Propanc Health Group Corp (OTCMKTS:PPCH) Might Be A Preclinical Diamond In The Rough

We're all about trying to uncover early stage biotech companies with big upside potential, and there's one in particular that looks interesting right now. It has taken a bit of a beating year to date, and currently trades 75% off highs. It's heading into a pivotal development phase, however, and we could see a flurry of catalysts across the next 12 months – catalysts which, if they fall in favor of the company, could easily spark a longer-term upside reversal. The company we are talking about is Propanc Health Group Corp (OTCMKTS:PPCH).Preclinical biotechs don't generally get that much attention from wider markets. It is often difficult to get an investor excited about a technology or treatment before it has reached the clinic and started trials in humans. Propanc is already starting to generate a bit of buzz, however, based on the unique mechanism of action of its lead (and only) clinical asset – PRP. We took a look at the drug in question, and sat in on a recent presentation from company scientists, and we think it's well worth a look despite its pre-clinical credentials.The company is an oncology focus, and it currently trades for a market capitalization of a little over $10 million. The asset in question, PRP, is looking as though it is going to target ovarian cancer as an initial lead indication (we are basing this assumption on comparative analysis of preclinical data) but it's not confirmed as yet.So what is the mechanism of action that everybody is getting excited about?To understand, it's worth touching on a generalization before we get into the specifics. Tumors have standard cancer cells, and these are the cells that traditional therapies (chemotherapy etc.) target. However, deep within a tumor, there are what are called cancer stem cells. Standard treatment very rarely reaches these cells, and as such, even after a patient undergoes a course of therapy, the dormant cancer stem cells generally remain. That's important point number one. Important point number two is that there is a process called EMT, which is essentially the cells transitioning and changing function. It's a standard process, and in healthy cells, it applies to things like wound healing and tissue repair. In cancer stem cells, however, it causes the cells to activate and starts a transitional process, which eventually sees them migrate away from the tumor in question. This migration forms the basis of the metastasis associated with cancer spreading.So, with that out of the way, things become pretty simple to explain. PRP reverses EMT's effect on cancer stem cells, and as they transition away from the primary tumor, PRP converts them into healthy epithelial cells. It's essentially turning cancer cells back into healthy cells, and this is what is exciting about it. It's (theoretically) non-toxic, or at least nowhere near to the degree of current standard of care, and could be applied to a wide range of cancers outside the initial ovarian target.We could talk about the science behind this one all day, and perhaps at some point we will put forward a follow-up in which we go into to things in a little more detail. In order to avoid this dragging on, however, let's move away from the science and look at the company and its catalysts.Pre-clinical efficacy is pretty well established, and the company is currently undertaking a 28 day safety toxicokinetic study that will form the basis of an investigational new drug application for the asset. Completion of this study is expected before the end of this year, and we should get results late this quarter. We see these results as a near-term catalyst.A recent press release also addressed the initiation of manufacturing of the product, and once we have some degree of confirmation that the manufacturing process is standardized and effective (we expect this early first quarter next year) then we should see some speculative volume moving ahead of an IND application submission and, beyond that, clinical initiation.It's worth noting here that this is not without its risks. Pre-clinical biotechnology can be a bit of a minefield, and that's why the more risk-averse investors will generally avoid it altogether. However, every so often, something stands out, and we think we've got just that with Propanc.Things are going to start heating up once the company moves into the clinic, slated for mid-to late next year.Subscribe below and we will bring you more as yet under the radar opportunities like this one direct to your inbox absolutely free!Disclosure: We have no position in PPCH and have not been compensated for this article.