Ah Prima…

I’ve been waiting a long time for this day.

You may not believe it, but I try to avoid just randomly commentating on companies, it’s always much nicer to have something to tie a post to. Something real-time and juicy.

Yesterday’s announcement about Prima Biomed (ASX:PRR) truly got my Germanic juices flowing, my säfte fließen if you will …

CVac zeigt in Phase-II-Studie deutliche Verbesserung beim Gesamtüberleben von Eierstockkrebspatienten in zweiter Remission

I mean, let’s face it, how many Australian biotech companies get to use the word “Eierstockkrebspatienten” in a press release?!! The rest of you Oz biotechs should all be extremely jealous.

All mocking aside, it’s genuinely nice to see the CVac story come to the end of its journey and I sincerely give my great respect and kudos to Lucy and the team for sticking to their guns. Yes, there are many zombie ASX biotech companies out there that simply don’t seem to die. But notwithstanding all the execution headaches, clinical hassles, CEO turnover, etc. (many challenges, of course, that have been self-inflicted) this is a company that has fought to stay alive and prove to cancer patients that it is committed to delivering on its technology. I obviously haven’t reviewed the clinical data but I trust the claims that are being made and they appear (at first blush) to be reasonably decent (albeit still from a fairly small-ish study).

PRR BOOM

Unfortunately for PRR shareholders, the stock rally (60+%, wow!) isn’t warranted and a golden example, if ever there were one, of how pretty much any good news makes the punters go crazy. To be fair, people have been waiting for good news for a long time. If this outcome had taken place, even three years ago, I might take a different position.

But not today.

Sadly, the world has moved on for ovarian cancer. There is just too much going on in the space that has far greater promise and CVac will be yet another potential therapeutic that misses the boat, much like Trovax did. Not because the science is bad – it isn’t – but because it’s no longer state-of-the-art and isn’t going to beat other drugs to the patient. Ovarian cancer is a highly competitive space for patient access at the moment and CVac will struggle to continue clinical development. Frankly, the target (MUC-1) is kind of a mediocre target and cell therapy technology has moved on considerably. At the most fundamental level, CVac is just too hard to manufacture/expensive to be all that appealing to someone to “take out” as pipeline.

Although they haven’t exactly shouted it from the rooftops, Prima has been consistent since its announcement in February, that it will no longer be investing in the CVac program and will instead focus its resources on IMP-321 (LAG-3 franchise). Therefore the stock price rally, in effect, reflects the end of the line for the CVac program. This is obviously completely nonsensical and I don’t really know how analysts can move their buy recommendations/price point on the basis of this announcement (yes, they did…).

I may yet be forced to eat my words (and that will be ok with me, I owe Stuart Roberts a moment of reciprocal humiliation anyhow) but I give the probability of this program getting partnered out at less than 10%.

But, it’s not all bad news. True to its historical form, Prima seems to be finding ways to survive and the LAG-3 program is actually quite interesting to me. A good target. I am skeptical that it is really the game-changer intellectual property portfolio that Prima claims it to be, but what really matters is that they have a promising candidate and a couple of grown-up partnerships that look genuinely exciting. In a prior post I had speculated, somewhat unfavorably, that Merck-Serono passing on the IMP-321 program was a red flag. Actually, Stuart has personally convinced me that it was just a bad / unlucky decision (not atypical of big pharma, as I also indicated in my prior post).

Hey – one company’s failing, can be another company’s great fortune. It’s happened before.

My final thoughts are as follows…

Prima stuck out a bumpy ride with CVac and showed a rational commitment to the program, and a tremendous loyalty to patients. In the past, in my opinion, Prima overstated the clinical potential of the program as well as early data points, and I think this hurt the company (lesson to all you other Oz biotechs out there). However, I also believe that the current outcome somewhat vindicates this. We all associate Prima with CVac – and if someone wants to partner the asset the know where to look – but now the time has come for the company to redefine its public identity. Close the door on CVac, clear out the web site and corporate materials, refresh your brand.

Focus on becoming a brand spankin’ new immuno-oncology company and enter the next stage of your existence.

Good luck…

Photocredit : sbnature.org

Photocredit : sbnature.org

11 thoughts on “Ah Prima…

  1. Hi Chris – nice article – is there a way to paste figures into comments on this site. If there is I’ll provide a few comments about the OS data just released by PRR.

    Like

    • That would be really exciting!

      If you email them to me at chris@behrenbruch.net, I will set up links for you. Unfortunately I don’t think there is an inline way of doing it in the comments by a poster unless you are a HTML/XML guru (unfortunately, I am not). I, however, can do it from my dashboard.

      In your email just identify what text in your post you want associated with what figure and I will make it happen.

      Cheers..

      C

      Like

  2. The survival benefit claims released by PRR come from the Can-3 Ph2 trial of 63 women with first or second remission ovarian cancer. The top-line overall result was a non-statistically significant difference on either Progression free survival (PFS) or Overall survival (OS). I’d like to review the claims:

    – A post-hoc sub-group analysis was performed on women in second remission OC. Twenty subjects in total 10/10 1:1 Cvac versus Standard of Care (SOC).

    – 19 May 2015 (two days ago) PRR announced “Cvac shows overall survival benefit” and showed final second remission data as follows: hazard ratio = 0.17 (95%CI: 0.02, 1.44; p=0.07).

    This is identical to the 6 November 2014 announcement also titled “Cvac shows overall survival benefit” that showed a hazard ratio=0.17 (95%CI: 0.02, 1.44); p=0.07). The difference between two announcements is that in November 2014 the potential median survival benefit was estimated at 10 months while now in May 2015 it is estimated at 16 months.

    Assuming there are no new deaths in the Cvac group in one year it will just get better – there will be a 28 month advantage… and so on into all of time. So whats going on?

    <Link to a survival curves figure>

    In the Cvac group the survival curve is extended into space horizontally as no new deaths have occurred. In fact as at November 2014 there had only been one death – but six in the SOC group. This means the median survival can be calculated for the SOC group but not yet for the Cvac group.

    So what are the problems with this apparent miracle cure?

    1. The numbers are so small imbalances between the two groups can easily occur even with randomisation.

    2. The HR is non statistically significant. There is a 95% chance the true hazard rate lies somewhere between 0.02 and 1.44 remembering that anything above 1 signifies negative effect for Cvac.

    3. The numbers don’t add up for Cvac. This is because two women were lost to follow-up. At that point they were considered censored (neither alive or dead). The assumption is that this loss to follow-up is not informative of outcome. This needs to be argued because your first guess is that when people are lost to follow-up in oncology trials the news isn’t good.

    4. The OS data is diluted over time because women will cross over to other treatments. What is being measured is most likely the effect of those other treatments. A secondary outcome in Can-3 was time to next treatment; but PRR have never released this data.

    So what we have here is a failed trial that decimated the share price when the top-line results were announced. Those results also caused the large P3 trial (Can-04a) for Cvac that was underway and recruiting to be cancelled.

    As a fall back and on the basis of the OS results that PRR describe as “compelling” PRR had started (approved in 20 sites) and was recruiting to a P2b proof of concept study in 200 subjects with second remission. This has now also been canned.

    But the share price has increased 100%?

    The reason is simple – a US hedge fund (Ridgeback).

    Like

    • Dear Southoz,

      I’m not quite sure where to begin with replying to this comment, except that it is rather extraordinary. I went back again over the public announcements and except for the last line of your comment (which I can’t really substantiate) I can’t fault what you have written. It’s a bit shocking.

      Does anyone else want to make a comment? Maybe even someone from PRR?

      Fundamentally, you and I are in agreement – the stock surge isn’t warranted. CVac is never going to go anywhere, whether it is because of the reasons you have written (in which case the program will never pass – or even commence – partnering diligence), or the realities of the program relative to the market and manufacturability (i.e. what I discussed in my post). It will be interesting to see what happens. As per my post, I am not entirely negative about the prospects of the company but I do believe CVac’s day has passed.

      Thanks for engaging.

      Like

  3. Pingback: No Fingernails Left : Prima Biomed | The Long Tail

  4. Thanks Southoz and cbehrenbruch for posting your opinions and comments.

    Re. the not updated OS survival charts: I presume the updated charts may be released in few weeks (after the ASCO conference). I think they did it similar last year – an ASX text only announcement leading up to ASCO and charts were available along with the ASCO presentation shortly after).

    Southoz, all your comments and assumptions about the study and results are relevant and plausible, however it’s all part of an early stage trial (i.e. Phase IIa) that should have given a signal (“compelling signal”) to move to the next stage trial that would come with a bigger population, significance and etc. And the company executives stated several times (in informal comms) that PIIb trial is required to address the reliability questions in order to partner or JV CVac. But having all these further trials being halted and no updates (on CAN-003X, CAN-004A, CAN-004B) does not leave much hope for progress on CVac.

    And I agree the company is hosing down the CVac story to make a soft landing and move on with a new “blockbuster” – LAG-3. “The show must go on”…

    Like

  5. Hi Arou011,

    I’m not sure PRR are presenting to ASCO – the November results were presented to STIG in a poster. Nothing has actually changed – and fact the update has been released now with the results suggests they can’t be released.

    Several things are fascinating here.

    First that probably the overwhelming majority of people buying and selling PRR/PBMD in the last couple of days had zero understanding of what those Can-3 results actually meant and the trial they had come out of.

    Second there is virtually zero fundamental analysis of those results available to investors. There are little splotches of information splattered around the place but that information is quickly lost in all the noise.

    Third there is little desire for that fundamental information. Because it doesn’t matter when you are just trading the ticker (not the company) or gambling.

    Fourth if someone had told me that the Cvac OS data would move the share price from 3c to 16c and that this would help fund the new Lag-3 studies I would have bet a million dollars that this was impossible. And I would have well and truly lost that bet.

    Lastly I am not as pessimistic as Chris about where this is all going to end up. I think Ridgeback has “re-rated” PRR and that rerating will be in line with a valuation that is set in the US. Quite where is that who knows but higher than 3c. Tril is a similar Canadian immuo company that I think is useful in a comparative sense.

    Regards Southoz

    Like

    • Yep, I am a bit more pessimistic but then I also sort of ideologically think that a bump in valuation should be for a reason :-). Looks like it is panning out a bit more like you said.

      Like

  6. glad someone else picked up on the non-significance in the phase 2. Incredible buying spike from a non-result….typifies herd mentality at its finest.

    Like

  7. Pingback: The Irrationality of Biotech Investing : Prima Biomed | The Long Tail

  8. Pingback: Prima Files a Patent | The Long Tail

Say something useful (or at least interesting)...

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s