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On 21 February 2018 the biotechnology industry in Australia reached an important milestone. That was the day an ASX-listed cancer drug developer called Viralytics announced that it was being acquired by Merck for a cool US$394m, which was A$502m at the time. Merck really liked the data it was seeing from Viralytics’s Cavatak product, which was one of the first ‘oncolytic’ viruses to be developed. And the American pharma company was prepared to pay up to get hold of it even though it was only at Phase 2.
The new kid on the oncolytic virus block
Oncolytic viruses are viruses that infect cancer cells. They represent an important emerging tool in the fight against cancer because they not only kill cancer cells directly, they also help engineer an anti-cancer immune response in the patient. This makes such viruses potential key players in the emerging field of cancer immunotherapy where the really big money is expected to be made in the future. Amgen pioneered the oncolytic virus space when it paid US$1bn to buy BioVex in 2011 and then gained FDA approval for BioVex’s product, called Imlygic, in metastatic melanoma in 2015. Merck got into the space with its acquisition of Viralytics in 2018. And in 2020 investors who follow the biotech industry are wondering if Imugene is the next cab off the rank with its new CF33 oncolytic virus.
Imugene has been a cancer immunotherapy player since 2013. The company started out working on so-called ‘B Cell peptide vaccines’, and is now in Phase 2 in gastric cancer with a peptide vaccine called HER-Vaxx, but the move into oncolytic viruses with CF33 is what has had everyone excited over the last year or so, because frankly this oncolytic virus is like Imlygic on steroids.
‘Viralytics 2.0’
CF33 is based on vaccinia, the virus that Edward Jenner (1749-1823), the father of vaccine science, famously used to create his smallpox vaccine. Back in the 1920s it was observed that vaccinia is oncolytic, and so it was natural that when the oncolytic virus field gained some momentum it would be studied for its anti-cancer potential. Professor Yuman Fong at the City of Hope Medical Centre in Los Angeles actually went one better – around 2017 he took numerous strains of vaccinia and related viruses and mixed and matched them until he came up with a really hot oncolytic virus, which he called CF33. That virus was so potent it was working in the test tubes at a fraction of the dose of comparable viruses that were out there, including Amgen’s. And it was working across multiple tumour types.
Imugene’s Chairman, Paul Hopper, had previously been Chairman of Viralytics so he knew what was good in oncolytic viruses. This was one of the best candidates out there, in Hopper’s opinion, and Imugene’s decision to take on the project has attracted a lot of happy former Viralytics shareholders all hoping to be part of ‘Viralytics 2.0’.
Imugene is more than a one-trick pony
Imugene is now preparing to kick off the initial Phase 1 work on CF33 in multiple tumour types and recently received guidance from the FDA on the development pathway. The company will test CF33 on its own as well as with the so-called ‘checkpoint inhibitors’, like Merck’s Keytruda drug that work by preventing cancer from monkeying with the body’s normal anti-cancer immune response. It was that combination (i.e. oncolytic virus plus checkpoint inhibitor) that worked so well for Viralytics. Imugene expects it will work for CF33 as well. Keytruda, by the way, is doing pretty well for Merck. 2019 sales were a massive US$11bn.
Before CF33 gets very far into its clinical development, Imugene is likely to have made significant progress with HER-Vaxx, its foundation B cell peptide vaccine. The thinking behind HER-Vaxx is that if the patient receives peptides representing important cancer targets, the immune system of the patient will be stimulated to mount an immune response against that target. That product worked well in Phase 1 and is now in the middle of Phase 2.
Making progress with B Cell peptide vaccines
HER-Vaxx is a vaccine for HER-2/neu, a validated target in gastric and breast cancer thanks to Roche’s blockbuster drug Herceptin. Her-Vaxx’s Phase 1b/2 study in gastric cancer dosed its first patient around September 2017 and by December 2018 the company had data showing clinically meaningful response in 11 of 14 patients in the Phase 1b part. We predict a good outcome for the currently ongoing Phase 2 part of the study, which kicked off in March 2019, and we’re also excited for a second B Cell peptide vaccine product that will target PD-1, the same target as Merck’s aforementioned Keytruda drug.
2020 has been a good year for the Life Sciences sector on ASX as a result of COVID-19 showing what the sector is capable of. However, with Imugene we think the appeal will last longer than the current pandemic. The company has promising clinical data with HER-Vaxx and promising pre-clinical data with CF33. And it has a team that has a lot of development smarts in the field. Four stars from us.
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