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Expert Financial Analysis and Reporting

ImmunoCellular Has Plans to Move ICT-107 Forward into Phase 3 Trials; Should It? (IMUC, $1.19 Trading Buy, For Paid Subscribers)

Investment Overview

ImmunoCellular (IMUC) and its dendritic cell cancer vaccine ICT-107 were written off as failures late last year after the phase 2 trial in newly diagnosed glioblastoma failed to reach statistical significance on the endpoint of overall survival. However, failure in a clinical trial does not always mean that the drug is ineffective. Trial design can sometimes result in a trial failure that can be corrected and lead to success in subsequent trials. ImmunoCellular believes that it can take the information gained from the phase 2 trial to design a phase 3 trial which could start in early 2015 that could be the basis for regulatory approval.

The recent experience with Acadia Pharmaceutical’s (ACAD) pimavanserin is an example of this. Its first phase 3 attempt failed and was followed by another phase 3 trial that also failed which caused the stock to drop to $0.67 in November 2011. Then a well-designed phase 3 trial based on knowledge gained from the two previous trials resulted in a successful outcome and the stock is currently trading at $18.52. I would caution that the Acadia example is far from the norm. However, it does show that it is possible to use information gained in a failed trial to design a new trial that goes on to be successful.

There is and should be appropriate investor skepticism when a trial fails. This means that management’s hypothesis for how the drug works in a disease state is wrong and a new hypothesis must be formed. Also, biotechnology managements have so much vested in a developmental drug that they are very reluctant to give up on it because of emotional or financial reasons (they could lose their jobs); they will often perpetuate development of a drug that ultimately is doomed to fail. It is always a hard judgment to make on whether there is a reasonable basis for continuing development of the drug following disappointing trial results.

One important issue for me in considering whether IMUC should pursue a phase 3 trial is that I think the phase 2 trial of ICT-107, was incorrectly presented by previous management as a potential registrational trial. It was suggested that it might even be stopped at an interim analysis for efficacy. As a result, expectations were extremely high that the trial would reach its primary endpoint of overall survival and a BLA would be filed. The trial more properly should have been presented as an exploratory trial that was intended to provide a signal of biological activity and to gather information needed to plan for a phase 3 trial. Had it been represented in this context, investors might well have deemed results as encouraging or successful.

Expectations were unfortunately set exceptionally high. As you will find in this report, there are some encouraging signals that this drug is biologically active. It gave a signal of increase in overall survival; this was a numerical improvement relative to standard of care that was not statistically significant. Importantly, this signal was confirmed by a statistically significant increase in progression free survival. In newly diagnosed glioblastoma multiforme, which is an aggressive cancer, progression free survival correlates very well with survival. While regulatory approval is not possible based on these results, for an exploratory trial the data were encouraging.

The analysis that resulted in the announcement that the trial had failed to reach its endpoint was made in December, 2014. Since that time the data has matured as the number of deaths in the trial has increased from 57 to 69. In addition, the Company has had time to look at other measures in the trial such as immunological data related to the vaccine and effects of the drug in sub-groups in the trial. New data will be presented at the ASCO meeting on June 1, 2014 that could give very important insights into the design of the phase 3 trial.

Management believes that there is sufficient positive data to warrant the conduct of a phase 3 trial. IMUC will meet with the FDA for an end of phase 2 meeting in the summer and with EMA for advice on a phase 3 in the fall. It believes that a phase 3 trial can be started in early 2015.

IMUC is in a very difficult financial condition. It ended the first quarter of 2014 with $25 million of cash and burned through $2.5 million of cash in the first quarter. At this rate, it will end 2014 with $17 to $18 million of cash. The design of a phase 3 trial has not been determined but if it were to be 300 to 500 patients, the cost could be $30 to $50 million and it would probably take four years to complete. IMUC will almost certainly have to raise a significant amount of capital prior to starting a phase 3 trial in early 2015.

Taking into account the amount of money needed to support research and overhead apart from the phase 3 trial, which I estimate as $10+ million per year, the Company will need to raise about $100 million or more to complete the phase 3 trial and get to topline results in 2019. This is a formidable challenge for a Company with a market capitalization of only $70 million.

I think that the strong consensus view of investors is that ICT-107 has failed and any plan of management to do a phase 3 trial would be a hopeless, quixotic adventure that would only waste shareholders money, what little remains. It will be a very difficult challenge for the Company to raise this amount of money or even the money needed to begin a phase 3 or attract a partner to help in the conduct of the trial. There is a very serious financial risk.

Readers may ask why even bother with this high risk situation. I think that it is possible that these extremely low expectations could improve significantly after ASCO and provide a bounce in the stock and this is the reason that I have suggested that the stock could be a good performer through and perhaps after ASCO meeting which ends on June 3. Whether this could then lead to a longer term buy recommendation on my part will be dependent on the ASCO data and the ability to raise capital.

One very important reason that causes me to remain interested is that after years of skepticism, immunologic approaches to cancer has become arguably the most active and promising area for cancer research. Investors are excited and focused on the use of antibodies to checkpoint inhibitors such as Bristol-Myers Squibb’s Yervoy (an antibody to CTLA-4) and Merck and BMY’s anti-PD-1 antibodies. There is growing excitement about other approaches such as T-cell vaccines.

In all of the excitement about immunology, the role of dendritic cell cancer vaccines could begin to be appreciated a as a very promising area for drug development. It has been surprisingly dismissed by investors and not pursued aggressively by big pharma or big bio. However, the dendritic cell is the central player in the body’s response to cancer and I think that it could be a major part of cancer therapy in the future. There is a strong body of thought that the combination of cancer vaccines and checkpoint inhibitors could produce significant synergies.

Realizing that dendritic cells may become very important in this new immunological led thrust into cancer research could restore investor interest in ImmunoCellular which is at the forefront of developing dendritic cell cancer vaccines. Its platform technology and leadership position in manufacturing dendritic cell cancer vaccines could come to be viewed by potential corporate partners and investors as an asset having much greater value than is reflected in the current market capitalization of $70 million.

ASCO Presentation of Phase 2 Data Could Be Very Important

ImmunoCellular announced on April 21 that the phase 2 data for ICT-107 will be presented at the 2014 American Society for Clinical Oncology (ASCO) annual meeting that will be held in Chicago May 30-June 3, 2014. The title of the abstract is "A randomized, double blind, placebo-controlled phase 2 trial of dendritic cell (DC) vaccination with ICT-107 in newly diagnosed glioblastoma (GBM) patients." The abstract will be presented orally at the Central Nervous System Tumors session on Sunday, June 1st at 10:00-10:12 AM CST. The abstract number is 2005.

Oral presentations are reserved for important research findings which mean that ASCO promises to be an important event for ImmunoCellular. They will be prominently featured in this oral presentation and this will provide a valuable opportunity to discuss ICT-107 with key opinion leaders and potential corporate partners.

This paper will go over in more detail the data that was first presented on December 11, 2013. At that time topline data was reported on the basis of 67 deaths in the trial. The average patient time since randomization had been on drug or standard of care for only 14 months. As of December, the median event (death) had not occurred in either the ICT-107 population or the standard of care group.

The Company reported that ICT-107 did not reach statistical significance on the primary endpoint of median overall survival. Still, there was a numerical improvement of two months in the intent to treat population. In the per protocol group which was defined as those who received at least four vaccinations, there was an improvement of three months in overall survival. While this was not statistically significant, there was a meaningful trend that should be taken as a signal of biological activity. Remember that temozolomide was approved on the basis that when it was added to radiation therapy it increased median overall survival by 2.5 months relative to radiation alone.

Statistical significance was achieved for the secondary endpoint of progression free survival as there was an improvement of two months which produced a p value of 0.014. In rapidly growing cancers like glioblastoma, progression free survival is a good predictor of having a meaningful effect on overall survival. This adds weight to the signal seen with overall survival.

ImmunoCellular has been an continues to conduct an in-depth analysis to broaden and deepen their understanding of the phase 2 data. This has allowed them to look at other important outcomes in the trial such as immunological effects and outcomes in sub-groups; these could be extremely important for planning phase 3 trial design. Also, the data is maturing as number of deaths in the trial has increased from 67 to 79 and the time since randomization for the average patient in the trial has increased from 14 to 20 months.

ImmunoCellular has also submitted an abstract to the Society for Neural Oncology (SNO) meeting in November of 2014. The Company will continue to monitor the 45 patients who remain alive and will periodically update results at conferences like ASCO and SNO.

What To Look for at ASCO

The December analysis was focused on overall survival (OS) and progression free survival (PFS). This will be updated for the 12 new deaths that subsequently occurred. There will also be some valuable information on immunological data that had not been analyzed in December.

One immunological assessment will be of dendritic cell activation and resultant markers that correlate with survival. IMUC has identified two hallmark indicators of dendritic cell activation that are statistically predictive of OS in the treated patients. This important finding may inform both manufacturing assay development and phase III trial design.

There will also be an assessment of each patient’s immune response to the vaccination. Blood samples were collected from each patient prior to vaccination and throughout the trial to look for T-cell response to ICT-107 and each of the six antigens present in ICT-107. This should enable IMUC to determine if there is a relationship between OS and the immunological response to ICT-107 as a whole and to each of the six antigens that it displays.

Researchers also have tumor samples that are being analyzed for antigen expression to see how well they match the six antigens present in ICT-107. They want to see how these correlate with overall survival. In 13 patients from the earlier phase 1 who were analyzed, two of these antigens showed a statistically significant correlation with OS (p<0.05) and two showed a trend toward OS (p=0.05 to 0.10). The other two were not correlated.

Analysis of pre-defined sub-groups will also be presented at ASCO. This could allow for the identification of certain sub-groups that would experience more profound treatment effects in a phase 3 trial. However, these groups are small and it would be unrealistic to expect statistical significance in OS and PFS. However, they could provide valuable information for planning the phase 3.

The population that will be studied in phase 3 could be the same types of patients studied in phase 2 or potentially a sub-group which demonstrated very positive outcomes. This remains to be decided. There are two sub-groups that are of particular interest. One is based on the MGMT methylation status of patients. Secondly, because this is an HLA A1/A2 restricted vaccine so they will look at response in the HLA A1 and HLA A2 populations.

MGMT methylation status is the most predictive variable for survival correlating with the use of temozolomide. (I will explain MGMT methylation later.) Studies with standard of care containing temozolomide showed that methylated MGMT patients had a median overall survival of 22 months while unmethylated MGMT patient had much shorter survival of 13 months. Researchers measured MGMT status for 90% to 95% of the patents in the phase 2 trial. It is believed that roughly 1/3 to 1/2 of patients have methylated MGMT.

The overall survival endpoint was not reached in the phase 2 trial, but statistical significance was achieved on the secondary endpoint of progression free survival. This supports the OS signal seen in the trial. IMUC believes that with maturing of the data, there could be an improvement in both overall survival of two months (not statistically significant) and progression free survival of two months (was statistically significant) that was reported in December.

You may ask how the Company could have reported the statistical difference in median overall survival and median progression free survival in December if neither the ICT-107 group nor the control group reached the median patient. The reason is that Kaplan Meiers analysis makes assumptions on future events based on those that have occurred. Hence in December, there was data on 67 deaths and projections were made for 57 deaths that had not yet occurred. The estimates on OS and PFS are very likely to change in the presentation at ASCO. Because immunotherapy seems to be characterized by unusually long survival in some patients, there is a good chance that we could see an improvement in both OS and PFS.

Age and MGMT status were pre-defined sub groups that were built into the statistical plan. In addition to those two groups they looked at HLA, extent of resection, gender and health status. There is a rationale to explain the differences in outcomes in these sub-groups. This is not just cherry picking the data.

The Importance of the MGMT Gene

A class of chemotherapy drugs called alkylating agents, treat cancer by damaging the DNA of cancer cells and blocking their ability to replicate. This is the mode of action of temozolomide which is part of the standard of care for treating newly diagnosed glioblastoma. The MGMT gene encodes a DNA repair enzyme that can block the activity of alkylating agents such as temozolamide.

If the MGMT gene is active, the damage caused by temozolomide is rapidly repaired. In glioblastoma, the MGMT gene may be inactivated due to methylation of its promoter region which controls gene expression. If the MGMT gene is methylated, there is a better response to temozolomide because the tumor has no means to repair the DNA damage. Hence MGMT methylation is a favorable prognostic factor for glioblastoma in the setting of radiation and temozolomide.

The importance of methylated MGMT is shown by looking at trials in which temozolomide was used as part of standard of care in the control group. In this control group, patients with methylated MGMT had OS of about 22 months and the unmethylated MGMT group had OS of 13 months. Methylated MGMT conveys a very significant advantage for survival. About 1/3 to 1/2 of GBM patients have methylated MGMT.

ImmunoCellular recorded the MGMT status of 90% or more of patients in the phase 2 trial of ICT-107. The Company expects that in the 43 patients in the control group (temozolomide plus radiation); there will be a big difference in OS between the methylated and unmethylated MGMT groups. Of great interest will be what the difference is in the 82 patients who received ICT-107 plus radiation and temozolomide. This could be very important in planning the phase 3 trial.

HLA Status May Also Be an Important Marker

Histocompatibility is a term that is used in organ transplantation to describe the ability of a donor’s tissue or organ to be accepted by a recipient (to be matched). There is a group of genes present in all animals called the major histocompatibility complex (MHC); in humans this is referred to as human leukocyte antigens (HLA). The more HLA proteins shared between a donor and recipient, the better the potential outcome of the transplantation.

Human leukocyte antigens are proteins located on the surface of white blood cells and other tissues in the body. Their central role is to recognize the difference from themselves and antigens displayed to immune system from invaders such as bacteria, viruses and parasites and launch an immune response. Differences can trigger an immune response against antigens.

ICT-107 is based on dendritic cells that are taken from the patient’s own body and are recognized as normal or self. They are then loaded with six peptides that are mimics of antigens commonly found in cancer. This makes ICT-107 only compatible with patients with HLA A1 and HLA A2 proteins on their white blood cells. Without this match antibodies will be formed to attack and destroy the dendritic cells of ICT-107.

In the phase 2 trial there were over 200 patients who were screened for the trial but only about 50% were HLA A1/A2 positive. This suggests that about 50% of glioblastoma patients could benefit from ICT-107 (management believes the correct figure is 75%). One of the things that will be of great interest in the analysis of phase 2 results will be if there is a difference in response between HLA A1 and HLA A2 patients.

Regulatory Pathways

The Company plans to have an end of phase 2 meeting with the FDA at the end of summer to discuss the design of a phase 3 trial. In Europe, there will be advice meetings with regulators from the UK, Germany and Netherlands to discuss the possible design of a phase 3. They will be meeting with the EMA in 2H, 2014 to discuss the possible design of a phase 3 trial based on information learned from the phase 2.

The endpoint of the trial will be overall survival. They could start planning the phase 3 trials late this year and begin the trial in early 2014. There might be a reason to delay the start of the phase 3 if they see something in phase 2 that justifies waiting for more data to present to the regulators.

The Pipeline

There are two other dendritic cell vaccines that will be in clinical trials in 2014. ICT-121 targets the cancer stem cell antigen CD-123. It uses the same dendritic cells as ICT-107 but is loaded with this antigen rather than the six that are used in ICT-107. An investigator sponsored trial is enrolling 20 patients with recurrent glioblastoma. Enrollment is expected to complete by 4Q, 2014. There will be four induction vaccinations and then a series of maintenance vaccinations depending on progression. They will be largely looking at OS and PFS.

ICT-140 is a seven antigen vaccine for ovarian cancer that uses the same dendritic cell as ICT-107 and ICT-121. They plan to do a phase 2 trial that will enroll the first patient in 3Q, 2014. The plan is to enroll 40 patients on ICT-140 and 20 on SOC. This is an exploratory trial looking at safety, OS and PFS. The SOC for this disease is watchful waiting.

Patients selected for this trial are difficult to treat ovarian cancer patients who have gone through numerous treatments with a focus on patients with a high probability of recurrence. These include patients who have has large tumors resected and or  have residual tumor, likely to recur. They will only enroll HLA A2 patients in this trial.


The Company had a cash burn of $2.6 million in 1Q, 2014 and ended the quarter with $25 million of cash. The balance of the year could see a comparable cash burn so that the IMUC could end the year with $17 to $18 million.

The phase 3 trial could not start before 2015. The design of the trial has not yet been determined, but a possibility is that it could be 300 to 500 patients and could cost $30 to $50 million and take about four years to complete. This will be dependent on the design of the trial.

They recently have established subsidiaries in Ireland and Bermuda so that they can move intellectual property rights into these lower tax rate domiciles. The Ireland subsidiary also allows them to do clinical trials in the EU and work directly with regulatory agencies.

Business Development

There is great focus on immunotherapy in cancer research that is investigating checkpoint inhibitors, T cell vaccines, dendritic cell vaccines and other products. Many scientists believe that combinations of immune therapies may provide synergies. IMUC is looking for a partner to do combination studies with. The ant-PD-1 antibodies on Merck and Bristol-Myers Squibb are likely to be approved next year and these appear to be strong candidates for combination with ICT-107, ICT-121 and ICT-140.

IMUC believes that it can put together a plan to develop and commercialize ICT-107 on its own in the US, Europe and Canada providing they can raise the needed capital in the public markets. If not, they will have to restrict territories and/or partner with big pharma. Big pharma could bring something to the development of ICT-107 other than capital. They can bring other immunotherapies.

New Manufacturing Process

The company conducted the phase 2 trial without a manufacturing process that could be scaled for phase 3. This was the reason that I thought that even if phase 2 was successful that the Company would not be able to file for approval. They have now completed a manufacturing process that should be in place by June 2014 that can support a phase 3 trial and commercialization of ICT-107 and the two drugs in its research pipeline.




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  1. The market gives no credit to dendritic cells technology partly due to the fact that it’s a living cell technology and partly due to the tragedy of Dendreon. But actually all trial data so far from DNDN, IMUC and NWBO tell us the technology is not delusional or pure luck.

  2. I couldn’t agree with you more. There is certainly a biological effect. I might add that DNDN has a very primitive manufacturing process. They reinfuse a hodgepodge on immune cells in addition to dendritic cells. NWBO has a much superior manufacturing process and IMUC does also.


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