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).
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.