"Amgen (AMGN-NC) announced a Phase Ib collaboration with Roche (RHHBYNC) to combine talimogene laherparepvec (T-Vec) and atezolizumab (anti-PDL1). We believe Amgen has been doing the heavy lifting in prepping regulatory authorities, physicians and markets for the advent of oncolytic virus therapy. We believe CAVATAK is a differentiated product and offers broad potential across tumor types based on multi-routes of administration. Reiterate Buy and AUD3.84 price target
Event
Amgen announced a collaboration with Roche to test talimogene laherparepvec (T-Vec) with Roche's anti-PD-L1 candidate, atezolixumab (MPDL3280A). The collaboration will be for a Phase Ib combination study in patients with triple negative breast cancer and colorectal cancer with liver metastases.
Impact
We believe Amgen has been doing the heavy lifting in prepping regulatory authorities, physicians and markets for the advent of oncolytic virus therapy. This is based on the recent positive talimogene AdCom for the melanoma data and the anticipated approval around the October 2015 PDUFA date. We believe that Viralytics and CAVATAK have put together a thorough development program to date and has 1) delivered strong data in the final CALM results yesterday, which we believe is differentiated from the T-Vec melanoma data, 2) is developing CAVATAK for diverse administration routes for multiple tumor types, whereas T-Vec is currently focused only on intralesion injectsion and 3) CAVATAK is a non-engineered virus, which could provide a potentially more favorable safety profile. Therefore, CAVATAK has fastfollower potential and could be the second oncolytic virus approved. Our discussions with management indicated a broad set of background activities beyond product/clinical progress, namely business development activities. Looking forward we believe Viralytics will deliver on the collaborative front for clinical trials as well as official partnership or acquisition potential. Recall that Viralytics already has strong preclinical data in hand with checkpoint inhibitor combinations and is currently running the MITCI study, which combines CAVATAK with Yervoy in advanced melanoma patients. Action With positive Phase II data in hand, and several ongoing clinical studies with near-term data readouts, we believe VRACY represents an attractive opportunity for U.S. investors."
