Imugene has developed a more potent formulation of its therapeutic cancer vaccine, HER-Vaxx, which will be tested in a Phase Ib/II trial in gastric (stomach) cancer in H215. HER-Vaxx could replicate or improve on the combination of two proven therapeutic antibodies, Herceptin and Perjeta (Roche), which significantly improves survival in breast cancer and may do so in gastric cancer. Imugene aims to gain a major pharma deal following Phase II data in the buoyant cancer immunotherapy area.
Imugene recently highlighted previously published preclinical data showing that polyclonal antibodies produced following vaccination with HER-Vaxx were more potent than the marketed monoclonal antibody Herceptin at inhibiting the growth of breast cancer cells. Less than half the dose of HER-Vaxx-stimulated antibodies was required to inhibit cancer cell growth to the same degree as Herceptin.
Imugene has developed a new formulation of HER-Vaxx that uses the vaccine carrier protein CRM197 together with an adjuvant, in place of the virosomes used in previous formulations. This new formulation stimulates faster immune responses and greater antibody production than the original vaccine used in Phase I trials. HER-Vaxx aims to stimulate a strong antibody response targeting normal HER-2 proteins, which are overexpressed in many breast and gastric cancer patients. The new formulation represents an important step towards this challenging goal and is the basis of a patent application that could extend IP protection by 6 years to 2036.
Imugene is on track to initiate a Phase Ib/II gastric cancer trial in H215. The Phase Ib trial will test three different doses of the reformulated HER-Vaxx. The Phase II trial will test the efficacy, safety and immune response of the selected dose in 68 patients from Australia and Europe. The efficacy endpoints of this randomised, placebo-controlled trial will be progression-free survival and overall survival.
Our valuation assumes a 20% likelihood of success for HER-Vaxx and includes a A$25m deal upfront after Phase II (at a 30% probability) and a A$50m Phase III success milestone at a 20% probability. Cash was A$2.6m on 31 March 2015, sufficient to initiate the Phase Ib/II trial. We estimate that A$5m of further funding will be needed to complete the trial. We calculate that our NPV would increase to ~A$66m (5.1c/share) if the formulation patent is granted and extends IP to 2036.