logo-loader

Imugene Limited phase II trial is highly encouraging: Bell Potter Securities

Published: 00:24 08 Dec 2020 EST

Imugene Ltd - Imugene Limited phase II trial is highly encouraging: Bell Potter Securities
The company is well funded with $26 million in cash and additional funding likely from options now deep in the money.

Imugene Limited’s (ASX:IMU) (OTCMKTS:IUGNF) valuation has been increased by Bell Potter after its ongoing randomised Phase 2 study of HER-Vaxx in gastric cancer showed positive overall survival (OS) with a Hazard Ratio of 0.418.

The median OS for patients receiving HER-Vaxx plus chemotherapy was 14.2 months, compared to 8.8 months in patients treated with chemotherapy alone.

Phase 2 data represent a clinical proof-of-concept signal for HER-Vaxx when added to chemotherapy and indicate that B-cell activating immunotherapy vaccines can induce clinically active antibody responses.

Bell Potter has raised its valuation of Imugene to 17 cents from 5 cents and has maintained its buy (speculative) recommendation.

The following is an extract from Bell Potter’s research update:

B Cell Immunotherapy – new kid on the block

Imugene recently announced further interim data from the first 27 patients to reach the first evaluation point in its randomised controlled phase 2 gastric cancer trial investigating the efficacy and safety of its HER-Vaxx (IMU-131) therapy in combination with standard of care chemotherapy. HER-Vaxx is a new class of immunotherapy drug designed to invoke a B cell response in cancers expressing high levels of the HER-2 protein. In the active arm of the study, median overall survival is 14.2 months compared to 8.8 months in the control group with the hazard ratio of 41.2%. Not surprisingly there have been fewer deaths in the active arm of the study with the longest HER-Vaxx treated patient remaining on therapy and progression free 16.3 months after dosing.

HER-2 is a well known and validated cancer target particularly in breast cancer where the Roche Genentech drugs Herceptin and Perjeta in conjunction with chemotherapy are the standard of care. Nevertheless bio-similars for Herceptin are now available in both the US and Europe, hence the timing of this new data is favourable. The data will allow IMU to conduct meaningful discussions with potential development partners in a range of new combinations across a range of cancer indications.

The phase 2 trial is not yet completed with a further 5 patients required, however, based on the efficacy data to date, the independent data monitoring committee has seen fit to recommend a reduction in patient numbers from 68 to 34. In other words the IDMC deems it unethical to continue to treat patients on the standard of care.

Investment View: Retain Buy (Speculative)

The stock has provided a 300% TSR since our initiation in May 2020. The data from this phase II trial is highly encouraging, however, a great deal more clinical trial work is required. The company now has two clinical stage assets with a third to follow shortly. Further clinical updates and news flow are likely in 2021. The company is well funded with $26m in cash and additional funding likely from options now deep in the money. Valuation is raised to $0.17 and we maintain our Buy (Speculative) recommendation.

Imugene with Proactive at ASX Small and Mid Cap Conference

Imugene Ltd (ASX:IMU, OTC:IUGNF) CEO and managing director Leslie Chong chats with Proactive's Jonathan Jackson live from the ASX Small and Mid Cap Conference in March 2024. The biotech stock is a clinical-stage immuno-oncology company that's developing a range of new and novel immunotherapies...

1 day, 12 hours ago