Azer Cel to the rescueLots of disarming at times unwarranted...

Azer Cel to the rescue

Lots of disarming at times unwarranted chatter surrounding Imugene (IMU-ASX) valuations at present. Some even suggesting the stock is worth but a fraction of its closing price today. Rest assured Imugene’s current and future valuations are underpinned by novel immunotherapies at the cutting edge of modern day cancer research. Let’s take a deep dive into one such product, the recently acquired Acer Cel technology.

As misfortune or perhaps luck would have it, depending upon which side of the fence you are sitting on, autologous Car T therapy has been placed under the microscope by regulators who perceive the therapy to have flaws that may or may not prove detrimental to their patients. Conversely “off the shelf” allogeneic therapies are starting to present a shining light in an otherwise disoriented market space. In short allogeneic therapies, such as those purchased by Imugene, have proven somewhat effective in improving outcomes for those relapsing from autologous Car T therapy.

Background

By way of background CAR T cell based therapies are transforming the treatment of haematological malignancies and have the potential to do the same in solid tumors. However, despite showing some evidence of anti-tumor effect, CAR T cell therapies still need to prove their efficacy to become a viable and impactful therapeutic option in the solid tumour arena.

All of todays approved CAR-Ts to date are so-called autologous treatments, meaning they are based on donations of a patient’s own cells. Whereas allogeneic, or "off-the-shelf," therapies, use engineered cells collected from a third party. This type of therapy is a new and up coming class set to rival autologous Car T therapy when treating blood cancers such as non Hodgkins lymphoma and other lymphomas.

Autologous Versus allogeneic Car T cells

An article in https://www.nature.com/articles/s41408-023-00822-w notes in recent studies the Complete Response rate of patients receiving allogeneic cells was 80% and that of patients with autologous products was 40%. During the follow-up period, the relapse rate showed more remarkable differences. One patient (25%) with allogeneic CAR-T cells suffered CD7− recurrence. One hundred percent of patients treated with autologous CAR-T cells relapsed whether in BM or in EMD. Patients experienced CD7+ recurrence, but CAR copies were not detectable in vivo. The less persistence of autologous CAR-T cells might contribute to the treatment failure. CAR-T cells could stably survive in 75% of patients with allogeneic cells but only 33% of patients receiving autologous cells at month 2.

Azer cel results

Imugene as we are aware has their own (recently acquired) allogeneic therapy in azer cel. Azer cel has achieved magnificent success to date. Azer-cel achieved an 83% overall response rate, a 61% complete response rate with 55% durable response greater than or equal to six months in this difficult to treat auto CAR T relapse setting.

What’s Azer cel worth?

So what are Big Pharma likely to pay for Azer cel if current Azer cel trials pan out and a Registration trial is granted later in 2024?

Imugene's website notes Azer-cel continues to demonstrate promising results in DLBCL patients who relapsed following CAR T, and we are encouraged by the high overall response rates with molecular remissions in this patient setting. They state that based on Phase 1b data, azer-cel has the potential to improve outcomes in this large and growing population with high unmet need. Remember diffuse large B-cell lymphoma (DLBCL) is an aggressive type of non-Hodgkin lymphoma (NHL) that develops from the B-cells in the lymphatic system, which are responsible for producing antibodies typically to fight infectious disease. The diffuse large b-cell lymphoma therapeutics market size has grown strongly in recent years. It will grow from $4.4 billion in 2023 to $4.8 billion in 2024 at a compound annual growth rate (CAGR) of 8.9%.

It should be noted when discussing Azer Cel’s potential in the broader market given its potential to offer relapse patients, that the National Institute of Health has performed a systematic review and meta-analysis collecting individual data on Duration of Response from at least 12-month follow-up studies. Their study found that the pooled prevalence of relapse within the first 12 months after CAR-T infusion was 61% (95% CI, 43%-78%); moreover, one year after the infusion, the analysis highlighted a pooled prevalence of relapse of 24% (95% CI, 11%-42%). This represents a huge unmet need Azer cel is potentially capable of filling.

So what are Big Pharma likely to pay for Azer cel if current Azer cel trials pan out and a Registration trial is granted later in 2024?

Depending on the percentage of the DLBCL market the drug is able to capture, and moreover the percentage of the relapse market they can obtain, quite a lot I would suggest. In December 2023 AstraZeneca entered into a definitive agreement to acquire Gracell Biotechnologies Inc. (Gracell, NASDAQ: GRCL), a global clinical-stage biopharmaceutical company developing innovative cell therapies for the treatment of cancer and autoimmune diseases, furthering the AstraZeneca cell therapy ambition. $1 billion USD is what they paid to acquire Gracell’s technology.

But one could rightly assume Azer Cel is further advanced than Gracell’s autologous Car T therapy, and that given Azer cel is an allogeneic therapy, it represents more appeal given the current cloud surrounding existing autologous Car T’s. Then there is the potential for Imugene's Azer cel to be combined with their Vaxinia oncolytic viral therapy and Oncarlytics to pursue solid tumours in cancer patients. That market is much broader than the blood cancer market currently being treated by Car T’s (i.e., 10% of all diagnosis). Solid tumours account for up to 90 percent of all cancer diagnosis.

So what are Big Pharma likely to pay for Azer cel if current Azer cel trials pan out and a Registration trial is granted later in 2024?

“Off the shelf” allogeneic therapies are all the rage at the moment as they shave time off the process when it comes to manufacturing or re engineering T cells, as autologous Car T’s do. As Car T leader Kite Pharma’s Executive Vice President Cindy Perettie notes “There’s this sense of urgency. Every patient matters. Every day matters.” The time taken to manufacture Car T drugs is therefore critical. Allogeneic treatments use donor cells to create a less expensive option that don’t require cell collection from the ill patient, but can trigger an immune reaction. Incidentally to speed delivery of its personalised immunotherapy Yescarta, Kite Pharma recently got the FDA to sign off on a new manufacturing process that will shave two days from its median turnaround time. They aim to turnaround the time between patient collection to infusion to 14 days. That is major progress when it comes to autologous Car T development.

But either way despite the fact allogeneic therapy treatment can still take weeks to occur in certain instances, this novel therapy line is still seen as much faster than traditional autologous Car T therapy. Hence the buzz surrounding this asset class at present in Big Pharma land.

So what are Big Pharma likely to pay for Azer cel if current Azer cel trials pan out and a Registration trial is granted later in 2024?

Gilead acquired Kite in 2017 for $11.9 billion to bolster its market position in cell therapy. pharmavoice.com notes that to date Kite has treated more than 19,500 patients with its CAR-T therapies. Their goal now is not only speed but broadened access. Currently, only 2 in 10 American patients who could benefit from CAR-T get the treatment, Perettie said. “This is a potentially curative therapy for almost half of the patients. It’s insanity to me that we’re unable to reach more patients,” she said. Because CAR-T treatments are only administered in authorised facilities — there are 135 in the U.S. and 400 worldwide — oncologists sometimes don’t offer it. Most authorised centre's are academic medical centre's, but the majority of people with cancer — 70% to 80% are treated in community practices, Perettie said. Similar to Imugene Kite are also doing a lot of work in solid tumors and beginning to look at autoimmune approaches,” Perettie said, pointing to compelling data related to autoimmune diseases.

“We’re seeing patients with highly refractory diseases like lupus, myositis and multiple sclerosis having profound responses from CAR-T,” Perettie said.

So is Imugene’s Azer Cel and access to Imugene’s other treatment lines targeting solid tumours worth the 11.9 US Billion dollars Gilead paid for Kite Pharma’s Car T treatment lines back in 2017?

The FDA’s recent decision to run a fine tooth comb over autologous Car T therapies definitely plays into the hands of those seeking to develop allogeneic Car T therapy products, such as Imugene with Azer Cel. If Azer Cel does ultimately receive Registration Trial approval for DLBCL later in 2024 and is shown to prove effective in treating patients who have relapsed off existing Car T therapies, a multi billion USD figure may well be in the equation, given Azer Cel’s ability to work in the relapse market and potentially tap into additional solid tumour treatment therapies. Kite Pharma however have been in this field for some time now, and they have the runs on the board with an end to end manufacturing facility targeted toward faster turnaround times for their Car T therapies, as noted in this article. Whilst Kite Pharma, from their CEO Perettie down, does one thing much better than Imugene, and thats communicate.

Kite Pharma

Most importantly Kite are big on telling patient stories. Thats right, real life stories. A quick scan of the Kite Pharma website today reveals stories of hope from Kite Pharma patients such as Branden, Celeste, Chuck, Chip, David, Elenora and many more blood cancer patients who have benefitted from Kite’s Car T therapies. Until Imugene can start telling their own patient stories the IMU story is more a message in a bottle, than a real life story. A story more akin to a scientific journal, than a lived and meaningful experience.

Let’s hope Imugene’s Azer cel changes all this and that their CEO can have the courage and fortitude to reveal some real life stories of their own as opposed to hiding behind the veil of secrecy so often present in their own clinical trial progress. Until investors can start to “touch and feel” Imugene as a company that is influencing and making a difference to the lives of real life patients, they are certain to remain a company associated with smoke and mirrors, rather than the multi billion dollar company they well should be, given the innovative and novel medicine they have at their disposal.

Precision Biosciences

At the time of out licensing Azer cel to Imugene Michael Amoroso, the Chief Executive Officer at Precision BioSciences announced his company was pivoting to focus exclusively on in vivo gene editing. Time shall tell if he made the right decision. As always being the CEO of a pre revenue biotech he was undoubtedly driven by the need to out license his intellectual property and return capital to his group, something Imugene has not done of yet. Precision have consistently shown the market they have been able to successfully bring capital in through partnering with others for upfront payments and ongoing royalties. Partnering with not only Imugene but Novartis, Ecure and more recently TG therapeutics, where they stand to gain up to $288 million USD in milestone payments. Unfortunately for Amoroso, he like Leslie Chong at Imugene has been dogged by a wretchedly low share price in recent years.

Allogene Therapeutics

Both Amoroso and Chong are no doubt hoping for similar success to that of Kite’s founder Arie Belldegrun. Arie has founded several successful biopharmaceutical companies, including Agensys, Cougar Biotechnology, and most recently Kite pharma, acquired by Gilead in 2017 for $12 billion dollars. In October last year, Kite Pharma’s Yescarta became the second CAR-T therapy approved by the FDA. And in April, 2018, Arie raised $300 to co-found Allogene Therapeutics, which will acquire and advance a portfolio of off-the-shelf CAR-T therapies previously controlled by Pfizer.

If Azer cel has anywhere near the success of Kite’s Yescarta then both Amoroso and Chong may well put the past behind them and cast their lines out toward deeper waters in search of the world’s first in class allogeneic therapy for both blood and solid tumour patients. That is if Arie’s Allogene Therapeutics doesn’t beat them to the punch. Having almost halved in price over the past year Allogene Therapeutics Inc's analyst rating consensus is currently a Strong Buy, based on the ratings of 10 Wall Streets Analysts. Maybe the market knows something we don’t.

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