NantKwest announces initiation of second generation COVID-19 vaccine candidate

NantKwest Inc. (NK) announced that it has dosed the first participant for its clinical trial of hAd5-COVID-19. The vaccine candidate uses a second-generation adenovirus to deliver multiple proteins of the SARS-CoV-2. The trial is currently enrolling healthy adult participants of up to age 55. The main aim of the trial is to examine the safety and reactogenicity of two doses of hAd5-COVID-19.

NantKwest is collaborating with ImmunityBio for developing this vaccine candidate. It is an engineered serotype vaccine and aims to work by delivering both the spike protein and nucleocapsid protein by dual constructs of SARS-CoV-2. Dr. Patrick Soon-Shiong, Chairman and CEO of ImmunityBio and NantKwest. “We believe this dual targeting is a key advantage that may lead to the stimulation of both T-cell-mediated and antibody-mediated immunity to SARS-CoV-2, which is an important differentiator from other vaccine candidates that only target the spike protein.”

hAd5-COVID-19 intends to generate B and T cell memory to the COVID-19 antigens and long-term immunity to the virus. Currently most of the COVID-19 vaccines being trialed are designed to provide only the monovalent spike protein on the surface of the virus to produce blocking antibodies.

The vaccine candidate has been developed using ImmunityBio’s novel human adenovirus vector. This technology enables the vaccine to be reengineered for increasing the immunogenicity of the COVID insert. The vector has shown preliminary safety in more than 125 patients spread across 13 Phase I and 2 trials till date. According to the data generated by National Cancer Institute clinical studies, the vector triggers antigen-specific T-cell immunity in patients, even if pre-existing adenoviral immunity is there.

The primary endpoint of the trial is to study the safety and reactogenicity of two doses of the vaccine. The companies are also working on developing different administration formats for hAd5 such as oral, intranasal and inhalational. NantKwest struck the deal with ImmunityBio in August 2020 and both will share development, manufacturing, marketing and commercialization costs.

ImmunityBio is a late-clinical-stage immunotherapy company. It develops cutting edge immunotherapies for treating infectious diseases and cancers. The company has three main technologies in its portfolio which are synthetic immunomodulators, antibody cytokine fusion proteins and second-generation human adenovirus technologies.

NantKwest is a clinical-stage, immunotherapy company. It mainly focuses on developing clinical dose forms of off-the-shelf natural killer cell therapies. This technology works by demolishing cancer and virally infected cells. Phase 1 clinical trials have corroborated the safety and performance against a wide array of cancers. The company has robust development programs with emphasis on immune-oncology programs.

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Analysis: Another player on the COVID-19 bandwagon, market for which is unfathomable presently. NantKWest is a ~$867 million company at a stock price of $8.58, midway between a 52 week range of $1.05 and $15.70. Major shareholding is over 63% by insiders, nearly 22% and 15% by the public and institutions respectively. Wall Street analysts are neutral with an average score of 3.5/5 and a price target of $13. 4.85 million shorted shares are to be covered in 4 days. The company has a debt of $12.55 million, and cash balance of $110.62 million, which is good for about 18 months considering cash burn of $67 million in fiscal 2019 and $71 million in the TTM. The company had revenue of $236,000 in 2015, while the 2020 estimate is $26,000.

Investment Thesis: The company has robust liquidity position and very low leverage, allowing it to undertake ambitious projects. Its stock has been a multibagger and is expected to retain the performance.

Protagonist Therapeutics receives orphan drug status for PTG-300

Protagonist Therapeutics Inc. (PTGX) announced that its lead product candidate PTG-300 has been awarded orphan drug designation for treating polycythemia vera. PTG-300 already holds the similar designation awarded by the FDA in the United States for this indication. The company is currently enrolling patients with polycythemia vera for a Phase 2 study of PTG-300.

The designation is awarded by the European Commission on the recommendation of the EMA Committee for Orphan Medicinal Products. Samuel Saks, M.D., Protagonist Chief Medical Officer said, “Completion of enrollment for the ongoing study of 50 patients is expected in mid-2021. A pivotal study is expected to begin in the second half of 2021, pending our planned discussions with regulatory agencies.”

Protagonist is currently working towards the design of a pivotal study. The company had recently reported early clinical results for the drug candidate which corroborated its potential to help a broad range of polycythemia vera patients.

Polycythemia vera is a myeloproliferative neoplasm. Its main feature is elevated production of red blood cells. PTG-300 is an injectable synthetic peptide mimetic of the natural hormone hepcidin. It is being developed for treating various blood disorders.

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Protagonist Therapeutics is a clinical stage company. It currently has three product candidates in different stages of development. These are PTG-300, PTG-200 and PN-943. PTG-200 is an orally delivered, gut-restricted, interleukin-23 receptor specific antagonist peptide whereas PN-943 is an orally delivered, gut-restricted alpha-4-beta-7 integrin specific antagonist peptide.

Analysis: Protagonist’s orphan drug is targeting a market of polycythemia vera (PV) market that was worth ~$952 million in 2017 and growing. Nearly 60% of the market share was of Jakafi, the main competitor in the second-line treatment of PV. Wall Street analysts are very bullish, scoring an average of 4.5/5 and a price target of $31.75 for the near 52 week high stock currently at $19.95. Market capitalization is ~$744 million with over 66% growth in 52 weeks. Major shareholders are institutions with over 58% holding and hedge funds with over 33% shares. Cash burn of $80.8 million in fiscal 2019 and $92 million in the TTM, and a cash balance of ~$209 million along with revenue estimate of $14.24 million for 2020 suggests a cash runway of about 30 months.

Investment Thesis: The company has strong yet focused development pipeline, ensuring multiple catalysts over a period of time. It also reports consistently robust quarterly results. However, the investors may wait for a pullback in its stock price.

Genmab reports positive data from Phase 2 CASSIOPEIA study

Genmab A/S (GMAB) announced positive data from the second part of the Phase 3 CASSIOPEIA study. The trial is designed to assess the use of daratumumab monotherapy as maintenance treatment versus observation (no treatment) for patients with newly diagnosed multiple myeloma eligible for autologous stem cell transplant. The study is being performed by the French Intergroupe Francophone du Myelome in cooperation with Janssen Research & Development and the Dutch-Belgian Cooperative Trial Group for Hematology Oncology.

The trial met the primary endpoint of improving progression free survival. It showed 47 percent decline in the risk of progression or death in patients treated with daratumumab. Jan van de Winkel, Ph.D., Chief Executive Officer of Genmab said, “Following the positive data from the first part of the CASSIOPEIA study, we are very pleased to see this benefit. We are appreciative of the efforts of the IFM, of HOVON and of Janssen for their work on this study.”

CASSIOPEIA Study is a randomized, open-label, multicenter trial. It has recruited 1,085 eligible patients. The first part of the study randomized the patients and administered induction and consolidation treatment with daratumumab combined with bortezomib, thalidomide and dexamethasone (VTd) or VTd alone.

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The second part of the study patients with response were randomized to be given maintenance treatment of daratumumab 16 mg/kg every 8 weeks for up to 2 years versus no further treatment.

DARZALEX or daratumumab is the first monoclonal antibody (mAb) to receive the US FDA approval for treating multiple myeloma.

Analysis: Genmab is a ~$23 billion company at a price of $35.67, near 52 week high. The company in collaboration with Janssen targets the huge MM market that will be worth ~$31 billion by 2026, growing at a CAGR of 6% from ~19.5 billion in 2018. The company’s revenue estimates for 2020 and 2021 are $1.53 billion and $1.24 billion respectively. Cash reserve is $1.93 billion, while cash burn was $409.5 million in fiscal 2019 and $489.8 million in the TTM.

Investment Thesis: As Genmab is currently embroiled in legal tussle with Johnson & Johnson over cancer treatment and the stock has shown steep rise in the recent past, it is worth to wait and watch.

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