Change typically doesn't hit the health care industry all at once, but in practically a blink of an eye, cancer immunotherapies -- training the body's immune system to recognize and attack cancer -- are all the rage.
We can certainly point to the American Society of Clinical Oncology meeting in 2013 as the reason this treatment pathway took center stage, with Bristol-Myers Squibb's nivolumab and Merck's lambrolizumab, which both treat advanced types of melanoma, stealing the show. These two experimental therapies are part of an exciting class of PD-1 inhibitors which, in really early-stage studies, delivered stunning overall response rates (ORR). A phase 1 study that combined nivolumab with FDA-approved Yervoy delivered an ORR of 53%, while the optimal dosage of lambrolizumab produced an ORR of 52%.
Yet, the truth of the matter is that there are a number of advancing cancer immunotherapy studies currently under way from the likes of Dendreon (NASDAQOTH: DNDNQ ) , Galena Biopharma (NASDAQ: GALE ) , NewLink Genetics (NASDAQ: NLNK ) , Peregrine Pharmaceuticals (NASDAQ: PPHM ) , and Inovio Pharmaceuticals (NASDAQ: INO ) as well. In other words, cancer immunotherapy studies aren't exclusive to Bristol and Merck.
These companies share one common bond
However, these five immunotherapy-focused companies above do share a bond that extends beyond their research. This bond in question is that they're all relatively small ($1 billion in market value or less) all things considered, and that a majority of their valuation is based on the future success of one or two therapies within their respective pipelines.
Let's have a quick look at each pipeline so you can get a better idea of how much "hope" is really baked into each of their valuations. Keep in mind that my intent is not to pass judgment in a good or bad sense on any of these five immunotherapy-focused companies, but to instead highlight which one or two immunotherapy drug hopefuls could make or break these companies.
Dendreon is really the only established biopharma of the group, with its metastatic prostate cancer immunotherapy Provenge being approved by the FDA in April 2010. Dendreon's therapy works by collecting some of a patients' immune cells (a process known as leukapheresis), exposing those cells to a signature protein from the targeted cancer, and then reinjecting those immune cells so they can target prostate cancer cells. In trials, Provenge was shown to have improved median overall survival by a tad over four months.
Unfortunately for Dendreon, competition in treating metastatic prostate cancer has been increasing at a ferocious pace, and Dendreon didn't exactly handle its product launch very well. Peak sales expectations for its immunotherapy vaccine have fallen from $4.3 billion a few years ago to roughly 10% of that total today, even with its recent European approval. If Dendreon is unable to cut its costs with its second restructuring in as many years, the company's share price may have further downside.
Galena might be the poster child for unbridled hopes and dreams in the biotech sector, with its share price both more than quadrupling and losing more than half of its value in just the past couple of months. There are a number of factors at work here for this volatility, but I'd surmise that the bulk of Galena's hope is built into the success or failure of its cancer immunotherapy NeuVax.
NeuVax is targeted at HER2-negative breast cancer patients (the predominant type of breast cancer) as an adjuvant therapy to help them maintain their disease-free status. Without getting too technical, NeuVax stimulates specific CD8+ cytotoxic T-lymphocytes causing them to recognize and destroy HER2-expressing cancer cells. In the final results from its phase 2 trial, Galena reports that at the 60-month mark, only 5.6% of NeuVax intent-to-treat subgroup of patients had a relapse, while 25.9% of patients in the control arm had a cancer reoccurrence. Overall, this represents a recurrence reduction of 78.4% in the target population and was more than enough to justify its ongoing phase 3 studies of the vaccine. It will still be a while before we have the results from Galena's phase 3 study, but NeuVax certainly has make-or-break potential for Galena.
Unlike Dendreon and Galena, NewLink Genetics really has two products in its HyperAcute immunotherapy platform working side by side to give the company its current $1 billion valuation -- algenpantucel-L in two separate late-stage pancreatic cancer studies and tergenpumatucel-L in relapsed or refractory non-small cell lung cancer (NSCLC).
NewLink's immunotherapy treatments work by modifying existing cancer cell lines to express alpha-gal, a carbohydrate that the human body has a natural immunity to. Once in the body, alpha-gals train the body to recognize these cancer cells and to seek out and destroy them. In early June, NewLink released phase 2 data on tergenpumatucel-L for NSCLC, noting that it delivered median overall survival of 11.3 months and long-term stable disease in eight of 28 evaluable patients.
Just days later, NewLink reported phase 2 data from a resected pancreatic cancer study involving algenpantucel-L, which demonstrated disease-free survival in 62% of patients after one year. The data also showed a median overall survival of 42 months in patients with elevated levels of anti-mesothelin antibodies, which was more than double the median overall survival of patients without elevated levels. NewLink's treatments are therefore very specialized, and based on its $1 billion valuation, hopes for its success run high.
With the exception of Cotara and PGN650, an early-stage tumor imaging agent, Peregrine's entire valuation is based on immunotherapy agent bavituximab which is being tested in both first- and second-line non-small cell lung cancer, liver cancer, and HER2-negative breast cancer, to name a few studies.
Peregrine's bavituximab is unique in that it's a phosphatidylserine (PS)-targeting monoclonal antibody. In easier to understand terms, PS is an immunosuppressive molecule typically found inside healthy cells, but in tumor cells, it's located on the outside of the cell, providing immune response protection. Bavituximab aims to block this immunosuppressive response and allow the body's immune system to recognize and destroy these cancer cells.
No trial is currently more important to Peregrine than its second-line NSCLC study, which is currently in phase 3 trials. Although its phase 2 results were far more complicated than they should have been, the end result was a better-than-doubling in median overall survival to 12.1 months from 5.6 months in the control arm. Bavituximab also delivered a 40% increase in progression-free survival, to 4.2 months from 3.0 months. Without question, this phase 3 study will go a long way to proving or disproving the viability of Peregrine's immunotherapy.
Inovio Pharmaceuticals might be the one exception to the rule, here, since it has four cancer-focused immunotherapies in development in addition to a number of clinical and preclinical HIV and hepatitis-focused vaccines.
Inovio's claim to fame in this space is its SynCon vaccine platform, which utilizes synthetic DNA to target multiple disease antigens and break down whatever immune resistances may exist. The company's SynCon vaccines have thus far been developed to treat cervical dysplasia/cancer, as well as cancers that express hTERT such as breast, lung, and pancreatic cancer.
Despite having a number of existing trials, only one of Inovio's in-house studies has advanced beyond phase 1. However, this vaccine, VGX-3100, demonstrated incredibly promising early-stage immune responses to antigens from the human papillomavirus infection. Early data showed that VGX-3100 was effective at destroying precancerous cervical dysplasias that had been transformed by HPV, meaning it could have early- and later-stage success in treating cervical cancer.
Most cancer immunotherapy stocks have exploded higher recently, but even these aforementioned five companies may have trouble keeping up with this top stock
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.