MOLOGEN has announced that its pivotal Phase III IMPALA trial testing lefitolimod as a maintenance therapy in patients with metastatic colorectal cancer (mCRC) has missed its primary endpoint of overall survival (OS). As a result, we have removed from our valuation lefitolimod’s prospects as a monotherapy in mCRC and small cell lung cancer (SCLC) (previously 72% of our valuation). MOLOGEN will focus on the development of lefitolimod and EnanDIM in combination with other therapies. Recently announced restructuring measures should reduce monthly cash burn to €0.8m from the current rate of €1.4m. We note gross cash as of 30 June 2019 was €6.0m, which should enable funding into Q419. We value MOLOGEN at €50.4m (€4.1/share) vs €169m (€18.2/share) previously.
549 patients were enrolled in the two-arm, randomised pivotal Phase III trial for the maintenance treatment of mCRC patients. The primary endpoint of a statistically significant increase in overall survival was not met. Patients in the lefitolimod group demonstrated a median OS of 22.0 months compared with 21.9 months in the control group with a hazard ratio of 1.12 (95% CI: 0.91–1.38). MOLOGEN now plans to focus on combinations for lefitolimod and its early-stage EnanDIM assets. An ongoing trial is testing Yervoy (BMY – CTLA-4 antibody) and lefitolimod in patients with solid tumours, while the TITAN study (funded by Gilead) in HIV patients testing lefitolimod in combination with novel antibodies is expected to begin shortly. MOLOGEN also expects to start an anti-PD1 combination study soon with its partner, Oncologie, in the near term if funding is achieved.
The net loss increased to €8.0m versus €4.8m in H118, resulting in gross cash at 30 June of €6.0m. In addition, as at the mid-year, MOLOGEN had €6.3m in long-term convertible bond liabilities. At the recent AGM, shareholders agreed a new authorised and conditional capital facility in addition to authorisation to issue new convertible bonds and/or option bonds. We model funding (as illustrative debt) of €10m by the year end to fund operations into 2020
We value MOLOGEN at €50.4m (€4.1/share) vs €169m (€18.2/share) previously, updated for the failure of the IMPALA trial. As a result of this data we have removed lefitolimod’s potential as a monotherapy in CRC and SCLC. In addition, we have rolled forward our model, and updated for FX and the increased number of shares.
