Clinical stage immuno-oncology firm headquartered in Australia, Imugene Limited (ASX: IMU) is engaged in the development of a wide range of new treatments that attempt to activate the cancer patients’ immune system to detect and remove tumours. Imugene focuses on targeting B cell peptide vaccines, that try to harness the patient’s immune system to produce polyclonal antibodies, possibly achieving an equivalent or greater effect than the already existing commercialised monoclonal antibody therapies. Imugene’s product pipeline includes multiple immunotherapy B-cell vaccine candidates and an oncolytic virotherapy (CF33) aimed at treating a variety of cancers in combination with standard of care drugs and emerging immunotherapies.
In a recent update on the ASX, the company published its 2019 Annual Report for the year ended 30th June 2019. Let us take a deep dive into the company’s Annual Report via its operational and financial performance:
Imugene’s Operational Performance
During the calendar year, Imugene has made substantial development in its proprietary HER2-positive cancer vaccine, HER-Vaxx. The company’s HER-Vaxx induces a polyclonal antibody response against the HER2/neu receptors, which are popular in gastric cancer and breast cancer.
The company’s management monitored the data collection and enrolment for the Phase 1b/2 clinical trial of its HER-Vaxx during the period. The company completed the Phase 1b gastric cancer study of HER-Vaxx in FY19, meeting all the study endpoints. Imugene reported positive top-line results in patients enrolled for Phase 1b study and commenced Phase 2 trial with dosing of the first patient in March 2019, recruiting patients across centres in Asia and Eastern Europe.
Phase 1b/2 Gastric Cancer Study Design
The company targeted patients with HER-2 positive gastric cancer for HER-Vaxx Phase 1b/2 clinical trial as HER-2 positive gastric cancer patients have less access to the approved therapies. As per the company, this type of disease is harsher than breast cancer, thus offering a considerable market opportunity for HER-Vaxx.
Phase 1b/2 Gastric Cancer Study Design, Source: Company’s Report (30th August 2019)
The Phase 1b trial involved enrolment of up to 18 patients divided into 3 cohorts, that were tested with HER-Vaxx vaccine (or IMU-131) in combination with chemotherapy. The Phase Ib study demonstrated promising results, which are as follows:
Imugene presented robust HER-Vaxx Phase 1b study results at the Annual Meeting of American Association for Cancer Research and American Society of Clinical Oncology in April and June 2019, respectively. Subsequent to the calendar year, the company also presented the Phase 1b study results at the European Society of Medical Oncology World Congress on Gastrointestinal Cancer in Spain. The Phase 1b data continues to be published, submitted and introduced at major cancer conferences across the world.
After meeting all the endpoints from Phase 1b study, the company began the Phase 2 clinical trial that involves enrolment of sixty-eight patients with HER-2 positive metastatic gastric cancer. Under this study, the patients will be randomised into two arms of either standard-of-care chemotherapy only or HER-Vaxx plus standard-of-care chemotherapy.
Imugene is currently working on the Phase 2 clinical trial to further assess HER-Vaxx vaccine for the treatment of HER-2 positive metastatic gastric cancer.
Other Key Developments in FY19
Besides making considerable progress in its HER-Vaxx vaccine, the company experienced the following developments during the calendar year:
Subsequent to the calendar year, the company also informed the market about its intention to acquire 100 per cent of the shares of Vaxinia Pty Ltd and the exclusive licence of oncolytic virus CF33, which was developed at the City of Hope Cancer Centre by Professor Yuman Fong. Completion of the acquisition is subject to a number of customary conditions precedent, and shareholder approval at an Extraordinary General Meeting to be convened shortly.
Imugene’s Financial Performance
Imugene holds a strong financial position in the immunotherapy market, which is currently experiencing significant growth with the use of immunotherapies becoming an important addition to the standard of care in oncology. The company has a healthy balance sheet and is well-financed to progress with its clinical programme.
The company reported a loss of ~AUD 7.77 million, however, it was attributable to a substantial increase in research and clinical trial activities (AUD 7.6 million expenditure) undertaken during the year ended 30 June 2019. On the back of a successful AUD 20.1 million capital raising in July 2018, its net assets improved to AUD 27.29 million during the period from AUD 15.47 million in the prior corresponding period.
Imugene recorded a decent cash & cash equivalent reserve of $19 million as at 30th June 2019 (FY18: AUD 7.8 million), which is strong enough to support its commercial and clinical milestones. An overall increase in receivables for the year reflects the pending receipt of $4,126,679 (2018: $1,867,714) for the research and development tax rebate. Besides this, during FY15-18, the company’s cash and cash equivalent balance has significantly improved and encountered a compound annual growth rate (CAGR) of 76.6%. This shows that the company has a decent liquidity position to meet its short-term obligations.
The chart below demonstrates the trend of Imugene’s Current Ratio between FY14 and FY19:
Imugene has progressed significantly well during the period, backed by its marvellous development strategies and robust product pipeline. Imugene’s operations in the short to medium term will be centred on the continued enrolment of the HER-Vaxx Phase 2 study and the development of oncolytic virus CF33 in a first in human study. The company also aims to establish the FDA IND package for PD1-Vaxx for approval and submission to begin a Phase 1 study with PD1-Vaxx in a first in human study.
Stock Performance: As on 3rd September 2019, IMU is trading at AUD 0.020 on ASX with 3.61 billion outstanding shares. IMU has delivered a YTD return of 16.67 per cent.
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