Chimeric Therapeutics Ltd (ASX:CHM) has made headway on multiple fronts in the past quarter, with material progress visible in its pipeline candidates, according to Diamond Equity Research.
Recently the company announced positive feedback from its pre-IND meeting with the U.S. FDA and the successful completion of viral manufacturing and quality release supporting the initiation of Phase 1 clinical trial for CHM 2101.
Both milestones signify a third candidate in the clinic that will be evaluated in patients with gastrointestinal and neuroendocrine tumors in the proposed phase 1 clinical trial.
The following is an extract from Diamond’s research update note on Chimeric:
Phase 1B Trial of CHM 1101 Approved for Initiation: The company’s first autologous CAR T cell therapy aimed to treat patients with recurrent or progressive glioblastoma is in its final stages of Phase 1A clinical trial. The company has previously reported strong efficacy data from the first two of the four cohorts in the CHM 1101 phase 1A study. Three of the four patients treated in cohort 1 (44 x 106 CLTX CAR T cells) exhibited a stable disease, while two of the three evaluable patients in cohort 2 (88 x 106 CLTX CAR T cells) reported stable disease. The company has completed the dosing in the third cohort with no dose-limiting toxicities, and the fourth dose cohort (440 x 106 CLTX CAR T cells) has been initiated. Furthermore, Chimeric has received ethics approval to initiate a two-part phase 1B multicenter clinical trial in recurrent GBM patients. The multi-site trial will be supported by the participation of the Sarah Cannon Research Institute (SCRI), one of the world's leading oncology research organizations conducting community-based clinical trials. Part A, or the dose confirmation part of the trial, will enroll 3-6 patients and will be a completion of the phase 1 dose-escalation/confirmatory study. The comprehensive initial Phase 1A data readout at the end of 2023 will be a crucial milestone for CHM 1101, potentially supporting further development of the drug. Based on safety and efficacy data from the dose escalation/confirmation cohorts and the optimal dosage, part B of the trial, a dose expansion phase will enroll 12-26 patients assessing multiple efficacy endpoints and safety. The successful completion of the part B dose expansion cohort will be followed by a registration trial in a much larger patient population.
Moving Another Potential Drug Candidate to Clinical Testing: Chimeric Therapeutics has made considerable strides in progressing its diversified pipeline of multiple candidates toward clinical trials. Recently the company announced positive feedback from its pre-IND meeting with the U.S. FDA and the successful completion of viral manufacturing and quality release supporting the initiation of Phase 1 clinical trial for CHM 2101. Both milestones signify a third candidate in the clinic that will be evaluated in patients with gastrointestinal and neuroendocrine tumors in the proposed phase 1 clinical trial. CHM2101, or CDH17 CAR T, is a novel CAR T therapy designed to find and kill CDH17-expressing cancer cells. Preclinical evidence has demonstrated strong anti-tumor properties in eight different types of gastrointestinal cancers with no off-target toxicity. The company’s pre-IND meeting with the FDA provided a clear clinical development pathway for IND submission for CHM 2101. Furthermore, in early March, the company announced the completion of manufacturing and quality release for the CHM 2101 viral vector amidst a challenging market environment and the current shortage of vector manufacturing capacity. These supply chain challenges have significantly delayed multiple other companies’ cell therapy development programs.
Valuation: In the past quarter, the company has made headway on multiple fronts, with material progress visible in its pipeline candidates. With the announcement of the company’s cash flow report, we have made changes to our valuation model, reflecting the updated financial numbers and accounting for potential dilution. The diverse pipeline of the company, the advancements seen in various candidates, and the promising early clinical and pre-clinical data have prompted a reassessment of the company's risk profile since our initiation coverage. Consequently, an adjustment has been made to the discount rate to align with this updated assumption. Furthermore, we have updated the comparable company analysis yielding a valuation of $0.70 per share contingent on successful execution by the company.
Quarterly Cash Flow Update for Q3 2023 and Capital Raise: The operating cash burn for the third quarter of the financial year 2023 was A$3.8 million, 87% of which was incurred for direct research and development expenditure (A$1.23 million) and staff costs (A$2.06 million). The company also received A$3.1 million as government grants and tax incentives during the quarter. Chimeric reported cash and cash equivalents at A$2.83 million for the quarter ended March 2023. The company has received commitments from its board and management to raise A$1.04 million by issuing 22,663,040 shares at A$0.046 per share. Additionally, the company has also launched a share purchase plan (SPP) to raise an additional A$5.25 million. The combined A$6.29 million raise when completed will add approximately 153 million shares to the total shares outstanding. It should also be noted that the company, in the recent ASX filing relating to its SPP offering, stated that it has reduced operating costs, including reduced employment costs, by A$1.7 million and A$2.5 million for the calendar years 2023 and 2024, respectively, further extending its cash runway.
Expanding Patent Portfolio: Chimeric Therapeutics announced an expansion of its patent portfolio for its CLTX CAR technology and other assets. The Indian Patent Office granted a patent covering certain aspects of its CAR technology using CLTX, and the Israel Patent Office issued a notice of allowance for the same. Additionally, the Indian Patent Office issued a patent covering its pre-clinical stage asset CHM 1301.