Bionovo (BNVI) is leveraging its proprietary drug discovery and development platform to elucidate promising drug candidates from naturally occurring compounds. The company, which just debuted on the Nasdaq at the end of May, has over 20 compounds in preclinical development for various cancers and women’s health issues, along with four lead product candidates targeting the same indications.

In early June, Bionovo reported encouraging results for MF101 in a Phase 2 trial in the treatment of hot flashes. This oral compound is being developed as a potentially safer alternative to existing hormone therapy [HT] treatments, which were shown in 2002 in a large study to increase the risk of heart attack, stroke, blood clots, and breast cancer. MF101 may be a safer alternative because it specifically targets only the beta estrogen receptor subtypes (ERb) rather than traditional HT which also causes activation of alpha estrogen receptors (ERa) that are associated with cancer proliferation in the uterus and breast. Bionovo’s compound showed a statistically significant decrease in the frequency and severity of hot flashes at the higher dose studied (10 mg/day) as compared to placebo, and it was safe with no serious adverse events reported in the study and a high compliance rate. The company expects to begin Phase 3 testing in early 2008, with approval by late 2010 at the earliest.

Bionovo’s lead breast cancer drug BZL101 began Phase 2 trials in April 2007 for the treatment of advanced, metastatic Stage IV disease. This compound is also an oral drug which targets cancer cells and causes their demise while sparing normal cells in the body. The drug has been shown in Phase 1 trials to be void of any serious side effects and there was a high compliance rate among patients being studied. Bionovo is also studying BZL101 for the treatment of pancreatic cancer. Subject to FDA approval of its IND and sufficient funding, Bionovo expects to commence a Phase 1/2 dose escalation trial to assess safety, dosing, and efficacy parameters for BZL101.

Another lead compound in Bionovo’s pipeline is VG101, which is a non-steroidal cream that is also selective for ERb in the treatment of vaginal atrophy and dryness associated with menopause. Bionovo expects to submit and IND and begin the Phase 1 trial in the next 12 months for this compound. The final lead drug candidate is AA102, which is another oral anti-cancer drug for the potential treatment of advanced breast cancer. An IND is expected to be filed with the FDA in 2007 to begin a Phase 1/2 dose escalation trial.

Since its Nasdaq debut closing price of $4.85 on May 29, shares of Bionovo have reached the $6 level briefly on good trial data for MF101 in early June, but have since traded down to around $4.30 as of June 15. It should be noted that a SEC filing in May registered 10.5 million shares for sale from a January 2007 private placement at $1.50 per share while the company was listed on the OTCBB. Also, another 4.4 million shares could be issued for sale if outstanding warrants are exercised (3.7 million shares at $2.25 and 0.7 million shares at $1.50).

While it is no secret that Bionovo will need to raise additional funds and seek licensing partnerships to fund development of its lead drug candidates, the company has a promising and robust clinical pipeline that targets conditions with large potential markets. The company will likely finance its future through a combination of private placements and partnerships. To this end, the company filed a $100 million shelf offering at the end of June authorizing it to sell up to 24.9 million shares of its common stock. Investors should note that Bionovo’s compounds may offer advantages in terms of safety compare to existing treatments due to their unique modes of action. While Bionovo may not be well known yet among biotech investors, a recent Nasdaq listing and the potential for development partnerships for its promising drug candidates may begin to draw attention to the company’s bright prospects.

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