Imugene presented positive clinical Phase Ib data for its HER-Vaxx B-cell vaccine at American Association for Cancer Research (AACR) conference earlier this month. Vaccination successfully broke immune tolerance and stimulated production of HER2-specific antibodies in a dose-dependent fashion; the antibodies inhibited a key component of HER2 signalling. Imugene has initiated a randomised Phase II study of HER-Vaxx in gastric cancer with interim results expected in 2020. It is on track to initiate a Phase I study of KEY-Vaxx, a B-cell vaccine that aims to induce production of antibodies that block PD-1 signalling, in Q419. We increase our valuation to A$159m or 4.4 cents per share.
Imugene’s presentation at the AACR conference showed that its HER-Vaxx B-cell vaccine broke immune tolerance and stimulated production of polyclonal antibodies specific for the self-HER2 molecule in a dose-dependent fashion. The antibodies were shown to be biologically active, inhibiting HER2 phosphorylation, a key step in HER2 signalling. Even though the subjects in the study received standard chemotherapy treatment in addition to HER-Vaxx, in our view it is very encouraging that there was a strong positive correlation between HER2-specific antibody levels and tumour responses in the highest dose cohort.
Imugene initiated a randomised Phase II study of HER-Vaxx in March. Patients with HER2-positive metastatic gastric cancer will be randomised into two arms of either HER-Vaxx plus standard chemotherapy or standard chemotherapy alone. Interim study data are expected in 2020.
The company had a productive pre-IND meeting with the FDA in February and aims to initiate a Phase I study of its KEY-Vaxx PD-1 B-cell vaccine in Q419. KEY-Vaxx aims to produce an anticancer effect similar to immune checkpoint inhibitor such as Keytruda and Opdivo. A successful clinical study of KEY-Vaxx with evidence of efficacy would likely attract considerable interest from potential partners.
We value Imugene at A$159m (vs A$147m) or 4.4 cents/share (vs 4.1 cents/share), including milestones and royalties for HER-Vaxx plus an indicative valuation of KEY-Vaxx. With cash of A$24m at 31 December 2018, it is funded beyond our FY20 forecast horizon.