The boy sat in front of the beach pavillion with his newly acquired handball.
Watch how high it can bounce Dad he said with excitement.
Bloody high the boys father thought to himself, if this time last year is anything to go by.
Thank you to those on this thread for asking me once again to contribute. Apologies for the break in play, I have been otherwise occupied playing beach cricket on the NSW South Coast with my son and relaxing with my head deep in the Bryan Brown novel “Sweet Jimmy”, a must read for any crime buffs or fans of Australian fiction.
Imugene and the ASX 200 inclusion
For those privvy to this thread I must admit to analysing IMU’s inclusion into the ASX 200 ALL WRONG, from a share price perspective. Whilst the price did advance to 49 cents during the closing auction on December 17, I had envisaged it pushing back through 50 at the time. Instead as we now know, the share price went the other way. That said, upon reflection, I do understand IMU is a difficult stock for ASX 200 investors to get their head around at first glance. Even moreso for ASX investors who can’t see past next week, and as a consequence espouse to the age old catchcry the stock has no revenue. I do realise the large ASX 200 mining stocks in which they traditionally invest are much easier to assess based on their existing tenaments, future contracts and production capabilities.
Now Imugene is included in the ASX 200 I appreciate the stock is subject to market vagaries, being influenced more heavily by the fluctuations and volatility that follow. We have witnessed an example of this during the past month, during which US investors have moved away from risk assets to capitalise on increasing treasury yields. Bitcoin and risk centric assets are notably all down 40 percent since November, although all appear now to be stabilising. The market in the US looks to have fully priced in four rate hikes, and there doesn’t look like being any more than that in 2022. Today US Fed Chair Powell looks to have allayed recent equity market fears, causing treasury yields to stabilise. Consumer discretionary's, communications stocks and emerging markets are all rebounding nicely this morning as a result, with a double bottom potentially shaping up.
Like other health care equities locally, Imugene too has been caught in the down draft in recent months, with Australian investors moving in search of value, as opposed to growth or more speculative stocks. We long term holders know IMU does not fit the bill from either an income producing or value stock perspective. However were it listed on the Nasdaq, a different beast to the ASX 200, where healthcare companies and growth stocks abound, it may well have been an entirely different story, when it comes to IMU’s net present value. As noted by me in previous posts the inherent value of the companies oncolytic virus CF33, based on pre clinical trials alone, would surely assume a market capitalisation of close to 2bn USD, given the current value of existing OV’s in that market place. Quite astonishing really, when one considers Imugene’s market capitalisation on the whole does not even equate to anything near 2bn USD. CF33 and Oncarlytics existing partnership arrangements with Celularity and Eureka Therapeutics further enhance the value of CF33, for anyone wishing to research this groundbreaking OV’s value.
Nb. According to Emergen Research, the global oncolytic virus therapies market size was USD 94.7 million in 2020 and is expected to reach USD 609.7 million in 2028 and register a revenue CAGR of 26.2% during the forecast period, 2021-2028.
Imugene’s B cell platform
The ASX200, market fluctuations and Imugene’s Oncolytics platform aside, in my opinion the market has totally under estimated and indeed under valued recent Imugene’s announcements pertaining to their B cell immunotherapy platform. Roth Capitals price target for IMU of 71 cents per share post recent B cell partnership announcements would tend to exemplify this fact. In particular announcements pertaining to Imugene’s PD1 Vaxx and Her Vaxx cancer treatment drugs. I do acknowledge the market, (unlike Roth Capital), is screaming for additional efficacy announcements on both drugs. Though I would note Big Pharma and the worlds leading fund managers aren’t sitting around on the haunches awaiting such announcements. With access to interim trial results for Imugene’s B cell drugs, Big Pharma’s Merck Germany, Pfizer, Merck and Roche have all stepped up to the plate to partner with Imugene. Whilst having performed extensive due diligence earlier in 2021 the world leading international Investment managers Blackrock, Vanguard and State Street, are not sitting around waiting for the ink to dry on trial results. All three have been busy accumulating IMU shares, as Australian fund managers still struggle to get their head around the stock. Needless to say it is a tad easier for the big three, given they are all leading shareholders in one of Imugene’s latest combination partners, Merck.
With that in mind let’s take a closer look as to why they may have invested.
1. PD1 Vaxx
PD1 Vaxx targets one of the largest cancer types in the world, that of non-small-cell lung cancer (NSCLC). GlobalData Healthcare forecasts the adjuvant-eligible population for NSCLC to include up to 55,000 patients in the US this year, of which up to 30% may eventually be assigned to any adjuvant ICI. In ScienceDaily first author and Imugene’s PD1 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 noted of PD1 "Our study is important for two key reasons. First, PD1-Vaxx activates both B- and T-cell functions to promote tumor clearance. Second, the treatment is targeted to block signaling pathways that are crucial for tumor 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."
Last week Imugene announced after aCRC review of monotherapy safety, tolerabilityand biomarker data, the CRCadvised Imugene to proceed tothe combinationphase of clinical development of PD1-Vaxx. At the time 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.I am encouraged thatwe are seeing positive signals at such an early stage of our PD1-Vaxx Phase I trial and we are now progressing to the Phase 1b combination studiesin treatment naïve patients. “Our Phase 1atrial has been open12 months and I’m pleased with both the pace of development and the early responses seen. It’s particularly gratifying to have followed a patientin the trialfor over 12 months where their tumour burden has been reduced to zero”.
2. PD1 Vaxx and Tecentriq
Plans are now being finalised to combine PD1-Vaxx with the Roche/Genentech’s PD-L1 targeting blockbuster ICI atezolizumab (Tecentriq) as first-line in ICI treatment naive patients.
In October 2021 GlobalData Healthcare noted the following when focussing on Roche’s Tecentriq drug, with whom Imugene is combining their PD1 Vaxx drug in further clinical trials:
“Immune checkpoint inhibitors (ICIs) have transformed the treatment of late-stage non-small cell lung cancer (NSCLC). Patients with resectable early-stage (Stage II–IIIa) NSCLC are typically treated by surgery, sometimes followed by adjuvant treatment with chemoradiotherapy, but no ICI had received marketing authorisation in this setting. Now following surgery, US patients with PD-L1 expression on ≥ 1% of tumour cells can be treated with Roche’s Tecentriq (atezolizumab), following a US Food and Drug Administration (FDA) approval based on interim results from the Phase III IMpower010 trial.
The trial’s primary endpoint was disease-free survival (DFS). The evaluable population included 476 patients who were randomised to receive Tecentriq or best supportive care as the control group. In the Tecentriq arm, median DFS was not reached, compared to a DFS of 35.3 months in the control arm (hazard ratio [HR]: 0.66). A subgroup analysis of patients expressing PD-L1 on more than 50% of tumour cells highlighted a DFS difference at a more impressive HR of 0.43.
Previous safety data presented at a satellite American Society of Clinical Oncology meeting showed that Grade 3/4 events occurred in 21.8% of patients receiving Tecentriq versus 11.5% in the control arm. The results of this study suggest that the more than 50% PD-L1 group derives the most benefit from adjuvant Tecentriq, which will undoubtedly affect physicians’ decision to prescribe Tecentriq in patients with PD-L1 expression of 1–50%. The long-term side effects from adjuvant treatment are not well appreciated yet, and more research into cancer-unrelated deaths should follow.”
Roche amassed CHF 58.32 billion ($62.05 billion) revenue in 2020. The PD-L1 inhibitor Tecentriq with whom Imugene is combining represents a key growth engine for Roche, with 2020 sales at CHF 2.74 billion, after an increase of 55% at unchanged exchange rates. The drug achieved several milestones in 2020, including U.S. approvals in newly diagnosed non-small cell lung cancer and for use in combination with Avastin for previously untreated liver cancer.
Toward the conclusion of this YouTube video with 2020 Innovator of the Year Finalist: Pravin Kaumaya, the PD1 Vaxx founder was excited by combinations such as this, where he forecast the most promising results would be found. And as Imugene followers are aware the company is currently embarking on multiple combinations across all their immunotherapy platforms.
3. Her Vaxx, Bavencio and Keytruda
Results of the upcoming Phase 2 combination trials for Imugene’s B cell drug Her Vaxx with Merck Germany, Pfizer, and Merck are all anticipated to be available to the public in this calendar year. Most importantly these results are on patients at earlier stages of cancer progression, than those enrolled in Imugene’s initial B cell clinical trials. The goal of the eventual combination drug owners shall be to proceed to registrational trials, licensing and manufacture of these Herizon drugs, should their Phase 2 trials prove successful. And if the interim Phase 2 results exemplified by Her Vaxx are anything to go by, is it any wonder these Big Pharma partners are keen to progress with Her Vaxx?
In a report to the American Association for Cancer Research (AACR) in 2021, IMU shared details from the first 27 (out of a total of 36) patients who participated in the Her Vaxx Phase 2 clinical trial. They noted the trial evaluated the progress of gastric cancer through standard-of-care chemotherapy with or without HER-Vaxx. Analysis showed that eight of 13 chemotherapy control patients died, compared with only four of the 14 patients who were treated with HER-Vaxx and chemotherapy. Nine chemotherapy-only patients’ disease progressed, compared with six who were receiving HER-Vaxx and chemotherapy.
Whilst if you think Roche’s Tecentriq is a standout in terms of revenue keep in mind the drugs Her Vaxx is combining with, Bavencio and Keytruda, are both on a roll. Bavencio sales doubled during the last year whilst Keytruda Sales Grew 23% to $4.2 Billion in the second quarter of 2021 alone. Her Vaxx adds value to both combination drugs through safety and low toxicity, in addition to patents in South East Asia and beyond, all of which extend out until the mid to late 2030’s.
Where to now for Imugene?
The macro economic environment in the US is sure to cause some headwinds for the ASX 200, and undoubtedly IMU’s share price with it. But let us remind ourselves that despite inflationary pressures, US unemployment figures are at all time lows, with the US economy continuing to grow jobs and GDP strongly into 2022.
Looking at Imugene from a micro perspective, with Her Vaxx Overall survival rates pending, CF33 efficacy results soon to be announced and updates on existing PD1 and B Vaxx trials all expected this quarter, not to mention future Oncarlytics combination trial announcements, the only way is up. As outlined above Her Vaxx combination trial results with Merck and Pfizer are anticipated in mid 2022. With this in mind the market, like Blackrock, Vanguard and State Street before them, is surely not going to wait til the dye is cast on these results. For healthcare analysts are aware of the fact Big Pharma is moving cancer drugs from the clinic to production faster than ever before in 2022. And with US health regulators under Biden crying out for cheaper and more cost effective cancer drugs, fast tracking these safe drugs to market is surely a fait accompli. Put one and one together and you come to the realisation (as these leading US fund managers do), revenue from the Her Vaxx combination drugs i.e., with Avemulab and Keytruda, is closer than one thinks.
Lesley Chong herself hinted at the time of the Her Vaxx combination trial announcements in late 2021 that one of the combination partners would no doubt buy or takeover and proceed with the combination drug(s), should there as anticipated be any sign of efficacy at the completion of their Phase 2 trials. Further to which at the conclusion of her recent interview with Proactive Investors in New York, she did highlight the fact the company is in ongoing partnership discussions at present. To me this presents the opportunity for potential IMU investors waiting on the sidelines to step up to the the plate themselves. With my initial holding at an average of 11 cents, and my most recent holding averaging 51 cents, I myself was more than happy to do so yesterday, with an acquistion of a third parcel of IMU shares at 36 cents. Needless to say I slept well last night as a result. For as an investor I’m looking beyond the Hobart Test Match toward the Easter Bunny’s arrival this year, as I’m sure are many prospective Imugene cancer patients. I don’t think I’ll be able to afford the same IMU parcel for Christmas in July this year, as July’s parcel could at the time cost me much more than yesterday’s windfall.
Happy New Year btw, I’m returning to watch the bounce from the shade of the Pavilion…I can sense the smell of Fomo in the air. It looks like being the first hot IMU day this Summer...
Do your own research, and seek investment advice where necessary.
Remember son to ignore the sea lice and side step the blue bottles for me…and look beyond the waves close to shore toward the horizon, and you’ll have a good summer
(20min delay)
