OXIS International, Inc. (OTCMKTS:OXIS) Shifts Gear And Moves Into Phase II

OXIS International, Inc. (OTCMKTS:OXIS) is gaining strength this week, with the company announcing that it's just received a green light from the FDA to carry its lead development asset into a phase II oncology study. The company closed out the session on Tuesday for $0.03 a share – up 175% on the Monday close. In response to the run, let's take a look at the drug that's driving it, as well as the trial that's about to get going, in an attempt to try and figure out what's next for OXIS and its shareholders.So, the drug is called OXS-1550, and it's being developed as a sort of selective alternative to the current standard of care (SOC) chemotherapy agents. Many reading will likely already be familiar with the mechanics of cancer therapy, but for those that aren’t, the reason it's so harsh from a side effect perspective is that the toxic agents used in chemotherapy are very unselective. They kill cancer cells, sure, but they are unable to differentiate (for the most part) between healthy cells and cancerous ones. The treatment is administered to the maximum possible toxicity that a physician feels a patient can withstand, and the hope is that it kills the cancer cells before it does any irreversible damage to the patient.So, this being said, there's an obvious potential market for a company that can bring a selective cancer agent to market – one that only targets cancer cells, or at least only hits a small number of healthy cells.This is the opportunity OXIS is going after with 1550. The way the company describes the drug is pretty jargony, but basically it's a combination of a diphtheria toxin and antibodies that target two receptors (CD19 and CD22), each of which are commonly expressed by cancer cells and rarely expressed by healthy cells. The drug is administered, and it rushes around the body looking for cells that express these receptors. When it finds them, it uncouples the toxin and the toxin kills the cell that it found based on said cell's expression of CD19 or CD22.It's actually pretty neat.So the upcoming phase II study is going to investigate the asset in the treatment of what are called liquid tumors – basically, blood cancers (lymphoma, leukemia, that sort of thing). It comes on the back of a recently completed phase I study conducted at the University of Minnesota, which the company set up to ascertain the safety of the drug and to also try and establish a maximum tolerable dose.The phase II part is technically also a safety study, as per the trial listing here at clinicaltrials.org, but it will also read out against a clinical benefit exploratory endpoint, and that's what markets are going to be looking at as and when the trial draws to a close as indicative of OXIS's future valuation.So what's next?Well, the trial is greenlighted, and there's a primary completion date set for June this year. The clinical benefit readout isn’t going to hit press until around June 2018, however, as it's primarily rooted in response and survival metrics at the twelve-month mark for the patients in the study.With that said, there's plenty of potential for interim updates. It's not a blinded study, so from a survival perspective we should see some information hit press before completion.So that's the catalyst side of the equation – the risk with this one is one of dilution and a split potential. The company is going to need to raise (there was around $150K on hand at end September last year) to fund the ongoing programs, and it is shareholders that are going to feel the hit from any equity issue.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.