Why IMU is a multi multi bagger, page-21897

Thanks for the question Why is Pfizer buying Seagen for 43 billion and not IMU for perhaps 5 billion? @Hart185. Whilst I don’t have time today, for those interested I’m happy to throw in some research from my previous posts on Seagen and Imugene, to shed some light on the topic.

Clearly Seagen is income producing, and Imugene is pre revenue. And as we realised yesterday, Imugene is dosing 3 patients at a time in their clinical trials, when Big Pharma and Seagen tend to dose closer to 30. As an example, in Seagen’s Tisotumab vedotin study a total of 660 patients were evaluated for eligibility and 502 patients were randomized. The outcome being that Tisotumab vedotin led to a 30% reduction in the risk of death versus chemotherapy as second or third line therapy in patients with recurrent or metastatic cervical cancer with disease progression on doublet chemotherapy.

That said, if Imugene are successfully able to ramp up patient numbers in their ongoing Phase 1 and Phase 2 trials, their innovative therapies may well be worth more than Seagen’s pipeline one day. I say may, because that is WHEN AND IF Imugene can obtain FDA Approvals for their drugs including Vaxinia, Oncarlytics and Azer Cel. There’s a bit of water to pass under the bridge before those outcomes are reached.

Why isn’t Imugene attracting more investment, as Seagen did?

I wish there was money around for Imugene, as there was for Seagen. But as noted by myself in previous posts Seagen always focused heavily on anecdotal evidence and stories from existing patients to tell their story. Imugene is the opposite, never wishing to spruik their wares with patient stories. Yet whilst we all love Imugene’s science, the clock is ticking. They now need some hard data and real life patient stories, if the market is to sit up and take notice. With no talk of discussions with Big Pharma in the near term, no Nasdaq listing in the offing, and no real time updates on many of their existing clinical trials including Next Herizon, IMPRINTER or CHECK VACC, the natives have become rather restless. Meanwhile Big Pharma has been paying big coin for cancer drug delivery methods such as ADC’s (see Seagen) and more recently actinium-based RPTs (see Rayzbio). Even Biogen’s recent acquisition of Reata Pharmaceuticals (NASDAQ - RETA), illustrates just what the biotech market have been prepared to pay for a slice of the action.

Are the big dollars being forked out by Big Pharma warranted? Some are now suggesting many Car T’s resemble flawed treatment, in that they are re-engineered from used if not depleted in human cells. Whilst ADC’s, such as those developed by Seagen, despite being flavour of the month in providing a delivery mechanism for treatment such as chemotherapy, could be described as just that, a delivery mechanism. Scientifically speaking ADCs are composed of an antibody targeting an antigen associated with malignancy, combined through a linker with a cytotoxic moiety, allowing for a more specific delivery of chemotherapy. The ADC binds a receptor on the target cell and is then internalised into the cell through receptor-mediated endocytosis.

People are sitting on the fence when it comes to Imugene - awaiting definitive trial results

Seagen sold to Pfizer for close to $43 Billion US, close to 75 times Imugene’s current value. Yet Seagen, in offering a conjugate from which to deliver toxic drugs to cancer cells, is ultimately only as effective as the drugs being delivered. As we now know chemotherapy and monoclonal antibodies such as Keytruda exhibit much higher levels of toxicity and therein side effects, when compared to Imugene’s immune stimulating drugs.

As the FDA considers Imugene’s results in their Phase 1 Oncarlytics trial in months to come, and as they continue to mull over Professor Fongs biopsies from the current Vaxinia trial, investors sitting on the fence may be forced to sit up and take notice. Though history tells us investors tend to jump to late. Sitting on the fence is far more comfortable than taking the big leap forward. Wikipedia informs us "Sitting on the fence" is a common idiom used in English to describe a person's lack of decisiveness, neutrality or hesitance to choose between two sides in an argument or a competition, or inability to decide due to lack of courage.

Vaxinia has a broad reach, not to be underestimated

Its interesting is it not, last year I wrote of Amgens decision to buy the oncolytic virus T - Vec pre revenue, and more recently of Merck buying PRA023 pre revenue. Why not take a look at Imugene pre revenue? If, as mentioned by you 5 billion USD was placed on the table for Imugene that would equate to over $1.00 per IMU share. It doesn't sound like a lot for a company with a drug that can potentially cure cancer patients with solid tumours. Although Professor Fong is yet to determine the most appropriate mode of delivery for the Imugene licensed Vaxinia, he has stated that once delivered to the solid tumour, his drug works. By working he means that once infected with the virus, the patients solid tumour effectively blows up and is killed.

PRA023 is being developed for the treatment of immune-mediated diseases, including ulcerative colitis (UC), Crohn’s disease (CD) and other autoimmune conditions. There are 70,000 new cases of inflammatory bowel disease (IBD) each year. Yet there are over 1,900,000 cases of cancer. So clearly Imugene’s Vaxinia is swimming in a much bigger pool than PRA023. Does that mean its worth potentially 28 times what Merck paid for Prometheus last year? Could Vaxinia be worth over $68 to the IMU share price?

If Mercks actuaries valued their play in the IBD market at over $10 billion, what’s a market with 28 times more prospective participants worth?

Well, I guess there are a myriad of permutations and combinations one would have to consider before we could reach that conclusion. Factors such as the cost to purchase PRA023 as opposed to the cost to purchase Vaxinia. The respective market penetration of both products would need to be considered as well. But it is definitely food for thought, is it not?

Pfizers acquisition of Seagen, potentially a good one

In short I think Pfizers purchase of Seagen was a strategically move to increase their footprint in the field of oncology. Anti Drug Conjugates or ADC's in which Seagen chose to specialise are a revolutionary technology in that they target the tumour cells in ones body when patients are being treated, and leave the healthy cells alone. Therefore chemotherapy and monoclonal antibodies are more successful in targeting the cancerous cells during treatment, when utilised in combination with Seagen's drugs. Seagen has been successful in trials with patients suffering from cervical cancer, non Hodgkins lymphoma and her 2 expressing cancers including breast cancer. ADCETRIS® TUKYSA® and TIDVAK are examples of Seagen’s drugs, which are more advanced than Imugene vaccines, with Phase 3 results and revenue in Seagen's mix. That said, as outlined above, ADC's have been recognised as a linker, or mode of delivery for chemotherapy and monoclonal antibodies, both which are known for inducing side effects within patients.

Seagen generated over $2 billion USD in revenue in 2023, and by 2028 annual turnover is forecasted to rise to over $7 billion. Adcetris, a CD30-directed ADC, is currently Seagen's best-selling drug with sales up 34% year over year, reaching $243 million in the first quarter. Adcetris reported record sales, and a phase 3 study demonstrated an unprecedented three-year progression-free survival of 94.9% compared with a more chemo-intensive international standard of care in advanced Hodgkin’s lymphoma. Due to Adcetris’ high efficacy, we forecast it is on track to achieve more than $1 billion in annual revenue in North America alone by 2024.

Late-stage trials for additional cancer indications utilising Seagen’s Padcev and Tukysa have shown positive results and garnered additional approvals. Analysts expect this will further expand Seagen’s patient reach, and think Pfizer’s deep pockets will help accelerate the development of Seagen’s pipeline candidates over the next several years.

Despite being a good buy for Pfizer, who look to advance their position in the field of oncology, all is not overwhelmingly rosy in the world of Seagen, as noted by fiercepharma.com recently. The rising antibody-drug conjugate (ADC) class has hit a setback as Seagen’s Adcetris, was recently outplayed by an immune checkpoint inhibitor. Compared with Adcetris, Bristol Myers Squibb’s Opdivo significantly reduced the risk of cancer progression or death by 52% in adults and children with newly diagnosed stage 3 or 4 classical Hodgkin lymphoma, according to phase 3 data unveiled at the 2023 American Society of Clinical Oncology (ASCO) annual meeting. Both drugs were used on top of the AVD regimen of chemotherapy. How is Imugene’s Azer Cel technology going to fair in this space?

Like Adcetris, Vaxinia wouldn’t be a bad buy either

Imugene's Vaxinia to date has resulted in little if any side effects and toxicity within patients. And we now know that once in the tumour, it infects, destroys and eradicates the tumour within a patient, according to the oncolytic viruses founder Professor Yuman Fong. Vaxinia appears to be successful in treating multiple cancer indications, as opposed specifically to blood and her 2 related cancers i.e., lymphoma and breast cancer respectively. Whilst recent Seagen successes have extended the company's reach into areas such as brain cancer, the company is only beginning to develop a pipeline to treat the huge unmet need that is solid tumours within patients. If I had to choose I'd be working with Imugene's OV's, in particular Vaxinia, over the Seagen ADC's and pipeline, despite the fact Seagen’s drugs are already in production and earning revenue. Although Imugene's OV's have yet to determine the best mode of delivery, and the most appropriate combination drugs, pre clinical results and now in human patient responses, would suggest Vaxinia has a much broader reach than Seagen’s drugs.

Chemotherapy and MAB's could be referred to as outdated technology in many respects, due to the toxicity associated wth them. Yes, Seagen has drugs that target only the cancerous cells within a patient, yet they themselves are ostensibly a method of delivery themselves. Yet IMO Imugene’s Vaxinia packs the whole punch, and from what we are being told is a stand alone weapon capable of killing solid tumours irrespective of their size or origin.

Once Vaxinia produces results later this year, in conjunction with the fast track FDA approval for the virus, the $5 billion USD you speak of may be within reach for Imugene. Though how do value a drug or vaccine that has never existed before? One that has the potential to destroy all cancer indications across the board? A drug with the potential to tap into the highly lucrative solid tumour market within a matter of years. Seagen is but one example of how Big Pharma is keen to pursue revolutionary new treatment arms in the field of oncology, whatever the cost.

DYOR Seek investment advice as and when required - Opinions only