Celldex Therapeutics (Nasdaq: CLDX) – Too late for Ted, but a big breakthrough for the rest of us
“We cannot have a fair prosperity in isolation from a fair society. So I will continue to stand for a national health insurance.” – Senator Ted Kennedy (1932-2009), 1980 Democratic National Convention.We’ve all got to go sometime, but if you had a choice you wouldn’t be taken out by the disease that claimed Ted Kennedy four years ago. The legendary Senator, who never lived to see America get the universal healthcare he championed for decades, was diagnosed in May 2008 with glioblastoma multiforme (GBM). The ‘glioblastoma’ part tells you that this was a brain tumour - it’s a cancer of the glial cells, the cells that provide support and protection for neurons. The ‘multiforme’ part refers to the fact that every GBM tumour looks different under the microscope. That’s one reason you don’t want to get GBM – the presence of many different kinds of cells in a tumour has traditionally made successful treatment a difficult proposition. Another reason you don’t want to get GBM is what the patient has to go through. Kennedy would have experienced all the usual headaches and extreme nausea, as well as the problems with memory, balance, speech and vision, before he died fifteen months later at the age of 77. Fifteen months was about the median survival time for GBM, where only 4% of patients can expect to be alive at the five year mark (click here), even though there are treatment options available - surgery followed by radiotherapy, and a couple of drugs (Temodar, from Merck, and Avastin, from Roche) that provide a modest survival benefit. Thankfully GBM is rare - Kennedy was one of only around 6,000 to 9,000 Americans who would have been diagnosed in 2008. However for those of us destined to get it, I have some good news – survival is set to stretch out markedly in the next few years. Celldex Therapeutics (Nasdaq: CLDX), from Needham in Ted Kennedy’s home state of Massachusetts, is now in Phase III with Rindopepimut (CDX-110), a cancer vaccine that in Phase II engineered median overall survival in GBM patients of more than 24 months.
Celldex’s glioblastoma breakthrough represents a fairly simple vaccine concept. You take a surface marker that is expressed only in cancer cells and not in normal tissue, and attach that protein to something that the immune system is likely to recognise. Just to make certain the immune system does what it is supposed to – wake up and smell the antigenic coffee - you administer an adjuvant as well. In Celldex’s case the marker is epidermal growth factor receptor variant III, or EGFRvIII, which is expressed in around a third of all GBM tumours. The immunostimulating protein is KLH, or Keyhole Limpet Hemocyanin, a respiratory glycoprotein obtained from Megathura crenulata, the giant keyhole limpet, which people have studied for its immunomodulatory properties since the 1960s (click here). The adjuvant is GM-CSF, the white blood cell stimulator routinely given to cancer patients to reboot their immune system after chemotherapy. Put these three together and you consistently get the immune response you want. In GBM patients whose tumour was EGFRvIII-positive, three trials of Rindopepimut showed median overall survival of 24-25 months from diagnosis. That wasn’t good enough for Pfizer, which pulled out of a three year partnership over Rindopepimut in late 2010. It was good enough, however, for Celldex’s backers to fund a pivotal study of Rindopepimut called ACT IV, which initiated in December 2011. ACT IV is a randomised, double-blind, controlled study that will treat newly-diagnosed EGFRvIII-positive GBM patients after surgical resection. Celldex expects to finish recruiting to ACT IV this year and be reading out data around the end of 2015. The company is also in Phase II with ReACT, which is studying Rindopepimut in combination with Avastin in recurrent EGFRvIII-positive GBM. The market is pretty optimistic about Rindopepimut’s prospects in both indications, with Celldex now capitalised at over US$2bn.
It helps that Celldex is also working on two other disease treatment approaches that the market has learned to like due to other success stories. CDX-011 (glembatumumab vedotin) is one of those antibody drug conjugates (ADCs) that have made Seattle Genetics (Nasdaq: SGEN) a US$4.8bn company. Celldex’s ADC has registered great Phase II data in triple-negative breast cancer where patients overexpress a marker called glycoprotein NMB. Meanwhile CDX-1135, a soluble receptor which inhibits a part of the complement system, just entered a Phase I/II pilot study in Dense Deposit Disease. That’s an ultra-rare progressive kidney disorder cause by dysregulation of the complement pathway. To some observers CDX-1135 sounds like the making of another Alexion (Nasdaq: ALXN), whose Soliris product, a complement inhibitor, has kept Alexion’s market capitalisation above US$20bn as we speak.
So there’s multiple arms to the exciting Celldex story. The naysayers will likely object that ImmunoCellular Therapeutics (NYSE MKT: IMUC), which I wrote about in my 27 August post has much better data on GBM than Celldex - it recorded 38.4 months of median overall survival in a Phase I GBM trial with its ICT-107 cancer vaccine (click here), but today you can buy the company for only US$136m. ImmunoCellular is, however, further behind in the journey – ICT-107 is still in Phase II. More importantly, ICT-107 is an autologous therapy. I described what ImmunoCellular’s vaccines involve on 27 August: ‘As with Dendreon, ImmunoCellular’s approach to cancer immunotherapy is to take from the patient white blood cells responsible for processing and orchestrating an immune response to antigens, exposing those cells to cancer antigens, and then giving back to the patient a large enough numbers of such cells so that his immune system finally recognises the tumour that has hitherto eluded it.’ There’s the problem. You get 38 months survival but you have the massive expense of processing individual batches of cells, something that has hindered Dendreon (Nasdaq: DEND) over the last couple of years with Provenge. Rindopepimut is off-the-shelf and therefore notionally much more cost effective. There’s no reason why both products can’t gain approval and go on to vastly change the treatment landscape for GBM – and get paid for under the Obamacare Ted Kennedy spent his Senatorial career working for. But at the moment the market is saying that Rindopepimut is the easier option.
The market didn’t always like Rindopepimut. I just went back and looked at an October 2009 report I wrote on another cancer vaccine Prima Biomed (ASX: PRR, Nasdaq: PBMD). Celldex was only US$216m back then. Which shows you how the wheel can turn once the favourable data starts to accumulate. Like Ted Kennedy on universal healthcare, with biotech stocks one has to keep the faith.
Stuart Roberts, Australian Life Sciences consultant, with global focus
+61 (0)447 247 909
Twitter @Biotech_buzz
About Stuart Roberts. I started as an equities analyst at the Sydney-based Southern Cross Equities in April 2001, focused on the Life Sciences sector from February 2002. Southern Cross Equities was acquired by Bell Financial Group (ASX: BFG) in 2008 and I continued at Bell Potter Securities until June 2013. Over the twelve years to 2013 I built a reputation as one of Australia's leading biotech analysts. I am currently consulting to the Australian biotech industry. Before joining Southern Cross Equities I wrote for The Intelligent Investor, probably the most readable investment publication in Australia. I have a Masters Degree in Finance from Finsia. My hobbies are jazz, cinema, US politics and reading patent applications filed by biotechnology and medical device companies.
Previous Australian Biotechnology Buzz posts:
Advanced Cell Technology (OTCBB: ACTC), 4 September 2013
Alcobra Pharma (Nasdaq: ADHD), 17 September 2013
Amicus Therapeutics (Nasdaq: FOLD), 22 September 2013
Aradigm (OTCBB: ARDM), 8 September 2013
BioSpecifics Technologies (Nasdaq: BSTC), 26 September 2013
Celldex Therapeutics (Nasdaq: CLDX), 9 November 2013
Celldex Therapeutics (Nasdaq: CLDX), 9 November 2013
Cellular Dyamics (Nasdaq: ICEL), 3 September 2013
ImmunoCellular Therapeutics (NYSE MKT: IMUC), 27 August 2013
Immunomedics (Nasdaq: IMMU), 21 August 2013
Inovio Pharmaceuticals (NYSE MKT: INO), 24 August 2013
Merrimack Pharmcaceuticals (Nasdaq: MACK), 26 August 2013
Novavax (Nasdaq: NVAX), 3 October 2013
Oncolytics Biotech (Nasdaq: ONCY), 22 August 2013
Pharmacyclics (Nasdaq: PCYC), 2 September 2013
Regulus Therapeutics (Nasdaq: RGLS), 23 August 2013
SIGA Technologies (Nasdaq: SIGA) - 30 September 2013
Sunshine Heart (Nasdaq: SSH), 28 August 2013
Synta Pharmaceuticals (Nasdaq: SNTA), 1 September 2013
TrovaGene (Nasdaq: TROV), 15 September 2013
Verastem (Nasdaq: VSTM), 5 September 2013
Disclaimer. This is commentary, not investment research. If you buy the stock of any biotech company in Australia, the US or wherever you need to do your own homework, and I mean, do your own homework. I'm not responsible if you lose money.
Biotechnology Consultant is the provision of professional technology advice to a business or organization.
ReplyDelete