Opexa Therapeutics: An Optimal Buyout Target Pending Successful Results From Abili-T

Today we are considering a long position in an emerging micro cap called Opexa Therapeutics (OPXA). This company operates within the biopharmaceutical sector, has a $45 million market cap and is listed on the Nasdaq. One of the primary reasons that we are considering a long position is that we believe the ongoing clinical success of Opexa's lead drug candidate, Tcelna (imilecleucel-T), could translate to regulatory approval and potentially fill a significantly unmet medical need in patients with Secondary Progressive Multiple Sclerosis (SPMS). In conjunction, we believe Merck Serono, the biopharmaceutical division of Merck (MRK), which has option and licensing rights to Tcelna, could purchase Opexa at a substantial discount before exercising this agreement.

Of course, our thesis is contingent on whether the topline results (expected in mid-2016) from the Phase IIb "Abili-T" clinical study are positive. But also keep in mind that Merck Serono has the option to exercise the license at any point during the trial, which is not likely given the lack of incentive, but possible nonetheless. If topline results are positive, a buyout is probable since it would allow Merck Serono to avoid up to $220 million milestone payments, as well as tiered 8-15% royalty payments to Opexa on the future global net sales of Tcelna, a drug that could become only the second FDA approved treatment for SPMS. Opexa's three main pipeline developments, in order of priority, are:

1. Tcelna for SPMS (Fast-Track FDA Designation)
2. Tcelna for Relapsing Remitting Multiple Sclerosis (RRMS)
3. Monocyte-Derived Stem Cells (MDSC) for Diabetes Mellitus

Read our full SA article here: http://seekingalpha.com/article/2170193-opexa-therapeutics-an-optimal-buyout-candidate-pending-successful-topline-results-from-abili-t