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Summary
Mentor Capital is well
poised to become a significant participant in the expanding medical sector of Cancer Immunotherapy,
an emerging approach to overcome the historic medical nemesis of Cancer. This is starting with
MNTR's initial $2.2 million or 20% investment in Quantum Immunologics, Inc. (QI), a private
company. The QI agreement contemplates "there is potential for significantly increased investment,
or even merger of the Parties."
Medical Treatment Methodology
Quantum Immunologics is
conducting FDA authorized Phase I/II trials for its metastatic breast cancer treatment to test the
goal of enabling the human immune system to identify and kill breast cancer cells with no harm to
other healthy tissue in the body. This is attempted to be accomplished by facilitating the
absorption by human dendritic cells in the blood of the Oncofetal Antigen
(OFA). OFA is believed to be
found on all cancers but is absent from normal cells. When prepared by QI outside the body and
re-injected into the patient, these dendritic cells contain OFA to pass to the body’s immune system
to enable certain white blood cells to identify and kill breast cancer cells previously not
recognized by the natural body defenses. The process involves drawing the patient’s blood,
capturing of the OFA antigen by dendritic cells and re-injecting this blood into the patient’s body
in three monthly treatments. A
positive immune response is hoped to be felt after 24 hours and stabilization or regression of the
breast cancer is the testing goal to be initially evaluated within four months. In any
immunotherapy, mild flu-like symptoms are experienced by the patients as compared to the severe side effects
experienced after chemotherapy, radiation, or surgical treatments. The cost of treatment is
estimated at $30,000 to $60,000 per patient compared with an average of $100,000 for late stage
traditional cancer treatments.
Market Position
The National Cancer
Institute estimates the new annual breast cancer cases and related deaths among women in the U.S.
to be 192,370 and 40,170, respectively. MNTR estimates about 40% of late stage
patients may enroll for the QI proprietary dendritic cell OFA cancer
immunotherapy. This calculates
to approximately a $900 million
revenue opportunity in this country. A similar market potential in Europe with additional worldwide
sales would represent a market size of around $2 billion in annual revenue. The various patent and
associated licensing rights are well established and are being professionally maintained and
extended.
Management
Mentor and Quantum
Immunologic management teams have decades of experience in finance, science and medical fields and
posses the capabilities to achieve future goals and profitable growth accomplishments as they
successfully execute their business plans.
Capital Markets
The company’s 28 million
in stepped warrants could raise almost $25 million in new capital near term and up to $145 million
if completely exercised. This
should provide sufficient capital to support QI programs through clinical trials and into the
commercial introduction of its medical technologies. Outside funding is also being pursued to abet
these endeavors as well as liquidating existing investment positions.
Outlook
Mentor is pursuing a
dual program of not only supporting the Quantum Immunologics' operating goals, but also considering
select acquisitions in this exciting field to expand its operating base. This is motivated by the
fact that the OFA marker has been found on many types of cancer, but not on normal tissue. It is
interesting to note that the common stock of Dendreon Corporation, pursuing a similar technology to
treat prostate cancer, has appreciated 1,000% in the past six months of this
year.TheMNTRsharesatcurrent pricelevelsrepresentexcitingspeculative prospects to risk
oriented investors seeking material capital gains potential.
________________
Howard N.
Stillman has over 20 years of Wall Street
experience and served as Director of Research at two New York Stock Exchange
firms. There he was approved by the New York Stock
Exchange as a Supervisory Analyst and held membership in the New York Society of Security
Analysts. Mr. Stillman earned an MBA in Finance from New York University and taught finance
and economics at the college level. He has often been called
as an expert witness in investment fraud cases and has participated in over 100 such cases
since 1987.
Analyst's Notice: This
report is read at your own risk. The report was prepared for a fee of $6,000. It is based upon
information believed to be reliable, but cannot be guaranteed as to its accuracy or
completeness.
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