When we first arrive at the beach, and look into the distance at the waves off shore, they appear much smaller to the naked eye than actually are. And often it’s not until we enter the surf we realise there is much more in play than we initially envisioned.
I thought it important, keeping in mind its lockdown, the weekend and a time for reflection, to take a deep dive into Imugene and the week that was. To canvass their recent partnership with Celularity in greater detail, and conclude with an analysis of the current share price, a topic at the forefront of many on this thread. However I cast a note of caution to you before you enter the surf, if you’re into a short read, you may need to find another beach.
This week Imugene took a further step into the solid tumour market, through the announcement of a strategic alliance with the Nasdaq based Celularity.
Solid Tumours - what are they and how are they treated?
Solid tumours represent approximatively 90% of adult human cancers. They can develop in many parts of the human body, including the breast, lung, prostate, colon, melanoma, bladder, and kidney. Solid tumours may be benign (not cancer), or malignant (cancer). Different types of solid tumours are named for the type of cells that form them. Examples of solid tumours are sarcomas, carcinomas, and lymphomas. Leukemias (cancers of the blood) generally do not form solid tumours. Solid tumours can also be found in children. The most common types of solid tumours in children include brain tumours, neuroblastoma, rhabdomyosarcoma, Wilms' tumour, and osteosarcoma. Treatment for solid tumours generally combines several types of therapy, which may include surgery, chemotherapy and radiation therapy.
Car T’s and IMU’s CF33 Oncolytic Virus in treating solid tumours - Whats the big deal?
CAR T cells have shown suboptimal efficacy in solid tumours, which as outlined above represent around 90% of all cancers world-wide. One of the major reasons for the limited success of CAR T in solid tumours is the lack of the selective and homogeneous expression of antigens or targets, or in layman’s terms a simple targeting point, on tumour cells. Given the ability of oncolytic viruses (OV’s) like Imugene’s CF33 OV to selectively infect cancer cells, it may be possible to selectively express a unique antigen or target from cancer cells by using an antigen/target-armed CF33 OV, followed by treatment with CAR T cells directed against that antigen or target. A recent study by City of Hope scientists led by Dr. Saul Priceman demonstrated proof-of-principle for such a strategy. Imugene has since licensed this technology.
Our new partner Celularity - Who are they?
This week Imugene entered a strategic partnership with Celularity, a NASDAQ listed biotech from NJ. Celularity is a clinical-stage biotechnology company developing off-the-shelf placental-derived allogeneic cell therapies including genetically modified and unmodified NK cells, engineered T cells including CAR-T cells, and mesenchymal-like adherent stromal cells (ASCs), targeting indications across cancer, immunologic, infectious, and degenerative diseases. The company states their MISSION
is to lead the next evolution in cellular medicine by delivering off-the-shelf allogeneic cellular therapies, at unparalleled scale, quality, and economics. Whilst their vision is to harness the unique biology and ready availability of Placenta. Their CEO Dr Hariri received his MD and Ph.D. degrees from Cornell University, (where he was the recipient of both the Julian R. Rachele Award and the Doctoral Dissertation Award). At Cornell he was a few years behind Dr Yuman Fong, the CF33 founder, whom he reveres as a respected surgeon and leading innovator in the cancer field. Indeed City of Hope, where Fong works states “Dr Yuman Fong has been a pioneer both in the operating room and in the laboratory, crafting new surgical techniques and instruments and creating entirely new modalities of therapy. Especially notable is his track record of launching human clinical trials of genetically modified viruses with the potential to fight cancer.”
IMU and Celularity the partnership — whats it all about?
The cancer vaccines market is projected to register a CAGR of 13.24% during the forecast period, with a revenue of approximately USD 4,825.61 million in 2020 and expected to reach USD 10,175.41 million by 2026. Celularity recognises there is significant unmet global need for allogeneic cellular medicines delivered on-demand, off-the-shelf. They believe the time has arrived for cellular medicines that overcome barriers of scale, quality, and economics. Combining Imugene’s oncolytic virus technology with Celularity’s allogeneic CAR T-cell therapy has the potential to become a novel approach to improve outcomes for patients with solid tumours. By tackling the solid tumour market head on, as Hariri and Fong plan to do, in conjunction with Dr Saul Priceman, assistant professor at the City of Hope, the stakes are high in this meeting of the minds. This represents the Holy Grail of cancer research, as it were. If they can pull this off it shall be “front page news," as Hariri noted in an investor webinar held this week, upon the announcement of their strategic partnership. Whilst Hariri’s track recored in business suggests the outcome could be even more favourable.
Celularity’s CEO Dr Hariri - Who is he?
According to lifescienceleader.com Hariri thinks in terms of systems engineering, in which he was first trained. He used that knowledge base to start his first company. “I invented some surgical instruments that I wound up selling to a large instrument company,” Hariri said. From their he developed the “health bug” as it were, studying medicineUniversity and surgery at Cornell University behind Fong.
It was there at Cornell University, according to life science leader, when working as Professor of surgery in the mid 1990s, that Hariri had his epiphany. “Through research and observation, I became convinced that the placenta was not simply a vascular interface between the maternal and developing fetal system, but that it somehow served as a supply depot for stem cells in embryo and fetogenesis,” he states. He explains that a mother contributes 50 percent of the DNA to the developing foetus. This means the mother is only 50 percent immunologically type-matched to the foetus, yet she carries the foetus and its placenta without rejection for nine months. In a surrogate pregnancy, a mother carries a foetus and its placenta for which she has zero relation for nine months without her immune system recognising either as foreign. Hariri wanted to know how that works. “Did you know that women who have certain autoimmune diseases go into remission during pregnancy? Yet when the pregnancy is over, the mother relapses.” Here’s another interesting fact: About one in every 1,000 pregnant women have some form of cancer. However, the reported incidence of maternal to fetal transmission of cancer is essentially zero. “Why is that?” he asks? “The placenta in a pregnant woman is getting 50 percent of her blood supply, so why isn’t she metastasising like crazy to the foetus?”
The rest for Hariri is history. Having obtained his MD and subsequent PHD Hariri convinced obstetricians into developing a placenta bank which was utilised in stem cell research and eventually resulted into the founding of his first company Lifebank.Lifebank then morphed into Antrogenesis, which was eventually acquired by Celgene, a small, extremely nimble, and very risk-tolerant company at the time. In 2019 after years of growth, he then convinced the board of Celgene to spin it off, at the ripe old figure of $74BN USD, to Bristol Myers Squib, before turning his focus to Celularity. “I thought Celularity would be able to do things faster, cheaper, and better than being part of a parent company,” he explains. “Plus, by Celgene remaining a significant stakeholder, they’d continue to benefit.” For example, the origins of the company’s entry into immuno-oncology originated with the cell therapy division. “Celgene’s first deal with Bluebird, and subsequent deal with Juno, were largely influenced by our expertise,” he adds.
Will the partnership be successful?
Just like the surf, we cannot see the sets rolling in out the back until they are upon us. And according to Hariri they may not arrive for 12 or 18 months, in our summer of 2022. Just to recap Celularity believes through combining Imugene’s oncolytic virus technology with their allogeneic CAR T-cell therapy the strategy has the potential to improve outcomes for patients with solid tumours. And who are we to argue with Dr Hariri, and suggest it won’t?
When commencing on the placenta train back in the Lifebank days “everybody thought I had lost my mind,” Hariri laughed. “Some people thought that if using the placenta for stem cells was such a good idea, why hadn’t some obstetrician thought of it already?” Others argued as to the viability of postpartum placentas. But Hariri viewed things differently. He believed the obstetrician was too busy taking care of the newborn and the mother to be thinking about what was in the biohazard waste bag (where the postpartum placenta typically ended up), and what within the placenta might prove useful in biologic drug development. And 20 years later we now know Hariri was on the whole correct in his assumptions.
Dr Yuman Fong is not one to argue with either. His CF33 oncolytic virus has been equally promising in preclinical trials with mice in all but eradicating tumours with a 90% or greater success rate across multiple cancer lines. And when supercharged with Priceman’s CD 19 IMU shareholders are looking forwarding to blowing solid tumours out of the water altogether. But what shall this all mean for the IMU share price? And what does this mean for Celularity?
How’s the surf?
The surf is getting bigger and bigger as our summer of 2022 approaches. As Phil Taylor, when writing for Fierce Pharma notes “If there was any doubt that the oncology market is set to reach unprecedented heights, FiercePharma’s top 15 list of cancer drugs in 2022 should eliminate it. All told, by 2022, the top 15 cancer drugs are expected to collectively make almost $90 billion in sales. To put that in perspective, that represents about one-fourth of the entire US pharma market in 2014, according to QuintilesIMS data. It’s also bigger than pharma’s haul in Japan or China that year.”
The Her VAXX wave
IMU shareholders have ridden high on these waves for the past 18 months, only to find in recent months the tide taking them further from shore, than they had initially envisioned. Shareholders were anticipating riding in on the wave of Her Vaxx, given the more than encouraging Phase 1 and ongoing Phase 2 trial results for the IMU drug. Her VAXX swims in the same HER 2 surf as Herceptin, Roche’s cancer drug that realised over $7BN in annual sales in 2019. And Her VAXX has been shown in post clinical trials to prolong life and reduce death rates, when compared to the standard of care chemotherapy. In November 2020 the Her VAXX waves were certainly building, given these successful trial results. However recent IMU management deliberations have seen the end date for Her VAXX Phase 2 trial results bumped from progression free survival rates (PFS) to overall survival rates (OSR). Overall survival refers to the fact that the patient has not died from any cause. Thus, in a clinical trial the measure of overall survival would compare the number of patients who had died and the number who had not died. Progression free survival refers to survival without progression of the disease. Imu shareholders had originally bought stock under the assumption that PFS results may come to light as early as August 17, in just over a weeks time. Yet this week Imugene’s CEO Lesley Chong suggested Big Pharma, although interested in Her VAXX, wanted to see the end data (OSR), before asking to hop on the IMU wave.
The PD1 wave
Then in early 2021 IMU shareholders rode the wave of their PD1 Phase 1 trial results. IMU’s PD1 swims in the same surf as Merck’s blockbuster Keytruda drug, which is annualising over 14BN USD in sales. KEYTRUDA is a type of immunotherapy that works by blocking the PD-1 pathway to help prevent cancer cells from hiding. KEYTRUDA helps the immune system do what it was meant to do: detect and fight cancer cells. IMU’s PD1 exhibits similar characteristics to that of KEYTRUDA yet IMU’s PD1 whilst proving to be both safe and efficacious, with less side effects than KEYTRUDA, is cheaper than Keytruda to produce. PD1 Phase1 trial results delivered a complete response (CR), in a patient dosed with the minimal 10 mcg of the drug. Other patients in the first, and then second cohort of the PD1 trial (i.e., at a 50 mcg dosage rate) were seen to have their tumour growth rates stabilise.IMU shareholders then eagerly awaited the dosing of Cohort 3 in the trial, with not 10 mcg, not 50 mcg, but the higher dose rate of 100 mcg, both here and in the US. These cohort 3 results, coming to light 43 days after the final dosing, were expected by IMU shareholders to come in on a July wave. Yet once again the data was pushed back, as IMU took the decision to scrutinise PD1 trial applicants more closely. Screening them to ensure they were appropriate candidates for the trial, taking into consideration their health history, previous drug intake and treatment as well as expected medical response to future PD1 drug combinations. As a consequence shareholders began paddling further and further out toward the waves that all of a sudden appeared to be eluding them. Catching a wave was becoming increasingly difficult for those who preferred staying in the surf, as opposed to going back to work.
Big Wave riders and IMU
Then as late as June 2020 the company suggested in their quarterly review they were managing outgoings with sufficient capital on hand to see out many quarters of clinical trials and ongoing pipeline development. They stated they had shareholders exercising options to add to their cash balance, in addition to R&D grant funding to support their cash needs. Yet alas, again the waves became even more choppy as nervous wave riders heard of a pending capital raise on the horizon. And when news came to light that the new wave riders in the capital raise didn’t have to pay full price to enter the IMU surf, existing surfers became increasingly frustrated. These guys were “dropping in” on the IMU surfers wave unchallenged. To make matters worse, when the new cornerstone investors did arrive as part of the capital raise, IMU’s surf officials failed to disclose who they were, as part of a pre surf agreement made between both parties. The share price started to fall. There were now a lot more people in the surf trying to catch the same wave, on a beach in which many commentators thought there were already too many bodies in play. Full disclosure would have served to elude many of the wave riders fears.For if the IMU wave riders and commentators were cognisant of the fact these were BIG WAVE riders, perhaps the share price may not have dumped as much as it initially did on the news of the capital raise.
And the lack of full disclosure by IMU surf officials appears to have kept further share price advances at bay, following on from the recent IMU Celularity strategic announcement. Both IMU and Celularity share prices have suffered, as wave riders are even more unclear as to which wave to catch. What does this deal mean for IMU? What does it mean for Celularity? Confusion appears to abound. Whilst anyone who can half surf knows the deal is good for both contestants, and the entry price (i.e., costs) for both parties are unchanged, contestants are unsure as to what their share of the overall prize money is going to be. And this uncertainty is no doubt causing mums and dads to leave the surf, sucked up by larger institutions who can wait for the larger waves to roll in from out the back. For these large institutions have wet suits on. Unlike the mums and dads who hold IMU, they can handle the cold water. And unlike the existing IMU mums and dads, they are already at work. They have time to wait for the larger sets to roll in.
The IMU share price - where to now?
It’s understandable that recent volatility in the IMU share price has resulted from the IMU’s board decision to steer clear of market sensitive data. ASIC, regulatory authorities, the AFR and other participants are lerking in the surf waiting to feast on the carcasses of unruly officials and surfers who they find to be breaking the rules. Yet perhaps it’s time for IMU to draw a line in the sand. To allay surfer fears by announcing the current standing in the contest. To keep them abreast of anticipated Her Vaxx endpoints. To let everyone know the state of play with PD1 cohorts 1 and 2. “At this point in time, with no reflection on ultimate trial results, this is where we stand”.
Perhaps it’s time for the new a Imugene Chief Business Officer (CBO) Monil Shah to step up to the plate and take some of the public pressure of Lesley Chong. To in the future disclose the details of registry shareholders,such as those participating in an IMU capital raise. To announce the commercial realities surrounding licensing deals and partnerships such as the recent commercial collaboration with Celularity. There is no doubt other CAR T owners shall be knocking on IMU’s door to team up with Fong and Priceman, in order to take advanatge of their City of Hope research. Three or four are probably already waxing their boards waiting to enter the surf. The prize money is high and the surfing combinations endless. And all this can only lead to greater rewards for the experienced IMU team. Kaumaya, Fong, Hoos and Priceman may well be the Mark Richards and Kelly Slaters of future world championships. Remember people thought Richards was crazy surfing a twin fin off Waimea Bay and Sunset Beach. Just as they thought Hariri was crazy for working with placenta in a quest to take on the cancer market.
Yet for mine I’d back the IMU professionals. Their encouraging trial results have thus far mirrored preclinical test results. Unlike their recent media coverage, there is no smoke and mirrors in the Phase 1 and Phase 2 trial results. And I’m confident Big Pharma won’t wait until Summer 2022 to have a crack at the prize money. Unlike some commentators they know there are already enough participants in the Her VAXX trial to reach a conclusion on who the final winner shall be. FDA approval is a fete accompli for the future Her VAXX owners. Whilst PD1 has already shown its true colours. If it can perform in small waves then on a bigger board it is sure to handle the larger ones.
And now it’s just a matter of holding on for the dosing of the first patient with IMU’s CF33 virus. That’s going to increase the prize money even further. Thereafter we only have to wait 28 days for the result of that contest. I can’t wait. In early October I might even be able to afford a board worth twice as much as the one I have now. Not that I’ll be selling any IMU shares to buy it. By then they may well be double the price they are now, but that’s far too cheap given everything IMU have in their pipeline.
(20min delay)
