Once the last patient was enrolled in the Her-Vaxx Phase 2 trial (Jan 2021) I figured we would likely see a final report sometime "around" mid-year 2021. All would be revealed and we'd have a pharma deal by year's end. It turned out that patients are living much longer on Her-Vaxx than anticipated, pushing out the final report well into 2022 (which is a very good omen for the final result). But even without a final report you only had to look at the last published report to see that Her-Vaxx would be attractive to one or more pharmas. The clinical data was solid. Her-Vaxx is clearly better, safer and cheaper than existing synthetic Her2 monoclonal antibodies. Delays aside, no real worries about the eventual results.
Late 2021 Imugene announced 3 planned Her-Vaxx P2 expansion studies. Without more details I could only speculate on the aim and goals of these clinical trials. However, in light of the pharma collaborations that have been announced a much clearer picture has emerged. Shifting gearsIn a recent webinar Leslie was asked whether the lack of final overall survival (OS) data had impacted her ability to put together Her-Vaxx/pharma collaborations. She brushed it off, saying the lack of OS data wasn't a problem at all--that the pharmas were mainly interested in Her-Vaxx's "mechanism of action". In other words, they were interested in biomarkers and other clinical data that provided insights into how effective Her-Vaxx was likely to be in a given patient. Nothing new here. Pharmas are always keenly interested in data-driven, robust predictive models.The new Her-Vaxx expansion studies were designed to answer just these questions.
Take, for example, the nextHorizon study--combining Her-Vaxx with Merck's Keytruda--which was described as follows: nextHorizon is an open label, multi-center, signal generating Phase 2 clinical trial. Note the inclusion of the term "signal generating" in the study description headline. This is new terminology. It represents a trial design that aims to rapidly uncover predictive biomarkers. I recall from one of Imugene's conference presentations that they found a statistical correlation between antibody concentrations and patient outcomes. Those patients with high antibody titres did well and lived longer than those who didn't. A clear example of a predictive biomarker.
The Pivotal neoHorizon Expansion StudyWith neoHorizon they will have access to patients with early stage disease--no longer restricted to failed, terminal patients. And this trial will be conducted in a perioperative setting: Her-Vaxx will be given to patients before their primary treatment (surgery, radiation, chemo, etc.) and after. In this way Her-Vaxx's full clinical potential will be revealed for the first time while providing a treasure trove of clinical data and biomarkers. It certainly speaks volumes of Imugene's confidence in the underlying science. Definitely a bold gangster move.I was also struck by the study's primary outcome measure: pathologic complete response (pCR). Normally imaging is used to assess tumor response to treatment. With neoHorizon doctors will be directly examining patient tissues for any sign of disease. Getting their fingers wet. They can examine patient tissues during surgery or via biopsy. It is also very important to note that the FDA has accepted the use of pCR measures as a basis for accelerated approval for cancer indications with poor outcomes.With the neoHorizon expansion study Imugene will be able to convincingly, objectively demonstrate to a pharma collaborator the clinical benefits of combining Her-Vaxx with one of their drugs. With hard numbers and comparative data. And just as important, Imugene can quickly pivot the study into a full FDA registrational clinical trial if good interim results are achieved. Early FDA approval can't help but increase Her-Vaxx's market and partnership value.Pharma PartnershipsIn 2021 Imugene clearly demonstrated that Her-Vaxx was commercially viable. That it had a dollar-value attached to it.
But the question remained: how viable? What was a "fair price"? For any given pharma the answers to these questions boil down to this: what is the marginal revenue gained by combining Her-Vaxx with their existing drug(s). What is the combination's likely impact on their market share? By setting up the collaborations the way they did, each pharma partner will be able to reasonably, objectively assess the market benefit Her-Vaxx brings to the table--for their particular drug, for themselves.Pharmas certainly know how to price-out combination treatments. They can assign a reasonable dollar value to them, based on patient benefits.. For example, how to price a combination therapy that gives patients an average of x more months of life, compared to the standard of care; or offers patients a y% chance of full remission; or a treatment without any significant side effects; and so on. The expansion trials will quantify the benefits gained through combination. For the pharma this translates into additional revenue, increased margins (given Her-Vaxx's very low cost-of-goods) and likely gains in market share due to the combination's competitive advantages. Once the combination's net dollar-value is established it's only a question of what's Imugene's slice of that bigger pie. But no matter how you slice the pie, with the expansion studies, Imugene will certainly command a much higher price than if it only had the Her-Vaxx P2 trial data to make its case. IMO, this is why Leslie decided not to go for a pharma deal in 2021. With her experience she knew how much more valuable Her-Vaxx would be by gathering key clinical data through collaborations with pharma partners. With good results it's a small step getting a pharma partner to offer Imugene a licensing deal at the right price. Note: By committing to this approach Leslie was effectively adding 1 year to the pharma-partnership deal timeline. So we're going to have to tread water until then. But don't forget that this strategy was put together at a time when the share price was on an upwards tear, nothing but blue skies and with boat-loads of money in the bank.The Merck factorRight now Merck is in the catbird seat, as Imugene is collaborating with them on the 2 planned Her-Vaxx studies. Adding more fuel to the fire, Merck's cash-cow Keytruda will be off patent in 2028. If Merck were to give Her-Vaxx a hard look it's difficult to imagine they wouldn't take a good look at PD1-Vaxx. It's a more potent, safer and much cheaper bio-identical version of Keytruda. They may think it's better to license it now than to face it in the market as a competitor. Given Merck's financial muscle, they would have enough time to gain FDA approval for key cancer indications for PD1-Vaxx before their Keytruda patent expires.However, Imugene will partner with Roche for the PD1-Vaxx expansion study. This particular combination (PD1-PD-L1) has amazing clinical potential--the potential to cure a certain percentage of patients.
And much like Her-Vaxx, the PD1-Vaxx combination study is very likely to pivot to a FDA registrational trial if the results look good. So we may see a bit of elbowing and a shoving match between Roche and Merck if the interim PD1-Vaxx trial data looks attractive. Nothing wrong with a good 'ol fashion cat-fight. Boy, wouldn't that be nice for a change! Ken
IMU Price at posting:
22.3¢ Sentiment: Buy Disclosure: Held
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