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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. The MNTR shares
at current price levels
represent exciting speculative 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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