pharmas.
Take Actinium's two largest shareholders, for example. AHLB Holdings owns 25% of Actinium's shares and is wholly owned by the Memorial Sloan Kettering Cancer Center (from whom Actinium licensed the technology). Actinium's second largest shareholder is a subsidiary of Merck (NYSE: MRK).
I can't help but wonder if the largest shareholder, AHLB Holdings, at some point in the near future won't want to cash out and be the catalyst for the second largest shareholder, Merck, acquiring the entire company.
Risks to Consider: Don't get greedy and make this a large position. The upside for betting on the right biotech company is big, but the risks here are still elevated. Results from trials for Actinium are very encouraging, but there is still a long way to go.
Action to Take --> Add some shares of Actinium to a diversified portfolio. The size of the potential market for its products is massive compared to its enterprise value, and it could be an attractive takeover target for big pharma -- maybe even a company it already has a close relationship with.
