Given high expectations and market backdrop, disappointing AIPAC Phase IIb metastatic breast cancer data has hit the stock hard. While the lack of a statistically significant improvement in overall progression free survival ("PFS") compared to chemotherapy alone is a substantial set back, the stock decline would suggest that Eftilagimod alpha ("efti") is dead; not so in our view. Although the current data will not support the hoped for regulatory approval in mBC, patient subgroup responses and other signals should encourage continued development in mBC and mould pivotal Phase 3 design. The data also does not have negative read-over into other programmes such as ICI combinations. Recent encouraging data from the TACTI-002 study in nonsmall cell lung cancer ("NSCLC") and first positive signals in head and neck suggest the drug may extend the benefits of immune checkpoint inhibitors ("ICI"). While the company will need to refinance either through partnering or the capital markets, we see significant unrecognised residual value in the stock, including the licensed programs with GSK and Novartis. We recommend the stock OUTPERFORM at a reduced TP of AUD0.32 (from AUD0.80).
26 Mar 2020
Efti breast trial: Down certainly not out
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Efti breast trial: Down certainly not out
Given high expectations and market backdrop, disappointing AIPAC Phase IIb metastatic breast cancer data has hit the stock hard. While the lack of a statistically significant improvement in overall progression free survival ("PFS") compared to chemotherapy alone is a substantial set back, the stock decline would suggest that Eftilagimod alpha ("efti") is dead; not so in our view. Although the current data will not support the hoped for regulatory approval in mBC, patient subgroup responses and other signals should encourage continued development in mBC and mould pivotal Phase 3 design. The data also does not have negative read-over into other programmes such as ICI combinations. Recent encouraging data from the TACTI-002 study in nonsmall cell lung cancer ("NSCLC") and first positive signals in head and neck suggest the drug may extend the benefits of immune checkpoint inhibitors ("ICI"). While the company will need to refinance either through partnering or the capital markets, we see significant unrecognised residual value in the stock, including the licensed programs with GSK and Novartis. We recommend the stock OUTPERFORM at a reduced TP of AUD0.32 (from AUD0.80).