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Search for Symbols, analysts, keywordsHomeHealthcare Immutep's Efti And Keytruda Combo Breaks New Ground In ImmunotherapyMay 18, 2023 4:11 PM ETImmutep Limited (IMMP)5 Comments2 LikesStephen Ayers4.24K FollowersFollowSummaryImmutep’s Efti and Merck's Keytruda combo have shown impressive 25-month median survival rates in Phase 2 trials for NSCLC patients, creating a stir in the biotech sector.Efti, Immutep's lead candidate, boosts the immune response against cancer cells, possibly amplifying Keytruda's effectiveness.Despite initial success, comprehensive research is needed to validate long-term safety, comparative efficacy, and reproduce findings across wider populations.The combination therapy suggests vast market potential due to the high prevalence of NSCLC globally.Investors are urged to consider associated risks with ongoing trials, regulatory approvals, and market penetration timelines.da-kukIntroductionImmutep (NASDAQ:IMMP) is a clinical-stage biotech company, based in Australia, focused on the development of LAG-3 immunotherapies for cancer and autoimmune diseases. Their leading candidate, eftilagimod alpha (Efti or IMP321), is a first-in-class antigen-presenting cell agonist. Efti activates immune cells and promotes key biological molecules, enhancing the immune system's cancer-fighting capabilities. It is currently being evaluated in several clinical trials for various cancers, including lung and head and neck carcinomas. The company also licenses two LAG-3 product candidates for immune response modulation, and is developing an agonist, IMP761, for autoimmune diseases.Recent events: On Wednesday, Immutep saw its stock surge by approximately 60% after revealing that lung cancer patients, treated with its main candidate Efti in conjunction with Merck's (MRK) Keytruda, demonstrated a median overall survival rate of 25 months. The results were from the Phase 2 TACTI-002 trial, where the combination treatment was shown to be an effective first-line option for non-small cell lung cancer patients (NSCLC) with more than 1% PD-L1 expression.This article aims to examine Efti's data and evaluate its potential in the treatment of NSCLC.Data by YChartsImmutep's FinancialsNote: Australian dollar [AUD] was converted to US dollar [USD] in the summary below.Immutep released its financial report for the first quarter of 2023 (Q3 FY2023). The net cash utilized for research and development (R&D) operations amounted to approximately $7.71 million USD, displaying a surge from $3.93 million USD in the second quarter of fiscal year 2023. This increase can be attributed to the heightened involvement in clinical trials and manufacturing endeavors. Moreover, the total net cash outflows for operating activities in the quarter reached around $9.49 million USD, in comparison to $4.69 million USD in the second quarter of fiscal year 2023. Immutep's financial standing as of March 31, 2023, revealed a cash and cash equivalent balance of approximately $37.02 million USD, expected to provide support to the company until June 2024.Combining Efti and Keytruda: Promising Results for NSCLC SurvivalThe reported 25-month overall survival [OS] in first-line (1L) NSCLC patients with more than 1% PD-L1 expression is significant, particularly given the historically poor prognosis of this type of cancer. NSCLC accounts for about 85% of all lung cancers, which is the leading cause of cancer deaths worldwide. Despite advancements in treatment, the median overall survival for advanced or metastatic NSCLC is typically ~12 months with traditional chemotherapy and ~16 months with chemotherapy plus immunotherapy.Eftilagimod alpha (Efti), Immutep's leading candidate, is a first-in-class antigen-presenting cell [APC] agonist that works on the Lymphocyte Activation Gene-3 (LAG-3) pathway. Its mechanism of action is to amplify the immune response against cancer cells. Efti is designed to bind to and activate antigen-presenting cells via MHC II molecules, leading to the proliferation of both CD8+ cytotoxic T cells, which directly kill cancer cells, and CD4+ helper T cells, which aid in the immune response. The LAG-3 pathway has a unique capacity to regulate the immune response and has been identified as a promising target in cancer immunotherapy.Efti is being used in combination with Keytruda, a PD-1 inhibitor. PD-1 is a checkpoint protein on T cells that, when bound to PD-L1 on cancer cells, helps keep the immune system from attacking the cancer. By blocking this interaction, PD-1 inhibitors can help the immune system destroy cancer cells. Efti could potentially enhance the effect of such inhibitors, leading to an even stronger immune response against the cancer.Thus, a median OS of 25 months is a remarkable improvement, effectively doubling the survival time associated with conventional treatments. This suggests that the combination of Efti and Keytruda could potentially offer a significant new therapeutic option for NSCLC patients, promising advances in immunotherapy, and demonstrating its potential in enhancing the quality and length of life for cancer patients.Evaluating Efti and Keytruda Combination for NSCLC: Ongoing Research ConsiderationsAlthough the initial findings from this open-label study show promise, further research is necessary to establish the safety and effectiveness of combining Efti with Keytruda for patients with NSCLC. Several key factors must be carefully examined and confirmed through ongoing and future investigations:Sample size and population: The outcomes of clinical trials can significantly vary based on the number of participants and the characteristics of the population studied. To ensure consistent efficacy and safety across different demographics, it is crucial to include a larger and more diverse patient population in the research.Long-term safety and side effects: Early-stage clinical trials primarily focus on short-term efficacy and safety assessments. However, it is essential to collect data on the long-term safety of the treatment and monitor for any potential adverse effects that may emerge over an extended period.Comparison to existing treatments: To establish the combination of Efti and Keytruda as a viable treatment option, it is necessary to compare its safety and effectiveness with other existing treatments. This evaluation should consider overall survival, progression-free survival, quality of life measures, and potential side effects.Reproducibility and independent validation: Findings from a single study or a limited number of open-label studies may not be universally applicable. To establish a strong evidence base, it is crucial to replicate the results across multiple independent trials conducted by different researchers and institutions, including double-blind, placebo-controlled studies.My Analysis & RecommendationIn conclusion, the combination of Efti and Keytruda presents a promising market opportunity for Immutep, which has seen its stock surge by 60% following the disclosure of the encouraging results from the Phase 2 TACTI-002 trial. However, it is important to note that Immutep is a microcap stock, which means it carries higher risk compared to larger, more established companies. Considering Immutep's current market cap of $230 million and the global prevalence of NSCLC, which accounts for about 85% of all lung cancers, the potential market for this novel treatment is substantial.The path forward for Efti + Keytruda in NSCLC should focus on addressing the key factors mentioned earlier, including larger and more diverse patient populations, long-term safety assessments, comparisons to existing treatments, and independent validation of the findings. By addressing these factors, a strong evidence base for the treatment can be built, enabling it to become a first-line option for NSCLC patients with more than 1% PD-L1 expression and creating significant market opportunities.Taking into account the promising initial results, the potential market opportunity in NSCLC, and the existing cash reserves of the company, Immutep's current market cap appears to be reasonable. However, investors should exercise caution due to the risks associated with the ongoing development and clinical trials, as well as the timeline required for regulatory approval and market penetration. Therefore, while Immutep may seem like an interesting investment prospect, I recommend a cautious and measured approach in evaluating its potential ("Hold"), keeping a close eye on the results of upcoming clinical trials and regulatory developments.Risks to ThesisWhen the facts change, I change my mind.Investing in Immutep, like any clinical-stage biotech company, comes with its unique set of risks. Here are some key factors to consider:Clinical Trial Uncertainties: While the Phase 2 results of Efti in combination with Keytruda have been promising, it's still in the clinical trial stage. Future trial phases might not replicate these results or reveal adverse effects that weren't apparent in earlier stages. Any negative findings in future studies would impact Immutep's stock negatively.Regulatory Risks: Gaining regulatory approval from authorities such as the FDA or EMA is a complex, rigorous, and unpredictable process. The combination treatment of Efti and Keytruda may fail to gain regulatory approval, delaying or even stopping the potential market launch.Competition: The oncology market is intensely competitive. Other pharmaceutical and biotech companies may develop more effective, safer, or less costly treatments for NSCLC, which would significantly affect the commercial potential of Efti and Keytruda combination therapy.Financial Risks: While Immutep's current cash balance is projected to sustain operations until June 2024, the company is heavily reliant on external financing to fund its operations and further development of its product pipeline. Future funding conditions might be less favorable, or the necessary capital might not be available at all, posing financial risks.