Ann: Investor Webinar on Acquisition of License for Azer-cel, page-255

Thanks again for asking of my opinion on this topic yesterday. I missed the webinar today and have not caught up yet but in summary these are my thoughts at the end of a long day.

Azer-cel and Imugene - is it worth all the pain, or is there some gain?

My oh my has the management of this company brought down some pain. That said, there may be some gain. Obviously history doesn’t repeat, but if Kite Pharma, Juno Therapeutics and those Car T therapies that have worn the path prior to azer-cel and Imugene are anything to go by, the future looks mighty bright for Imugene’s new acquisition. Particularly with Oncarlytics and Cf33 riding shotgun to Imugene’s new found Car T.

Car T therapy

What's this Car T stuff all about? Well in a nutshell Chimeric antigen receptor T-cell therapy, known as CAR-T, harnesses the body's own immune cells to recognise and attack malignant cells. These types of gene therapies have been viewed by many in the pharmaceutical industry as a new frontier in cancer treatment. Novartis, Kite Pharma and Juno therapeutics were pioneers in the field of Car T therapies. This type of therapy has been successful in patients with non-Hodgkins lymphoma and other blood cancer types.

Car T - the cost

Car T therapy comes at a cost both from a health and financial perspective. Car T therapies can cause infusion reactions, an overreaction by the immune system that creates severe inflammation and often looks like severe allergic reactions. As an example on 29 June 2017 it was reported Juno had fifteen deaths that were in some way were related to their CAR therapy trials.

Financially CAR T-cell therapy can cost between $500,000 and $1,000,000. “CAR [T-cell therapy] is the most expensive Medicare diagnosis-related drug,” noted Brian Koffman, MD, founder of the Chronic Lymphocytic Leukemia Society, in January of this year.

Car T providers - raking in the $$$$$$$$

Due to the cost to purchase and administer CAR T therapies those trialling these therapies have been paid billions by Big Pharma, despite often being at pre revenue stages in their development, before FDA approvals were announced.

Lets’ take a look at the first CAR T therapies and the prices Big Pharma paid to acquire them:

Novartis had the first Car T drug Kymriah approved in August 2017. Kymriah treats young adults with a severe form of Leukemia.

The FDA then approved a second CAR T immunotherapy developed by biotech company Kite Pharma, which announced a deal to be acquired by Gilead Sciences shortly before the approval. On August 28, 2017, Gilead Sciences announced that it would acquire Kite Pharma for $11.9 billion.

In November 2017 Juno’s JCAR017 CAR T drug began the first of three mandatory clinical trial phases before it could be submitted for approval to the FDA. On February 5, 2018, Celgene agreed to buy Juno Therapeutics for $9 billion, to get its hands on the company's promising CAR-T technology.

Azer-Cel Car T Allogenic therapy and Imugene - What’s it potentially worth?

We've heard it all before from Imugene, every time news comes the aftermath is better than sliced bread. Alas, Dr Glover tells us that the facility purchased is "a remarkable asset" and has room for expansion.

But what about Azer-Cel? Azer-Cel, the drug Imugene acquired from Precision Biosciences last week is a Potential First-in Class Allogeneic CAR T Product Candidate for CD19+ CAR T Relapsed Patients. The drug is currently in clinical trials to treat diffuse large B-cell lymphoma (DLBCL), 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. Therefore you can quickly gauge it is being trialled to treat blood cancers, just as Kite and Juno’s Car T therapies were before they were acquired by Gilead Sciences and Celgene, for $11.9 billion and $9 billion dollars respectively (I.e., USD).

Hypothetically speaking if Azer-cel was to obtain a registrational trial from the FDA it may be in a position to treat say 1,000 patients at maybe $250,000 each, and in doing so accumulate revenue for Imugene of somewhere in the vicinity of $250 million USD per annum. Okay so that may add a billion dollars to the Imugene bottom line for their outlay.

But the big carrot is being able to mix the azer-cel allogenic therapy with Imugene’s Oncarlytics platform in the pursuit of solid tumours, a market ten times as big as the blood cancer market. Multiply Kite’s $11.9 billion by 10, or Juno’s $9 billion by 10, and that’s a pretty decent pay check for Imugene’s azer-cel Car T allogenic therapy down the track. Shareholders have been screaming for revenue from Imugene, but it’s worth remembering that for Kite and Juno it was not revenue, but simply a sniff of an FDA approval for their Car T’s, that brought Big Pharma to the table.

Wake me up, when November comes

Could the acquisition run aground and the money outlaid run astray? Anything is possible. Multiple patients could eventually pass away and the trial cease. But I think not. The results have been promising if not better than sound to date. This drug has the potential to be not only the first allogenic therapy through the FDA gates, but first in class.

IMO when the market wakes up to the value of Imugene's Ocarlytics/Car T combination drugs, and the potential upside in marrying them with their silver bullet, Cf33, the boat shall come in. I just hope Bell Potter and their bottom feeding customers have sold out before then as they usually do. Oh that’s right, even if they do (or already have), they’ll still have those bloody options Imugene handed them for a pittance.

Never mind, I’m kind of thinking there’s enough to go round when the boat finally does come in. In the interim I suppose a potential Her Vaxx sale or even pending Vaxinia news can keep me stirring at night. I’m drifting now, sneaking a glimpse of my IMU dream boat as it moves in and out of our distant heads, lit up ever so briefly by the lighthouse beyond.

Don’t forget to wake me up when November comes…

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

Nb. Many of the figures herein are “rounded out” summations if not hypothetical examples of scenarios at the behest of the author that in no way constitute an exact science, recommendation or advice