Imugene has agreed to acquire a worldwide exclusive licence for a highly potent, chimeric oncolytic poxvirus known as CF33. The company proposes to progress CF33 into a Phase I safety study in 2020, including a cohort treated with CF33 in combination with a checkpoint inhibitor. This strategy is similar to that pursued by Viralytics, which was acquired by Merck for A$502m in 2018 after conducting studies of its Cavatak oncolytic virus in combination with Merck’s checkpoint inhibitor, Keytruda. The CF33 acquisition strengthens Imugene’s immunooncology pipeline, which is currently focused on B-cell vaccines. As the CF33 deal is a related party transaction and therefore contingent on shareholder approval, we maintain our published valuation of A$159m or 4.4 cents per share.
CF33 is a novel, chimeric oncolytic poxvirus developed at the City of Hope Cancer Center in California, which was deliberately designed to maximise its potency at killing cancer cells. Like other oncolytic viruses in development, CF33 replicates in tumour cells, causing those cells to rupture, as well as triggering the body’s immune system to recognise and attack the cancer cells. Imugene proposes to develop CF33 in combination with checkpoint inhibitors (a strategy sometimes described as pushing on the accelerator while releasing the brakes on the immune response).
CF33 is being in-licensed from a company associated with Imugene’s chairman, Paul Hopper. Approval will be sought at a shareholder meeting (date TBD).
Imugene initiated a randomised Phase II study of its HER-Vaxx B cell vaccine in HER2-positive gastric cancer in March. It also aims to initiate a Phase I study of its PD1-Vaxx PD1 B-cell vaccine in 2020.
As the proposed transaction is contingent on shareholder approval, we have not attempted to place a value on the CF33 programme, so for now we maintain our published forecasts and last published valuation of A$159m or 4.4 cents per share. With cash of A$21m at 31 March 2019, Imugene’s existing clinical programme is funded beyond our FY20 forecast horizon (not including licensing deal costs or trial expenditure for CF33).