By Stone Fox Capital Advisors
As with any treatments dealing with cancer, opportunity exists to drastically improve the survival rates and, as importantly, reduce the side effects caused by surgery and chemotherapy. Several drugs are in different phases of development that focus on a therapeutic approach of using local injections to produce a systemic effect. The products include T-Vec by Amgen (NASDAQ:AMGN), ImmunoPulse by OncoSec Medical Inc. (OTCMKTS:ONCS), and Allovectin-7 by Vical Incorporated (NASDAQ:VICL).
While all of these drugs promise to fight cancerous tumors and reduce side effects, a large difference exists between the impacts the approvals of these therapies will have on the corresponding stocks.
The company is a massive biotech with almost unlimited resources. On June 1st, it announced the results from a pivotal Phase III trial evaluating talimogene laherparepvec or T-Vec in patients with unresected Stage IIIB, IIIC or IV melanoma compared to GM-CSF. T-Vec is an investigational oncolytic immunotherapy designed to work in causing local lytic destruction of tumors while also stimulating a systemic anti-tumor immune response.
The study met its primary endpoint of durable response rate [DDR], defined as the rate of complete or partial response lasting for at least six months. The DRR was highest amongst patients with Stage III where the observed DRR for T-VEC was 33% while the GM-CSF was not higher than 4% in any of the stage subsets. The results for Stage IV were encouraging, but not as impressive.
Serious adverse events occurred in 26% of the patients versus only 13% of GM-CSF patients. At a market cap of $76B and revenue of over $17B, T-VEC would have to be a multi-billion dollar therapy in order to move the needle for Amgen.
OncoSec Medical’s ImmunoPulse
OncoSec might be a small biotech stock, yet it has a couple of offerings that could lead to breakthroughs in cancer treatment and, as importantly, a reduction in the drastic side effects involved with the standard treatment of chemotherapy.
It is developing its advanced stage ImmunoPulse DNA-based immunotherapy and NeoPulse therapy to treat solid tumors. The therapy treatments provide a less invasive and less expensive option to currently available cancer treatments such as surgery or systemic chemotherapy.
Back in March, the company released an update on the Phase II study of ImmunoPulse in metastatic melanoma patients. The study includes patients with Stage III or IV cutaneous and in-transit metastatic melanoma enrolled to assess local and distant objective response, following treatment of cutaneous melanoma lesions with DNA IL-12 and electroporation, with primary endpoint of 24 weeks. One treatment cycle will consist of three treatments applied to up to four lesions on days 1, 5 and 8.
The initial results are encouraging with 68% and 45% of treated lesions demonstrated a durable response at three and six months, respectively. While the patient data remains limited, the results are still very encouraging. The company recently announced complete enrollment in the Phase II melanoma trial, with final analysis anticipated as early as Q4 2013. The final data announcement will be highly watched should be a solid catalyst, if results are close to matching previous findings.
OncoSec is currently undergoing other Phase II trials using ImmunoPulse including Merkel cell carcinoma with enrollment initiated on February 13th, 2012, and cutaneous t cell lymphoma initiated on July 19th, 2012. The company also has the NeoPulse therapy that focuses more on advancing the treatment of chemotherapy with limited side effects. The goal is to utilize a partner for this therapy as the company lacks the resources to move forward with testing on both products.
Fellow contributor Smith on Stocks has an exhaustive review of the stock for those interested in a more thorough understanding of OncoSec. The stock is considerably smaller providing for a high risk, high reward profile. The encouraging results are only tempered by the limited resources of the company.
Allovectin is a first-class DNA-based immunotherapeutic designed to stimulate both innate and adaptive immune responses in local tumors and distal metastases. The goal is to become a first-line treatment for Stage III and IV melanoma, where it is intended to provide improved efficacy, a better safety profile, and simple outpatient administration.
As last reported, the company is approaching completion of a Phase III registration trial versus chemotherapy in patients with metastatic melanoma. The reporting of end results has had numerous delays, but the results are now expected by Q3.
Outside of Allovectin, Vical has ten clinical trials ongoing, three of those independent and the rest in collaboration. Clearly, Vical is not totally dependent on this immunotherapy though it is the most advanced independent program in the company’s pipeline.
Vical has a market cap of $257M, so clearly a homerun therapy could send the stock soaring.
Regardless of the success of these therapies, the noticeable difference in the impact on the stocks is very pronounced. Amgen might not see a meaningful gain if T-Vec is a successful therapy. Vical would most definitely benefit from positive results for Allovectin considering a market cap of $257M, but the company also benefits from a robust pipeline. OncoSec would substantially benefit from positive results from ImmunoPulse considering it is the only therapy the company is funding with the limited resources.