New Stock Index for Cancer Immunotherapy Launched

Cancer may still be considered an incurable disease, but plenty of innovative advancements in the biotech industry have pushed the limits of cancer treatment. One of the most successful developments is cancer immunotherapy, which has captured nearly 50 percent of the overall oncology drugs market. It has generated about U$41 billion [$53.6 billion] in 2014 alone, propelling the biotech industry to the top of outperforming stocks five years in a row.

The outstanding performance of immunotherapy in pharmaceutical research and development has prompted Brad Loncar, CEO of Loncar Investments, LLC, to come up with a single place for investors interested in investing in cancer immunotherapy stocks, the Loncar Cancer Immunotherapy Index (LCINDX). It is the first professional equal-weighted index that tracks the immunotherapy field within the biotechnology space. LCINDX tracks the performance of the whole group consisting initially of 25 pharmaceutical and biotechnology companies, rebalances its components every six months and serves as benchmark for how the immunotherapy sector performs when compared to other indices like NASDAQ or Standard & Poor's.

Each of the companies in the index is worth at least U$100 million. Furthermore, these companies should already be developing or marketing drugs which use the body's own immune system to destroy cancer cells. Some of the companies included in the index are big, diversified ones like Bristol-Myers Squibb, Novartis and Merck, as well as smaller ones like Kite Pharma, Lion Biotechnologies and Juno Therapeutics.

"Cancer immunotherapy is driving innovations that have the potential to transform the therapeutic treatment of cancer. The goal of the cancer immunotherapy index is to give investors a better understanding of the immunotherapy sector by highlighting major companies involved and providing a metric to track their progress," Loncar said. He has a long history of investing in cancer immunotherapy, and is a well-known member of the biotech Twitter tribe.

According to Loncar, though there is already a specialised basket of stocks focused on biotechnology, he saw a need for something new because the industry is so broad and not well-defined in the public mind. "I want to repackage biotech in a way that ordinary people can understand it," he said.

Loncar is hoping to make the field more inviting to general investors, as well as focus on one promising subsector — cancer immunotherapy — which is something that everyone can relate to in some ways. He said, "We hope that highlighting immunotherapy in this fashion will lead to more awareness within the investment community, more investment in the field, and more progress for patients who battle cancer disease."

Back-testing the index yielded a year-to-date return on less than 28 percent. But according to Loncar, back-testing, even when conducted professionally, cannot be relied for future performance. Since October, the index has almost doubled in value.

In the last few years, investor interest surged in cancer immunotherapy, also dubbed as immuno-oncology, and touted as a possible and better alternative for current cancer treatments like chemotherapy, radiation, surgery and targeted molecular therapy. Even the most complicated cancers, such as brain cancer for instance, has carved a niche in immunotherapy through the likes of Nascent Biotech, Inc. (OTC:NBIO), a California-based biotech company that developed Pritumumab, the first fully natural human antibody for treating brain cancer patients. It was derived using proprietary technology from a B-cell isolated from a tumour draining lymph node of a patient with cervical cancer.

Pritumumab has already been used to treat 250 brain cancer patients during its Phase I and Phase II clinical trials. After five years, patients treated with Pritumumab have an overall survival rate of 25 to 30 percent, compared to three percent standard therapy. Toxicities were minimal, demonstrating that pritumumab is a safe and effective therapeutic agent for treating brain cancer.

The future of immunotherapy

Enthusiasm continues for the field of immunotherapy as big companies like Merck and Bristol-Myers Squibb have won the approval of FDA for new drugs that are not just simple to administer to patients, but also able to produce long-lasting remissions for certain types of cancer.

Loncar believes that the new cancer immunotherapy index can lay down the foundation for an exchange-traded fund dedicated solely to cancer immunotherapy. It could provide individual investors with a way to invest in immunotherapy without shouldering all the risk that comes with individual stocks that possess the possibility of failure. After all, it is not enough for investors to focus on what the media is feeding them about the biotech sector. Through the index, new investors could do their homework before randomly buying an individual biotech stock based on a positive headline.

To contact the writer, email a.lu@ibtimes.com.au.