Biotech Buzz Post No. 6 - IMUC

Imagination is more important than knowledge. For knowledge is limited to all we now know and understand, while imagination embraces the entire world, and all there ever will be to know and understand” – Albert Einstein (1879-1955)

ImmunoCellular Therapeutics (NYSE MKT: IMUC) – Cancer Immunotherapy Version 2.0

Last week when I blogged about Oncolytics Biotech (Nasdaq: ONCY) I described the emerging field of virotherapy for cancer as ‘immunotherapy on the cheap’. It’s immunotherapy because when you attack cancer with viruses specific for cancer cell targets, the lysing of the cells tends to promote a beneficial immune response to the cancer. And it’s ‘on the cheap’ because you don’t have to spend a fortune manipulating each individual patient’s white blood cells. That kind of treatment has been pioneered by the Seattle-based Dendreon (Nasdaq: DEND), which in 2010 gained FDA approval for the first ever cancer immunotherapy, a product called Provenge, indicated for metastatic prostate cancer. Dendreon had a lot of folks excited until the company ran into reimbursement issues – the ~US$93,000 price-tag is considered cost-effective but the process of getting paid in the US had led to reluctance to use the therapy on the part of physicians. The stock has been trending back for a while now, even though in 2012 Dendreon enjoyed US$325m in sales. Mind you, Dendreon is still a big name by Australian standards – the current market capitalisation is US$437m.

Dendreon has another issue to deal with rather than just market pushback, namely, competitor products coming across the horizon. It’s the same in drug development as in any other industry. When you invent and commercialise what looks like a world-beating product, you then need to get moving on a Second Generation that’s a whole lot better and less expensive per unit of utility than the First Generation, or someone else will do it for you. In Dendreon’s case, that someone else is southern California's ImmunoCellular Therapeutics (NYSE MKT: IMUC), from the affluent LA neighbourhood of Calabasas.

As with Dendreon, ImmunoCellular’s approach to cancer immunotherapy is to take from the patient white blood cells responsible for processing and orchestrating an immune response to antigens, exposing those cells to cancer antigens, and then giving back to the patient a large enough numbers of such cells so that his immune system finally recognises the tumour that has hitherto eluded it. The difference between the two companies is in the type of cells and the type of antigens. For Dendreon’s Provenge a single antigen, called prostatic acid phosphatase, is fed to various ‘antigen presenting cells’ (APCs) that, as the name suggests, pass the antigen on to other immune system cells that then act against the cells carrying the antigen. For ImmunoCellular, multiple antigens are fed only to a more specialised class of APCs called the ‘dendritic cells’ (DCs). The result, argues ImmunoCellular, is a much more effective cancer vaccine available at lower cost. ImmunoCellular has chosen DCs that are robust enough to be stored in liquid nitrogen so that there’s no time pressure on administration to the patient. Also, the company has optimised its manufacturing process so that up to 90% of the material that is administered is actual DCs, meaning that the patient only needs to undergo one apheresis procedure to harvest the requisite cells. The comparable figures for Dendreon are 25% active cells in the final mix and three apheresis procedures. Throw in only an 18 hour window before Dendreon’s APCs are toast and ImmunoCellular appears to win this game hands down. Then there’s the price. ImmunoCellular reckons the manufacturing cost and the margins for its product will be not unlike those for monoclonal antibodies, something Dendreon can only dream of.

One thing that makes ImmunoCellular worth paying particular attention to is the cancer stem cell angle. Cancer stem cells are another one of those big trends in cancer therapy that are going to make strides this decade because we now know how to identify, thanks to cell surface markers, many of those notorious rebuilders of tumours after conventional chemo has done its worst. ImmunoCellular’s vaccines make heavy use of antigens specific for cancer stem cells. So, for example, its ICT-121 vaccine targets the cancer stem cell marker CD133, which overexpresses in many cancers including ovarian, breast and pancreatic. I have yet to see much commentary on ImmunoCellular as a cancer stem cell play, but I think the first late stage success for one of its vaccines may prompt may prompt people to join the dots given the recent excitement over Verastam (Nasdaq VSTM), Oncomed (Nasdaq OMED) et. al. and the fact that you can currently buying ImmunoCellular for only US$156m on the NYSE MKT.

That late stage data may not be long in coming. ImmunoCellular’s lead product is ICT-107, a cancer vaccine targeting six antigens and now in a 124-patient randomised, placebo-controlled, double-blind Phase IIb study in patients newly diagnosed with an aggressive brain cancer called glioblastoma. An interim analysis completed in early June after 32 deaths concluded that this trial should go forward, which suggests that things are working as planned. Phase I pointed to some good data ahead. Ordinarily with glioblastoma, which hits 10,000 Americans a year, you live around 15 months from the time of diagnosis. ImmunoCellular’s patients from Phase I enjoyed median overall survival of 38 months. Final data from ImmunoCellular’s Phase IIb, to be reported after 64 deaths, is expected to read out later in 2013. Last month ImmunoCellular’s second product, the aforementioned ICT-121, went to Phase I in recurrent glioblastoma, while a Phase IIa is planned for ICT-140 in recurrent ovarian cancer, where the IND cleared in January.

The curious reader may ask why, if I like virotherapy so much, that I also like this kind of immunotherapy as well. The answer is that we still don’t know much about the kind of anti-cancer immune response that virotherapy would prompt – that’s still being worked out – although we can infer there is one. By contrast we know a lot more about how this kind of cancer vaccine works. And we know that it does work – in its second pivotal Provenge extended the median overall survival of metastatic castrate-resistant prostate cancer patients by around four months, while we’ve seen the strong survival numbers for ICT-107 in glioblastoma. Could be worth checking out in detail. And while you’re at it, take a look an ASX listed company called Prima Biomed (ASX: PRR, Nasdaq: PBMD) currently capitalised at A$106m. Like Dendreon, Prima's CVac product only uses one antigen (MUC1), but, conjugated to a sugar called mannan, that may be enough to get a decent outcome in ovarian cancer, where it’s in Phase III. Also worth doing some homework on.

Stuart Roberts, Australian Life Sciences consultant, with global focus
Nisi Dominus Frustra

+61 (0)447 247 909

sroberts2164@gmail.com

Twitter @Biotech_buzz

About Stuart Roberts. I started as an analyst at the Sydney-based stockbroking firm Southern Cross Equities in April 2001, focused on the Life Sciences sector from February 2002. Southern Cross Equities was acquired by Bell Financial Group in 2008 and I continued at Bell Potter Securities until June 2013. Over the twelve years to 2013 I built a reputation as one of Australia's leading biotech analysts. I am currently consulting to the Australian biotech industry. Before joining Southern Cross Equities I wrote for The Intelligent Investor, probably the most readable investment publication in Australia. I have a Masters Degree in Finance from Finsia. My hobbies are jazz, cinema, US politics and reading patent applications filed by biotechnology and medical device companies.

Previous Australian Biotechnology Buzz posts:
ImmunoCellular Therapeutics (NYSE MKT: IMUC), 27 August 013
Immunomedics (Nasdaq: IMMU), 21 August 2013
Inovio Pharmaceuticals (NYSE MKT: INO), 24 August 2013
Merrimack Pharmcaceuticals (Nasdaq: MACK), 26 August 2013
Oncolytics Biotech (Nasdaq: ONCY),  22 August 2013
Regulus Therapeutics (Nasdaq: RGLS), 23 August 2013

Disclaimer. This is commentary, not investment research. If you buy the stock of any biotech company in Australia, the US or wherever you need to do your own homework, and I mean, do your own homework. I'm not responsible if you lose money.