JP Morgan and the road ahead
Where does Vaxinia sit in the market place? What potential does the drug offer for those seeking to invest? Who are the major competitors and players in this oncology arena? Its high time Team Imugene started providing some relevant information and began to answer some questions pertaining to the marketability and prospective commercial benefit of investing in their flagship candidate. What better place to do this, than the forthcoming JP Morgan Healthcare and Investment Conference.
Following on from the Vaxinia announcement in early November I note one patient with bile duct cancer treated intravenously with a mid-dose had achieved a complete response with no recurrence in more than 200 days. Another patient has had a partial response and a further 16 patients at the time remained stable. Early results from six patients with gastrointestinal cancers who received Vaxinia alone – including two with colorectal cancer, two bile duct, one pancreatic and one liver – showed positive treatment effects with a disease control rate of 75 per cent.
So if we take these cancer indications individually we find the market size applicable to each cancer indication is forecast to be:
Colorectal US$ 24. 078.5 billion by 2028
Bile Duct USD$ 198.4 Million by 2030
Pancreatic USD 7.91 billion by 2032
Liver USD US$ 26 Bn by 2032
It goes without saying each indication is in the difficult to treat compartment where a huge unmet exists. Therefore I would be confident in saying that, as was the situation with bile duct cancer, if Vaxinia continues to produce positive signals within each indication, FDA fast track designation and priority review status would ensue.
With these figures in mind could Team Imugene please put some numbers around their oncolytic virus therapy at the forthcoming JP Morgan Conference, as opposed to just discussing the science. No more repetitive scientific slides this time around please. What does the company hope to achieve with the drug? How does the drug compare, contrast and stack up with other drugs such as Jemperli? How does Imugene’s technology compare with what leading industry players such as Bristol Myers Squibb Company; Novartis AG; Merck & Co., Inc.; Eli Lilly and Company; Biocon; Teva Pharmaceutical Industries Ltd; Celltrion Healthcare Co., Ltd; Samsung Bioepis; Pfizer Inc.; and Ipsen Pharma are producing and researching? It is after all an investment conference, as opposed to a scientific symposium. Investors failed to grasp the investment opportunity surrounding the company’s latest Azer Cel acquisition, with a failure to take up in total the share price placement designed to fund the IP.Let us not make the same mistake on the world stage, by failing to put in black and white the anticipated market penetration, market size and prospective market potential of Vaxinia, based on the aforementioned clinical trial results and market conditions.
For many years now Imugene has been reticent to discuss the nuts and bolts of their innovative technology from both a commercial and economic perspective. In focusing firmly on the science they have missed several opportunities to engage and perhaps enlist investors who are in the main not scientists. They still have a predominantly retail shareholder base, in downtown Australia, where only a very small portion of the investment market resides. I note that at present many investors are unaware of the expected cost to produce Vaxinia. Of the forecast sale price for the drug. Of which market future sales and distribution outlets could sell the drug into. There are many missing pieces to the investment puzzle which put Vaxinia firmly back in the research and development box (R&D). The drug is currently visualised by many as a great idea, or notion, as opposed to the commercial cash cow it promises to be in the near term. At times Team Imugene compares their drug candidates to such household names as Opdivo or Keytruda, but that’s about as far as it goes.
Take Neurens Trofinetide as an example. Investors are aware the cost is $US125,000 for a single course. They are aware of the size of the Retts Syndrome market. They don’t have to join all the dots to ascertain what their investment is potentially worth. In fact the Neuren CEO Mr Pilcher does it for them. The company explains how patients arereimbursed in the US generally through Medicaid public health insurance for children, or families’ private health insurance policies. They understand that once prescribed, it’s ingested twice a day in a liquid form by children from two-years-old upwards for indefinite periods. The company goes into detail when discussing and outlining sales figures. As an example they reported, following the recent Arcadia deal, that their rest of the world licensing deal would see Neuren earn up to $US363 million in milestone payments from Europe, Japan and other ex-US overseas markets if variable total annual net sales milestones are met. “Neuren will also earn $US35 million on the first commercial sales in Europe and $US15 million on the first commercial sales in Japan," they stated at the time of the recent Arcadia licensing deal.
Which markets does Imugene believe they shall receive Vaxinia approval for first? What is the forecast cost and sale price of the drug? Which cancer indications are they aiming to target and in whichorder? And what is their rational behind making such a decision? Are they looking at producing the drug themselves, or out licensing the drug? If so what prospective figures are they envisaging placing on each specific cancer indication, or the indications overall? This is information and indeed questions that if unexplained and unanswered, leave the investment market confused and at times lost when it comes to the Imugene offering. This is information and these are questions that if unexplained and unanswered, continue to place Imugene firmly in the R&D basket, as opposed to commercial basket of biotechs. Investors need to see light at the end of the tunnel. Oncology is a congested space, and failing to place dollars, cents the potential returns around an offering places you a distant second to those who forecast potential returns, combined with a commercial rod map to realise them.
Sometimes you have to spell it out at investment conferences. You need to lay a platform from which the investment community can calculate potential returns, based on the cost of production, forecast sales prices, potential market penetration and the future indication approvals you would ideally like to obtain. The appropriate delivery mechanism for Vaxinia is yet to be determined. Whether it is via the RenovoGem delivery route into gastrointestinal cancers, or via another administrative route, such as IT or IV, is unknown. Though that should in no way prevent company executives from placing some numbers around the oncolytic virus itself, and the prospective returns for those seeking to invest.The JP Morgan Conference is said to be the largest and most informative healthcare investment symposium in the industry which connects global industry leaders, emerging fast-growth companies, innovative technology creators and members of the investment community. Note “connecting with members of the investment community.”What are they at the Conference for? To analyse and assess where to invest. In order to make investment decisions fund managers and institutions need figures, market information and numbers upon which to hang their investment dollars. Is Vaxinia going to cost more than Keytruda and Opdivo? Of course we know it isn’t, but does the investment community at large? Where does this unique OV stack up against others, such as Replimune’s offering? Please explain.
I love what Imugene is doing from a scientific perspective. But unfortunately that’s only a small part of the investment equation. The number one question on every investors lips is “What is the product worth”. If you can attempt to answer that question, you can go a long way toward attracting investment. With this in mind its probably time Imugene’s business and commercial personnel started to earn the significant dollars and bonuses forked out to them in recent years. Oh and btw please don’t tell me it’s all behind closed doors and not public information, or that the company is bound by privacy and confidentiality, or they are playing their cards close to their chest. That’s all beginning to become a bit tired now, wouldn’t you agree? Transparency is of the essence when you have safe and efficacious drugs that aim to assume preeminence in a market where there is a huge unmet need. If the results are there, they are there for all to see, as are the commercial benefits forecast to flow from them. Please don’t confine these results and estimated returns to the boardrooms of a few. Tell the world about it.Then maybe, just maybe, they shall decide to invest. And wouldn’t that be a good thing for those already invested in IMU.
I had a beer with an investor yesterday and mentioned I couldn’t see why a hedge fund wasn’t stepping up to the plate to take Imugene on, given how good Vaxinia was looking. He said maybe there was something we didn’t know. And that seems to sum up investor sentiment, unfortunately. There still appears to be a lot investors don’t know. But as Paul Hopper said before speaking at an investor conference in Sydney earlier this year, “It’s not my or my teams job to sell shares in our company to you”. Why bother going to investor conferences, I thought to myself at the time. Let’s hope there’s a reason to attend this one, come January 10. I’d prefer US investment dollars in 2024, as opposed to ongoing CR’s from Bell Potter and more dilution down the line.
What do you think your drug is actually worth? Maybe, just maybe, if investors can answer that question, following the JP Morgan Conference in San Fransisco this year, we could see IMU trading a little higher than it is at close of play in 2023.
DYOR Seek investment advice as and when required Opinions only
“A diverse mix of voices leads to better discussions, decisions, and outcomes for everyone.” — Sundar Pichai.
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