Mologen’s pipeline is focused around lead candidate lefitolimod (MGN1703). Patient enrolment for IMPALA, the pivotal Phase III study in metastatic colorectal cancer (mCRC), continues on track and we expect full enrolment by end 2016. Data due in H117 from the IMPULSE Phase II trial in lung cancer could trigger a licensing deal. FY15 net cash of €24.6m should ensure IMPALA patient recruitment by year-end 2016. We have lowered our valuation of Mologen to €337m, or €14.89 per share, on a more protracted market launch timeline across the product portfolio.
Lefitolimod (MGN1703), an innovative DNA-based TLR9 agonist, is currently in four clinical trials. In January Mologen announced preliminary demographic data for the first 200 patients in its most advanced study, the 540-patient Phase III IMPALA trial in mCRC; full patient enrolment is expected by end 2016. Results from lefitolimod’s Phase II IMPULSE trial in small cell lung cancer (SCLC), which completed patient enrolment in 2015, are expected in H117. This could potentially trigger a licensing deal and consequently additional funding options for lefitolimod.
Initial data for the use of lefitolimod to treat HIV patients (TEACH study) have demonstrated that it increases activation of key immune markers. Encouraged by this response, investigators have extended the patient dosing regimen. Dosing has been extended from one to six months; final results are now expected H117.
A combination study of Mologen’s lead candidate lefitolimod with Yervoy (BristolMyers Squibb), an immune checkpoint inhibitor, has been announced. The combination of two immunotherapies has potential synergistic effects on survival. While Yervoy’s safety record is a concern, lefitolimod has previously demonstrated a good safety profile; if this is maintained while increasing efficacy over the monotherapy, lefitolimod’s licensing appeal increases.
We have reduced our valuation of Mologen to €337m (vs €387m) or €14.89/share (vs €17). Our lower valuation is attributed to a change in market launch times across the product portfolio. Our model suggests a cash runway into 2017; we forecast additional illustrative financing of €30m in FY16.
