Why IMU is a multi multi bagger, page-15834

Her Vaxx on the Herizon - Watch this space

With the Imugene AGM fast approaching and investor disquiet on the uptick, I was wondering what rabbit the IMU BOD could pull out of their collective hats to appease the masses and retain their positions of authority moving forward. Were Vaxinia to produce safety and tolerability, as opposed to efficacy at SITC in November, they would need to come up with another revelation, as clearly Vaxinia would still be a few months away from providing their lifeline, as prospective efficacy results drifted out into early 2024. My mind wandered back to the company’s Ursula Wiedermann designed B cell candidate Her Vaxx, currently in a combination trial with the Merck blockbuster Keytruda. Given the company’s statement the drug was a standout in conferences throughout late 2022 and into 2023, there would no doubt have been significant interest in it from a number of parties. Could a Her Vaxx license deal or sale be imminent? Is this what’s keeping Imugene representatives so confident and self assured during the current SP rout? They have been insinuating talks in this domain are fluid for some time now, perhaps the deal is all but done. Let’s take a closer look.

HER-Vaxx is designed to treat tumours which over-express the HER-2/neu receptor such as those related to gastric, breast, ovarian, lung and pancreatic cancers. N pre-clinical and Phase 1 studies, researchers proved that HER-Vaxx stimulates a potent polyclonal antibody response to HER-2/neu, which is a well-known and validated cancer target. Earlier this year at the World Congress of Gastrointestinal Cancer in Barcelona, Imugene concluded that HER-Vaxx treatment could produce robust anti-HER-2 immunoglobin G and G-1 antibody responses. Most notably Her Vaxx was patented in 2020 for the generation of a therapeutic antibody response against HER-2/neu. According to Imugene’s website in their clinical HERIZON study, which was designed with a specified 1-sided false positive probability of 0.10, showed a 41.5% survival benefit for patients treated with HER-Vaxx plus SOC chemotherapy compared to SOC chemotherapy alone. This translated into an overall survival HR of 0.585 (80% 2-sided CI: 0.368, 0.930) with a statistically significant p-value of 0.066. There was no difference in safety events between the two treatment arms, suggesting that HER-Vaxx does not add toxicity to SOC chemotherapy (see imugene.com for more).

The Her 2 market, in particular breast cancer is a competitive landscape. Based on DESTINY-Breast04 results AstraZeneca and Daiichi Sankyo’s Enhertu reduced the risk of disease progression or death by 50% and increased median overall survival by more than 6 months vs. chemotherapy in breast cancer patients, leading to the drugs approval in the massive Chinese market earlier this year. In China, breast cancer is the most common cancer in women, with more than 415,000 patients diagnosed in 2020.There were nearly 120,000 breast cancer deaths in China in 2020, representing around 18% of global breast cancer deaths. Its important to note that approximately half of all breast cancers are considered HER2-low (see AstraZeneca.com for more). The Her 2 breast cancer market is set to grow in size to close to 12 billion USD by the end of the decade.

So with gastric, breast and other her 2 cancers firmly on the Her Vaxx radar there is huge potential for Imugene’s Her Vaxx, throughout Asia and into the US, where the drugs excellent safety profile is set to compliment existing cancer treatment drugs such as Keytruda. Its now a question of who seeks to dip their toe in the water and acquire Her Vaxx, or partner with Imugene to take the drug to market. Despite the Her 2 market being a competitive landscape I would anticipate interest in Imugene’s successful B cell therapy to be strong, as evidenced by the company’s suggestion the drug was the feature at last years ESMO Asia Congress 2022, held in Singapore in early December 2022. How much is the drug set to net Imugene in the event of a sale? As an example AstraZeneca secured partial rights to the Daiichi Sankyo compound Enhertu three years ago in a deal worth up to $6.9 billion, if that is anything to go by. Enhertu extended the life of breast cancer patients slightly longer than Imugene’s gastric cancer patients, by 6.4 months as opposed to Her Vaxx’s close to six months. Keep in mind Enhertu’s results were delivered from a much larger patient pool, I.e., 550 patients versus Imugene’s ultimate smaller pool of 50 patients. That said the longest HER-Vaxx treated patients remain alive 2.5 years (with one patient approaching 3 years) after starting therapy. Imugene notes that these patients generated the strongest anti-Her-2 antibody levels from their dosing schedule on HER-Vaxx.

Given the competitive Her 2 environment sales of leading drugs in the space such as Herceptin, have fallen markedly in recent years. Though Herceptin still realised 2.34 US billion dollars in sales for Roche in 2022. Therefore if Big Pharma is paying close to 4 times peak sales for cancer drugs, and Enhertu and Herceptin are any guide, Imugene’s Her vaxx is set to deliver a handy windfall for Imugene investors in the near term. With a 42% survival benefit for patients treated with HER-Vaxx plus chemotherapy compared to chemotherapy alone, and median overall survival (OS) for patients receiving HER-Vaxx plus chemotherapy was 13.9 months, compared to 8.3 months in patients treated with chemotherapy alone and no added toxicity, the results are strong. As Principal Investigator Dr Chawla commented earlier this year to the study team, “It has been a true pleasure to be an investigator on the HERIZON clinical trial. I have seen a positive impact on the long-term survival in my patients taking HER-Vaxx and look forward to the future development of this vaccine.“ Which begs the question, who is going to license Her Vaxx, or indeed buy it outright from Imugene? Is it an Asian biotech firm? Or perhaps a Big Pharma suitor such as Roche, looking to increase sales revenue as Herceptin slowly moves out of the picture?

Imugene’s current Her Vaxx combination trial is being run at the optimal biological dose rate for the drug, a higher level than that previously administered to patients. As such the patient antibody production levels are anticipated to be higher. With this in mind whomever it is that seeks to take Her Vaxx to market shall no doubt benefit from the underlying strength in patient antibody production, as exemplified in Imugene’s earlier clinical trials to date. From the Imugene side of the coin a few hundred million USD upfront and a footprint into the lucrative Her 2 Asian market would be an underwhelming yet satisfactory result IMO. The addition to Imugene’s bank balance would be of welcome relief to IMU shareholders, who have suffered immeasurably in recent times. A Her Vaxx sale would go a long way toward healing a few investor wounds, restoring confidence in the Imugene franchise, and adding value to their remaining pipeline, in particular PD1 Vaxx. It may even save the bacon of one or two directors, not to forget few higher up the IMU food chain.

DYOR - Seek investment advice as and when required - Opinions only