Oncarlytics
Imugene has created a therapy wherein a cancer patients solid tumour is infected with an oncolytic virus (i.e., CF33), expressing a CD19 protein marker. As Imugene’s Managing Director and CEO Leslie Chong noted on an interview recently solid tumours express a variety or “mosaic”of protein markers from Her 2 expression to PD1 expressing markers but CD19 is not one of them. In other words CD19 does not exist on solid tumours. Therefore by coating or covering cancerous solid tumours with a CD19 marker or target as it were, they are then more readily identifiable and susceptible to incoming therapeutic insurgents, such as Amgens Blincyto, a drug renowned for working with ones immune system to find and destroy cancer cells. Imugene, an ASX listed biotech company, have proven their oncolytic virus CF33 only replicates within a patients cancerous, as opposed to their healthy cells. Therefore the addition of a CD19 marker makes it easier for drugs such as Blincyto to seek out and ultimately destroy the malignant, as opposed to healthy or benign cells in a patients body.
When you have time to digest the concept being employed here by the esteemed scientists at the City of Hope Medical Research Facility in the USA, you start to see why they are so excited by what they are describing as a paradigm shift in the treatment of solid tumours. What this breakthrough ostensibly means is that irrespective of whether a patients solid tumour is Her 2 expressing (i.e., breast or gastric cancer) or a PD1 expressing tumour (i.e., melanoma or non small cel lung cancer), it doesn’t matter. Through the administration of Imugene’s new therapeutic approach, which they call ONCARLYTICS, the tumour can be marked and killed by this combination of drugs. Therefore, as Imugene’s Leslie Chong suggests, in its current OASIS Trial for ONCARLYTICS this combination therapy has the potential to treat a myriad of solid tumours, or cancer indications, be they in the breast, brain or bowel of a patient. In other words WHEREVER they are located.
In Sydney during November 2023 I was lucky enough to sit near two of the founders of the Imugene licensed ONCARYLTICS therapy, Professor Yuman Fong and Saul Priceman, MD. Saul suggested at the time when ONCARLYTICS hit the clinic there was sure to be significant interest from both Big Pharma and large US healthcare investors alike, given the opportunity this novel and unique therapy presented to medical researchers worldwide. The ability to identify, mark and target all or any type of solid tumour with an oncolytic virus has until now been practically unheard of. Whilst successful in treating blood cancers, thus far autologous T cell and allogeneic therapies have been unable to treat solid tumours successfully. This new medical concept opens the door for not only Amgen, but several other players in the field of T cell therapy, and oncology more broadly, to access and enter the lucrative solid tumour market.
Oncarlytics and the IMU share price
So why isn’t Imugene (IMU-ASX), the company that has licensed and is responsible for conducting this ground breaking, potentially game changing paradigm shifting OASIS Trial soaring in value, you may well ask?
Well, I guess that’s a whole other story, that if answered goes to the heart of the general disquiet lurking beneath the surface of many investors in IMU. Many talk of poor communication when it comes to clinical trials, other speak of a lack of commercial outcomes, others of vested as opposed to shareholders best interests being in play. Some even suggest the company bosses Chairman Paul Hopper and CEO and Managing Director Leslie Chong run the company as if its their company, as opposed to one owned by the public. Whatever the situation may be, it does little to dampen both the investor or medical expectations, if not hype, surrounding Imugene’s ongoing OASIS Trial for their ONCARLYTICS platform. The trial commenced in October last year with a monotherapy arm and then ramped up to an intravenous arm in February of this year. Then two months ago patients in the dose escalation trial were administered their first dose of the CF33 CD19 infused virus in combination with Amgen’s Blincyto. Thus far patients with ovarIan, breast cancer and melanoma are believed to have been treated in what is gazetted to be an overall enrolment of 52 patients.
Does the share price even matter if it’s ONCARLYTICS to the rescue?
Given the advent of the OASIS Trial for Oncarlytics can Imugene (IMU-ASX) turn investor sentiment around in the ensuing months one well may ask? Does it really matter what the share price is prior to the ONCARLYTICS results coming to fruition some time later in 2024?
In essence it does unfortunately matter what the prevailing share price of the day is, for that is the benchmark when it comes to assessing a company's market capitalisation and from that future capital raises. Biotechs have historically either sold or “out licensed” their drugs in partnership with others to fund future trials and drug development, or alternatively gone to the open market to obtain future funding.
Taking the former option first, Imugene (IMU-ASX) for whatever reason have been unable to secure upfront or milestone payment payments, agreements or partnerships with any third parties. They have entered into two or three non binding third party collaborations, which have been on more of a research or supply basis, as opposed to being of a commercial nature. It’s worth noting I myself have at times been critical of this inactivity, suggesting it would have been both logical and indeed more transparent to out source their M&A and corporate activities to third party firms in the US who specialise in healthcare M&A activities, but at the time have been met by disagreement from many. In taking the second option, that being to raise money on the public market to fund their future during the pre revenue stage, listed companies are in fact heavily dependant on the prevailing share price of the day. That unfortunately is where Imugene (IMU-ASX0 has run into trouble in fulfilling their business model.
It’s not easy to raise capital at a premium (i.e., higher price) to the existing share price as investors rightly assume, Why can’t I just buy “on market” and attain the same deal? Therefore the company raising the capital for their drug development and business plan is required to add some “sweeteners” for investors, such as cheap options or offers to buy the stock at attractive prices in years to come. Hence the overall shares on offer in the said company increase in a process known as dilution. In essence where you held on average 10 shares in a company prior to the capital raise, you may find you're holding reduced to the equivalent of say 9 shares, after or post the capital raise. So yes, in short the company’s share price does matter. Thats why there is pressure on the Board of Directors in Publicly Listed companies, in particular pre revenue biotech stocks such as Imugene, to ensure they are keeping abreast of share price movements and activity.
Prioritiea and perceptions
Imugene appear to have the science right on the ONCARLYTICS front, with the aforementioned OASIS Trial set to deliver positive outcomes according to the initial prognosis of all involved. Whilst the company's concurrent trial for Vaxinia, CF33’S potent parental oncolytic virus, is performing so well in some indications such as bile duct cancer, that the FDA has granted fast track designation status for the drug. But with limited funding Imugene has sought to prioritise Oncarlytics and Vaxinia over and above some of their existing and long held immunotherapies, including Her Vaxx and PD1 Vaxx, constituents of their B cell therapy platform. Once again shareholder discontent has eventuated with many having initially viewed both Her Vaxx and PD1 Vaxx as safe, low toxic drugs with huge potential in the lucrative Her 2 and PD1 oncology market space, where breast, gastric and lung cancer are running rife. This move together with a perceived lack of communication at board level has confounded the issue leaving many shareholders unclear as to the current direction of the company when it comes to either the IMU share price, their B cell therapy arm, or both.
Aside from communicating effectively and defining a clear commercial pathway forward another way to increase demand for your biotech share during the pre revenue stage is to increase demand for your shares, over an above that of supply. In other words to increase investor engagement and participation in your stock. Communication is a key ingredient to this as hinted above, either through out sourcing media and public relations to professional and experienced organisations who specialise in that field, or through the use of influencers, stock brokers or healthcare analysts who focus on the market segment(s) you are working in. Once again Imugene has chosen, as with their M&A and corporate activities to handle these tasks internally. They have asked the investment community to adopt a “follow the science” or “wait and see” philosophy centred around a “build it and they will come” style approach, whereupon they establish medical platforms, wait for the clinical results for these platforms to eventuate, and in doing so assume investors are sure to come based on the results. The only problem being that when the results for their initial B cell platform did eventuate, and were initially successful, investors and shareholders were left “out on a limb’, or so to spaek. The company's internal M&A, corporate and communications teams failed to materialise anything significant from a commercial perspective for them, leading to a supposed de-prioritisation of these long held assets.
Conclusion
In summary Imugene has licensed brilliant immunotherapies from The City of Hope in California. Therapies that bring with them creative minds capable of tackling what is a huge unmet need facing the overwhelming majority of cancer sufferer's diagnosed each year, those with solid tumours. Despite negotiating their way alongside what is an intensely competitive list of therapies and treatment arms in the field of oncology, Imugene’s existing mark and kill approach possesses the armoury to tackle any type of cancer, whatever the indication. Yet at the same time company executives must be mindful of the share price of the day, and the mindset of those investing with them. It is futile if not counter productive to dismiss IMU investors and shareholders as ‘bed wetters,” not patient or resilient enough to stay the course.
What’s needed
Commercial realities are paramount in the pre revenue stage of any biotech stock, as is constant communication, with a view to keeping shareholders abreast each and every step of the way during clinical trial development. In my opinion taking a “wait and see” or “build it and they shall come” approach as Imugene did during their B Cell development cycle is not going to prove fruitful for them, when it comes to the now prioritised Vaxinia and Oncarlytics platforms they have in play. Investor sentiment, like it or not, must be reinvigorated if future capital raises, commercial outcomes and investor participation are to flourish. Irrespective of the naysayers, negative posts and comments to the contrary, I believe there is much blue sky on the horizon for those who have indeed followed the science, but that in no way abrogates management from the responsibility to learn from the mistakes of the past.
In my opinion taking the public and shareholders with them every step of the way in the clinical development of both Vaxinia and ONCARLYTICS would be a great way to enhance shareholder support, create awareness and encourage investment participation in this exciting new therapy. It may not be commensurate with the Big Pharma protocol many on the IMU management team have been accustomed to, but last time I checked Big Pharma were already on the right side revenue and not facing considerable cash concerns any time soon. Although costly, regular data cuts throughout these prioritised trials including patient dosed data, a summary of the cancer indications treated and subsequent patient outcomes are what is required to stay in front of an investment community with lots of investment options at their fingertips.
Science is simply one part of the equation. If Imugene are to ultimately prove successful they are required to entice investors to buy more of their shares than are sold, and that is something that unlike their outstanding scientific platforms, they need to work on perfecting.
DYOR Seek investment advice as and when required Opinions only
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