Cellular medicines have finally begun to demonstrate their potential in the real world after decades of promise in the lab. The U.S. Food and Drug Administration (FDA) approved the first such drug, the chimeric antigen receptor T-cell (CAR-T) drug Kymriah, in summer 2017, followed by the CAR-T drug Yescarta two months later. Both drugs take aim at blood cancers, but that's just scratching the surface of what cellular medicines can likely do.
Companies are now developing a variety of cellular medicines based on various immune cells as potential treatments for blood cancers and solid tumors, inflammatory diseases, and more. Such immunotherapy drug candidates include CRISPR-engineered T cells, "off-the-shelf" natural killer (NK) cells, and tumor-infiltrating lymphocytes (TIL).
The latter opportunity is being pursued most notably by Iovance Biotherapeutics (NASDAQ:IOVA). While promising data from mid-stage and late-stage clinical trials sent shares soaring this spring, the stock has receded 25% from its recent highs. Should investors with a long-term mindset consider the recent dip a buying opportunity?
Where's the company now?
Iovance Biotherapeutics wowed the scientific community and investors at the 2019 American Society of Clinical Oncology (ASCO) annual meeting with clinical updates from two programs.
The company's lead drug candidate, LN-145, is being studied as a treatment for advanced cervical cancer. It demonstrated an objective response rate (ORR) of 44% and a disease control rate (DCR) of 89% in the first 27 patients with evaluable data from an ongoing phase 2 trial. The former metric measures how many patients saw tumor shrinkage, while the latter measures how many patients kept their cancer from progressing. At the 7.4-month follow-up, the median duration of response (DOR) had not been reached, which means it will be longer than 7.4 months for that patient group (that's a good thing). The results earned the drug candidate Breakthrough Therapy Designation from the FDA a week after they were announced.
The company's second-most-advanced drug candidate, LN-144, is being studied as a treatment for advanced melanoma in patients who fail to maintain a response to checkpoint inhibitors. It delivered similarly impressive results from its phase 2 trial. Iovance Biotherapeutics reported an ORR of 38% and a DCR of 76%, and said that the median DOR had not been reached at the 8.8-month follow-up. A total of 66 patients were evaluated by the cutoff date. The drug candidate has since moved into a phase 3 trial.
Both trials had impressive results. For comparison, the ORR for cervical cancer patients taking Merck's Keytruda, a checkpoint inhibitor blocking PD-1 proteins (which allow cancer cells to evade detection by the immune system), is only 14% as a second-line treatment option. Keytruda delivered a four-year ORR of 42% in advanced melanoma patients who have failed at least one other treatment option, although the results announced to date for LN-144 are from patients who have failed to respond to Keytruda. Iovance Biotherapeutics also recently began studying a combination therapy comprising Merck's drug and LN-144 in advanced melanoma.
In short, Iovance Biotherapeutics is on the cusp of a stepwise improvement in the treatment of two of the deadliest cancers. Now the two drug candidates have to keep up the impressive results with the finish line in sight.
Where's the company headed?
Iovance Biotherapeutics is also studying LN-145 in non-small cell lung cancer (NSCLC) as a monotherapy, and as a combination therapy with Keytruda in NSCLC and head and neck cancer. The company owns full rights to LN-144 and LN-145 in those indications. There are also three phase 2 trials under way by the MD Anderson Cancer Network and Roswell Park in ovarian, bladder, and pancreatic cancers and sarcomas.
Barring updates from ongoing mid-stage studies, the near-term future of the stock will be determined by the continued success of LN-144 in melanoma and LN-145 in cervical cancer. Iovance Biotherapeutics recently told investors that it remains on track to file a biologics license application (BLA) for LN-145 in advanced cervical cancer in the second half of 2020. That could "potentially overlap" with the timing of a BLA for LN-144 in advanced melanoma. The late-stage studies are expected to enroll up to 100 and 164 individuals, respectively.
Iovance Biotherapeutics also said it broke ground on a commercial-scale manufacturing facility for its TIL cellular medicines. It doesn't make headlines, but the race for gene therapy and cellular medicine manufacturing is arguably more important than the results from clinical trials in the early days of the field. The 60,000-page BLA filed by Spark Therapeutics for Luxturna, the first gene therapy approved by the FDA, was mostly filled with data on manufacturing, not clinical trials, according to Jacob Bell at BioPharma Dive.
Investors should be pleased with the focus on manufacturing, as well as the fact that Iovance Biotherapeutics exited June with $404 million in cash. The business reported an operating loss of $90 million in the first half of 2019, so it will likely need to raise additional funds within the next year, and will certainly need more capital to market its leading drug candidates should they earn regulatory approval. Investors probably won't care, so long as the $2.4 billion biopharma can continue to deliver impressive results from its TIL pipeline.
A solid buy for long-term investors
Iovance Biotherapeutics is well-positioned to raise the standard in treating advanced cervical cancer and advanced melanoma. The two lead indications for LN-145 and LN-144 are expected to generate over $1 billion in combined peak annual sales. That doesn't take into account earlier-stage research in additional indications such as ovarian and bladder cancers, nor does it appear to factor into the company's current $2.4 billion valuation. If the results hold up and the TIL therapies can stave off potential competition from the fast-paced field of immunotherapy and cellular medicines, then investors buying the dip today should be rewarded for their long-term mindset.