Imugene Limited (ASX:IMU, OTC:IUGNF) is buoyed by a new research report from Roth Capital Partners after signing a clinical trial supply agreement with Merck KGaA and Pfizer to assess IMU’s peptide immunogen, HER-Vaxx, which has been designed to combat gastric cancers.
The company hopes to evaluate HER-Vaxx's performance in combination with the anti-PD-L1 immune checkpoint inhibitor BAVENCIO, co-commercialised by Merck KGaA and Pfizer, and standard chemotherapy.
Merck KGaA and Pfizer will supply free BAVENCIO to IMU and could potentially take a greater interest in HER-Vaxx if the trial results demonstrate a clear HER-Vaxx benefit in a HER2+ gastric and gastroesophageal adenocarcinoma disease setting.
IMU will fund the entire Phase 2 trial.
These developments have led Roth Capital Partners to place a buy recommendation on IMU.
Price target projections
The success of the HER-Vaxx trials to date has also encouraged Roth Capital Partners to raise its price target to A$0.71 from A$0.62. The current price is A$0.565.
This 12-month price target is based on a discounted cash flow analysis using a 15% discount rate on all cash flows and the terminal value, which is based on multiplying the company’s 2031 projected income of approximately A$1.48 billion by six.
The figure has been arrived at by projecting future revenue from three of its products, including CHECKvacc in TNBC, HER-Vaxx in advanced HER2+ gastric cancer and PD1-Vaxx in NSCLC.
Commercial success outside these financially modelled programs would increase these projections, while risks, such as clinical, regulatory, financing or competitive failure, or high stock price volatility, might put the target in jeopardy.
The analyst has also factored in loss of key management personnel, along with any significant delay of clinical progress caused by, for example, lasting COVID-19 headwinds.
Phase 2 trial
The open-label, multi-centre, randomised Phase 2 trial is taking place in a perioperative setting with pathologic complete response (CR) as its primary endpoint, and secondary endpoints of safety and biomarker evaluation.
The trial is randomised for the presence or absence of BAVENCIO rather than HER-Vaxx, and will draw a stronger conclusion about BAVENCIO's added benefit than that of HER-Vaxx.
That said, larger companies, such as IMU’s partners in this trial, will await the results with interest – particularly if there is a positive outcome for the triple combination therapy arm. The company hopes this will increase interest in its work.
Results from previous trial
Results from Phase 1b/2 are promising for gastric cancer.
Earlier this year, in a report to the American Association for Cancer Research (AACR), IMU shared details from the first 27 (out of a total of 36) patients who participated. The trial consisted of evaluating 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.
Safety in both treatment groups was highly similar, which demonstrates that HER-Vaxx does not add appreciable toxicity to chemotherapy.
In terms of adverse cardiovascular events, two patients in each treatment group had an asymptomatic left ventricular ejection fraction (LVEF) drop, with none of them below an LVEF of 50.
By week six, HER2-antibodies were detected in the HER-Vaxx-plus-chemotherapy group and remained high throughout HER-Vaxx treatment.
After the AACR report, IMU reported additional HER-Vaxx trial information in early September, including that 24 patients had achieved a PFS, or progression-free survival, event - meaning that their cancer did not get worse.
IMU is waiting for sufficient data to draw conclusions, which it expects in the next four months, but this is a highly informative endpoint. The company believes it can achieve statistical significance in a larger trial.
About Imugene
The clinical stage immuno-oncology company is developing HER-Vaxx as part of a range of immunotherapies that seek to treat and eradicate malignant tumours by harnessing the body’s immune system.
The hope is that this approach will have greater success than synthetically manufactured monoclonal antibody treatment and other immunotherapies.
On the horizon are multiple immunotherapy B-cell vaccine candidates and an oncolytic virotherapy (CF33) targeting a variety of cancers, in combination with standard of care drugs and emerging immunotherapies such as CAR T’s for solid tumors.
The company sports a leading team of international cancer experts with extensive experience in developing new cancer therapies and its stated aim is to transform and improve the treatment of cancer and the lives of the millions of patients who need effective treatments.
Imugene is well funded and resourced to deliver on its commercial and clinical milestones.
Imugene hopes its immuno-oncology therapies will become foundation treatments for cancer. Its business goal is to ensure that shareholders remain at the centre of this rapidly growing global market.