Batting with B cells, or battling with them?
I think with the Imugene share price grovelling at around four and a half cents its fair to say many investors have been let down by management, who for some strange reason cannot explain why their own share price is going, going, gone as it were. Perhaps looking back as opposed to forward may enlighten us. Wikipedia tells us Imugene began as a research project in the laboratory of Professor Ursula Wiedermann at the Medical University of Vienna, where from 2004 Wiedermann developed a B cellpeptide cancer immunotherapy that could induce an antibody response targeting HER-2 overexpressing tumours. History then tells us that nine years later Imugene was listed via a reverse takeover, with Her Vaxx being their leading drug candidate. Then in 2017 Her Vaxx entered the clinic with results highlighted in Imugene’s recent newsletter, some 19 years after the drugs inception.
Those being (as per the newsletter):
HER-Vaxx treatment produced robust anti- HER-2-IgG (the most common type of antibody found in blood circulation) and IgG1 antibody responses (p<0.001).
HER-Vaxx-based vaccination of patients with HER-2 overexpressing gastric/gastro- esophageal junction cancer (GC) induced anti-HER-2-IgG and IgG1subclass antibody responses (p<0/001).
HER-Vaxx induced antibodies correlated with tumour reduction (p=0.001).
Compared to chemotherapy alone, the vaccination resulted in a statistically significant overall survival benefit
The present data further validate the proof of concept for a first-in-class B-cell immunotherapy based on HER-2/neu peptides.
Now as we are set to enter the third decade of Her Vaxx’s existence, Imugene is mid way (supposedly) through a trial enrolling 30 gastric patients in Wollongong, South Australia and Taiwan, who have previously failed on Herceptin. Commencing on August 17, 2022, the primary completion date for the trial, in combination with pembroluzimab (I.e.,Keytruda), is on March 31, 2024.
Now from a lay persons perspective, and perhaps the markets, you may well ask yourself, if Her Vaxx was so good, why has it taken decades, and now perhaps another decade, for Imugene to advance the drug to market? Why are they mucking around recruiting a handful of patients in down town Wollongong, Woodville and Taiwan, and joining masses of other drugs out there looking to combine with Pembro? And by the way, if the trial started in August 2022, close to 15 months ago, where is the data on the enrolled patients to date? It all seems a bit strange doesn’t it? Wouldn’t you have been better off just partnering up years ago with a Big Pharma, out licensing the whole process to their well equipped machinery, enrolled a few hundred patients with a view to establishing FDA Approval at the earliest possible opportunity across the broad spectrum of Her 2 expressing cancer indications? It all looks a bit like the slow boat to China approach, recruiting a handful of patients here, and a handful over there, like throwing a few darts at the board hoping a few are going to stick. A bit random isn’t it? Investors who entered the listing close to a decade ago may well be asking the same questions.
Maybe investors could ask the same of another Imugene B cell candidate, PD1 Vaxx, which produced sound results in its Phase 1 trial a few years ago. Imugene only recently took the step of commencing a clinical trial to evaluate the safety and efficacy of PD1-Vaxx, the B-cell activating immunotherapy, alone or in combination with atezolizumab (Tecentriq®). Having already established safety and efficacy for PD1 Vaxx, together with the drugs optimal biological dose rate in phase 1, Imugene set about doing the same again, rather than progressing toward a full blown phase 2 trial with a few hundred patients, in order to work rapidly toward an FDA Approval for the drug. Wouldn’t it have been more advantageous to just partner up a year or two ago with a Big Pharma, out license the whole process to their well equipped machinery, enrol a few hundred patients with a view to establishing FDA Approval at the earliest possible opportunity for treatment in the burgeoning lung cancer indication? Surely any number of those looking to chance their arm in the massive Asian lung cancer market would have thrown them a line.
With Her Vaxx entering its third decade of evolution, and Imugene entering its second, some questions need to be asked this November when shareholders meet. Is flying solo and developing these drugs on what appears to be an ad hoc basis, without a clear sense of strategic direction toward market, the first best approach? Imugene does not have enough money to progress all of their leading drug candidates to market. In fact it could be said they do not have enough to progress one of their drugs to market. If indeed they have already established proof of concept in their B cell treatment arm, what are they waiting for? Why hang around for another decade chasing down more and more rabbit holes in search of further proof of concept with additional combination partners, albeit on a small scale, time and time again. One may well argue that given the PD1 Vaxx trial is set to enrol up to 88 patients it may produce meaningful results. But whether in addition to determining the safety and optimal dose of PD1-Vaxx in combination with atezolizumab, enough efficacy data is established to warrant the subsequent FDA approval for the drug, is another matter. I think, as with Her Vaxx back in late 2021, Imugene ought to have pulled the trigger and said this drug works, let’s partner up and make it happen on a grand scale. That way they shareholders could have started eating from a smaller piece of a much bigger pie down the track. Okay so IMU shareholders still own all the pie at present when it comes to Imugene’s B cell platform, but its going to take a long while to cook. And what’s the market going to look like when they finally get there? Make no mistake, there are a lot more players in the Her 2 market two decades on from when Ursula Wiedermann started in the laboratory with Her Vaxx.
People often throw stones at those asking for a commercial plan when it comes to Imugene. But what they need to comprehend is that Imugene is making commercial decisions daily. But are they making them in a scattergun type approach, on an ad hoc basis, without a clear financial strategy in place? Are they employing a strategy to deliver meaningful outcomes for investors year in year out? Has the decision to purchase azure cel been at the expense of not progressing Her Vaxx to a marketable position? Have they dropped the ball when it comes to Her Vaxx? Okay, so its a given there is only 30 patients in the current trial with Keytruda, but what’s going on with those patients? Where are they at? There is reason Imugene is only trading at 4.6 cents, and one cannot always blame macroeconomic conditions and volatility within the biotech industry for the prevailing downdraft when it comes to IMU. If you say you aren’t in the business of taking your drugs to market, that you plan on selling them toward the end of Phase 2 trials, then you better have a clear plan on how to deliver the said outcomes. It goes without saying Imugene has not inked one commercial deal in the decade past, or one financial outcome for Her Vaxx, their leading candidate, that was invented close to two decades ago now. Have they been successful? Clearly not successful enough to entice the market to pay more than 4. 6 cents for their shares, which are worth with little over 100 million dollars US, when you take cash at bank into the equation.
I wonder if Imugene are set to announce resounding results for their leading oncolytic virus candidate, Vaxinia? Or if they are just to present some anecdotal evidence pertaining to the drugs safety? Brushing it off as purely a phase 1 trial, never designed to establish efficacy. Imugene CEO and Managing Director Leslie Chong is on record saying of the Vaxinia Trial “We remain incredibly eager to bring the results of this trial to our shareholders, patients and the wider public.” I hope for her sake the results presented are everything they have been cracked up to be, otherwise I cannot see shareholders and the market having the stomach for another year of Imugene in its current format. Taking on more and more projects, whilst related and perhaps complimentary to one another, before completing ones initial project, is often treated with disdain by markets, as it has been in this instance. “Get the runs on the board, and then come back and ask for another handout,” the market repeatedly says.
I definitely cannot envisage shareholders stomaching any further dilution, at any time in the future. This could well be Imugene’s last chance to put runs on the board, where existing shareholder votes are concerned. I only hope the existing Board of Directors are aware of who they’re playing here. As they no doubt found out when they were quickly bowled out of the ASX 200, it’s not club cricket anymore. And if as a team you can’t tell your supporters why you’re not increasing your overall batting average, then sooner or later they’re going to battle on with another team, without you on it. It’s called life.
DYOR Seek investment advice as and when required Opinions only
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