Cancer Immunotherapies Heating Up

The market for cancer immunotherapies – drugs that stimulate patients’ own immune system to combat cancer – appears to be heating up. Last April, the FDA approved Dendreon’s (NASDAQ:DNDN) Provenge for prostate cancer, making it the first cancer immunotherapy ever approved. Analysts forecasted that Provenge sales could be more than $1B a year, and the company’s market cap shot up from about $600M to now over $5B. Despite some controversy, the FDA has clearly shown that it is open to immunotherapy as a viable treatment for cancer.

On January 24th, Amgen (NASDAQ:AMGN) endorsed another novel cancer immunotherapy announcing the acquisition of privately-held BioVex. Amgen agreed to pay $1B for BioVex ($425M upfront and additional payments of up to $575M depending on regulatory and sales milestones). AMGN is acquiring BioVex based on promising Phase II study results of lead product, OncoVex GM-CSF, a genetically engineered herpes simplex virus type 1 (HSV-1). In 50 patients with either stage IIIc (10/50) or stage IV (40/50) melanoma showed an overall response rate of 26%. Eight patients had complete responses where disease was completely eliminated, while five had partial responses, where there was greater than 30% reduction in disease. Duration of response was greater than six months in 12 of the 13 responders. Although not a primary endpoint, overall survival (OS) was 58% at one year and 52% at two years, compared to a historical one-year OS rate of about 26%. Overall median survival was greater than 16 months. OncoVex GM-CSF was well tolerated with the most common adverse events being mild influenza-like symptoms. Although investigators were concerned about possible encephalitis caused by injection of HSV-1 into the brain, none was observed in clinical trials.

OncoVex GM-CSF is currently in Phase III studies for metastatic melanoma and head and neck cancer. The melanoma trial is a controlled, open label, randomized study with approximately 430 patients with unresectable stage IIIb, IIIc, and IV disease, comparing OncoVex GM-CSF against GM-CSF alone. The primary endpoint is the rate of complete or partial response lasting for six or mor months. Results are expected mid-2012. The head and neck cancer trial is a controlled, open label, randomized study with over 525 untreated patients with locally advanced squamous cell carcinoma of the head and neck. The study is comparing OncoVex GM-CSF in combination with chemoradiation vs. chemoradiation alone. The primary endpoint is two-year event free survival. Study results aren’t expected until the end of 2017.

OncoVex GM-CSF is genetically engineered so that when injected directly into tumors, it selectively replicates in and kills cancer cells. Deletion of the ICP34.5 gene allows for viral replication in rapidly dividing cells, while normal cells are left alone. Deletion of the ICP47 gene allows the virus to be detected by the immune system, thereby limiting broad infection. OncoVex also induces an immune response to attack cancer cells by stimulating dendritic cells via GM-CSF expression. Thus, not only do tumors injected with OncoVex GM-CSF shrink, but tumors that spread throughout the body and were not injected also shrank. Unfortunately, OncoVex GM-CSF is currently limited to inoperable tumors, and direct injection into tumors sometimes requires ultrasound guidance. Also, it’s unclear whether OncoVex GMC-CSF can be effective in non-solid tumors, like as leukemia and lymphoma, since injection is required. Dendreon’s Provenge also uses GM-CSF to stimulate patients’ immune response but is administered more conveniently via intravenous infusion and can theoretically be used to treat blood cancers.

Although some analysts considered the acquisition risky, the BioVex deal makes a lot of sense strategically considering AMGN’s fairly thin pipeline and large cash position. The company should be able to leverage its clinical development, regulatory, and marketing expertise to enhance the success of OncoVex GM-CSF. AMGN now has access to an innovative oncolytic virus technology platform that can be potentially used to treat other solid tumors.

Immunocellular Therapeutics (IMUC.OB) is starting to attract attention with its cancer vaccine technology. Results from a non-controlled Phase I study in patients treated with lead product, ICT-107 vaccine, for glioblastoma multiforme (GBM), an aggressive form of brain cancer with few treatment options, were extremely promising. In sixteen newly diagnosed GBM patients receiving ICT-107 in combination with standard of care (including surgery, radiation, and chemotherapy with temozolomide), one-year OS was 100% and two-year OS was 80%. For comparison, the one-year OS rate for current standard treatment alone is historically 61% and two-year survival is 27%. The median progression-free survival (PFS) was 16.9 months vs. the historical median PFS of 6.9 months with standard treatment. Safety data for ICT-107 also compared well to current standard of care: no serious adverse events were reported and minor side effects included only fatigue, skin rash, and pruritis.

IMUC recently launched a Phase II randomized, controlled, double-blind, multicenter study for ICT-107 in patients with newly diagnosed GBM. Enrollment is planned for 200 patients. The primary outcome will be both OS and PFS comparing ICT-107 in combination with chemotherapy and radiation vs. chemotherapy and radiation alone. Although results from the Phase II study will not be available until late 2013, an interim analysis should occur much sooner. If the interim data looks good, IMUC will likely be receiving calls from strategic partners, such as Pfizer (PFE) or GlaxoSmithKline (GSK), who are rich with cash but struggling with thinning pipelines. IMUC’s technology is unique and should complement any strategic partner’s oncology portfolio.

Similar to DNDN’s Provenge, ICT-107 utilizes patients’ own dendritic cells to illicit an immune response to target cancer cells. However, instead of infusing dendritic cells with a single antigen (PAP) commonly found on prostate cancer cells, IMUC uses six antigens that target cancer stem cells in addition to regular cancer cells. Cancer stem cells are thought to play a role in relapse and metastasis, so targeting such cells should improve patient survival and quality of life. The antigens used in ICT-107 are highly expressed in GBM cells, but also other cancers, such as breast, melanoma, pancreatic, and colon. Thus, IMUC’s technology can eventually be used to treat a number of solid tumors, as well as hematological cancers. The company is actively pursuing recurrent GBM and ovarian cancer as the next clinical trials to be started over the next twelve months.

IMUC has raised less than $15M so far making it quite capital efficient in its development path. Its lead product, ICT-107, is still a bit early in development, but at a market cap of only about $40M (a relatively reasonable valuation) and with the success of cancer immunotherapy companies, e.g. Dendreon and Biovex, investors are beginning to realize the huge potential of IMUC’s cancer vaccine technology, which may have a broader utility than other immunotherapy platforms.

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Mark Richards

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UPN

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