Iomai and Pandemic Avian Flu Vaccine (IOMI)

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Iomai Corp. (Nasdaq: IOMI) is one of the interesting microcap stocks in the biotech sector with a government twist to its avian flu program.  The company has announced positive interim results from a 500-subject Phase 1/2 trial of its patch used with an injected vaccine for H5N1 influenza (bird flu). The trial demonstrated a clinically relevant adjuvant effect when the Iomai patch was used with a single dose of the 45-microgram H5N1 vaccine. The trial found that a single 45-microgram dose of an H5N1 influenza vaccine, coupled with a single 50-microgram Iomai patch, was sufficient to provide an immune response considered protective in 73% of those tested.  This is deemed a statistically significant improvement over those who received the H5N1 influenza vaccine alone.

Iomai has also noted that this is one of the first trials to demonstrate that a single dose of pandemic influenza vaccine may meet the level of protection suggested in FDA guidance, which recommends that a pandemic vaccine achieve immune response levels considered protective in 70% or more of vaccine recipients. No treatment-related serious adverse events were reported.

This trial was conducted under a $14.5 million contract with the U.S. Department of Health and Human Services (HHS) with the potential for an additional $114 million in follow-on funding. Iomai has shared the data with HHS and is now working with them to determine the next steps.

The only FDA-approved vaccine in the United States for the avian influenza H5N1 virus requires two 90-microgram doses, administered 28 days apart, to achieve hemagglutinin inhibition (HI) titers equal to or greater than 40% in 44% of vaccinated individuals.

This is a stock we have had under review for our "10 Stocks Under $10" weekly letter.  Iomai has a mere $27 million market cap and its $1.05 closing price yesterday is at the lower end of its $0.70 to $5.15 trading range over the last year.  Back in early 2006 and part of 2007 this stock traded north of $6.00.  While it is a microcap with a small balance sheet, the company has ample operating capital according to its most recent balance sheet as long as that government funding from HHS remains.

Jon C. Ogg
March 20, 2008