Are we swimming yet?
Leslie Chong, Imugene CEO and Managing Director’s mantra is “follow the science’. She is of the belief science can help her innovative biotech Imugene (IMU), swim her to the other side, wherein she can enjoy the success of her former employer Genentech, a large biotech with a market capitalisation of $100bn USD, before she left to head up Imugene. But let’s swim to that $100bn USD market cap later in this article. For now all we need to know is that Leslie’s science is that of immunotherapy and immuno-oncology. Immuno-oncology can be broadly defined as those treatments that utilize the body’s immune system to fight cancer from within. Combination therapies in this field continue to yield encouraging results and the development of novel checkpoint inhibitors has led to an increasing number of possible treatments. In this article I seek to canvass some of these immunotherapy treatments by focusing specifically on the most successful of these in todays marketplace, checkpoint inhibitors.
In their newsletter for July 2020, Imugene mentioned the market leaders in this field Merck and Bristol Myers Suibb (BMS). Merck reported FY19 sales of USD 11.1 billion for Keytruda®, while Bristol Myers Squibb (BMS) announced sales of USD 7.2 billion for Opdivo®. In doing so they highlighted that while both these drugs have been approved for public use by the FDA in recent years for many different types of cancer, including lung cancer, toxicity and immune-mediated side effects have been discovered. Imugene went on to stress that the success rates of these drugs are relatively low, with just a proportion of patients responding to the treatment as a monotherapy.
It is worth noting that the pre-clinical studies of Imugene’s PD-1 and Her-2 vaccines have demonstrated both efficacy and a response rate with minimal toxicity. Imugene’s research suggests that PD1-Vaxx holds the potential to prevent lung cancer cells from averting T-Cell recognition and subsequent killing, which then provides the T-Cells with the ability to comprehend cancerous cells and produce an immune system response. According to the company, this concept of tutoring and encouraging the body to produce its own antibodies targeting PD1 expressing cells epitomises a paradigm shift in oncology and is a unique treatment method for cancer.
Before taking a closer look at Imugene’s checkpoint inhibitor, PD1 Vaxx, let us examine the concept of checkpoint inhibitors and review the success of the market leader Keytruda, before considering some of the drugs limitations.
Checkpoint inhibitors are a form of cancer immunotherapy — treatments that stimulate the immune response to cancer cells. Checkpoint inhibitors are not the first form of cancer immunotherapy , but they are, so far, among the most successful, particularly in melanoma. They’re also having a big impact in lung and urinary tract cancers. “Melanoma is the most sensitive type of cancer to checkpoint inhibitors,” says James Larkin, medical oncologist at the Royal Marsden Hospital in London. But no one is sure why. Some patients respond well to checkpoint inhibitors, but others don’t respond at all, for reasons that are also not yet understood.
Checkpoint inhibitors work by preventing tumour cells from hijacking, and therefore avoiding, the cellular immune response that should eliminate them. Their discovery came about in the late 1990s, when two groups of researchers from the United States and Japan uncovered a series of interactions between cell-surface receptors and proteins that led to the death of immune T cells .
T cells are the cells that would normally lead the charge against cancer and other threats. They have a receptor on their surface called PD-1 (programmed cell death protein 1). When that receptor is engaged, it triggers the T cell to rupture — one of the many checkpoints that have evolved to help keep the immune system from over-reacting.
The protein that engages that receptor is PD-L1 (PD ligand 1). It turns out that many human cancers also produce PD-L1, the factor that tumours are using to hijack the checkpoint and engage the T-cell death receptor to stop the response against them.
Examples of checkpoint inhibitors include pembrolizumab (Keytruda), ipilimumab (Yervoy), nivolumab (Opdivo) and atezolizumab (Tecentriq).
Keytruda is the worlds leading immunotherapy drug. The average overall survival duration among Keytruda treated patients is now 26.3 months compared to 14.2 months for those treated with chemotherapy. The 36-month overall survival is 43.7% for Keytruda compared to 24.9% for chemotherapy. The treatment is not without side effects. Most commonly these include, fatigue (lack of energy), side effects related to digestion, such as: abdominal (belly) pain, nausea, diarrhea , constipation , mild skin reactions, such as itching or a rash , fever , reduced appetite, pain in your muscles or bones , cough and shortness of breath. Keytruda’s success comes in part in the treatment of lung cancer, as this type of cancer remains the leading cause of cancer-related deaths worldwide. In the United States, NSCLC accounts for 75–80% of all lung cancers. Progress has been made in recent years using immunotherapy and novel precision cancer medicines.
The FDA’s initial approval of Keytruda (pembrolizumab) immunotherapy was based in part on data from the KEYNOTE-001 clinical trial, which initially showed that Keytruda alone had an overall response rate of nearly 20% among previously treated and treatment-naive patients with advanced NSCLC whose cancers expressed high levels of PD-L1.
By way of background Keytruda (pembrolizumab ) is a cancer medicine that interferes with the growth and spread of cancer cells in the body.
Keytruda is used alone or in combination with other medicines to treat certain types of cancer such as:
Keytruda is often given when the cancer has spread to other parts of the body, or cannot be treated with surgery or radiation, or when other cancer treatments did not work or have stopped working.
Limitations with Keytruda and current immunotherapy treatments
Despite Keytuda and Opdivo’s success there are still numerous hurdles that need to be overcome to make this treatment modality a long-term option for more cancer types. The three main hurdles, or obstacles are the large number of side effects associated with existing treatments, the huge cost for patients taking the treatments, and the cost and time taken to bring future immunotherapy treatments online and into human patients. The monetary cost for patients is often the largest hurdle to overcome with checkpoint inhibitors often having a list price near $150,000 USD a year. In 2017 reuters.com noted a combination of Yervoy and Opdivo, approved by the Food and Drug Administration for advanced or inoperable melanoma, had a cost of $256,000 a year for patients who respond to the treatment. And it’s not just the side effects and cost for patients that is preventing the world of immunotherapy from taking over as the standard of care from chemotherapy, it is the cost of trials. The hundreds of millions of dollars required to take cancer drugs from bench to bedside ostensibly means that ONLY BIG PHARMA CAN AFFORD IT.
immunooncology.com expanded on some of these issues recently in stating that although we have seen great advancements in the development of novel immuno-oncology agents and promising results from clinical trials; a key question remains. How can we expand access to these medicines? Crucial medicines such as pembrolizumab have been pulled from the Cancer Drugs Fund for certain indications.
Yes biosimilars can play a role in making cancer drugs more affordable and allow them to be accessed earlier in the patient care pathway.
Whilst they noted that Clinical trials also need to increase diversity, inclusion and meaningful patient participation to provide a better real-world representation of the drugs.
So what are Imugene proposing to overcome these limitations, and what is their solution to the problems facing patients, who are searching for cost effective cancer drugs with lower side effects? And what can they do to appease regulators in search of cheaper healthcare? Or to reduce cost of bringing drugs to market?
Imugene’s answers to these questions may well lye in the development of their own checkpoint inhibitor, PD1 Vaxx. Let’s review the vaccine and catch up on its progress.
VIDEO
Dana-Farber’s Science Illustrated explains how immunotherapy is used to fight cancer.
PD1 Vaxx - Imugene’s Wonder Drug - Pre Clinical Results
Imugene’s PD1-Vaxx is a B-cell activating immunotherapy designed to treat tumours such as lung cancer by interfering with PD-1/PD-L1 binding and interaction.
This then ultimately produces an anti-cancer effect similar to Keytruda®, Opdivo® and the other immune checkpoint inhibitor monoclonal antibodies that are transforming the treatment of a range of cancers.
Source: OHIO STATE UNIVERSITY WEXNER MEDICAL CENTER
The journal Oncoimmunology
Whilst the study found that PD1-Vaxx was effective in inhibiting tumour growth.
It was even more effective when used in combination with a second therapeutic peptide vaccine, one that targets two sites on the HER-2 receptor on colon cancer cells.
The combination treatment produced complete responses in nine of 10 animals. That vaccine, called B-Vaxx, was developed earlier by the same research team.
"Our study is important for two key reasons," says first author and vaccine developer Pravin T. P. Kaumaya, PhD, a member of the OSUCCC - James Translational Therapeutics Research Program and professor of medicine at The Ohio State College of Medicine.
"First, PD1-Vaxx activates both B- and T-cell functions to promote tumour clearance.
Second, the treatment is targeted to block signalling pathways that are crucial for tumour growth and maintenance.
By giving this vaccine in combination with an immunotherapy drug, we are essentially super-charging and specifically directing the immune system to target and kill cancer cells.”.
Key findings:
PD1-Vaxx outperformed the standard anti-mouse PD-1 antibody (mAb 29F.1A12) in an animal model of HER-2 expressing colon carcinoma; The combination of PD1-Vaxx with combo HER-2 peptide vaccine (B-Vaxx) showed enhanced inhibition of tumour growth in a HER-2-positive colon cancer model; Both the PD-1 and the combined vaccines were safe with no evidence of toxicity or autoimmunity.
"With additional study," Kaumaya says, "we believe PD1-Vaxx will prove to be safer, more effective and have a lower incidence of resistance than checkpoint-blockade antibodies."
This study was supported by grants from the National Institutes of Health (CA84356, CA13508, CA181115), and by Imugene Ltd.
The safety of the vaccine was confirmed in pre-clinical animal studies at OSU and Charles River labs (Ashland, Ohio).
PD1 Vaxx Vaccine Receives IND Approval
In November 2020, the U.S. Food and Drug Administration (FDA) granted investigational new drug (IND) approval to Imugene for clinical testing of the investigational vaccine, known as PD1-Vaxx, an important milestone in the research collaboration between Ohio State and Imugene.
At the time Imugene prepared for the first in human trials of PD1 Vaxx, and Professor Kuamaya and Leslie Chong, Imugene’s CEO, could not hide from their excitement of the prospect.
“Reaching this point where we can transition our findings from the lab to the clinic speaks to the perseverance and dedication of Imugene's clinical and research team -- including our research lab staff at Ohio State -- to build on the clinical and commercial potential," said Kaumaya.
Leslie Chong, said "the multiple commercial, strategic and clinical benefits of our collaboration with the OSU secures our leadership position in the promising B-cell peptide cancer vaccine sector, and in particular PD-1 checkpoint inhibitors, where OSU's pre-clinical work for a Phase I PD-1 clinical trial was pivotal to our FDA IND approval."
"This collaborative research with Imugene has closely paralleled my personal work over the past two decades, and together we form a strong team driving multiple combination immunotherapy drugs through the clinic targeting lung, breast, gastric and other cancer targets.
This collaborative venture with Imugene supports the rapid development to achieving a potential cure for several important cancer targets.”
VIDEO
2020 Innovator of the Year Finalist: Pravin Kaumaya
PD1 Vaxx Phase 1 Results
“I am excited to hear the CRC recommended opening the third and final dose cohort based on the outstanding safety and tolerability of PD1-Vaxx reviewed to date,” Principal Investigator Professor Gary Richardson said.
Imugene’s PD1 Vaxx has been so successful in its current 2021 Phase 1 trial the company is planning further clinical trials, with a view to having the vaccine manufactured and marketed worldwide.
In explaining the PD1 Vaxx phase 1 trial Imugene MD & CEO Leslie Chong said “Phase 1 trials are generally designed to look for safety, tolerability and early response signals to determine the optimal dose for further development. The completion of the monotherapy component of our Phase 1 trial will be a milestone for Imugene and clinicians treating Australians faced with the challenges of lung cancer.”
The first-in-human, Phase 1, multi-centre, dose escalation study of PD1-Vaxx is recruiting patients with non-small cell lung cancer. Medical investigators are testing three different doses of PD1-Vaxx. The primary goal of the Phase 1 trial is to determine safety and an optimal biological dose as a monotherapy (mOBD). Efficacy, tolerability and immune response will also be measured. Determination of mOBD will be made by the CRC and requires successive dosing within cohorts of at least three patients each.
Whilst primarily seeking to achieve low toxicity and safety in Phase 1, Clinical results continued to indicate that PD1-Vaxx is showing early signs of an immune response in patients, with antibodies to the target biomarker PD-1 evident in validated assays. Patients in cohorts 1 and 2 of the study had in fact shown tumour stabilisation. And last week in an interview with ‘Seeking Alpha” Leslie Chong spoke of a man in cohort 1 of the trial who is now close to being a full year “cancer free”, having had his initial dose of D1 Vaxx. The man, in his early sixties, who endured so many lines of therapy without halting his tumor growth one iota, arrived at Imugene in last-resort territory, only to leave with scans so clean the radiologist and oncologist who have had to break so much difficult news suddenly have a considerably more pleasant job.
“Can you imagine the joy that this man feels?” Chong marvels. “He gets to go home and tell his family, ‘I don’t have cancer anymore.’ This is when you realize that all the day-to-day work is translating into something more profound.”
Imugene’s PD1 Vaxx has been so successful in its current 2021 Phase 1 trial the company is planning further clinical trials, with a view to having the vaccine manufactured and marketed worldwide.
What does PD1 Vaxx and the vaccines Ph1 results mean for Imugene shareholders?
It would be fair to say that initial PD1 Vaxx results do not lend themselves to the term failure. For both safety and low toxicity have been observed in Ph 1 trial Cohorts 1 and 2. At worst if there is no immune response in Cohort 3 of the trial, attention may well turn to combination trials of the drug, and I believe the outcome would have minimal impact on the IMU share price. Share price momentum is coming from multiple sources at present, including Her Vaxx, CF33 and Oncarlytics partnerships and prospects with CAR T providers. Further to which I believe that even if one were to forget about the initial immune responses exhibited by PD1 Vaxx patients in cohorts 1 and 2 of the existing trial, Imugene’s ongoing efforts on PD1-Vaxx would still retain a two-fold potential. The first as a standalone therapy, given the drugs safety profile and the second as a combination therapy with treatments like Keytruda® and Opdivo®, two of the most financially successful drugs on the market.
Keep in mind there is the added potential to pursue further trials with Imugene’s own Her Vaxx, a B-cell peptide cancer vaccine designed to treat tumors that over-express the HER-2/neu receptor, such as gastric, breast, ovarian, lung and pancreatic cancers. Her Vaxx was shown to be equally as successful as PD1 Vaxx in its Phase 1 trials. For those on the highest dose of Her Vaxx, by day 182 of the trial, their tumors were shown to have either shrunk further or stabilized. In one patient, their tumor had shrunk more than 70 percent since joining the trial. Initial preclinical trials of Her Vaxx when dosed in combination with PD1 Vaxx were encouraging. When PD1 was trialled in mice in combination with Her-vaxx researchers noted “The anti tumor effect of our Her-2/neu vaccine (HerVaxx)62,63 was shown to be potentiated when combined with JT-mPD1.39."
If successful the PD1 Vaxx Phase 1 trial shall serve to validate Imugene’s B cell platform as a whole, and increase the value of their extensive portfolio of peptides acquired from the City of Hope University in the US. No doubt leading to even further interest from Big Pharma, who are madly scrambling around in search of assets and combinations to acquire in the lucrative immunotherapy space. Given the long patent life of both Her Vaxx and PD1 Vaxx, Big Pharma, were they to partner with Imugene, would have a much longer runway than they do with their existing immunotheray IP. And theywould have safe, efficacous drugs with which to combine in order to increase margins and sales of their existing drugs.
With results of Cohort 3 in the PD1 Vaxx trial due any day now, the future looks bright for long term holders of the rapidly exanding biotech IMU. For Cohort 3 has been dosed at a much higher rate than those in Cohorts 1 and 2 of the Phase 1 trial, and the higher dosage rate is already being hailed as the optimal dose by Imugene company executives. Whilst if there are any more stories of men or women returning to their families “cancer free”, Professor Kaumaya may well be bestowed with the title of “Innovator of the decade.” Indeed Imugene’s board could practically write their own cheque if Cohort 3 in the PD1 Vaxx trial exemplifies immune responses even close to those achieved in Cohorts 1 and 2. To have a safe checkpoint inhibitor with next to no side effects, that can be produced at low cost with minimal ongoing treatment requirements is a boon for any patient. But then to add the potential for tumour shrinkage or even eradication, well that’s a paradigm shift in the world of immunotherapy and cancer treatment. PD1 Vaxx could well be the sleeper in Imugene’s burgeoning portfolio that takes the company to another level and well into the grips of the ASX 100 in 2022.
Blue Sky Mining
“I am encouraged that we are seeing positive signals at such an early stage of our PD1-Vaxx phase one trial,” Managing Director and CEO Leslie Chong said.
There is no guarantee PD1 Vaxx is going to shoot the lights out, as the Merck wonder drug Keytruda has. In fact the Cohort 3 results could show reduced levels of safety, increased levels of toxicity and no immune response at all. Let’s face it some Imugene executives have gone quiet of late on PD1 results, much to the satisfaction of shorters of IMU. Professor Kaumaya’s 30 years of research could be frowned upon by the wider medical community, and Imugenes share price could stay exactly where it is, or even retreat as a consequence of poor trial outcomes. No doubt naysayers are praying for a return to 2.24 cents per share in 2022, as opposed to my price target of $2.24, by the end of 2022. It may simply be a case of “What might have been” for Kaumaya and the City of Hope. To the naked eye it would apppear incomprehensible would it not? That Professor Kaumaya , after thirthy years of work for a noble cuase, and Imugene with him, could be cut down and hung out to dry for one bad outing? Perhaps not. A cursory glance over one or two negative comments on these threads, and a look from a distance at some of the random tweets flying into cyberspace brings even the most positive among us to the conclusion that at times the world can be a very unforgiving place. And on that front be careful what you wish for @PilbaraBoy and IMU multi baggers. Before the sun sets on the day after you have finished celebrating your first IMU $1 party, in the not to distant future, every two bit journo, on the take analyst and HC dissident is going to be out on parade, gunning for your scalp.
But enough of the negative, I’m backing Kaumaya and Imugene in. As mentioned earlier Imugene’s PD1 Vaxx has already been successful in the early stages of its current Phase 1 clinical trial. Yes if it is to succeed commercially over the longer term it’s going to need some deep pockets along the way to swim it to the other side. Now am I getting ahead of myself? It could realistically all fall over at the final hurdle and be shelved, like so many other Phase 1 trials before it. I guess we are going to find out within days or weeks of this article going online.
The New York Times noted as far back as February 2019 “Major drug makers are in a race to find their next blockbuster. As the complexity of drugs has increased, though, so has the cost to develop them. That has made buying a biotech company with a promising candidate an increasingly popular way in recent years for the largest pharmaceutical companies to replenish their drug pipeline.”
They said at the time “Competition for the takeover targets, however, has also meant big pharma companies are having to pay high prices. That is being reflected in the premiums being offered in the deals this year. The high premiums are also a result of the battering that biotech stocks took during the market’s downturn in late 2018.
When it acquired Celgene, a cancer-focused biotech, for $81 billion in the largest deal of the year, Bristol-Myers Squibb paid 52 percent more than Celgene’s stock price over the prior month. Eli Lilly paid Loxo Oncology’s shareholders a 74 percent premium this year, and Roche agreed this week to pay a 164 percent premium for a gene therapy company, Spark Therapeutics.”
In October 2021 Merck reported sales of Keytruda, which is on track to become the world's biggest-selling medicine by 2023, rose 22% to $4.53 billion in the quarter, topping analysts' lofty estimates of $4.31 billion. That’s approximately $18 billion dollars per annum. Keytruda’s existing patent is expiring in 2028.
Imugene’s PD1 Vaxx has a patent life to 2037. Big Pharma are currently valuing and paying around 4 times peak sales for leading cancer drugs. That gives them approximately 8 years of margin on peak sales having paid for their initial acquisition. Given successful drugs are moving from clinical trials to manufacturing much faster than previously has been the case, if successful PD1 Vaxx could be in the market by late 2024, or in combination by 2025, giving the licensor, owner or acquirer of the drug a sales runway of the at least 12 years. Assuming PD1 Vaxx is anywhere near as successful as Keytruda, that would put the value of Imugene’s Kaumaya designed peptide vaccine at $72bn USD. The lower cost of the PD1 Vaxx drug would reduce peak sales figures, though this would be somewhat offset by the lower cost of production, and the anticipated rise in inflation over the coming decade(s). Whilst the potential for future PD1 combinations could extend the sales runway even further. Putting that in perspective for some of our local journalists, commentators and erstwhile analysts, (who are notoriously slow at arithmetic), that’s a value knocking on the door of $100bn AUD. With close to 6 bn shares on issue that puts the IMU share price at closer to $16, than .60 cents. Hey, let’s be conservative, say its only two thirds as successful as Keytruda, or peak sales are significantly reduced due to the drugs eventual sales price, how does around $10 a share sound? As they say in the classics, “Stick that in your market cap and swallow it”. Oh and btw, for those fast at arithmetic, this is only the first of Professor Kaumaya’s seven peptide vaccines.
“How are we looking now?”
Ceteris parabis, (or all other things being equal), for those who feed on company market capitalisations (i.e., not mentioning any names), Merck, Keytruda’s owner, has a current market cap of $212 billion USD, or the equivalent of $290 billion AUD. And Keytruda’s time is fast running out. Yes they have potential Covid vaccines and other drugs in the market, obviously, but Keytruda’s performance accounts for a large slice of Merck’s market cap cake. And as much as I like blue sky mining, we do need to take a rain check. PD1 looked Verry Elleegant in the mounting yard, and she’s off to a good start, but it’s a long way to the 3200, or the final post as it were. Particularly with the weight of future trial costs on her back (just ask Incentivise). Big Pharma and companies like Merck and BMS are in the drivers seat when it comes to swimming PD1 Vaxx to the other side, or taking her to the final post, for they are the ones with deep pockets. IMU, with over 100m AUD in the bank can afford a flying fox to take them to the other side, but they are not yet strong enough to swim there on their own. As such I believe the eventual license deal or sale of PD1 Vaxx is going to be struck at a fraction of these figures. Albeit a healthy fraction, if Paul Hopper and long term IMU shareholders have any say in the matter. Let’s leave Jack Irish out of it for now…until the vote that is…
Either way for those obsessed with share price analysis (as I am) irrespective of the PD1 Vaxx Phase 1 trial outcome I am still maintaining my IMU 2022 price target of $2.24 per share (refer previous posts for analysis).I’m more than happy to appear as a bullseye target on the front page of the AFR on New Years Day 2023 if the stock doesn’t reach my 2022 target. And yes I’m more than happy for AFR readers to use the page as fish and chip paper wrapping on Australia Day 2023, whilst enjoying a swim at their favourite beach or listening to the one dayer between India and Australia. (Btw that doesn’t include you @Zior . Save it for later that year when you need it to light a fire up in the bush for your new bride during winter).
Conclusion
The implementation of combination treatments has improved the outcomes for a variety of cancer indications over the past year. Imugene is set to initiate several combination trials for drugs in both their B cell and Oncology platforms. As Professor Kaumaya stated earlier in this article (visa vie YouTube), “combinations are the way of the future”. However, in order to roll out the treatment modality more successfully, Imugene and other immunotherapy companies need to focus on better characterizing tumors, through next-generation sequencing, as well as evaluating their associated side effects and improving patient access to the drugs themselves. Sponsored University and institutional trials are one way to ultimately reduce company and drug costs, with further government funding providing an added bonus. Leslie Chong herself has been lobbying for such a move in recent times. Additionally researchers should also seek to explore investigative approaches to overcome inherent shortcomings, such as those associated with reactivating T-cells and immunogenicity. Perhaps ongoing collaborations between Imugene, Cellularity and now Eureka can be mindful of these industry concerns.
Best of luck in the week ahead for all patients in existing Imugene trials, long term shareholders and the IMU Board, who are no doubt busy preparing for their 2021 AGM later this week. And congratulations to Yuman Fong on presenting an informative and mind blowing performance on his brainchild CF33, in Thursdays Inaugural Imugene “Science Series.” Just to good…
Do your own research. Seek investment advice where necessary
(20min delay)
