Biopharmaceutical company Imugene Limited (ASX:IMU) is benefiting from a cash injection and new leadership expertise as trialling for a key product heightens anticipation among market watchers already calling for a three-fold increase in share price.
Trials of Imugene HER-Vaxx therapy for gastric cancer are expected to demonstrate the medical and commercial viability of the company’s strategy as investors contemplate a multi-decade rollout of patenting and royalties related to a strong intellectual property portfolio.
Earlier this year, analyst valuations for Imugene projected share price rises from the current level of A$0.01 to a range of $0.04-$0.05 based on the company’s ability to extend current patents and realise commercial ambitions into the 2030s.
Imugene IP is exclusive until 2030 and granted in all major jurisdictions. The company, however, is now aiming for an extension of these right until 2036.
The macro context for this marketing scheme is underpinned by the prevalence and high death rate of gastric cancer, particularly in Japan, Korea and China.
Immunotherapy to develop vaccines against gastric and breast cancers is considered the hottest area of oncology today thanks to the breakthrough approval last year of the first cancer cell-killing drug for blockading immune checkpoints.
Immune checkpoints are molecules within the immune system which have emerged as increasingly researched targets for treating cancer.
HER-Vaxx trials (on track for an early 2016 start) will explore Imugene’s vaccine on breast cancer by targeting HER-2 receptors on cancer cells. This is a clinically and commercially validated cancer target. The killing of HER-2 receptors results in the host cancer cells stopping their growth and dying.
The trial work could improve Imugene’s case to achieve orphan drug designation from the United States Food and Drug Administration as well as steering development of follow up clinical candidates using the HER-Vaxx technology.
Vote of confidence
Investor support for the program has been most recently evidenced by firm commitments to raise $3 million through a placement of shares priced at $0.0075 each. This includes one free attaching option exercisable at $0.015 and expiring on 31st March 2017 for every two shares subscribed.
The company also plans to issue 2 bonus options for every 15 shares held in the company to shareholders. These have the same terms as the placement options.
The capital raising includes a subscription by non-executive director Otto Buttula for shares amounting to $225,000 and non-executive director Charles Walker for $11,250 worth of shares.
Proceeds will go toward HER-Vaxx trialling and preclinical work on drug combinations.
New specialist expertise
Momentum has also taken the form of an important leadership appointment, with immuno-oncology specialist Leslie Chong taking over the role of chief operating officer.
Chong served previously as senior clinical program lead at Genetech Inc in the U.S., which is widely regarded as one of the world’s most successful biotech companies with a significant oncology franchise including the best-selling breast cancer drug, Herceptin.
In July, the company selected global contract research organisation Simbec-Orion to conduct the upcoming HER-Vaxx gastric cancer human clinical trial.
Analysis
Cancer survival rates have increased dramatically in recent decades, thanks in no small part to serious breakthroughs in immunotherapy.
Imugene's HER-Vaxx trials are targeting the same receptor as the A$6.4 billion breast cancer drug, Herceptin. This establishes HER-Vaxx as a focusing on a commercially validated target.
The $3 million raising and the appointment of Chong reflect strongly on confidence of Imugene’s properties from within both the research and investment communities. Chong’s deep immuno-oncology experience and industry networks are expected to be invaluable as HER-Vaxx development milestones come into focus.
Beyond its HER-Vaxx product holdings, Imugene also owns a drug delivery platform, Linguet, that uses its proprietary technology to improve the efficacy and safety of a diverse number of existing prescription and over the counter medicines.
The platform technology, enables the active ingredient of drugs to be absorbed straight into the bloodstream when placed inside the cheek or under the tongue.
Further product diversification can be found in Imugene’s development of a vitamin D supplement tablet, which melts in the mouth, better known as a “meltlet”. The technology is available for outlicensing to interested parties.
Imugene's validated HER-2 target and a world-class drug development team in Dr Axel Hoos and Professor Ursula Weidermann provides investors with a well credentialled pure-play listed Immuno-oncology stock - once the preserve of big pharma.
There are significant share price catalysts ahead in 2016 for this lightly valued $12M capped stock.
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