Propanc Health Group Corp (OTCMKTS:PPCH) Has Upside Potential On Orphan Designation

Propanc Health Group Corp (OTCMKTS:PPCH) is a junior biotech company that currently has two separate orphan designation applications with the European Medicines Agency (EMA) for its lead asset, PRP. One of the applications should feed back a decision before the year draws to a close, and this decision could serve up some considerable upside momentum in the company's market capitalization if the EMA gives it a green light for designation.Propanc has had a rough time this year, and its shareholders are somewhat disgruntled. Market cap is down 55% year to date, but volume has picked up recently on the back of a couple of corporate presentations. Some good news would be very welcome, and could compound the current increase in volume and – by proxy – interest, helping shareholders to recoup some of the hit they've taken year to date.With this in mind, what are the chances of an EMA orphan designation for the two PRP applications, and what is the importance of the designation going forward?Before we get into the designations, let's start with a look at PRP. The drug is targeting what are called cancer stem cells. Current SOC treatments in the cancer space (chemotherapy, radiotherapy, etc.) destroy tumor cells, but they don't destroy cancer stem cells, which sit deep inside a tumor and lay dormant for a long time. When these cells spread, they convert into cancer cells, and can cause explosive tumor growth, locally and otherwise, long after the initial tumor has been treated.PRP is targeting these cells.It's formed from two pancreatic proenzymes, trypsinogen and chymotrypsinogen, and when this combination comes into contact with the cancer stem cells, it turns them back in to healthy cells. That's the theory, at least. And it's this theory on which the application to the EMA rests.The two target cancers are Ovarian cancer and Pancreatic cancer, and the submissions were filed on November 1 and September 7 respectively. The EMA aims to return an application with an answer within ninety days of submission, so the latter of these two applications – the pancreatic cancer indication – is due for return any day now.So, what are the chances of orphan approval, and what would it mean for Propanc?In order to qualify for orphan designation, the drug in question has to meet a number of criteria. First, it must target a life threatening or debilitating disease. In both cancer targets, the drug ticks this box. Second, it must target a disease which affects no more than 5 in 10,000 individuals in the EU – it must be rare, in other words. Pancreatic cancer kills around 5-7 people in every 100,000, so there's no problem there. Ovarian cancer is a little higher, between 10-15 deaths per 100,000, but again, against the 5 to 10,000 number, its no issue. Box ticked on both counts. The final checkpoint relates to currently existing satisfactory treatments. For the foreseeable future, any drug that targets an oncology indication isn’t going to have trouble ticking this box. Checked.So they are the inclusion criteria, but there's a fourth element, and that's a network interpretation of the drug itself. Basically, a network of physicians takes a look at preclinical data, and votes as to the status should be awarded or not.We think that PRP should have no problem in front of the panel. The MOA is fresh, and the drug could make a real difference if it can be proven in trials.So what would it mean?Well, orphan status brings with it a host of incentives, including tax credits on development, a more open communication line with the agency, an extended exclusivity post approval and the waiving of the prescription drug user fee. It makes things quicker, cheaper and more rewarding post approval.Now we wait to see what the EMA says.We will be updating our subscribers as soon as we know more. For the latest updates on PPCH, sign up below!Disclosure: We have no position in PPCH and have not been compensated for this article.