Here's What The Latest OXIS International Inc (OTCMKTS:OXIS) Announcement Means

OXIS International, Inc. (OTCMKTS:OXIS) just announced that it has entered into a sponsored research agreement with the University of Minnesota, designed to help forward the development of one of its preclinical assets.This is a company we've looked at before here at Insider Financial, and it's one that we see as having the potential to be a winner long term. Right now, however, it's down around 50% on the last thirty days, and close to 80% year to date.Here's what the latest announcement means, and how it affects our forward thesis for the stock.So, by way of a quick recap, this one is a biotech play that is developing novel therapies in the oncology space. Its treatments are cancer immunotherapy treatments, and as part of some pretty optimistic claims, OXIS management has repeatedly pointed out that its own approach can be superior to some of the more well known approaches taken by companies like Kite Pharma Inc (NASDAQ:KITE) and Juno Therapeutics Inc (NASDAQ:JUNO) – both of which it has referenced specifically in various communications.These latter two mentioned companies, of course, enjoy valuations far higher than that of OXIS, so if management's claims hold water, there's plenty of reward to be had on a value rebalancing.So do they hold water?Well, sort.We say sort of because the theory (in other words, the scientific description of the MOA these drugs employ) seems to suggest superiority in approach. The latest announcement refers to a platform called the TriKE platform, and specifically a drug that is about to undergo a toxicity (dose finding) study and is based on this platform, called 3550. It's a combination of some standard immunotherapy principles (turning the immune system against cancer cells through CD19 and CD22 receptor targeting), chemotherapy (delivering a toxic agent to cancer cells) and – and here's the thing that makes it shiny and new – recruiting what are called NK cells to play a sort of third line of defense/cleanup role.As we've said, the science is sound.There's not going to be a revaluation based on sound science, however, and therein lies the uncertainty. Markets need results that prove the addition of NK cells to the potent chemo/immuno mix actually has an impact on tumor cell death and – when all's said and done – overall survival.And that's where the latest announcement comes in.This partnership with the UoM was initially announced last year. The technology is actually Uo tech, that the university has licensed to OXIS for development. The recent announcement basically says that the university will carry out the above mentioned toxicity study, in anticipation of OXIS using the results to carry the asset (3550) forward into clinical development.Theses toxicity studies are a necessary hurdle before a company submits an IND and a phase I protocol, and that it's about to kick off is a step forward. It's not as big a step as completion and IND submission would be, but it illustrates a degree of momentum, and that's enough to keep us interested for now.It also gives us some fresh catalysts to watch out for across the coming few quarters. These studies don’t (or at least shouldn’t) take long. We'd expect UoM to get it done within the second quarter (assuming near term initiation) and that's a generous timeframe. Realistically, we could be looking at a month's worth of study, and an IND submission at some point during the third quarter.That's when markets will really start to look at potential of this TriKE platform, and when we will see the speculative loading ahead of 3550 shifting into clinical development.Cash is always going to be an issue here, and that needs to be kept in mind going forward. Dilution is inevitable (there's practically nothing on hand) and it's the early shareholders that are going to have to take the hit as the company issues to raise.If management, keeps things efficient, and can hit on its own targets, in terms of where it's looking to be when the drugs hit the clinical points of its peers, however, this dilution won't significantly harm the potential for return.We will be updating our subscribers as soon as we know more. For the latest updates on OXIS, sign up below!Disclosure: We have no position in OXIS and have not been compensated for this article.